Tag Archives: taxes

Capital Gains Tax Cuts Prove: Rich Win, You Lose

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Why are “capital gains” taxes so much lower than taxes on other income? The reason capital gains taxes are lower is because most of the income of the rich is from capital gains. And the reason most of the income of the rich is from capital gains is because capital gains taxes are lower.
Our System
“Capital gains” are the gains, or profits, made from the investment of capital — the big pools of money that a few of us have the great responsibility and burden of being stuck with. The theory is that the few among us who have bundles of money (capital) use that money to start businesses or buy stocks or property (or race horses) and thereby “create jobs.” (For more on how businesses and the wealthy “create jobs,” click here and then click here.)
If the value of the business or property (or race horses) goes up those wealthy few make even more money (gains). This ability to obtain these huge gains is a benefit offered to those who have lots of money in the first place. Thus the term “capital gains.” These gains are differentiated from the gains the rest of us make from … working … because the rest of us do not have the intelligence and wisdom of having those huge pools of money to invest.
Incentives
In our system the income gained from these investments by these wealthy few is therefore taxed at a special very, very low rate, because they have the wisdom and intelligence to have large sums of money available to invest, and the rest of us do not. This low rate is considered an “incentive” to those who have these large accumulations of money, to try to persuade them to make these huge profits. They require these “incentives” to make huge profits, because otherwise they might not be interested in making the huge profits that can result from owning most of the property and stock and race horses (and yachts and private jets and multiple homes and million-dollar cars.) So that is why they must be given the incentive of these very special low tax rates – to persuade them to make investments that reap huge profits that they otherwise would not want to make.
Government Interference
Of course, the wealthy usually complain when government gets involved in creating “incentives” and “picking winners and losers” in ways that help We, the People, saying government interference distorts decision-making. But when the “incentive” is special low tax rates to persuade the wealthy to invest and make huge profits, that’s different. Because it is, that’s why. Shut up. Hey, look over there!
Job Creation
This reaping of huge profits from “efficiencies” like downsizing, laying people off and making the remaining workers do 2 jobs each in the same amount of time, outsourcing, buying companies and firing everyone and then selling off the pieces, offshoring, force reductions, firing people and then bringing them back as “contractors” at half the pay, relocating factories out of the country where people don’t have the protections of democracy, replacing workers with machines, etc. is called “creating jobs.”
Effect Of Cutting Capital Gains Taxes
In 2001 these special low tax rates for the very rich “job creators” were made even lower. This was done in order to provide even more incentive for them to make even more profits from their large accumulations of property, houses, cars, yachts, private jets and race horses, so that these “producers” – the “job creators” – would produce even more and create even more jobs. (Click here for more on who and what really creates jobs.) The result of these 2001 tax cuts was spectacular: eight years of the lowest economic growth and lowest job-creation rate since WWII, followed by the collapse of the entire financial system and mass layoffs of millions of us.
So the 2000s brought upon us an even greater need to provide incentives for the producers to create jobs! In fact, each time these incentives are increased and jobs do not result there is even greater pressure to provide even more incentives to the “job creators.” A great system, this, if you’re already rich, no? The worse things get, the more you get, because you had the wisdom and intelligence to be sitting on a huge pile of cash. Brilliant! (See Did The Rich Cause The Deficit?)
So with all this in mind, today the Washington Post looks at these super-low tax rates for those who have large accumulations of money, in Capital gains tax rates benefiting wealthy feed growing gap between rich and poor,

For the very richest Americans, low tax rates on capital gains are better than any Christmas gift. As a result of a pair of rate cuts, first under President Bill Clinton and then under Bush, most of the richest Americans pay lower overall tax rates than middle-class Americans do. And this is one reason the gap between the wealthy and the rest of the country is widening dramatically.
[. . .] Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.

Repeat, “about half of all the capital gains have gone to the wealthiest 0.1 percent.”
The Washington Post story explains the strongest reason why it is so important for legislators to pass these lower tax rates to “incentivize” the wealthiest to invest and make huge profits:

Some lawmakers who have backed low tax rates on capital gains have later been hired by the financial industry.

So you see, it is very clear why it is very, very important for members of Congress to make sure that there is a special very, very low rate of taxation for the wealthiest few. And the result?

The 400 richest taxpayers in 2008 counted 60 percent of their income in the form of capital gains and 8 percent from salary and wages. The rest of the country reported 5 percent in capital gains and 72 percent in salary.

Yes, that is the very same 400 wealthist who have more wealth than 60% of all Americans combined. (That’s right, I had it wrong when I wrote that it was more than 50%, it is now more like 60%.)
So here is how it is: the rich are rich because they are smarter than the rest of us. And what is the proof that they’re smarter than the rest of us? That’s easy:
Because they’re rich!
Take a moment to browse a collection of pictures of the job-creating results of these special exemptions from taxation enjoyed by these wealthiest, in Nine Pictures Of The Extreme Income/Wealth Gap. And read more about the ideology behind this idea that the wealthy are “producers” who “create jobs.”
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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Contract For The American Dream And The Emergency Jobs Bill

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Rebuild The Dream
As I wrote earlier in Ten Years Ago We Were Paying Off The Nation’s Debt. But Then We Elected Obama., the The American Dream Movement is rolling out their Contract for the American Dream. The Tea-Party-fascinated press is largely ignoring this, but this movement represents the majority of the public, and can’t be ignored for long.

Today on a call with bloggers and the press to announce the The American Dream Movement Van Jones described the movement’s origins. He has been traveling around the country giving talks and talking to people, and found that it seemed that the American people had smarter solutions to our problems than our politicians seemed to. So he helped set up an “open source” process to gather ideas from regular people. 131,203 participated, held 3,600 house meeting, and came up with 29,000 ideas. These ideas have been distilled down to the ten most popular ideas, which are now the Contract for the American Dream.
No Help From FOX News
Unlike the Tea Party, they had “no help from FOX TV or the billionaire Koch brothers.” And unlike the Tea Party, which began with much smaller numbers, the American Dream movement is getting almost no press attention.
The Emergency Jobs to Restore the American Dream Act

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Ten Years Ago We Were Paying Off The Nation’s Debt. But Then We Elected Obama.

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Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait…
Something Happened

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A Bipartisan Move Against Democracy

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Step back from the day-to-day, hour-to-hour details of the debt-ceiling negotiations for a minute and look at the bigger picture. Look what we’re in the middle of. Our legislators are being stampeded by a manufactured “crisis” into profoundly changing the nature of our country and who our economy is “for,” on extremely short notice, against the clear wishes of the majority of the public. They are doing so without following the long-established process for due consideration of important issues; they are not holding hearings, not giving time for public input, not going through committees… The act of negotiating with these hostage-takers at all is itself a violation of our established, democratic system. The question to ask is not, “What painful cuts should we agree to to save our country,” but rather, “Why are we engaged in this anti-democracy exercise at all?”
A Functioning Democracy?
In a functioning democracy an informed public considers and debates its options and then comes to a decision on how best to proceed. In a representative republic our representatives are called “representatives” because they represent us, and vote to implement our wishes.
The founding idea of our country is that We, the People are in charge, and our country exists to promote the common good — “welfare” — of all of us. Elected officials take an oath of office to protect and defend our Constitution, which begins with those words, “We, the People.” Over time we have built up a system of institutions, processes, procedures, traditions and mechanisms to implement this founding idea. The oath they take is to protect and defend this system.
Oath Of Office: Protect and Defend Our System
Today all of this seems all to have fallen away from us. A fanatical but extremely well-funded minority is using a manufactured “crisis” to hold the country’s economy hostage. As ransom — if we don’t want the country to go into default, destroying our economy — they demand that we force fast and dramatic changes to the nature of our country and our social safety net. These changes will take effect before the public can react and gather the forces of opposition. They will be “locked in,” creating “facts on the ground” that we have to deal with, and which are extremenly difficult to undo, no matter what We, the People want or need.
Rather than honor their oath of office to protect and defend our We-the-People system from all enemies, foreign and domestic, and to listen to “We, the People,” and to promote the common good of all of us, our leaders have instead entered into negotiations with the hostage-takers. The act of entering into these negotiations is by itself an agreement to work outside of our established system, and the result of these negotiations will be to change the equation of who our system is for.
Crisis?
Is there really a “debt crisis” necessitating such a dramatic and immediate response? Just 10 years ago the “crisis” we faced was that we were paying off the debt too fast and it was claimed this would lead to socialism as government surpluses were invested in private assets. So taxes for the wealthy were cut. At the same time, enabled by another “crisis,” the military budget was dramatically increased — in ways that enriched “private contractors.”
The result of these changes was an immediate return from budget surpluses to the dramatic budget deficits initiated by President Reagan. Then-President Bush called these deficits “Incredibly positive news” precisely because they would bring on a debt crisis that would enable today’s stampede to change our system of government. The debt “crisis” was intentional.
Cause Of Deficits and Debt
The increase of deficits beyond $1 trillion occurred in President Bush’s last budget year — the consequence of the financial collapse and the resulting drop in tax revenue combined with increases in social safety-net program payments. But the underlying cause of the deficits was the Bush tax cuts and wars. Today, in How the Deficit Got This Big, the NY Times offers charts and figures that show that:

…under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.

As for the causes of the longer-term debt picture The Center on Budget and Policy Priorities has put together this chart, explaining:


Longer term most of our country’s future debt problem is from tax cuts, increases in military spending, and the effects of the economic downturn. Most of the rest is because of our private healthcare delivery system. These “debt-ceiling” negotiations are not addressing these causes of the problem at all. Instead they are about using whipped-up panic over those intentionally-created problems to move the common wealth into private hands.
Not The First Time
This tactic of whipping up panic over a “debt crisis” has been used before to stampede legislative bodies into making radical changes on short notice, moving common wealth into private hands. In the post Debt Crisis? Really? I hilighted a 1993 example from Canada that was very similar to today’s. From the source’s account,

By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets.

There is example after of example of the use of manufactured “crises” to panic and stampede legislatures into privatizing public wealth, just as we are experiencing today.
Democracy Eroded
What is happening here is not supposed to be the process of decision-making used in a representative democracy. Instead what we are experiencing is designed specifically to engineer circumstances that persuade us to bypass established processes and safeguards. These safeguards are in place to protect us from making the very sort of panic-driven decisions that we are about to make. And they are designed to “lock in” the changes, so we can’t reverse the damage when we are able to catch our breath.
How can our leaders not recognize and resist what is being done here? Have our own leaders drifted so far from America’s traditional love of democracy that they accept this and fall into playing the game?
Elitist Mindset
It seems that our own leaders have fallen into an elitist mindset, which enables them to go along. Persuaded by decades of corporate-funded propaganda, many now believe that the public doesn’t know what is good for them, that the things democracy entitles them to — “entitlements” — will bankrupt the country, that taxing the wealthy and corporations — the “job creators” — will harm the economy. They do not seem to see how much of our wealth is now flowing to a very few at the top of the pyramid. The fact that taxes on the wealthiest have been cut from a top rate of 90% all the way to a rate of only 15% for hedge-fund managers making billions — far lower than many of the rest of us pay — is ignored. And the fact that we did not have budget deficits when the wealthy paid higher taxes is also ignored. In fact, today just 400 people now have more wealth than half of our population, and the trend is accelerating. But many of our leaders believe that the things We, the People do for each other are a problem, and we must be protected from ourselves.
One example of the slow drift away from love of democracy is the recent “Deficit Commission.” This was a commission of elites — there were no teachers or unemployed or plumbers or disabled or poor people in that room — that was assigned to come up with ways to lower our budget deficits. They did not come up with any recommendations, but the leaders of the commissions came up with a plan of their own — to cut taxes on the wealthy while cutting the things that We, the People do for each other.
Again and again our elites try to create bodies like this that act as an external force they have to submit to, allowing them to escape accountability to voters.
These commissions come up with plans that benefit the wealthy few but violate what the vast majority of Americans want. They are designed to come up with recommendations that benefit the wealthy few, and are presented to Congress with “up-or-down-vote” procedures that leave legislators and voters with no recourse – on purpose. Pre-ordained conclusions with non-democratic force-through procedures.
“Super Congress”
Another example of this kind of anti-democratic, elitist drift was a proposal floated over the weekend to establish a “Super-Congress” — a Politburo of elites, that sits above the Congress and is not accountable to the public. The idea is to save the people from themselves by creating a special 12-member panel of lawmakers who come up with proposals that the Congress must vote on, with no changes and an “up-or-down vote” to implement, thus bypassing the established, democratic system and keeping individual members from being held accountable for the results. The idea is to “tie the hands” of Congress, keep them from meddling, and get things done quickly before the public can rally opposition.
That this idea was even floated shows the extend of separation that exists between our elected officials and We, the People.
Public Will Revolt
Regular Americans are not currently following this, and are turned out because it is just one more Chicken Little coming out of DC. But the public will revolt when the final decisions are put in front of them. The public overwhelmingly supports Social Security and Medicare, and overwhelmingly want taxes increased on the wealthy.
So when the results are presented to them there will be trouble. And that is also part of the plan.
In the 2010 election Republicans campaigned on a theme that “Democrats cut $500 billion from Medicare” and won the election. In 2012 the public will be presented with hundreds of millions of dollars spent on campaign ads, crying out that “Democrats cut your Social Security and Medicare, while keeping taxes low for the rich.”
Think I’m kidding? They have already started.
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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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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Dems Should Vote For Clean Debt Limit Bill

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The House is voting on a “clean” debt ceiling bill today — a bill to raise the debt ceiling without any “hostage-taking” conditions. This is the right thing to do for the country and every Democrat should vote for this. Voting for a clean bill will draw the contrast for the public between those who are doing the right thing, and those willing to hold the world’s economy hostage to a make-the-rich-richer plutocracy agenda. Democrats who do not vote for a clean bill should lose committee assignments, parking places, even bathroom keys.
The Debt Ceiling
The country’s “debt ceiling” has been reached. This means that the government’s authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. The Congress must extend this limit, or the government will default on its bonds.
If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.
WHY We Have This Debt
In 1981 the Reagan administration dramatically changed the course of the country. They defunded government by passing huge tax cuts for the rich and massively increasing military spending, and began cutting back on the things We, the People (government) do for each other. The country cut back on maintaining — never mind modernizing — our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.
One major result of these changes, of course, was the huge budget deficits that accumulated into today’s massive debt. This was the plan from the start, to “starve the beast” by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government’s protections for the people, unleashing plutocracy.
Hostage-Taking Enabled: The Tax Cut Extension
This debate over the debt ceiling and hostage-taking follows the recent extension of the Bush tax cuts — another product of hostage-taking. At the end of the last Congress unemployment benefits for the millions of unemployed were running out. Republicans — having filibustered much of the legislation of the prior two years — held the extension of benefits “hostage” saying they would not let it pass unless the deficit-creating Bush tax cuts were extended.
Enough Democrats caved and passed an extension of the Bush tax cuts. This validated hostage-taking as a successful tactic while making the deficit much worse, setting the stage for today’s debt-ceiling fight.
The Vote Is A Trick
Today’s vote has been scheduled by the Republican leadership as a trap, trying to get some Democrats to vote with Republicans to support their hostage-taking agenda and create the appearance of bipartisan support for plutocracy. If the Republican position gets the support of enough Democratic members, Republicans can then demand deep cuts in Medicare and other programs that help people and hold corporate power in check, in exchange for their votes to allow the world’s economy to continue to operate.
From TPM: First Debt Limit Vote Today As GOP Looks To Divide Dems,

The vote is intended to expose fault lines within the Democratic caucus, with Republicans counting on sizable number of Democrats to side with them and bolster their case that Democrats need to agree to deep spending cuts as a condition to raising the debt limit.

Vote For A Clean Debt-Ceiling Bill
Voting for a clean bill stops government-by-hostage-in its tracks. Voting for a clean bill saves the world’s economy. Voting for a clean bill fights the plutocracy agenda. Voting for a clean bill saves Medicare, Social Security and the things We, the People do for each other. Voting for a clean bill is the right thing to do and doing the right thing is the right thing politically.
Call your member of Congress NOW and demand a vote for a clean debt-ceiling bill.

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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Republicans Announce Jobs Plan — This Time It’s Different

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Republicans announced something they called a “jobs plan” today. This time it’s different. It really is. This time it really will create jobs instead of just handing even more money to a few at the top at the expense of the rest of us. You might not believe this because Republicans sell everything by calling it a jobs plan. And what they sell is always tax cuts for the wealthy while cutting the things We, the People do for each other. And it always ends up messing everything up for most of us. But this time it’s different.
But This Time It’s Different
Republicans always offer something called a “jobs plan” and the plan is always tax cuts for the rich while gutting the things We, the People — a.k.a. government — do for each other. Their “jobs plans” always end up enriching the already-wealthy while messing things up really bad for us.
But this time is different because this time they actually offered something that is called a “jobs plan.” So there you go! And this time the plan is different because this time the plan is to cut taxes for the wealthy and giant corporations, cut government protections for working people and the environment, but also opening our borders to let in goods made in countries unhampered by democracy’s protections while cutting taxes on companies that offshore jobs. So Bob’s your uncle.
It will work. Republicans always promise their plan will work, and then it messes things up for most of us, but this time it’s different because this time they say the plan will work. So this time it is different.
The “Plan”
You can look over the official Republican job plan here (PDF): The Republican Plan for America’s Job Creators. Here is a summary of the points: (summary: cut taxes for the rich, cut the things We, the People do for each other, send factories out of the country.)

  • Require congressional (anonymous corporate campaign donations) approval of any significant federal regulation (overriding scientists and experts in the executive branch).
  • Let companies bring overseas (offshoring jobs) profits into the US without paying US taxes.
  • Pass “free trade” (more offshoring of jobs) agreements with Colombia, Panama, and South Korea.
  • Streamline the patent system.
  • Give more non-Americans visas to to take professional-level jobs here because “high-tech companies in America are struggling to hire qualified employees.”
  • Let the FDA approve drugs (Vioxx) and devices faster, with less testing.
  • Expand oil and coal exploration and production (Deepwater Horizon oil spill, climate change).
  • Cut government spending (Medicare, but don’t touch military) by almost $6 trillion over the next ten years.

(Note, regarding the phrase “job creators,” see Actually, “The Rich” Don’t “Create Jobs,” We Do.)
What’s New In This Plan?
Nothing.
But this time the plan is to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country. This time it’s different from those other plans to cut taxes for the rich, cut the things We, the People do for each other and send more factories out of the country.
The Name Is The Game
It’s all in the name. Republicans think giving a plan a name is what matters, no matter what the plan actually does. Say whatever you need to say, but do what you wanted to do all along. They believe that people will be fooled into thinking something does a certain thing because the name says that is what it does, regardless of the actual details and results. For example, their budget plan cuts government “costs” by eliminating Medicare and replacing it with something entirely different, but since it is still named “Medicare” it still is Medicare.
So today they are recycling the usual stuff and naming it a “jobs plan,” are we are supposed to think therefore it means it is a plan that will create jobs. But really, it means sending even more money to a few at the top at the expense of the rest of us and of our country’s future.
Been There Done That — Made A Real Mess
Everything they are proposing has been tried, and tried again, and has not worked. After Reagan took office they cut taxes, deregulated & gutted government, etc. terrible debt, trade deficits, the S&L crisis, wage decline, etc. resulted. After George W Bush took office they again cut taxes, deregulated, stopped enforcing the remaining laws and regulations, privatized government and contracted the functions to cronies, expanded oil drilling and opened the borders to trade with countries that pay very little and have no environmental protections, and we saw what happened.
We are living through the nightmare that resulted. Worldwide financial collapse. Tens of thousands of American factories closed. Millions of jobs lost. Millions of lost homes. Wars. Climate change unaddressed and worse. Terrible concentration of income and wealth. Terrible trade deficits. Terrible debt. Pensions gone, savings gone, heath care benefits gone, government rampantly corrupt, unprosecuted corporate fraud common, oil spills, mountaintops removed, miners killed … a terrible, terrible list of bad results that just goes on and on and on and on and on…
Some Republicans fervently believe that doing these things will help, but the rest of them understand exactly what they are doing. These are not stupid people, and all you have to do is look around to see what actually happens in the real world when you do these things. They do them precisely because these are the results.
The Party Of Wall Street And Billionaires
Here is a fact: today when you hear from Republicans you are hearing from Wall Street, giant oil companies, huge multinational firms and a few billionaires, period. OK, maybe you also get a dose of religious right with your tax cuts, but really they just say that stuff to get those votes, too, but what they actually do is tax cuts and policies that enrich the already-wealthy at the expense of the rest of us. And the things they do always mess everything up.
But this time it’s different. It really is.
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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Actually, “The Rich” Don’t “Create Jobs,” We Do.

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You hear it again and again, variation after variation on a core message: if you tax rich people it kills jobs. You hear about “job-killing tax hikes,” or that “taxing the rich hurts jobs,” “taxes kill jobs,” “taxes take money out of the economy, “if you tax the rich they won’t be able to provide jobs.” … on and on it goes. So do we really depend on “the rich” to “create” jobs? Or do jobs get created when they fill a need?

Here is a recent typical example, Obama Touts Job-Killing Tax Plan, written by a “senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth,”

Some people, in their pursuit of profit, benefit their fellow humans by creating new or better goods and services, and then by employing others. We call such people entrepreneurs and productive workers.
Others are parasites who suck the blood and energy away from the productive. Such people are most often found in government.

Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” …

Producers and Parasites

The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people “produce” and are rich because they “produce.” The rest of us are “parasites” who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just “the help” who are otherwise in the way, and taxing the producers to pay for our “entitlements.” We “take money” from the producers through taxes, which are “redistributed” to the parasites. They repeat the slogan, “Taxes are theft,” and take the “money we earned” by “force” (i.e. government.)

Republican Speaker of the House John Boehner echoes this core philosophy of “producers” and “parasites,” saying yesterday,

I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

“The very people” who “hire people” shouldn’t have to pay taxes because that money is then taken out of the productive economy and just given to the parasites — “the help” — meaning you and me…

So is it true? Do “they” create jobs? Do we “depend on” the wealthy to “create jobs?”

Demand Creates Jobs

I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.

If I had extra money I wouldn’t just hire people to sit around and read the paper. And if I had more customers than I could handle that — the revenue generated by meeting the additional demand from the extra customers — is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.

If you ask around you will find that every business tries to employ the right number of people to meet the demand. Any business owner or manager will tell you that they hire based on need, not on how much they have in the bank. (Read more here, in last year’s Businesses Do Not Create Jobs.)
Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don’t even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to “cover” your taxes. And even if you did lay people off to “cover’ taxes it would lower your costs and you would have more profit, which means you would have more taxes… except that laying someone off when you had demand would cause you to have less revenue, … and you see how ridiculous it is to associate taxes with hiring at all!

People coming in the door and buying things is what creates jobs.

The Rich Do Not Create Jobs

Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.

When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

Democracy Creates Jobs

This idea that a few wealthy people — the “producers” — hand everything down to the rest of us — “the parasites” — is fundamentally at odds with the concept of democracy. In a democracy we all have an equal voice and an equal stake in how our society and our economy does. We do not “depend” on the good graces of a favored few for our livelihoods. We all are supposed to have an equal opportunity, and equal rights. And there are things we are all entitled to — “entitlements” — that we get just because we were born here. But we all share in the responsibility to cover the costs of democracy — with the rich having a greater responsibility than the rest of us because they receive the most benefit from it. This is why we have “progressive taxes” where the rates are supposed to go up as the income does.

Taxes Are The Lifeblood Of Democracy And The Prosperity That Democracy Produces

In a democracy the rich are supposed to pay more to cover things like building and maintaining the roads and schools because these are the things that enable their wealth. They actually do use the roads and schools more because the roads enable their businesses to prosper and the schools provide educated employees. But it isn’t just that the rich use roads more, it is that everyone has a right to use roads and a right to transportation because we are a democracy and everyone has the same rights. And as a citizen in a democracy you have an obligation to pay your share for that.

A democracy is supposed have a progressive tax structure that is in proportion to the means to pay. We do this because those who get more from the system do so because the democratic system offers them that ability. Their wealth is because of our system and therefore they owe back to the system in proportion. (Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections.)

The conservative “producer and parasite” anti-tax philosophy is fundamentally at odds with the concepts of democracy (which they proudly acknowledge – see more here, and here) and should be understood and criticized as such. Taxes do not “take money out of the economy” they enable the economy. The rich do not “create jobs, We, the People create jobs.

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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Republicans Hearing Citizen Backlash At Town Halls – Actions You Can Take

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Note – see action updates below.
Members of Congress are holding local town hall meetings now and into next week, and Republicans are hearing from constituents angry that they voted to privatize Medicare to pay for even more tax cuts for the rich and corporations.
Think Progress has the story: More Republican Congressmen Face Town Hall Backlash Over Tax Breaks For Wealthy And Medicare Privatization,

Earlier this week, Rep. Paul Ryan (R-WI) held town halls across his district to defend his budget’s plan to end Medicare and extend tax cuts for the wealthy. During a stop in Milton, WI Ryan’s constituents made their feelings apparent, booing down the … congressman when he defended tax breaks for the rich… Yesterday, Rep. Lou Barletta (R-PA) received the same hostile reception from his constituents for voting to end Medicare.
This town hall backlash is now spreading to other districts across the country. As Huffington Post reports, freshmen Reps. Robert Dold (R-IL) and Charlie Bass (R-NH) got an earful from their constituents for voting in favor of the Republican budget this month. During a Buffalo Grove, IL town hall, Dold caught a lot of flack for supporting corporate tax breaks and voting to end Medicare: …

Please go read the rest. And click this link to find out if your member of Congress is holding a local town hall meeting this weekend or next week!
And if you can get video or audio recordings of citizen reaction to the Republican votes please post them to YouTube and let me know!!
Here is Ryan being boo’ed by constituents:

Here is Barletta:

Update — ACTIONS
Click this link to find out if your member of Congress is holding a town hall meeting this weekend or next week, and attend! Ask questions and demand answers
MoveOn has an action page where you can locate your representative’s local office, asking you to drop by. Note that this is different from attending a town hall meeting. Here is what MoveOn is saying on the page:

Drop by and tell your Representative:

Eliminating Medicare is unacceptable!

Congressional Republicans just voted to eliminate Medicare for anyone under 55. It’s time the Republicans hear from us, loud and clear: voting to end Medicare is completely unacceptable and we will hold you accountable.
No need to RSVP. Just follow the instructions below and drop by with other MoveOn members at 12 noon on Thursday, or any other time during business hours this week.

Click through for the rest at the MoveOn page
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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The Lesson Of The 2010 Election Was Jobs, Not Cuts

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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 was the lesson of the 2010 election? Since the election conservatives and the DC opinion elite have been claiming that the public voted for budget cuts. But before the election they ran ad after ad saying Dems cut your Medicare and didn’t provide jobs. Now every single poll shows that the public wants jobs not cuts.
Politico today has one more typical Washington Elite journalism story. Their story, Govs face budget blowback, begins,

“It was supposed to be one of the clearest messages of the 2010 elections: Voters were finally fed up with government spending.”

Politico begins their story with one more example of the gap between the DC Elite and the rest of the country. In the rest of the country we remember that the Republican campaign theme against Democrats was that Democrats were responsible for “Half A Trillion In Cuts To Medicare”.
Who can forget that? Ad after ad after ad after ad after ad blasted out from the TV saying Rep. So-and-so “cut $500 billion from Medicare” and many of those ads also blasted the Democrat because there was no cost-of-living adjustment to Social Security last year. That is just a fact, the Republicans campaigned against cuts.
Here are just a few of the ad barrage Republicans ran before the election:







And voters were sent flyers like this: (click for larger)
politifact-photos-ron_johnson_flier_combined_660
Talking Points Memo captured it well today, calling it “Opinion Journalism,”

There’s a feature piece in Politico today that perfectly captures the assumptions most national political reporters, especially at certain publications, bring to the core questions of budgetary politics. The gist of the piece is that ‘we’ all agree that the message of the 2010 election was that the public has decided that government is too big and wants dramatic budget cuts. But now it seems like the governors who are really going whole hog on this — overwhelming Republicans — are getting really unpopular. Ergo, the public isn’t really ready for the “grown-up conversation” about budgets than it seemed they might be.

The public wanted jobs before the election, voted for jobs, wants jobs, needs jobs, demands jobs. End of story.
On April 4: We Are One
On April 4, millions of people will come together for the “We Are One” series of community and workplace actions.
“On April 4, 1968, Dr. Martin Luther King Jr. was assassinated in Memphis, where he had gone to stand with sanitation workers demanding their dream: The right to bargain collectively for a voice at work and a better life. The workers were trying to form a union with AFSCME.”
Find local events in your area here.
“Join us to make April 4, 2011, and the days surrounding it, a day to stand in solidarity with working people in Wisconsin and dozens of other states where corporate-bought politicians are trying to take away the rights Dr. King gave his life for.”
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Cutting Government Creates Jobs Like Cutting Taxes Increases Revenue

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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.
A “report” from Republican staff of the Joint Economic Committee says that the path to job creation is cutting … the very things that create jobs. This is like saying that cutting taxes increases revenue. We know how that worked out, and the job-consequences of budget cuts are going to be just as disastrous.
Sometimes you can cut through ideology by looking at what actually happens in the real world. Reagan cut taxes: huge deficits resulted. Clinton raised taxes, the deficits went away. Bush cut taxes, we went back to huge deficits. And you can see the same thing when you look at government spending and jobs. England and Greece are trying austerity, and their economies are sinking as a result. In 1937 the United States learned this lesson, succumbing to deficit cutting which choked off the recovery from the depression. On the other hand, the “stimulus” boosted the economy, held off a depression and created millions of jobs — but not enough jobs to overcome the Bush years. Here is the chart — note the obvious effect of the stimulus and of the end of the stimulus on the jobs picture:

chart_jobs2

Cut Cut Cut To Grow Grow Grow?
Republicans say that cut cut cut leads to grow grow grow. Their prescription is to cut taxes to “reduce uncertainty” which they say will result in job creation. Never mind that Clinton raised taxes and then the economy boomed. Then Bush cut taxes and then gave us the worst job-creation record in decades, even before the recession started! From The Hill, GOP study backs ‘cut and grow’ but says new jobs could take time,

House Republican leaders on Tuesday released a study that they said shows their “cut and grow” strategy will boost the economy.

The study argues that reducing uncertainty about future taxes will increase household spending and business investment, spurring growth and hiring.
House Majority Leader Eric Cantor (R-Va.) said the report shows “less government spending means more private sector jobs.”

Just how will “certainty” about tax cuts create jobs?

The study argues that “non-Keynesian effects” result from government budget cuts. It says households expecting future taxes to pay for government spending will purchase more homes and durable consumer goods once uncertainty about future taxes is erased.

Right, knowing that taxes will be lower, people will go out an “purchase more homes.” The people funding the Republicans will just go buy an 8th house with their tax savings. And maybe a Maybach or two. Plutonomy in action!
No Path To Jobs
Laying off teachers and firefighters is not the path to jobs. Cutting government cuts the very things that nurture the soil in which business can thrive. We need a modern infrastructure to compete in world markets, but they are cutting back on infrastructure spending. We need a well-educated population to grow the economy, but they are cutting back on education.
Cutting is clearly not the path to more people having better-paying jobs: Congress takes aim at jobs program,

Becky Thompson of Sioux Falls turns 72 next month, and she is quietly grateful that she has a job working in the computer lab at Experience Works, an agency that helps older workers find employment.
. . . But now she and other older workers are worried that all this – the training, the support, the camaraderie – will disappear in the next round of budget cuts.
That’s because more than 60 percent of Experience Works’ budget comes from the Senior Community Service Employment Program, the only federally funded job training program for low-income seniors – and one of many programs targeted for reduction in the Republican spending bill that passed the House last month.

Economists, Analysts, Everyone Says Budget Cuts Will Kill Growth
Isaiah Poole summed it up in, More Than 300 Economists Repudiate Right-Wing “So Be It” Economics,

Today the Economic Policy Institute and the Center for American Progress jointly released a statement signed by nearly 320 economists from around the country, including Nobel Prize winners Kenneth Arrow and Eric Maskin, former Vice Chairman of the Board of Governors of the Federal Reserve System Alan Blinder, and former Chair of the President’s Council of Economic Advisers and Director of the National Economic Council Laura Tyson.
That comes a day after Mark Zandi of Moody’s Analytics released a report that estimated the House budget cuts would result in a loss of 700,000 jobs by 2012. That finding evoked a “so what?” from House Majority Leader Eric Cantor that was remarkably in line with the dismissive “so be it” comment that House Speaker John Boehner made earlier in February in response to concerns that budget cuts would result in job losses.

If people had good jobs that paid well the deficit would be a heck of a lot lower than it is. People would be paying taxes instead of collecting unemployment. Cutting the things that create jobs is certainly not a path to creating jobs. England is learning this, our Congress is not.
No Job Creation Programs At All
Republicans have held the Congress for months but have not introduced a single job-creation program. In GOP Bait And Switch On Jobs, Anne Thompson lays it out,
,

The House Republicans have developed a track record of bait and switch when it comes to their approach to job creation.
Last week, House Republican leadership released a PowerPoint by Congressman Paul Ryan that they are using to educate the Republican Caucus on their top policy priorities. Ryan laid out the “Jobs Deficit” as the number one challenge facing America in his very first slide. Yet he failed to focus on jobs until the very last slide, which reads: “Keep taxes low; spur job creation and growth.” Not quite the robust plan we need to put millions of Americans back to work.

Is There At Least A Secret Plan?
Is appears — and this kook “study” confirms — there is no real plan for jobs. But is there at least a secret plan in operation?
Secret plan? When they said that cutting taxes increases revenue they knew it wouldn’t — they had a hidden agenda. They knew better than to actually believe that cutting taxes would actually increase revenue to fund the government. They said so. The resulting deficits were the agenda. The plan was to “cut their allowance” and “starve the beast” to create a debt crisis, then demand that government cut back the things it does to protect and empower We, the People.
What is the agenda behind this job-destruction agenda? If there is a secret agenda behind destroying so many American jobs — and the ability to create new jobs that pay well — then what is it? They can’t be crazy enough to destroy the economy just to increase their 2012 electoral odds, can they? On the other hand, no one has ever finished the sentence, “Republicans aren’t crazy enough to …” without being proven wrong.
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Don’t Pass Tax Cuts For The Rich And Then Tell Me About Deficits

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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.
Congress passed tax cuts for the rich and cut the estate tax way down, adding $800 billion to the deficit and placing Social Security on the chopping block. No one will have predicted what’s coming next year in the name of deficit reduction: they are going after Social Security and everything else that benefits the middle class, and will hold the full faith and credit of our country hostage to get that. Choice: Gut the programs or kill the country. Action: get ready now for the coming fight.
Where We’ve Been
The Congress passed tax cuts for the rich and a huge cut in the estate tax at a time of worries about deficits and intense concentration of wealth. This act just puts the name on what has occurred since Reagan: it formalizes the collapse of We, the People democracy, replaced by plutocracy. And that was with the big Democratic majorities that we all worked so hard to elect. Next year is when it starts getting bad. Action: get ready now for the coming fight.
Here is my message to Republicans: Tax cuts for the rich were so important to you that you took the country hostage, you refused to help the unemployed, you obstructed everything to get them. You blocked unemployment checks, DADT, the DREAM Act, the START Treaty, everything. So don’t come back to me and complain about deficits, and say you need to cut the budget.
My message to the President and Democrats: Rewarding obstruction just makes things worse. You caved on, well, everything in the last two years. You pre-negotiated away things the country needs, only to have Republicans respond by increasing their demands, and then you caved on that. They filibustered something like 420 bills, not to mention judges and appointees, and you only brought the cots out once. So they just did it more. And they will do it more and more, until you stop rewarding them. Action: get ready now for the coming fight.
Worse Fights Coming
There are already signs of the start of the next fight. The big fight is when the debt ceiling has to be raised, and they can hold the country’s and world’s economy hostage to their demands. Before that, though, will be an omnibus spending bill.
Giving in to hostage takers has only solidified this kind of hostage-taking as a successful tactic. For example, last night, even while the House was capitulating to the last hostage-taking, Republicans again used the tactic to kill the omnibus spending bill. Republicans took the spending bill hostage and threatened to shut down the government if Dems didn’t accept their new demands. And Dems again gave in. As TPM puts it today,

Late last night, Harry Reid’s plan to get the federal government funded through the end of the fiscal year went up in flames, burning months and months of work by Senate appropriators and their staffs. To avert a government shutdown, Reid agreed to work out a federal funding plan with Senate Minority Leader Mitch McConnell — Congress will agree to continue funding the government at its current levels through some yet-to-be-determined point next year.
… Next year, though, this arrangement will come back to haunt Dems. … Whatever date they decide will be the deadline for resolving the next spending fight, which will occur in a dramatically different, and more conservative political environment. Republicans will demand spending cuts. And if they’re successful, the stimulative impact of the just-passed tax package will be clawed back.

If they win every time, why would they stop using the tactic? Again and again rewarded for obstruction, Republicans take new hostages. Essentially they say, again and again, “Agree to our demands or we will blow everything up.” Again and again the President and Dems cave. Rinse and repeat.
Action: get ready now for the coming fight.
How Far Will They Take This?
Just how far will they take this? Look at just how far they have taken it. Look what they have already done to the country. As CAF’s Robert Borosage put it in Top End Tax Cuts and a Collapsing Infrastructure

America is literally falling apart. Collapsing bridges, exploding water mains, crumbling levees are a deadly clear and present danger. Children go to schools that are dangerous to their health. Our declining infrastructure is also costly economically, with outmoded transport, crowded highways, slow and inadequate broadband impeding our ability to compete. As President Obama has suggested, we need to make significant investments in building a 21st-century infrastructure, in education and training, in research and development as a foundation for a revived American economy.

The new batch of conservatives is very different from anything this country is used to, and that even includes the conservatives who shut down the government in the 90s, and relentlessly investigated President Clinton and literally anyone who ever knew him. Don’t forget impeachment. They do not care about governing, they care about winning. And they now see absolute obstruction — no matter the cost to the country — as a wining tactic.
People haven’t come to grips yet with what it means when one party can just block everything, and has no interest in governing at all. The corporate right intends to use the debt ceiling and the threat of literally ruining the country to get their way. They will refuse to provide funding for anything they don’t like and threaten to kill the government if they don’t get their way. At risk: Social Security, Medicare, alternative energy programs, infrastructure funding, the Department of Education, certainly NPR, anthing to do with science, reason, civility …
They see this as their moment. They intend to reform the government in their far-right image or destroy it. If you think I am being extreme to say this, watch Fox for a while, listen to their radio shows, read their magazines and blogs. They intend to destroy the government.
Limbaugh: “We won the election, we shut it down.”

Limbaugh was talking about last night’s hostage-taking on the omnibus spending bill, but reflects what I am hearing on the radio and blogs about their attitude in general. They really, really mean it, they see this as their moment to get everything they want or just destroy the government. They don’t really care which.
Former Senator Alan Simpson recently gave a preview of conservative thinking. From Politico,

“I can’t wait for the bloodbath in April,” Simpson said, relishing the prospect of political turmoil. “When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ‘em a piece of meat, real meat” in the form of spending cuts.
“And boy, the bloodbath will be extraordinary,” he said.

They want that “bloodbath.” They just can’t wait.
Actions:
First we have to bolster our own leaders, ask them to stop rewarding obstruction and fight for us and let them know you will fight for them if they do. We need an absolute commitment that Social Security will not be touched! Especially now that the just-passed payroll tax cut threatens Social Security’s financing.
Tell The President: Stand Up To The Hostage-Takers! Defend Social Security And Medicare.
Action: get ready now for the coming fight.
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