Tag Archives: tax cuts

10 Years Since Bush Tax Cuts: Why The Onion Was Right

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It is 10 years since the Bush tax cuts passed. When Bush took office (and never forget the Supreme Court’s 5-4 role in that) The Onion famously declared, “Our long national nightmare of peace and prosperity is finally over.” They had no way to know how prescient they were. Now we are living the real nightmare.
10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
The Onion satire had Bush declaring,

“My fellow Americans,” Bush said, “at long last, we have reached the end of the dark period in American history that will come to be known as the Clinton Era, eight long years characterized by unprecedented economic expansion, a sharp decrease in crime, and sustained peace overseas. The time has come to put all of that behind us.”
Bush swore to do “everything in [his] power” to undo the damage wrought by Clinton’s two terms in office, including selling off the national parks to developers, going into massive debt to develop expensive and impractical weapons technologies, and passing sweeping budget cuts that drive the mentally ill out of hospitals and onto the street.

Everything the Onion declared in jest became true right down to the Bush administration proposing to sell national parks. Pushed through using “reconciliation,” the Bush tax cuts — along with the Bush wars and military increases — have nearly bankrupted the country. As Roger Hickey writes in, 10 Years Of Bush Tax Cuts Is Enough,

Cutting taxes on the wealthy did not create jobs as conservatives promised. … the Bush Administration [had] the “worst track record on record” for jobs, according to the Wall Street Journal. Bush declared that “the surplus is the people’s money,” and proceeded to give the surplus away to very few people. Now that we face chronic deficits, it’s long past time for millionaires and billionaires to starting giving back.

10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
Deficits: “Incredibly Positive News”
Ten years ago we had a huge budget surplus. Then came the Bush tax cuts, immediately pushing us into terrible budget deficits. What did Bush say about that? Bush said that turning from surplus to deficit was “Incredibly Positive News,”

President Bush said today that there was a benefit to the government’s fast-dwindling surplus, declaring that it will create “a fiscal straitjacket for Congress.” He said that was “incredibly positive news” because it would halt the growth of the federal government.

“Incredibly positive news” — never for a minute think that these deficits and the resulting debt were anything but intentional, a scheme to gut government and force us toward the current rigged and one-sided discussion of cutting Medicare, etc.
Bring Back Peace And Prosperity
It would be so simple to bring back peace and prosperity. First and foremost: undo the Bush tax cuts.

5-12-11bud2

But the Supreme Court helped lock in the Bush nightmare, with the “Citizens United” ruling, allowing unlimited corporate money to interfere in our elections. In the 2010 Congressional midterms more than $300 million was pumped into those nasty smear-ads by corporations, half of it from secret donors, according to Common Cause. How much of that came from, say, China? We don’t get to know.
P.S. A Simple Plan To Fix The Jobs Emergency — And The Economy, Too
Take Action
10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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A Medicare Phase-Out By Any Other Name Still Stinks

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The Republicans voted to phase out Medicare and use the money for even more tax cuts for the rich. The public found out and turned out. So now they are coming up with new ways to mask the same thing. They call them “triggers,” “across-the-board cuts” and “spending caps” but these are all really just about cutting Medicare and Social Security and education and giving more and more tax cuts to the rich. Please don’t be fooled. And please get active and let them know you do not like what they are up to.
The “Ryan Plan” To Phase Out Medicare
A Republican named Paul Ryan came up with a plan to phase out Medicare and use the money to give even more tax cuts to the rich. Hence the name “Ryan Plan.” The plan replaces Medicare with a “premium support” voucher that covers some of the cost of insurance, (as if an ill 80-year-old can get insurance at all. The trick was to start the phase-out in 10 years, hoping people won’t notice.
While this phase-out of Medicare cuts “government spending” it just shifts that cost to you and me, and actually dramatically increases the overall costs. The Center for Economic and Policy Research calculates that it adds $7 in individual costs (you and me) for every $1 it cuts in “government spending.” But the mask that it cuts “government spending” gives them cover for even more tax cuts at the top.
Town Hall Anger
Last week every Republican in the House (save for a few) voted to say, “Yes, let’s do this.” Then they went home and met with constituents at town hall meetings, and were surprised to learn that regular people are smarter than they thought they were. They thought they could just slip this past people, under the cover of deficit hysteria. Instead people shows up at town hall meetings demanding answers. And they were not happy about what the Republicans were doing.


So now, returning from exposure to the unwashed masses they are saturating the airwaves with corporate-funded propaganda, ads with soothing voices telling us how good for us the Republican plan to get rid of Medicare will be. And they are working on new plans to do the same thing, but to make it less obvious what they are up to. “Triggers. “Caps.” “Across-the-board cuts (that leave out military and cut taxes at the top.)” Etc.
The Polls
Poll after poll after poll after poll shows that the public understands where the deficits came from — tax cuts for the rich, huge increases in military spending and the costs of the recession — and wants their government to fix these causes of the deficit. But the people are not in control of the government, the powerful few who own the giant corporations are, so the government keeps coming back again and again with schemes to cut the things government does for We, the People and use the savings to cut taxes on the wealthy and the corporations.
Demand The Details
Do not accept any plan that does not detail specifically what they are doing to fix the problems. Any plan that does not clearly raise taxes on the rich, cut the military spending and provide jobs and a solid economic foundation for the future by investing in infrastructure and alternative energy is not addressing the problems. (The People’s Budget is a plan that does these things.)
These are the things that the public is demanding. This is why the powerful forces in control of the government keep coming up with shadowy detail-free schemes like “triggers” and “spending caps.” They are trying to mask tax cuts for the rich and cuts in the things We, the People do for each other like Medicare, Social Security and education.
Get Angry
We are bombarded with scheme after scheme to take away what is ours, so that a wealthy few can have even more. They have plan after plan. Here is comedian Lee Camp explaining that “Evil People Have Plans“:

Don’t just take it, foil their plans. React. Get angry.
And then:
Get Active
Get out there and get your voice heard. Call your member of Congress and both senators. Show up at town hall meetings and demonstrations and protests. Sign up to be on mailing lists of organizations like Campaign for America’s Future, MoveOn, Srengthen Social Security and Don’t Make Us Work Till We Die!, Credo Action, Coalition on Human Needs, US Uncut, On May 12, Campaign for Community Change, Working America and others who are working to fight back. Join Up.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Did American Workers “Get What They Deserved?”

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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.
What did people expect would happen when they voted for Reagan, Bush and other conservatives, or supported their policies? In the Holland (Michigan) Sentinel community columnist Ray Buursma writes, American workers got what they deserved. Some of the things he says might resonate with many of us,

Remember the Reagan standard? Are you better off today than you were a decade ago? Two decades? Three? Unless you make more than $380,000 a year, the answer is no. In fact, your standard of living over the last quarter century has actually decreased while millionaires have added 30 percent to their net wealth. Why? Two reasons.
First, hundreds of thousands of manufacturing jobs went overseas while the politicians you elected did nothing to stop them. Yet you continue to elect leaders who offer nothing but tax cuts, as if that would stem the flow of disappearing jobs.
Did you demand your leaders address America’s trade imbalance or continuous outsourcing of jobs? Did you demand your leaders require foreign countries to buy a dollar’s worth of American goods for every dollar of goods they sell here?
No and no. You didn’t bother.

Buursma writes that instead of resenting people who make more because they are in a union, people should join a union and fight for your job, wages and benefits. He continues,

Maybe you’re thinking, “I’m not a union worker, so this doesn’t affect me.”
Stop being stupid. Union benefits provide a standard other companies have to match, or at least come close to. When those benefits are cut, yours are, too. Or do you think you operate in your own little employment vacuum?

Agree or disagree, please click through and read his entire piece.
Whose Fault?
There is no question that things are not going the way they should be going. We see decline all around us — all pointing back to the changes made after the election of Ronald Reagan. Tax cuts led to massive debt. Deregulation led to mine, oil and financial disasters that cost us more than deregulation ever saved. The infrastructure is crumbling. It seems like we are entering third-world status.
So is it the fault of American workers that their wages and benefits have declined as jobs are shipped overseas?
I don’t blame working people. After all, they’re working! So they’re busy, and stressed, and focused on work. They can’t be expected to keep up with the little details and facts and nuances — especially when they are attacked daily with a barrage of well-funded and professionally crafted corporate/conservative propaganda!
This assault on information and truth has been going on for decades. Under Reagan there was a dramatic shift toward “market” — one-dollar-one-vote — sources of information and away from objective, citizen-oriented democratic — one-person-one-vote — sources. This market-sourced information necessarily reflects a conservative/corporate view because it is driven by money and profit instead of humanity and humanity’s needs.
Information for Democracy!
How do we counter the corporate/conservative assault on truth? One answer to the problem of getting accurate, objective information is to use (and support) alternative sources that are not offered by the conservative/corporate machine. Here is a list of a few links to alternative news sources. Please send these to relatives, friends, and even post them to conservative forums.

PLEASE suggest more progressive information and news sources in the comments! And forward this to others.
Added suggestions, not necessarily just news:
AFL-CIO Now Blog
Manufacture This
Scholars & Rogues
Crooks And Liars
Firedoglake
Black Agenda Report
Washington Monthly
Eschaton
AMERICAblog
The Raw Story
Agonist
Today’s Workplace
Republic of T
Democrats.com
Hullabaloo
Jack and Jill Politics
Liberal Oasis
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Can’t Get By On $250K? Try Leaving Your Bubble!

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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.
The Washington Post ran a story how hard it is for a family making only $250K a year. Just who could a story like this be written by and for? How many ways does this story mislead its readers? If you want to write about hardship write some stories about and for the rest of us!
Over the weekend the Washington Post carried a story labeled as a “Fiscal Times” piece, Where does $250,000 a year go? Summary:

It’s the annual income that President Obama and others have repeatedly used to define what it means to be “rich” in America today. … Just how flush is a family of four with a $250,000 income?
… The bottom line: Living in high-tax areas on either coast can leave our $250,000-a-year family with little margin.

Richard Eskow hit the nail on the head in his post, A Quarter Of A Million Little Pieces: Pete Peterson & The Washington Post Have A New Fiscal James Frey, writing,

This “analysis” was written by someone named Karen Hube, and it’s based on two phony premises: First, that “President Obama and others have repeatedly used (that level of income) to define what it means to be ‘rich’ in America today,” and second, that it’s a hardship to get by on $250,000 a year.

(Please read Richard’s post, because he gets into what the Fiscal Times is, and why it carries stories like this one.)
The story claims that President Obama and others label them as “rich” because $250K would be the lower borderline if the Bush “tax cuts for the rich” expire. But this misleads readers because the family making $250,000 will NOT see any tax increase at all. If you understand how tax brackets work you know that only amounts above $250K get taxed the additional 4.6%, so someone making $250,001 will pay an additional tax of $0.046. Yes, that’s right, four point six cents. The amounts become large only with very (very) high incomes, but those incomes are so high that the additional tax is still almost nothing. A person making $1,000,000 would pay an additional tax of $2,875 a month on their $83,333 a month of income. (Sorry, it’s hard to write a number like that without shouting.)
So Who Is The Story For?
Just who is going to feel the pain of the people who “only” make $250K? The Joneses in the story actually have retirement savings and life and disability and health insurance! They have student loans to pay off because they went to expensive universities and they will have the high expenses to send their kids because their kids will, too. 98% of us understand that when we read this story. Since anyone who makes less than $250K is going to know better from their own experience than to believe what they read in this story, who is this story written for? Hint: the Washington Post is in … wait for it … Washington!
What about the rest of us? If $250K a year — the borderline for entering the top 2% — leaves the Joneses “with little margin” then shouldn’t there be 49 articles for every article like this, explaining how people who make less than $250K are doing — since that is almost all of us? Shouldn’t there be 49 articles about how 98% of us are not getting by, and have no margin at all?
Anti-Government
The story tries to make an anti-government point by claiming that taxes are squeezing the Joneses, complaining that the Joneses “only” take home $173K after all taxes (incl cell phone tax). (That is “only” $14.4K a month take-home.) But a careful reading shows that the opposite might be the case. It might really be limited government that is squeezing them:
College Costs: One of the factors in the cost analysis is college costs. They are paying off high student loans, and are getting ready to send kids to expensive collected. But college costs are so high because we have less government, because of tax cuts. This is clearly true in California, for example.
Child Care: Child care costs are high because government is “limited” in our conservative on-your-own society.
Health Care: The Joneses health insurance bill is another product of our on-you-own limited government here. Health care is covered anywhere else.
Retirement: The Joneses are saving a lot for their retirement. This drain on their income is high because in conservative America you are on your own. Corporations got rid of most pensions through the 401k scam, while the Social Security system is inadequate.
There are many other areas where limited government pouts a squeeze on people: insufficient transportation options and high energy costs due to fossil-fuel reliance among them.
They Did One For The Rest Of Us
To their credit the Post also has a story this weekend, In the U.S., Christmas remains a great divide, but the story misses the point by blaming the recession for the difficulties regular people face,

A new division is emerging in America between those who have moved on from the recession and those still caught in its grip.
This holiday season, those two worlds have been thrown into stark relief: At Tiffany’s, executives report that sales of their most expensive merchandise have grown by double digits. At Wal-Mart, executives point to shoppers flooding the stores at midnight every two weeks to buy baby formula the minute their unemployment checks hit their accounts. Neiman Marcus brought back $1.5 million fantasy gifts in its annual Christmas Wish Book. Family Dollar is making more room on its shelves for staples like groceries, the one category its customers reliably shop.

But many, many people with jobs are having a hard time buying baby formula, too, these days. It was like this for more and more people before the recession. In fact, many say that is why there is this bad economy. Where I live people go through my recycle bin looking for cans – and were doing so before the recession. People living on Social Security are having a very, very hard time while the people making $250K “with little margin” can talk casually about cutting the program in order to avoid having the cap lifted causing them to pay a bit more into the system.
The Post story attributes the divide to the “grip” of the recession and not to the problems caused by policies that have led to our intense concentration of wealth. The problem is that our economic system for thirty years has been increasingly rewarding a few at the very top, and not the rest of us. Tax cuts, bailouts and bonuses for them, government cutbacks and stagnant wages for us.
But flawed as it is, that is one down, only 48 more stories about the other 98% to go to catch up with the one about getting by on only $250K.
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Tax Cuts Now Force Terrible Budget Cuts Later

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Deal or No Deal? OurFuture.org’s Bill Scher and Dave Johnson make their cases for and against the preliminary tax cut deal between the President and Republican leaders. Dave Johnson’s case against the deal is below. Click here for Bill Scher’s case for the deal.
The White House has announced a deal on extending tax cuts for the rich, in exchange for restoring unemployment benefit extensions for those out of work more than 26 weeks. They are also going to cut the Social Security tax and give more tax breaks to businesses. I think this is a mistake.

Continue reading →

Extend Unemployment Benefits Not Tax Cuts For Wealthy

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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.
In a stunning public display of just who our government works for and who it does not work for, unemployment checks for people out of work longer than 26 weeks run out tomorrow night. Congress, meanwhile, is caught up in a debate over extending a special tax break for the few people making more than $250,000 a year.
This is the situation. Here is a chart of the number of people unemployed for 26 weeks or longer: (click to enlarge)

Here is a chart of the economic divide, showing members of Congress receiving employment benefits from Wall Street: (don’t click the pig is big enough already)

Yes, the extended unemployment benefits that go people who have been unemployed more than 26 weeks will run out at the end of November – tomorrow night. Congress did not extend this program because Republicans blocked it, saying the cost is too high, since we spent so much money making sure that the banksters continue to receive their bonuses. Instead of acting on extending these unemployment benefits Congress is currently debating extending a special tax break that goes only to wealthy people making more than $250,000 a year.
The Human Cost
The terrible human cost doesn’t even get considered. According to the Ayn Rand terminology that conservatives favor, considering the human cost would be wrong and would enable the parasites (us) to feed off of the producers (the wealthy few).
Pennsylvania: Food pantry organizers hope stockpiles hold up in case unemployment benefits run out,

Unless Congress extends unemployment benefits, an estimated 83,000 people will see their benefits run out in December and another 200,000 in the first four months of 2011, according to the state Department of Labor and Industry.

Kentucky and Indiana: Thousands in Kentucky and Indiana face lapse of unemployment benefits,

Amid an anti-spending atmosphere in Washington, funds to extend unemployment compensation for more than 33,000 Kentuckians and nearly 67,000 Hoosiers are likely to run out next month.

Maryland: Benefits due to end for thousands in Md.

Thousands of Marylanders face being cut off from unemployment benefits next month — just in time for the holiday season — as Congress remains undecided on whether to extend the payments in one of the worst job markets in decades.
An estimated 2 million people nationwide are slated to lose benefits, including 14,000 in Maryland. And more than 30,000 laid-off Maryland residents will exhaust their benefits early next year. The phase-out is happening because a federally funded program that gave residents payments beyond the normal 26 weeks lapses on Tuesday.

Iowa: Interactive map shows unemployment by county,

Extended federal benefits lapse on Nov. 30, giving Congress only two days to pass an extension. If they fail, hundreds of thousands could lose benefits. Failure to pass an extension would mean nearly 44,000 Iowans will see an immediate reduction in benefits and 8,700 Iowans will be prematurely cut off completely. Every week beginning Dec. 1, another 1,500 Iowans will lose their benefits.

Michigan:
Flint: Many Genesee County families could lose unemployment benefits without vote from Congress
Grand Rapids: With unemployment benefits to end this month, Gov. Jennifer Granholm makes plea for extension,

Michigan, with the nation’s second-highest unemployment rate at 12.8 percent, would see 168,520 unemployed workers lose their benefits between December and April 30, according to new figures from the Michigan League for Human Services. But even if an extension is granted, 13,011 will lose their benefits because they will have received the maximum 99 weeks of assistance.

Ohio: 2,332 Muskingum County residents face losing jobless benefits,

Statewide, 301,404 people will lose jobless benefits in the same window.

Arizona: Many Arizonans on verge of losing jobless benefits,

PHOENIX — About 90,000 Arizonans will lose their unemployment benefits soon unless Congress passes an extension, according to the Arizona Department of Economic Security.

Alabama: Unemployment expiration could leave thousands without benefits,

Unless Congress extends unemployment benefits by Nov. 30, Alabamians could begin losing unemployment compensation and nearly 58,000 residents could be off the rolls by April.

Mississippi: Editorial: House failing the jobless,

An effort to extend unemployment benefits past Nov. 30 for an estimated 53,000 Tennesseans, 8,000 Arkansans and 6,600 residents of Mississippi fell short of the necessary votes in the House of Representatives last week.

Colorado: 150k unemployed Coloradoans at risk of joining more than 26k with no UI benefits,
North Carolina: Unemployment Extension Standoff Makes NC Woman ‘Feel Like A Pawn In A Chess Game’,

“My last check will be the week ending Nov. 30 unless they come back on Nov. 29 and miraculously vote an extension,” said Millen, who lives in Charlotte, N.C.

Will Congress act before tomorrow night and extend unemployment benefits to people who are suffering because of the greed of a few?
Action Items
Click here to call your members of Congress and demand they act!
Sign this petition to Congress: Continue the Federal Unemployment Insurance Programs
Sign the petition: Tell Congress: Don’t extend the Bush tax cuts for the wealthy
Visit unemployedworkers.org
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Does It Matter What The Public Wants Or Needs?

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
Does it even matter what the public wants anymore?
I guess that’s a rhetorical question these days because more and more obviously the answer is no. It matters what the plutocrats want, and they know how to get what they want. Public opinion is “engineered” or at least “managed.” When it can’t be managed it is ignored and the effort shifts to our elected officials, who are led to believe the public wants what the plutocrats want using elite opinion leaders, astroturf, front groups or flat out cash.
According to polls (and most of these by overwhelming margins):
Things the public doesn’t want:

  • Tax cuts for the rich. For example, this morning’s Progressive Breakfast hilited:

    Another poll shows support for ending Bush tax cuts for the wealthy. McClatchy:”…51 percent want to extend the tax cuts only for households making less than $250,000 a year, and 45 percent want to extend the tax cuts for all … Those who want to extend all of the tax cuts, including for the wealthy, include Republicans, tea party supporters, conservatives, Southerners and Westerners, Independents were closely divided, with 49 percent for extending only the ‘middle class’ tax cuts, and 48 percent for extending all of them.”

    P.S. Campaign for America’s Future and CREDO Action have a petition, Tell Congress: Don’t extend the Bush tax cuts for the wealthy. Click the link, and add your voice.

  • Cuts in social security. Isaiah Poole wrote last week, Nobody’s Buying The Cut-Social-Security Line,

    A whopping 82% of respondents in the poll oppose Social Security cuts for the purpose of deficit reduction, while only 15% support cuts. What’s particularly telling is the striking uniformity of opinion across the political spectrum: 83% of Democrats, 82% of Republicans, 78% of independents and 74% of Tea Party supporters.

    P.S. Campaign for America’s Future has a petition, Tell President Obama to Reject Social Security Cuts. Click the link and add your voice.
    P.S. Strengthen Social Security is holding a National Call Congress Day on November 30. Click for details.

  • Cuts in Medicare. Republicans figured this out, and ran ad after ad after ad (after ad after ad) telling voters that Democrats should be thrown out of office because they cut $500 billion from Medicare. You saw the ads. (and saw them and saw them and saw them.)
  • Cuts in anything. (Actually, polls show that the public wants cuts in foreign aid.)
  • Corporate-written “free trade” schemes. As Leo Gerard points out in Corporate Rewards: Controlling U.S. Trade Policy,

    In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

    Things the public wants:

  • Jobs. The official unemployment rate is 9.6%. The total including “underemployed” is 15.9%.
  • Unemployment benefits extended. Poll: Majority of voters support another extension of unemployment benefits,

    In a poll released Monday, 73 percent of voters say it’s too early to cut back benefits for those who are struggling to find work as unemployment rate hovers at 9.6 percent….

  • A plan to revive American manufacturing. Election Day Poll: Voters Weren’t Backing Extreme Right Agenda,

    Eighty-nine percent of those surveyed agreed with the statement that “America is falling behind” in the global economy and that “we need a clear strategy to make things in America, make our economy competitive, and revive America’s middle class.”

  • Rebuild America’s Infrastructure. From the poll cited above,

    Significant majorities in the poll also supported new investments in infrastructure through a national infrastructure bank, and a five-year strategy for reviving manufacturing in America

    So there are things the public clearly wants and doesn’t want. These things are significantly at odds with the things the plutocrats want. If we are still a democracy we will get the things the public wants. If we have completed the transformation to a plutocracy we will get the things the plutocrats want. That’s the definition of the terms.
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    • How Tax Cuts For The Rich Made Corporations Predatory

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    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

    America used to have a top tax rate of around 90%. This meant that after a person earned a lot of money in a year, additional income beyond that amount was taxed at the higher rate. Back then government worked a lot better. We didn’t have deficits, the schools and public universities were better, there were enough police and firefighters, the courts were not overwhelmed, even the IRS was better. Most important, our country’s infrastructure — the soil in which business thrives — was kept in good shape so the country was more competitive and livable. And all of this meant that the very people who were paying those top rates benefited because their businesses did better.

    Government and the services it provides aren’t all that has changed for the worse since we cut tax rates for the very, very rich. It caused the relationship between big businesses and the rest of us to deteriorate, too. Here is why.

    When top tax rates were high it took time to build up a fortune. So businesses had to depend on the health of the communities around them to help keep them growing over a long period. They had to plan and act long-term. Businesspeople had to carefully build up solid businesses that served their customers and kept them coming back. And they had to train and hold on to employees because their experience was needed.

    After the top tax rates were lowered people could reap huge fortunes in a hurry. This changed everything. It created incentives for people to do things that we can now see have harmed our country. Quick-buck schemes for short-term profit became the business model. It made more sense to run up high debt, cut for very high short-term profit or just sell off businesses rather than invest and build build carefully for the long term. Cost-cutting was the name of the game. So cutting R&D and training and quality and support, closing factories and outsourcing jobs made more sense than investing in new equipment and training & retaining a good workforce. Managers who held to the old-fashioned serve-the-customer and support-the-community model faced the private equity buyout — where companies become buy-and-sell commodities with workers, customers and the country as costs.

    So big corporations became predatory, caring little for customers, communities and country because executives planned to get rich quick and leave soon. Businesses’ interdependence with the community went out the window. It made more sense to fleece the community with quick-buck schemes than to rely on its well-being over a long period of time. Short-thinking business models that cut employees to the bone and took advantage of customers began to make sense. Then, as communities fell apart, those few who benefited from such business practices could just fly away in their private jets or sail away in their yachts. The greater community was no longer of any use to them except as a crop to be harvested.

    Bring Back The 90% Top Tax Rate

    So it is time to change the formula. It’s time to bring back the 90% top tax rates. We can use the money to start paying off our debt. It is time to rein in our businesses and make them part of our communities again. The way to do this is to continue to help people become wealthy – just a bit more slowly, please, and bring us all along.

    Bring back the top tax rates of America’s golden years so we can all enjoy the benefits of our economy again.
    A top rate of 90%, phased in as income gets higher and higher, wouldn’t raise taxes at all for most of the people in the country but it would mean that the top 15 hedge fund managers would only take home an average of about $100 million a year. While bringing in only $100 million a year might be a terrible hardship for them, it brings up an important question for the rest of us: how much is enough? Especially when a few having so much means that the rest of us have much, much less and live in communities that are much, much worse off than they used to be.

    See also Tax Cuts Are Theft.
    And see Tax Cuts Are Theft: An Amplification by Sara Robinson.
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    How Tax Brackets Work — $250,001 Will Pay Five Cents More Tax

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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.
    This discussion of whether to get rid of the Bush tax cuts for the rich has been a learning experience. I have been listening on the radio and reading the comments at blogs. The main thing I am concluding is that people just do not understand how tax brackets work.
    When people talk about raising taxes on people “who make more than” a certain income they really mean that they are going to raise it ONLY on the income that comes in after a certain income is received, not on the person’t entire income.
    Here is what I mean. Suppose they say they are going to raise taxes on incomes above $250K. People seem to think that this means if you earn $250K plus a dollar, that you owe an additional tax on the entire $250K. This is not correct. I actually hear stories about people who give away money, and do other things to avoid going “into a higher bracket” because they think they have to pay additional taxes on their entire earnings.
    Here is how it really works. What happens is that the first $250K is taxed just like it has been, but anything that is made over $250K — and only the amount over $250K — is then taxed at the higher rate. The tax on the amount below $250K is not changed.
    Example: Suppose the tax increase is 5% on income over $250K. This means that a person who reports income of $250K plus one dollar will be taxed an additional 5 cents. FIVE CENTS!
    Yes, that’s right, if it is 5% they are talking about then it means a 5 cent tax increase on people who make $250,001.
    Let me repeat that. If you make $250,001, and they raise taxes 5% on people who make over $250K, then you will have to pay 5 cents more. Five cents. F.I.V.E. C.E.N.T.S. That is what people are so upset about. 5 cents.
    If it is 5% a person making $260K might pay an additional $500. That’s right, the proposed tax increase is approx. $42 a month on people making $260K, about $21,600 a month. Forty-four dollars out of twenty-one thousand. THIS is what all the right-wingers are screaming about. THIS is what all the Ayn Rand cultists are threatening to stop working over. THAT is how tax brackets work.

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    The Middle Class Squeeze Is A Result Of LOW Taxes

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    This post originally appeared at Speak Out California
    It is a popular misconception that taxes add to the squeeze on the middle class. But it isn’t tax increases that have squeezed the middle class, it’s tax cuts. It may be hard to believe (after so many years of constant anti-tax rhetoric) but here is why.
    The middle class IS squeezed these days. There are pressures and long hours at work, long commutes, health insurance costs, housing costs, food and gas prices rising, and wages are not keeping up — they haven’t been for a long time. But it is not a coincidence that the middle-class squeeze began at the same time as the corporate-funded anti-government, tax-cutting fervor. In fact a good case can be made that many of the reasons the middle class feels squeezed are the result of pressures brought about almost entirely FROM the effects of tax CUTS and cutbacks in government services, regulations and enforcement that went along with the tax cuts.
    There are direct and indirect relationships. One example of a direct relationship is the dramatic rise in the cost of a college education. Sending kids to college has become extremely expensive. And this places a very hard squeeze on parents who want their children to get a degree. But here in California tuition was very, very low before Proposition 13. Tax cuts directly led to this squeeze on the middle class. (And remember, most of the property taxes that were cut were on business property.)
    Indirect results include rising energy prices from cutbacks in government R&D and subsidies for oil alternatives as well as longer commutes as the government cuts back on transit solutions like buses, trains and roadbuilding or improvements. Health care costs continue to rise because of government inaction and deregulation — the result of the anti-government sentiment encouraged as part of the the anti-tax campaign. And insurance costs rise while coverage is reduced or even denied as the government cuts back on regulation and enforcement. (My wife is the one who brings in the health insurance for our family. Every year she gets a raise, but every year the amount taken out of her check to cover her portion of the health insurance payment goes up by more than her raise, and her take-home pay is lower. So more squeeze.)
    Other areas where the anti-government, anti-tax campaign has increased pressure on the average person is at work. Anyone that works for a corporation is feeling the extra pressures there. As government of, by and for the people declines corporate power fills the vacuum.
    And there are so many more areas where we are squeezed by this increasing dominance of corporations in our lives. As government — the power of We, the People — diminishes, the corporations swoop in to pick us clean. How many examples of corporate power coming to dominate over people power can you think of?
    Click through to Speak Out California

    Tax Cuts make Us Poor

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    This post originally appeared at Speak Out California
    Some years ago the corporate-funded anti-tax, anti-government advocates paid their way to become the dominant voice in our civil discourse. They said there was a magic, simple formula that would lead to shared prosperity. All we had to do was cut taxes, and everyone would have more money.
    Everyone wants to have more money so this sounded wonderful. It is always a seductive argument to tell people that you have a magic formula that can make things better for them. One example is machines that create as much energy as they use — or more. A common myth is that doctors are conspiring to hide the cure for cancer because it would put them out of business. Another is that there is a formula that turns water into gasoline — or lead into gold.
    “Just cut taxes, and we will all have more money.” “Taxes take money out of the economy.” “It’s your money and you should decide how to spend it.”
    “But,” some people asked, “where will the money come from to pay for our roads and schools and all the things that have made us so prosperous?” The seductive response from the tax-cutters was that government is an anonymous, incompetent, inefficient “them” that spends too much money that we could all have in our pockets, and if we just cut out waste everything would be all right. Just cut the waste.
    The thing was, whenever one tried to pin them down on specifics of this waste they would never really explain where all that fat really was that they were going to cut — at least not in quantities sufficient to match their tax cuts. Don’t worry, put us in power, cut the taxes, and it will all sort itself out.
    So eventually we fell for it and cut taxes and put the anti-government people in power. When we noticed that their tax cuts went mostly for corporations and the very rich, they said don’t worry, the money would trickle down to the rest of us. So we quieted down and waited for the magic to happen. When we noticed that the corporations and wealthy were getting richer and richer while we were losing our pensions and health insurance and jobs, they said don’t worry, tax cuts make us richer. We still didn’t understand that you and I and the regular people of California were not part of their “us” that would get richer.
    The fact is the public officials that We, the People had elected had done competent jobs and there just wasn’t really much waste to cut. Why would there be? The people that we had elected had been good managers of our money. Democracy and accountability require open, transparent processes that the corporate anti-government, anti-tax advocates labeled as “inefficient bureaucracy.” That was the waste they had been talking about – the oversight and transparency of good government! Our elected officials had put these systems in place and they had made sure there was no waste — it was a myth.
    Our government had been humming along, paving the roads, educating our children and investing in projects that led to modern wonders like the Internet. And we had been enjoying the resulting prosperity. California had the best public schools, colleges and universities in the country. We had the best roads, courts, parks, libraries, health care system, water projects and most innovative and open government and this investment had led to a thriving economic ecosystem.
    So instead of cutting imaginary waste we started cutting out this engine of prosperity. We cut the schools and the road maintenance and everything else. The education system started getting worse and the roads and other infrastructure started deteriorating. California fell from first to near the bottom on many scales. Companies started leaving the state because of the deteriorating infrastructure and lower education levels.
    Then when cutting our own services wasn’t enough we borrowed money to cover those tax cuts and pay for what government was left. We borrowed and borrowed and borrowed. We were just like the homeowner who refinanced every year as prices went up it seemed like the gravy train would run forever.
    Today the borrowing is catching up with us. As so many homeowners are learning to their dismay: borrowing means payments. And borrowing more means larger payments. In California the payments on our borrowing just happen to be pretty close to the amount of our budget shortfall. The same is true of the federal government.
    Now we approach a day of reckoning for our tax cuts. The bill has to be paid, and the people who received the big tax cuts are pointing the finger at you and me. We can continue to cut out government and lay people off. We can continue to cram more and more children into classrooms with fewer and fewer teachers. We can have longer and longer lines at the DMV. We can close parks. We can have fewer police patrols and fire stations and ambulances and health and safety inspectors. We can just get poorer and poorer.
    Or, we can start to close loopholes like the one that lets wealthy people avoid sales taxes on yachts and private jets while the rest of us pay sales taxes on everything we purchase. We can start to close loopholes like the one that lets oil companies pump our oil out of the ground without paying us and then sell our oil to us. We can start to raise taxes on the wealthy and corporations who prosper because of the roads and financial and legal system we built, and whose taxes were cut leading to this mess. They need to stop simply taking and start paying their fair share. We can do these things and start to restore the thriving economic ecosystem we once had.
    Click through to Speak Out California

    What The Reagan/Bush Debt Means To You

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    As I write this, the US national debt is about $9.17 TRILLION dollars. This debt is the amount we have borrowed to pay for our government since the Reagan tax cuts – compounded by the Bush tax cuts. This is because of a choice we made – yes I say WE, because this government is US – to borrow and pay later instead of pay now.
    Don’t for a minute think that you do not owe that money. It comes to about $30,000 for each American, including infants. If you are a family of four you now owe about $120,000 thanks to those tax cuts. YOU owe this money, even though the tax cuts have primarily gone to the very rich. You WILL be paying it, one way or another. Don’t think that debt like that just goes away.
    PLUS now each year we pay about $433 billion for interest on that debt. That amount, of course, rises every year. So in addition to owing all that money we have to service the debt by paying $433 billion every year. That amount is larger than the current federal deficit – which means if we had not cut those taxes and borrowed all that money in the past we would have $433 billion more each year to spend or save AND we would not owe $9 trillion.
    I do not understand how we tolerate this situation. Yes, it happened because we listened to lies, but how many of our candidates are seriously talking about the changes that need to be made to fix this?

    The Gross National Debt