The “Tax Freedom Day” Trick

This post originally appeared at Speak Out California
It takes a 2/3 vote to pass a budget in California. As we have seen this means any budget that does not completely meet the hard-core anti-tax, must-cut-government position of the Republicans in the legislature is voted down. Even though there is enormous public support for government – schools, roads, firefighters, etc. – they will not compromise at all. They demand that we gut the government, lay off tens of thousands of workers, or nothing. So California races toward economic ruin.
What do your taxes buy you? The average person benefits greatly from strong government. By gathering together into a community that is jointly managed (i.e. government) people can pool their resources and accomplish great things that cannot be accomplished by people who are on their own. Roads and bridges are examples of things that people cannot accomplish individually. Police, firefighters, public schools are other examples. Law and courts and a monetary system are still more. And then there are benefits like Social Security and the “safety net” of programs for people who lose jobs to food programs for those of us without enough to eat.
The reason we have almost everything that we value as a society, our education and (until recently anyway) jobs, the internet, buildings that don’t easily burn down or blow away, drinkable water coming to our houses and sewage systems leaving them and (until fairly recently, anyway) a health care system that stops epidemics is our government. All of the businesses we see around us exist because of our government — a corporation cannot even exist without the government that establishes it and the legal system that maintains it.
But there are some who would personally benefit more in the absence of government than in its presence. History has taught that there are some who would organize themselves to take what others have worked to build rather than do that work themselves. One need only look at the walls built around cities in the past to understand this. There have also been organized gangs and other criminal enterprises that take rather than build, and more recently we have seen that organized predatory enterprises also find ways to victimize and prey on people. Fraud, confidence and ponzi schemes, consumer scams and all manner of trickery prey on people who are left unprotected by their community. Government is what has always protected regular people from such predators.
Government — the people banding together to guard and accomplish their interests — serves to protect people from those who would just take rather than work with the rest of us to build.
So why did Ronald Reagan famously say “government is the problem” in his first inaugural address and he loudly and repeatedly attack the idea of taxes? The foundation and strength of government is the taxes it collect. Taxes are what provide government with its strength to do all of the good things described above. This is why anti-government ideologues reason that the way to cut government (and thereby bring in its alternative) is to cut taxes. They say that if they can just cut out the foundation of government, it will fall. Or, more famously, that they can “drown it in a bathtub.”
One way that anti-government ideologues have worked to accomplish this is to turn people against their own government, tricking people into misunderstanding how taxes work and what government does for them. last week, in What Are Tax Brackets, I explained how one of these tricks works — that you only pay bracket rates taxes on income that falls in that bracket, not on all income earned up to that bracket.
Another way they turn people against taxation and government is to misrepresent how much is collected and how it is used. Exaggerated statements like, “We pay half our income in taxes” are commonly heard, along with under-representation and misrepresentation of the benefits we receive from government.
“Tax Freedom Day” is one example of this technique. Tax Freedom Day is a product of The Tax Foundation, which is funded by the very same collection of right-wing donors that fund the Heritage Foundation, Cato Institute and so many other components of the anti-government “conservative movement.”
Tax Freedom Day is widely publicized by corporate media, and usually described as being when “the average American” has earned enough income to pay their taxes. Tax Freedom Day for 2008 is April 23. To calculate Tax Freedom Day the The Tax Foundation adds up all the taxes paid to the government from all sources, but it only includes certain forms of income. It doesn’t include capital gains income, for example, yet includes capital gains taxes on the tax side of the calculation. These misleading calculations of course result in a much higher tax amount than “the average America” really pays. So while they say that 30.8% of “our” income went to pay taxes in 2008, anyone reading this who looks at their own tax bill can see that their taxes are substantially lower than this figure.
So the next time you hear about Tax Freedom Day, keep in mind who is making this claim, and why.
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Thought Experiment On Government

This post originally appeared at Speak Out California.
Try this: Every time you read the word “government” substitute the appropriate variation of the term “We, the People” or “democracy” and then see how you feel about what is being written. Use the same substitution for the term “the state.”
This is especially fun when reading anything written by a conservative or a right winger.
Ronald Reagan’s famous phrase, “Government is not a solution to our problem, government is the problem” takes on a whole new meaning, doesn’t it? He was saying that “democracy is the problem” — and here we are 25 years later seemingly living under corporate rule instead of democracy. How has that turned out?
When conservatives complain about government or “the state” they are complaining about control of decision-making by the people rather than by a few. Never forget that.

Do Republicans Believe In Free Markets?

This post originally appeared at Speak Out California
A news story on Monday, McCain urges free-market principles to reduce global warming. Which”free-market principles” does McCain mean?

McCain’s major solution is to implement a cap-and-trade program on carbon-fuel emissions, like a similar program in the Clean Air Act that was used to reduce sulfur dioxide emissions that triggered acid rain.

Summary: the government sets a limit on how much CO2 companies will be allowed to emit. The government sets a fee for any emissions above that level. The government allows companies with emissions below that limit to sell “credits” to companies above the limit.
McCain describes this as a “free market” approach.
Conservatives always come up with nice-sounding ways to describe their ideas. They talk about “free markets.” “Free” sounds so good. Has a nice ring to it. But is there really such a thing?
In McCain’s example every single component of this market is defined, set up and regulated by government. But conservatives always say that government is the enemy of freedom and of markets. Do they not see the contradiction?
In fact, is there a market that is not defined, set up and regulated by government? Would markets even exist if there were no government? First, there is the money that is exchanged in a market. Unless we revert to a pure barter system where goods are exchanged money is entirely a creation of government. And it is entirely regulated by government. Next are the laws that, excuse the word, “govern” the market system. These laws are entirely a creation of government and it is government that enforces them and government that runs the courts that resolve disputes. And yes, these laws are “regulations.”
So when conservatives complain about “government” and “regulation” and advocate “free markets” what is it they are really saying? The best way to understand what they want is to look at what they do, not what they say. If we look closely at the results of those times when conservatives gain power we can see that they really seem to mean they will use the power of government to protect the wealthiest people and biggest corporations.
For example, conservatives in government have always defended the big energy companies against threats to use of their products. They oppose mass transit, alternative energy research, even requiring cars to get better gas mileage.
A closer look reveals that what they really stand for is a protection of the status quo, defending the rich and powerful against the rest of us.
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Hating On We, the People

This post originally appeared at Speak Out California.
At Speak Out California, we have been writing quite a bit about democracy and about the meaning of the words “We, the People.”
Decades of conservative/corporate marketing has convinced too many of us to think of ourselves as passive consumers rather than participatory citizens. This thinking has brought with it numerous negative consequences. But if we work to restore our understanding that WE are “the government” we can start to see our state and country the way the founders intended. We can see that we are in control and can make decisions that increase the benefits we receive as citizens.
In a recent post, The Power of the Words “We, the People”, I wrote,

As an experiment, try substituting the words, “We, the People” every time you read or use the word “government.” Or use the word “our” instead of “the” when you say “the government.” Our government, us, we, the people.

Later in that post I wrote,

Conservatives have worked hard to make “government” a bad word. They complain about “big government.” They complain about “government schools.” But what happens when we substitute a form of “We, the People” into their slogans? The whole meaning seems to change.

With that in mind, lets take a look at an opinion column in April 2’s Orange County Register by Howard Jarvis Taxpayers Association President Jon Coupal: California Focus: No tax loopholes merit closing. The column is your standard conservative anti-government screed, arguing against closing tax loopholes that benefit corporations and the very wealthy to solve the state’s budget problems. It begins,

In recent weeks, Gov. Schwarzenegger, legislative leaders and the Legislative Analyst’s Office have called for eliminating what they term “tax loopholes” to help close California’s staggering $16 billion budget deficit.
But one person’s loophole is another person’s legitimate advancement of public policy. This is especially true with those tax credits or deductions that are both broad-based – benefiting large segments of society – and which result in a significant societal benefit.

The specific tax loopholes under discussion include one that allows the very rich to avoid paying sales tax on new yachts and private jets, while the rest of us have to pay. Another lets oil companies pump our oil out of the ground without paying the state, and then sell it back to us. Another lets sales over the internet go untaxed, giving them a competitive advantage over local businesses that pay rent for a storefront, employ sales clerks, etc.

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Things Change When We Realize WE Are the Government

This piece originally appeared at the Speak Out California blog.

Have you ever heard the song that goes, “This land is your land, this land is my land, this land was made for you and me”?  The lyrics to this song make the point that the United States belongs to you, and that you are the government.

The Constitution of the United States and of the State of California begin with the words, “We, the People…” because here the people are the government.  And it is time we all realized it.

Last week I wrote about the way we think about our government. 

Ronald Reagan liked to say “Government is the problem, not the solution” and, “The nine most terrifying words in the English language are: “I’m from the government and I’m here to help.’ ” … [But] the Constitutions of the United States of America and of the state of California both begin with the words, “We the people.”  So “we, the people” are the government. …When you think about it this way, it makes the things Ronald Reagan said sound contradictory. How can we, the people be the problem? How can it be scary that we, the people are here to help each other?

Our government is US working together to take care of each other.  This is a monumental shift in the way many of us have come to think about our relationship with our government.  Government is not some “them” out there, like the conservatives want you to think – government is you, and me, and all of us in this together, for each other. 

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Health Care — Public Or Private Best?

I would like to comment of this letter to the editor that appeared in the San Jose Mercury News this morning, Let market rule in health care:

…Under a single-payer system, the government has sole control over health care coverage, so it controls how and when money can be allocated to health care expenses. With this system, government bureaucrats will be charged with saving money for the government – not patients’ lives. The current health care system is in need of reform, but a single-payer system is not the cure for universal access to proper coverage. We need to seek alternative solutions, such as free-market competition, and not assume government-run care is in our best interest.

This is an example of the thinking that sets in after years of anti-government propaganda.
So how does this letter read if you think of government as citizens banding together to take care of each other and get things done?

…Under a single-payer system, the people have control over their health care coverage, so they control how and when money can be allocated to health care expenses to best benefit the public. Compare this to the current system, in which corporate accountant bureaucrats are charged with saving money for the company – not patients’ lives. … We need to corporate-run health care, and should not assume publicly-run care is in the public’s best interest.

Huh. Interesting.

We The People, Through Our Government

In the post Conservative Capitalism Vs. Liberal Socialism, John Hawkins responds to my earlier post about sick pay. He writes,

It is not the job of a company to provide benefits for society or health care or sick days or anything else. It’s the job of a company to make a profit for its owners and in the process of doing so, it will create things like jobs, taxes, health care for workers, value for its customers, and other such things that are beneficial to society.

And I agree with him 100%. I’ll go even further. Wal-Mart is not “bad” because it pays low wages or skimps on providing health care. If they did that, Target could charge lower prices and customer might go to Target instead. They’re just doing their job, as WE, the people, through our government, define it through our laws.
So whose job IS it to provide for higher wages and health care? It is OUR job – the people – through OUR laws and regulations. WE are the ones who have dropped the ball on higher wages and health care. WE tell companies what to do – or the system doesn’t work. If WE, through our government, require ALL companies to pay higher wages and provide health care that levels the playing field for Wal-Mart’s competition with Target.
Here is where I differ with Hawkins. Hawkins writes,

…the government shouldn’t get involved with things like what sort of health care a company is providing, sick days, or the minimum wage…

This is the standard Libertarian view – keep the people (government) out of the decisions. But I say that is exactly where the people, through our government SHOULD get involved! We need to keep that playing field level. Companies MUST work to provide the highest profits. Therefore WE must set a playing field that provides the greatest benefit to US from this system. WE must level that playing field on which the companies compete. We MUST tell them to pay higher wages or the system doesn’t benefit us. WE have fallen down on the job, not the companies, by not doing OUR part, through our government, which is to set the minimum wages and benefits at a level that is high enough. And that is why wealth is concentrating at the top and the rest of us are working longer hours for fewer benefits.
Hawkins writes that people can always quit and get a better job elsewhere. But there is a problem with that approach, and we have seen the problem play itself out over and over throughout history. There are more people in the world than jobs, so without our intervention wages would necessarily sink to the lowest level to sustain the necessary employees – and the rest starve. Of course, in a consumer economy the companies would be drying up long before that because the consumers won’t have money to spend. We have learned from history that if we, acting through our government, “stay out of it,” it is a formula for worldwide poverty – a race to the bottom. Historically it is the periods of greatest involvement that have been the periods of greatest economic growth. This is because in a consumer economy policies that provide greater disposable income to the consumers grow the economy. Duh!
The system that Hawkins admires is ENTIRELY a creation of government – of us. We defined what a corporation IS. We give the owners limited liability so they can take risks without losing everything. (Imagine if buying a share of stock meant that you could become a defendant in a lawsuit.) We set up the infrastructure of the internet, and the roads, etc. upon which the companies conduct commerce… And now we need to give ourselves a raise and health care, and maybe longer vacations and shorter workweeks.

Capitalism 3.0 – A New Way To Think About What We Own

I’ve just finished a very interesting book, Capitalism 3.0, A Guide To Reclaiming The Commons, by Peter Barnes. The book talks about ways we can restructure our laws and rules of ownership to cover who should pay for polluting and other harmful things — costs that our current system ignores and even encourages. The change is based on our realizing that we all own certain things in common.
Here’s a quick way to understand the ideas in this book:
Suppose you live next door to a sawmill operation. The owner makes lots of money, but aa waste product, sawdust, is building up on his lot. This big pile of sawdust is getting bigger and bigger, and it’s getting to the point that he’s going to have to shut down his profitable operation if he can’t find some place to dump some sawdust. So one day he comes to you and asks if he can dump some sawdust in your back yard. You answer, “If you give me $25,000 a year, each year you can dump 5 truckloads, but no more, in my yard.” You are $25,000 richer, you limited the sawdust to a level you could tolerate, and the sawmill can continue to operate and make money.
This happened because you “own” that property and have the “right” to refuse to let others make money by dumping their waste in it – or to negotiate for some of the resulting profits. This sounds so basic – but there is a reason I put quotes around the words “own” and “right.” The concepts of ownership and rights only exist because they are granted to us by law, and laws are nothing more than creations of government. It didn’t used to be that way, that regular people could “own” things and have “property rights,” but people thought it would be a good idea, and made it happen. And in America it is set up that we can do things like that because, guess what, WE’re the government. (It says that in our Constitution.) More on this later.

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What Does The Public Hear?

I have a post up at the brand-new Commonweal Institute Blog. The post is titled What Does The Public Hear?
A CNN poll this week shows that, as CNN worded it,

“…most Americans still agree with the bedrock conservative premise that, as the Gipper put it, “government is not the answer to our problems — government is the problem.”

From the CNN story:

“Queried about their views on the role of government, 54 percent of the 1,013 adults polled said they thought it was trying to do too many things that should be left to individuals and businesses. Only 37 percent said they thought the government should do more to solve the country’s problems.”

Let me ask a different question: How many Americans do you think have been exposed to the other side of the story? We hear, over and over, that government is bad, that it is inefficient, that it sucks up our tax dollars and harms the economy, that it messes up everything it gets involved in, and negative point after negative point. And we hear, over and over, that regulation of business is bad and “private sector solutions” are good, efficient, and are exposed to a hundred other positive images and messages along those lines.

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Just Get Rid Of Government?

Today my local newspaper’ subjects me to this right-wing propaganda comic strip (click to enlarge):

Mallard_FillmoreAug12.gif

Today the cartoon’s message is: Get rid of public schools, then we don’t have to pay property taxes, and everyone can pick out for themselves what education their kids get. At least today we get to see the pure, honest message of the Right without the usual disguises — today’s cartoon is not even offering the usual pretense of vouchers.
The larger exchange offered is clear: just get rid of government and the taxes it requires, and leave everyone to fend for themselves.

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