The Difference Between "Broadening the Tax Base" and Raising Taxes on the Rich

The President's Opening Bid on the Grand Bargain (III)

robert reich

The President says he wants $1.6 trillion in tax hikes. Republicans say they won’t raise tax rates but might be willing to close some loopholes and limit some deductions and tax credits. Is compromise in the air?

Not a chance. True enough, such “base broadening,” as Republicans like to call it, could conceivably generate $1.6 trillion in additional tax revenues over the next decade.

But, wait. Didn’t the President just win a second term? The major issue decided in last week’s election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans.

“Broadening the base” has nothing whatever to do with the rich paying more. That’s because a lot of tax credits and deductions help the middle class and the poor.

If we end the Earned Income Tax Credit, for example, some of the poorest Americans will end up sacrificing. That tab was $63 billion last year.

Or if the “loophole” is tax-free employee health care, or the home mortgage tax deduction, or tax-deferred 401K accounts, most of the added tax revenues will come out of the pockets of the middle class.

So when Republicans talk about “broadening the base,” watch your wallets. Now that the President has set his goal on $1.6 trillion in additional taxes, the question is whether the rich are going to cough up $1.6 trillion more.

There’s no way that $1.6 trillion can come out of the pockets of the wealthy merely by capping the deductions the wealthy take advantage of.

If Republicans won’t budge on raising tax rates but insist on broadening the base, Democrats should take aim at the biggest tax loophole of all for America’s wealthy: the preference for capital gains.

Capital gains are now taxed at only 15 percent (the major reason Mitt Romney pays a rate of under 14 percent on over $20 million of annual income). Capital gains should be taxed the same as ordinary income. That way, under a progressive tax system, the wealthy would pay far more — on the way to $1.6 trillion.

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With the election behind us I had hoped we’d get beyond games of chicken. No such luck.
But first you need to understand that the game of chicken isn’t about how much or when we cut the budget deficit. Or even whether the upcoming “fiscal cliff” poses a danger to the economy.

The non-partisan Congressional Budget Office on Thursday warned that the automatic tax increases and spending cuts scheduled to start in January amount to too much deficit reduction, too soon. They’d put the economy back into recession, and push unemployment to about 9 percent. But the CBO also warned of an economic crisis ahead if the United States doesn’t stem the growth of the nation’s exploding deficit.

Get it? Reduce the budget deficit too quickly, and we’re in trouble. But fail to address the deficit, and we’re also in trouble.  It’s really a matter of timing. That’s why I think any deal should include a trigger mechanism that begins to cut spending and raise taxes when the economy has two consecutive quarters of 6 percent unemployment or less, and 3 percent annualized growth or more. 

In reality, though, the upcoming game of chicken isn’t about any of this. It’s over the clearest issue President Obama and Mitt Romney fought over: whether taxes should be raised on the rich.

Democrats and Republicans are now maneuvering to maximize their bargaining leverage when they sit down next year to decide this.

On Friday the President called on called on Congress to immediately make permanent the tax cuts for Americans who make less than $250,000 a year, while at the same time allowing tax rates to rise for wealthy Americans — and then making those rates part of a broader deal next year.

The President knows congressional Republicans won’t agree, but he needed to set out his central demand because it’s the one thing that can fairly be interpreted as a mandate from the election.

So what’s going to happen? Bear with me, because this gets interesting.

Some Democrats (and some White House strategists) figure they’ll have most bargaining leverage in next year’s deal if they do nothing now – allowing tax rates to rise automatically on everyone after the first of the year. Then they plan to offer Republicans a deal that reduces taxes on people earning less than $250,000 – which would be retroactive to January 1^st.

Republicans would have to choose between a tax cut on the middle class or no tax cut at all. Democrats believe Republicans would have to take the deal. Even Grover Norquist would be hard-pressed to come up with an argument against it.

Some Republicans, meanwhile, figure they’ll have more bargaining leverage if they keep things as they are until late January or February.

What’s magical about late January and February? That’s when the debt ceiling has to be raised again, which means that’s when Republicans can once again threaten to vote against raising it. (In theory, we’ll hit the ceiling at the start of January, but the government can juggle payments and take various “extraordinary measures” for another month or two beyond that – maybe even until March – before it could no longer be able to borrow enough money to pay its bills.)

This is the thinking behind House Speaker John Boehner’s proposal earlier Friday that all the tax cuts — including those for the rich — should be extended until next year, until there’s a deal. “I’m proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us,’’ Boehner said.

So who blinks first? Democrats who don’t mind going over the cliff because they’ll get a better final deal – and the deal will be retroactive to January 1^st so it’s not really a cliff at all but more like a little hill? Or Republicans who want to extend the Bush tax cuts beyond January 1^st, until we get sufficiently close to the debt ceiling that they can once again threaten the full faith and credit of America?

As I said before, I had naively assumed the election would put an end to these games, but obviously not. Yet Obama and the Democrats are holding most of the cards now. Let’s hope they use them.

 

Tax the Rich or Privatize the State?

Countering the Cutting Frenzy

by SHAMUS COOKE

 

The Great Recession and its possible continuance has brought the issue of privatization to the forefront of American politics. But most Americans aren’t even aware that this debate is happening, because the media and politicians aren’t using the word “privatization;” instead less threatening substitutes are used to ram through a corporate agenda that aims to massively transform public resources into corporate profit.

The mass privatization frenzy is the corporate solution to the budget crises occurring on the city, state, and national level — crises caused by the recession that the banks and corporations created themselves, and are now positioning themselves to benefit from again, beyond the infamous bailouts.

The effects of the recession will continue for years, and the already slowing economy is exacerbating these effects, most notably the bankrupting of government budgets. Politicians from the Democratic and Republican parties both holler that “there is no money,” and therefore massive cuts have to be made to public services, while public employees must either be laid off or have their wages destroyed.

But another corporate solution to this corporate-caused problem is now proceeding full speed ahead: Urban Infrastructure Banks. Under this scheme, the funding of publicly-run infrastructure — roads, bridges, public buildings, etc. — will be taken out of the public realm and transferred to the corporations, who will fund these projects as long as they profit from them.

The right-wing Economist Magazine explains:

“The private sector will invest money in projects and get it back in the shape of tolls, user fees, premium pricing or even tax breaks.”

So essentially, a big bank will front a city the money — presumably at a giant discount — to buy a road or bridge; the tolls charged will go to the bank with interest (profit), while the bank is also likely to get tax-exempt status for its profit. The bank will also have a profit motive to do the cheapest possible maintenance work, if any at all. Working people will thus pay more to use these services so that the banks can make a profit.

This nefarious right-wing plot is being pushed hardest and fastest by the Democratic Party. The Mayor of Chicago, Obama’s former Chief of Staff Rahm Emanuel, is the poster boy for city privatization. Again from the Economist:

“…Mr Emanuel wants to spend about $7 billion to rebuild the city of Chicago — on everything from streets, to parks, to the water system, schools, commuter rail and the main airport… The city will finance the running costs of the [Urban infrastructure] trust itself to the tune of $2.5m. Several financial institutions are already lined up to make investments totalling $1.7 billion, among them Macquarie Infrastructure and Real Assets, Ullico, Citibank and JPMorgan.”

Democrats everywhere were inspired by Rahm’s corporate crusade to privatize Chicago, so much so that Bill Clinton organized a national conference of Democratic Party mayors to promote the idea. This from the official press release of the Clinton Global Initiative:  

“I was thrilled when Rahm Emanuel set up America’s first urban infrastructure bank in Chicago, and I see this ongoing conversation among America’s mayors as an important step towards finding a workable model that can be replicated in every other city around the country,” said [former] President Clinton. “My hope is that coming out of this meeting, mayors will realize that attracting private investment in their cities’ roads, bridges, water and sanitation systems, waste to energy projects, and new electrical grids is an idea that will put people to work, stimulate the local economy, and increase the value and quality of life of their cities in the long term.”

Obama, too, has caught the fire of public infrastructure privatization, and has proposed a plan for the federal level.

This privatization debate has already entered the realm of other cherished social programs — Medicare, Social Security, and public education — under the catchword of “choice.”  

Obama’s misnamed Race to the Top education plan consciously aims to privatize public education in a more blunt manner than Bush dared, as it awards states money if they create privately run charter schools.

And while the Democrats shed fake tears about the Republicans’ plan to privatize Medicare, the giant Medicare cuts that the Democrats have already proposed imply a total re-structuring of the program, i.e., its privatization. Any publicly run program that is underfunded — and thus requires individuals to pay extra for the baseline service — can be considered half privatized.

The alternative to this bi-partisan privatization madness is to drastically raise taxes on the wealthy and corporations to pre-Reagan levels. It is a deliberate lie to say that “there is no money” to fund public programs. Taxes have shrunk for the wealthy and corporations for decades, thus causing these budget deficits that working people are made to pay for.

President Obama has made “taxing the rich” one of the pillars of his election campaign, but all he promises to do is to remove the Bush tax cuts for the rich — the same promise he broke after the last election. But Obama combines his “tax the rich” slogan with promises to balance the national budget by making massive cuts to social programs: Obama’s proposed budget included $3 trillion in cuts, including hundreds of millions of cuts in Medicare and other social programs.

Therefore, labor and community groups need to put forward a completely independent demand to tax the rich and corporations, including the demand of NO CUTS to social services. There is enough money in the United States to fully fund a national jobs program, Social Security, Medicare, public education and all vital social programs. But this money has accumulated in the hands of the top 1%, who must be taxed at 70 percent or higher for the benefit of all working people. All forms of income and wealth of the 1% must be “on the table” for taxation.

The Fortunate 400

The Fortunate 400 - top 400 wealthiest Americans pay an average of 11.6% in taxes. The poorest class of Americans pay 25%. In a depressed economy, this doesn't work. I couldn't care any less if the wealthy get tax breaks during a strong economy. But as long as the economy is in the tank, the wealthy need to pony up and help pull us out of the mess they helped to get us into. Once the economy produces substantial growth from which it can gain momentum, give them their tax cuts back, who cares? but the whole philosophy with that should be:

No tax cuts:
A: during a bad economic slump, and/or
B: while funding multiple wars

The dumbest thing any president did (other than riding in an open convertible) is cut taxes while embroiled in two wars. Hello budget problems in a debt based economy!

Stephen King: Tax Me, for Fuck’s Sake!

Apr 30, 2012

The iconic writer scolds the superrich (including himself—and Mitt Romney) for not giving back, and warns of a Kingsian apocalyptic scenario if inequality is not addressed in America. 

 

Chris Christie may be fat, but he ain’t Santa Claus. In fact, he seems unable to decide if he is New Jersey’s governor or its caporegime, and it may be a comment on the coarsening of American discourse that his brash rudeness is often taken for charm. In February, while discussing New Jersey’s newly amended income-tax law, which allows the rich to pay less (proportionally) than the middle class, Christie was asked about Warren Buffett’s observation that he paid less federal income taxes than his personal secretary, and that wasn’t fair. “He should just write a check and shut up,” Christie responded, with his typical verve. “I’m tired of hearing about it. If he wants to give the government more money, he’s got the ability to write a check—go ahead and write it.”

Heard it all before. At a rally in Florida (to support collective bargaining and to express the socialist view that firing teachers with experience was sort of a bad idea), I pointed out that I was paying taxes of roughly 28 percent on my income. My question was, “How come I’m not paying 50?” The governor of New Jersey did not respond to this radical idea, possibly being too busy at the all-you-can-eat cheese buffet at Applebee’s in Jersey City, but plenty of other people of the Christie persuasion did.

Cut a check and shut up, they said.

If you want to pay more, pay more, they said.

Tired of hearing about it, they said.

Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar. It’s true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (Jaws of Life tools are always a popular request), schools, and a scattering of organizations that underwrite the arts. Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.

What charitable 1 percenters can’t do is assume responsibility—America’s national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts. Charity from the rich can’t fix global warming or lower the price of gasoline by one single red penny. That kind of salvation does not come from Mark Zuckerberg or Steve Ballmer saying, “OK, I’ll write a $2 million bonus check to the IRS.” That annoying responsibility stuff comes from three words that are anathema to the Tea Partiers: United American citizenry.

And hey, why don’t we get real about this? Most rich folks paying 28 percent taxes do not give out another 28 percent of their income to charity. Most rich folks like to keep their dough. They don’t strip their bank accounts and investment portfolios. They keep them and then pass them on to their children, their children’s children. And what they do give away is—like the monies my wife and I donate—totally at their own discretion. That’s the rich-guy philosophy in a nutshell: don’t tell us how to use our money; we’ll tell you.

The Koch brothers are right-wing creepazoids, but they’re giving right-wing creepazoids. Here’s an example: 68 million fine American dollars to Deerfield Academy. Which is great for Deerfield Academy. But it won’t do squat for cleaning up the oil spill in the Gulf of Mexico, where food fish are now showing up with black lesions. It won’t pay for stronger regulations to keep BP (or some other bunch of dipshit oil drillers) from doing it again. It won’t repair the levees surrounding New Orleans. It won’t improve education in Mississippi or Alabama. But what the hell—them li’l crackers ain’t never going to go to Deerfield Academy anyway. Fuck ’em if they can’t take a joke.

Here’s another crock of fresh bullshit delivered by the right wing of the Republican Party (which has become, so far as I can see, the only wing of the Republican Party): the richer rich people get, the more jobs they create. Really? I have a total payroll of about 60 people, most of them working for the two radio stations I own in Bangor, Maine. If I hit the movie jackpot—as I have, from time to time—and own a piece of a film that grosses $200 million, what am I going to do with it? Buy another radio station? I don’t think so, since I’m losing my shirt on the ones I own already. But suppose I did, and hired on an additional dozen folks. Good for them. Whoopee-ding for the rest of the economy.

Tired of hearing about it, they said. Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them?

At the risk of repeating myself, here’s what rich folks do when they get richer: they invest. A lot of those investments are overseas, thanks to the anti-American business policies of the last four administrations. Don’t think so? Check the tag on that T-shirt or gimme cap you’re wearing. If it says MADE IN AMERICA, I’ll … well, I won’t say I’ll eat your shorts, because some of that stuff is made here, but not much of it. And what does get made here doesn’t get made by America’s small cadre of pluted bloatocrats; it’s made, for the most part, in barely-gittin’-by factories in the Deep South, where the only unions people believe in are those solemnized at the altar of the local church (as long as they’re from different sexes, that is).

The U.S. senators and representatives who refuse even to consider raising taxes on the rich—they squall like scalded babies (usually on Fox News) every time the subject comes up—are not, by and large, superrich themselves, although many are millionaires and all have had the equivalent of Obamacare for years. They simply idolize the rich. Don’t ask me why; I don’t get it either, since most rich people are as boring as old, dead dog shit. The Mitch McConnells and John Boehners and Eric Cantors just can’t seem to help themselves. These guys and their right-wing supporters regard deep pockets like Christy Walton and Sheldon Adelson the way little girls regard Justin Bieber … which is to say, with wide eyes, slack jaws, and the drool of adoration dripping from their chins. I’ve gotten the same reaction myself, even though I’m only “baby rich” compared with some of these guys, who float serenely over the lives of the struggling middle class like blimps made of thousand-dollar bills.

In America, the rich are hallowed. Even Warren Buffett, who has largely been drummed out of the club for his radical ideas about putting his money where his mouth is when it comes to patriotism, made the front pages when he announced that he had stage-1 prostate cancer. Stage 1, for God’s sake! A hundred clinics can fix him up, and he can put the bill on his American Express black card! But the press made it sound like the pope’s balls had just dropped off and shattered! Because it was cancer? No! Because it was Warren Buffett, he of Berkshire-Hathaway!

I guess some of this mad right-wing love comes from the idea that in America, anyone can become a Rich Guy if he just works hard and saves his pennies. Mitt Romney has said, in effect, “I’m rich and I don’t apologize for it.” Nobody wants you to, Mitt. What some of us want—those who aren’t blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn money—is for you to acknowledge that you couldn’t have made it in America without America. That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged. That it’s not fair to ask the middle class to assume a disproportionate amount of the tax burden. Not fair? It’s un-fucking-American is what it is. I don’t want you to apologize for being rich; I want you to acknowledge that in America, we all should have to pay our fair share. That our civics classes never taught us that being American means that—sorry, kiddies—you’re on your own. That those who have received much must be obligated to pay—not to give, not to “cut a check and shut up,” in Governor Christie’s words, but to pay—in the same proportion. That’s called stepping up and not whining about it. That’s called patriotism, a word the Tea Partiers love to throw around as long as it doesn’t cost their beloved rich folks any money.

This has to happen if America is to remain strong and true to its ideals. It’s a practical necessity and a moral imperative. Last year during the Occupy movement, the conservatives who oppose tax equality saw the first real ripples of discontent. Their response was either Marie Antoinette (“Let them eat cake”) or Ebenezer Scrooge (“Are there no prisons? Are there no workhouses?”). Short-sighted, gentlemen. Very short-sighted. If this situation isn’t fairly addressed, last year’s protests will just be the beginning. Scrooge changed his tune after the ghosts visited him. Marie Antoinette, on the other hand, lost her head.

Think about it.

When the Rich Jump Ship

Don't Toss Them a Lifeboat (Tell them to tear their asses1--JEF)
by DAVID MACARAY


In the wake of the 2008 financial meltdown, one of the arguments you heard Republican economists and Wall Street executives repeatedly use to defend the amounts of money being paid investment bankers and hedge fund managers was that if these guys didn’t receive exorbitant salaries and bonuses, they would be forced to leave the U.S. and find jobs elsewhere, presumably in Western Europe and Hong Kong. In other words, if we don’t pay them what they demand, they’ll find someone who will.

Even though a simple examination reveals that federal income taxes are lower than they’ve been in many decades, you also hear something similar in regard to raising the taxes on the very rich. You hear pundits say that if we did that, if we nudged their brackets any higher, we’d risk having these people close up shop and abandon the country. Give these armchair pundits credit for being able to something that silly with a straight face.

Instead of being cowed by those absurd threats—instead of being intimidated into abandoning plans for a fairer tax system and stricter regulations on the banking industry—we should greet those condescending arguments with delight. In truth, those defections would not only be welcomed, they would prove salutary because they would give ambitious men and women on the lower rungs the opportunity to move into the top spots.

There’s a corollary to that replacement argument. Wall Street cautions us that, should these financial prodigies leave the industry, the newbies who replace them wouldn’t be nearly as competent or reliable. That line of reasoning may have worked a few years ago, but it doesn’t today. Ever since we learned that it was those very “prodigies” who precipitated the financial disaster that almost destroyed the world’s economy, and required a trillion-dollar taxpayer bailout just to keep us afloat, that old, “We’re too damned talented to be replaced” argument has pretty much lost its luster.

Unfortunately, despite all the hand-wringing and chest-pounding, most of these Wall Street vultures aren’t going anywhere. They can huff and puff all they like, but on Monday morning they’ll show up for work just like the rest of us for the simple reason that they have no place to go. If they honestly believe all they have to do is report to Zurich, briefcases in hand, and they’ll be offered multi-million dollar banking gigs, they’re even more arrogant than we thought. Those European banking jobs are already taken. By Europeans.

But it would be wonderful if they did leave. These soulless whores may, technically, be citizens of the U.S., but by no index are they patriotic Americans. These ultra-materialistic people are cultural eunuchs. They have no sense of honor, no sense of community pride, no sense of “belonging.” They not only live rarefied, privileged lives in gated mansions or penthouses far, far away from the “herd,” but given a choice, they would rather watch America’s great industrial cities fall into decay and despair than voluntarily part with so much as a nickel of their own money.

More condescension: Those Wall Street executives who argued that we’d be losing invaluable “expertise” if we allowed these guys to get away are the same Wall Street execs who argue that if the very wealthy were, in fact, to leave the United States because of higher taxes, they would take their money with them, and that would put a sizeable dent in the economy. That’s a bad argument.
It’s already happened. Wealthy people already have their money squirreled away in places believed to bring them the maximum return. If one of those places happens to be the U.S., then lucky us, because that’s where they’ll keep it. But they’re far more likely to have money invested in convoluted off-shore bank accounts or foreign businesses. And that’s where it will remain, no matter where they live or work.

Let’s be clear. If the very rich threaten to jump ship, we need to do everything in our power to ensure they carry out that threat. What a cathartic moment that would be! The entrenched, inbred, self-perpetuating moneyed class being abruptly vacated—and new blood, new ideas, new faces and new ethnicities rushing in to replace it. Ain’t that what America was supposed to be all about?

The Best Reason for the Very Rich to be Paying A LOT MORE in Taxes

Monday, March 5, 2012 by Common Dreams
by Paul Buchheit

Before getting into the best reason, here are some of the usual -- and always good -- reasons. First of all, for every dollar the richest 1% earned in 1980, they've added three more dollars. The poorest 90% have added ONE CENT.

The richest million families have not worked three times (let alone 300 times) harder than the other 99 million families.

The richest 10% own 80% of the stock market, providing billions in "unearned income" that is taxed at less than half the rate of income earned through real work. The richest million families may have actually worked LESS than the other 99 million families.

A number of individuals have had one-year incomes over a billion dollars, enough to pay the salaries of 25,000 teachers or health care workers or emergency responders. It's questionable whether a guy who makes a billion betting on a mortgage collapse is worth even one teacher or health care worker or emergency responder.

Next is the woeful state of tax collections on the people making most of the money. Mitt Romney pays 15%, Warren Buffett 17.4%. The richest 400 Americans, 16.6%. The whole top 1% (a million families) paid less than 23% in 2006.

Average Americans pay more than that. Studies show that when state and local taxes, payroll taxes, property taxes, sales taxes, and excise taxes are tallied up, low-income people can be paying a higher percentage of taxes than the rich, perhaps up to 40% of their incomes.

Average Americans are also paying more than corporations. For every dollar of workers' payroll tax paid in the 1950s, corporations paid three dollars. Now it's 16 cents.

Whew. A lot of good reasons for the rich to be paying a lot more in taxes.

But here's the BEST REASON. The super-rich like to believe their own initiative and creativity have been the primary drivers of growth in technology and science and business and medicine. Some innovative business leaders deserve credit for putting the pieces together on specific initiatives. But the pieces themselves were put together over many years by thousands of less conspicuous people. As Elizabeth Warren said, "There is nobody in this country who got rich on his own. Nobody."

Consider just a simple communications device. The pieces were put together by a procession of chemists, physicists, chip designers, programmers, engineers, production-line workers, market analysts, testers, troubleshooters, etc., etc. They, in turn, couldn't have succeeded without another layer of people providing sustenance and medical support and security and administrative assistance and transportation and office maintenance for the technologists. ALL of them contributed to the final product.

You say a lot of them DID get paid? Well, then, something's wrong, because few of the profits over the last 30 years went to this "middle class" of people to keep them financially secure, and to keep them educated in all the new technologies that are replacing their jobs.

The long-term dependency on the supporting members of society is the best reason for the most fortunate among us to care about everyone else. Sadly, research suggests that wealthy people have less empathy for people unlike themselves, because they no longer have reason to associate with them.

This psychological gap between the rich and the rest of us naturally diminishes the incentive for the 1% to support anyone beneath their economic class. Thus less tax revenue and more cutbacks. Cuts in federal spending have been accompanied by an onslaught of social ills, including the highest poverty and homicide and incarceration and obesity and mental illness rates, an increasing child mortality rate, the highest health care costs, low global rankings in math and science scores. We continue to cut the programs that support a stable society.

The most fortunate among us have succeeded because all of America has supported them for 60 years. Yet they've somehow come to believe that they did it all on their own. Nothing could be further from the truth. They should be thanking all the people who contributed to their success.

Thanking them by paying taxes.

Obama, Sarkozy and Taxing Wall Street

Wednesday, January 11, 2012 by CommonDreams.org

by Jeff Cohen

 

With U.S. media obsessing on the fight here at home among conservatives vying to become president, most of them missed some big news about France, which already has a conservative president.  This week, French President Nicolas Sarkozy announced that he would take the lead – even go it alone within Europe, if need be – in introducing and pushing a Financial Transaction Tax in his country.
 
That’s right – the conservative president of France wants to tax the financial traders and speculators.

Referring to the tax as a “moral issue” and blaming deregulation and speculation for the global economic meltdown, Sarkozy has said that traders must “repay for the damage they have caused.”

What does it tell us about U.S. politics that the conservative president of France – on this issue and others – is way to the left of President Obama?  The U.S. president has not publicly promoted a Wall Street transaction tax (even though US financial institutions, not the French, were largely responsible for the global financial crisis).

Sometimes called a “Robin Hood tax,” a Financial Transaction Tax is endorsed worldwide by everyone from conservative European leaders to the Pope and Archbishop of Canterbury to Bill Gates and Ralph Nader.  The tax is a tiny per transaction fee and would barely be felt by middle-class investors or their pensions or 401(k)’s, but it could raise big bucks from high-volume investors and impose a brake on the kind of speculation that tanked the world’s economy. 

French President Sarkozy keeps explaining to the people of France and Europe that a small transaction tax raises billions for countries facing deficits.

Wouldn’t it be something if President Obama went to the American people with such a deficit proposal, instead of putting Medicare on the chopping block?

President Sarkozy invokes the “moral issue” of financial institutions repairing the damage they caused.  What a shock it would be to see President Obama aiming the “moral issue” at Wall Street profiteers and demanding repair of damage, instead of rewarding them with top White House jobs.

After failing to get resistant allies among European countries to join him, Sarkozy is going forward on his own – declaring yesterday: “If France waits for others to tax finance, then finance will never be taxed.”

Can you imagine Obama standing up to a resistant Congress on a Wall Street transaction tax?  He can’t even stand up to his own advisers on the issue, according to Ron Suskind’s insider book on the Obama White House, “Confidence Men.”  Suskind reports that Obama briefly embraced the tax and declared at one meeting: “We are going to do this!”  But after Obama’s top economic adviser (and Wall Streeter) Larry Summers criticized the tax, the idea was buried at the White House.

That was back in 2009.  But the idea is still alive on Capitol Hill.  A couple months ago, Sen. Tom Harkin and Rep. Peter DeFazio introduced a Financial Transaction Tax bill in Congress that would easily raise $350 billion over 10 years.  Rep. John Conyers introduced a similar bill last year – it would tax Wall Street to fund federal jobs programs.

A Wall Street transaction tax is backed by National Nurses United and other unions.  It’s popular with the U.S. public, and would be even more popular if Obama were to campaign for it in 2012. RootsAction.org has gained 50,000 signatures in support of the tax.

You can add your name here to those pushing Obama to (re)embrace the Wall Street tax.

And don’t get me wrong about President Sarkozy of France.  He’s no great humanitarian.  But he is facing an uphill reelection battle this year and the conservative president understands how popular a financial tax is with voters.

Facing reelection this year, maybe it’s time President Obama came to that same understanding.

Occupy New Hampshire Derides Both Parties

Sunday, January 8, 2012 by CommonDreams.org

'Why Does the Top 1% Have Two Parties and We Have None?'

All political eyes were on New Hampshire this weekend, and members of the Occupy movement hoped to take advantage of the swirl of coverage ahead of Tuesday's Republican Party primary, the first of this election year.
 
 From New Hampshire Public Radio:

Members of Occupy New Hampshire returned to Manchester Saturday to demonstrate outside of the Republican Presidential Debate at St. Anselm's College and spread their message of economic inequality.

Nearly five months after Occupy New Hampshire’s last tents were torn down in Veteran’s Park, the ninety-nine percenters returned to Manchester to demonstrate against what they perceive to be growing economic inequality across the nation.

This time around, though, protesters hope to garner the attention of the national media, who have descended on New Hampshire for the first in the nation primary.

According to Occupy organizer, Michael Grosse, they’re already succeeding:

“Well I think we’ve already gotten a lot of coverage when you really think about it...When a group of about 30 people being able to get national press attention for an event, that’s an accomplishment right there.”

CNN reports today:

Occupy protestors know that many Republicans view them as an extension of the Democratic Party. Elizabeth Grunewald tried to dispel that notion by speaking with folks who are willing to stop and listen to what the group has to say.

"You can't have a slogan that says we are the 99% without including Republicans also," said Grunewald. "It's not aligned with the Democratic Party. It's aligned with the free thinking party."

Doug Bowen tried to sway voters while holding a sign that read "Why does the 1 percent have 2 parties but we have none?"

He said his message to the candidates and voters is "Get money out of politics, pass a constitutional amendment to ban corporate personhood and have publicly funded elections. It's the only way the 99% will get represented rather than the 1%."

There has not been any friction between the people in the small encampment and local police. But there has been plenty of debate on the sidewalks.

Last night, outside of the GOP Presidential debate at St. Anselm's College, protesters gathered to make their voices heard. Among their calls, "How do you fix the deficit? End the wars and tax the rich!"

Patch.com has video.

How the 1 Percent Could Do Its Share to Rebuild America

Monday, January 9, 2012 by Other Words
When Taxes Were Higher, This Nation Built a Vibrant Middle-class Life for Millions
by Susan Adelman

I'm a member of the 1 percent. I've watched my income tax rates fall over my lifetime, from a top rate of 91 percent under President Dwight Eisenhower to the current low rate of 35 percent.

When taxes were higher, this nation built a vibrant middle-class life for millions. Our schools, libraries, bridges, railways, and roads made the United States the envy of the world.

America has been good to my family. My grandfather was a Lithuanian immigrant who owned a general store in Waco, Texas. He helped my father start his business — the Tivoli Theatre in Fort Worth — during the Great Depression. Times were tough. Going to the movies was a way to escape and a ticket cost only a nickel. The business grew to a chain of eight independent theaters in Texas and Oklahoma. My dad invested the money he made wisely.

As tax rates have fallen, our schools, libraries, bridges, railways, and roads have begun to crumble. Millions of Americans have lost their jobs in this Great Recession. Congress continues to resist raising taxes on the wealthy, even though those higher taxes could create the jobs and rebuild the infrastructure that this country so desperately needs.

The 1 percent made billions of dollars during the boom years. Each time Congress reduced the tax rates, we made even more. When President George W. Bush took office, the top income tax rate was just under 40 percent. Congress cut it to 35 percent. Moreoever, many wealthy Americans make a lot of money earning interest on investments, buying and selling stocks, and banking the dividends those stocks produce. Most of those financial gains are taxed at just 15 percent.

A few years ago, Warren Buffett vowed to give a million bucks to any Fortune 500 CEO who could prove he paid a higher tax rate than his secretary. Not one came forward.

Our government taxes work much more than it taxes wealth. What does that say about our values?

Even if tax rates for the 1 percent had been maintained at year-2000 levels, the wealthiest of us would pay more than we do now, but not as much as we should. Still, there would be several trillion dollars more in the nation's treasury, and we 1-percenters would all still be rich.

Some of us get it. We've come together in groups like Patriotic Millionaires to make the case to Congress and the public that we should push those tax rates up to reasonable levels.

As long as Congress refuses to act, here's a simple proposal: I call on other members of the 1 percent to come together to set up a temporary fund to be run by someone with a commitment to rebuilding America, someone like Warren Buffett or Melinda Gates. Those who like the idea would pay in the amount of money they've saved from the lower tax rates. The fund would be used to support our country's long-term economic health, from infrastructure projects to making our schools energy-efficient. Other projects could help rebuild vibrant and green Main Streets.

This is properly the role of government, but government right now isn't doing its job. Just imagine how many jobs we could create if we taxed ourselves as we should be taxed in a decent and fair society.

I believe others would join me in this effort. As more joined in, we millionaires and hopefully some billionaires could challenge others to do the same thing. This would prove that many rich people are ready and willing to raise taxes on themselves.

I was raised to understand that I am part of a privileged minority. I'm getting tired of standing out here by myself yelling, "Tax me!"

A Nightmare on Wall Street

A Christmas Message From America's Rich

Friday, December 23, 2011 by Rolling Stone

by Matt Taibbi 

 

It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.

"The very rich on today’s Wall Street," writes Taibbi, "Are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government." 

True, they’re doing it from behind the ropeline, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.

But while they haven’t yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays.

Courtesy of a remarkable story by Max Abelson at Bloomberg, we now get to hear some of those choice comments.

Home Depot co-founder Bernard Marcus, for instance, is not worried about OWS:

“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

Former New York gurbernatorial candidate Tom Golisano, the billionaire owner of the billing firm Paychex, offered his wisdom while his half-his-age tennis champion girlfriend hung on his arm:

“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said Golisano, who turned 70 last month, celebrating the birthday with girlfriend Monica Seles, the former tennis star who won nine Grand Slam singles titles.

Then there’s Leon Cooperman, the former chief of Goldman Sachs’s money-management unit, who said he was urged to speak out by his fellow golfers. His message was a version of Wall Street’s increasingly popular If-you-people-want-a-job, then-you’ll-shut-the-fuck-up rhetorical line:

Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.

“You’ll get more out of me,” the billionaire said, “if you treat me with respect.”

Finally, there is this from Blackstone CEO Steven Schwartzman:

Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax.

“You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”

There are obviously a great many things that one could say about this remarkable collection of quotes. One could even, if one wanted, simply savor them alone, without commentary, like lumps of fresh caviar, or raw oysters.

But out of Abelson’s collection of doleful woe-is-us complaints from the offended rich, the one that deserves the most attention is Schwarzman’s line about lower-income folks lacking “skin in the game.” This incredible statement gets right to the heart of why these people suck.

Why? It's not because Schwarzman is factually wrong about lower-income people having no “skin in the game,” ignoring the fact that everyone pays sales taxes, and most everyone pays payroll taxes, and of course there are property taxes for even the lowliest subprime mortgage holders, and so on.

It’s not even because Schwarzman probably himself pays close to zero in income tax – as a private equity chief, he doesn’t pay income tax but tax on carried interest, which carries a maximum 15% tax rate, half the rate of a New York City firefighter.

The real issue has to do with the context of Schwarzman’s quote. The Blackstone billionaire, remember, is one of the more uniquely abhorrent, self-congratulating jerks in the entire world – a man who famously symbolized the excesses of the crisis era when, just as the rest of America was heading into a recession, he threw himself a $5 million birthday party, featuring private performances by Rod Stewart and Patti Labelle, to celebrate an IPO that made him $677 million in a matter of days (within a year, incidentally, the investors who bought that stock would lose three-fourths of their investments).

So that IPO birthday boy is now standing up and insisting, with a straight face, that America’s problem is that compared to taxpaying billionaires like himself, poor people are not invested enough in our society’s future. Apparently, we’d all be in much better shape if the poor were as motivated as Steven Schwarzman is to make America a better place.  
 
But it seems to me that if you’re broke enough that you’re not paying any income tax, you’ve got nothing but skin in the game. You've got it all riding on how well America works.

You can’t afford private security: you need to depend on the police. You can’t afford private health care: Medicare is all you have. You get arrested, you’re not hiring Davis, Polk to get you out of jail: you rely on a public defender to negotiate a court system you'd better pray deals with everyone from the same deck. And you can’t hire landscapers to manicure your lawn and trim your trees: you need the garbage man to come on time and you need the city to patch the potholes in your street.

And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air.

The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.

An ordinary person who has a problem that needs fixing puts a letter in the mail to his congressman and sends it to stand in a line in some DC mailroom with thousands of others, waiting for a response.

But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.

Want to lower the capital reserve requirements for investment banks? Then-Goldman CEO Hank Paulson takes a meeting with SEC chief Bill Donaldson, and gets it done. Want to kill an attempt to erase the carried interest tax break? Guys like Schwarzman, and Apollo’s Leon Black, and Carlyle’s David Rubenstein, they just show up in Washington at Max Baucus’s doorstep, and they get it killed.

Some of these people take that VIP-room idea a step further. J.P. Morgan Chase CEO Jamie Dimon – the man the New York Times once called “Obama’s favorite banker” – had an excellent method of guaranteeing that the Federal Reserve system’s doors would always be open to him. What he did was, he served as the Chairman of the Board of the New York Fed.

And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?

Dimon, incidentally, is another one of those bankers who’s complaining now about the unfair criticism. “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” he recently said, at an investor’s conference.

Hmm. Is Dimon right? Do people hate him just because he’s rich and successful? That really would be unfair. Maybe we should ask the people of Jefferson County, Alabama, what they think.

That particular locality is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.

Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance, leaving future residents and those residents’ children with the bill. As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.

Do you think Jamie Dimon would have done that deal if he lived in Jefferson County? Put it this way: if he was trying to support two kids on $30,000 a year, and lived in a Birmingham neighborhood full of people in the same boat, would he sign off on a deal that jacked up everyone’s sewer bills 400% for the next thirty years?

Doubtful. But then again, people like Jamie Dimon aren’t really citizens of any country. They live in their own gated archipelago, and the rest of the world is a dumping ground.
Just look at how Chase behaved in Greece, for example.

Having seen how well interest-rate swaps worked for Jefferson County, Alabama, Chase “helped” Greece mask its debt problem for years by selling a similar series of swaps to the Greek government. The bank then turned around and worked with banks like Goldman, Sachs to create a thing called the iTraxx SovX Western Europe index, which allowed investors to bet against Greek debt.

In other words, Chase knowingly larded up the nation of Greece with a crippling future debt burden, then turned around and helped the world bet against Greek debt.

Does a citizen of Greece do that deal? Forget that: does a human being do that deal?

Operations like the Greek swap/short index maneuver were easy money for banks like Goldman and Chase – hell, it’s a no-lose play, like cutting a car’s brake lines and then betting on the driver to crash – but they helped create the monstrous European debt problem that this very minute is threatening to send the entire world economy into collapse, which would result in who knows what horrors. At minimum, millions might lose their jobs and benefits and homes. Millions more will be ruined financially.

But why should Chase and Goldman care what happens to those people? Do they have any skin in that game?

Of course not. We’re talking about banks that not only didn’t warn the citizens of Greece about their future debt disaster, they actively traded on that information, to make money for themselves.

People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.

What makes people furious is that they have stopped being citizens.

Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors. It's called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here. Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.

But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.

Nobody with real skin in the game, who had any kind of stake in our collective future, would do any of those things. Or, if a person did do those things, you’d at least expect him to have enough shame not to whine to a Bloomberg reporter when the rest of us complained about it.

But these people don’t have shame. What they have, in the place where most of us have shame, are extra sets of balls. Just listen to Cooperman, the former Goldman exec from that country club in Boca. According to Cooperman, the rich do contribute to society:

Capitalists “are not the scourge that they are too often made out to be” and the wealthy aren’t “a monolithic, selfish and unfeeling lot,” Cooperman wrote. They make products that “fill store shelves at Christmas…”

Unbelievable. Merry Christmas, bankers. And good luck getting that message out.

The Jobs Crisis: What Did Roosevelt Do That Obama Should?

by: Martin Bennett and Richard Walker, Truthout | News Analysis

Friday 25 November 2011

The nation is experiencing the most severe economic crisis since the Great Depression. Princeton economist and former Vice Chair of the Federal Reserve, Alan Blinder, calls the current crisis a "national jobs emergency."

The "official" unemployment rate in September was 9.1 percent - nearly twice the rate a decade ago - leaving 14 million people out of work.

It's not just the financial meltdown of 2008 and the Great Recession. The American economy has been underperforming for years. Business Week calls 1999-2009 "The Lost Decade for Jobs" as private-sector employment grew by a paltry net 1.1 percent - the lowest increase for any ten-year period since the 1930s.

The original version of President Obama's increasingly embattled jobs plan aimed to provide a much-needed extension of unemployment benefits and a payroll tax cut for working Americans, but outlined only scarce measures to dent the catastrophic rate of unemployment. What we need today is a massive jobs program like the Works Progress Administration (WPA) launched by President Franklin Roosevelt. The WPA put millions of people back to work in the midst of the Great Depression, restoring their dignity, putting money in their pockets and quite literally saving lives.

The crisis is much worse than most of us think. According to the US Department of Labor, the real unemployment rate is 16.5%, when you count people whose unemployment benefits have run out and still are not working, part-time workers who want full-time jobs, and discouraged workers who have simply stopped looking. The Economic Policy Institute (EPI) reports that the number of long-term unemployed, meaning those unemployed for more than six months, hovers at a postwar record level of 45 percent. All these figures are much higher for black and Latino workers.

No one is insulated. Workers at every educational level have seen their unemployment rates double since 2007 - high school graduates, college graduates and even those with graduate degrees. The severity of the crisis has overturned conventional wisdom that higher education is a cure for joblessness. The unemployed do not need more education - they need work.

What Did Roosevelt Do That Obama Is Not Doing?

In the winter of 1933, with unemployment reaching 25 percent, Roosevelt established the Civil Works Administration, an emergency jobs program that put 4.2 million unemployed to work within six months. He also started the Civilian Conservation Corps to employ a half-million young men with minimal skills in useful work in the nation's parks, forests and rangelands. Meanwhile, Roosevelt launched the Public Works Administration, which funded long-term infrastructure projects such as highways, bridges, dams and public buildings.

The WPA followed in 1935, employing 8.5 million more between 1935 and 1943. It put those men and women to work on projects requested by state and local governments, such as roads, schools, sewers and airports, and operated local arts, educational and media programs.

Once the New Deal was launched in 1933, the US economy began to grow again by leaps and bounds - at a rate of nearly 10 percent per year. By 1937, production had doubled and the unemployment rate had dropped by half. By 1941, before the war began, the economy was back where it would have been had the Depression never happened. With the wartime build-up, mass unemployment became a distant memory.

To tackle our current unemployment crisis, the federal government should spend $500 billion a year over the next three years on emergency jobs programs like those of the New Deal. The first step would be to give every state and local government the funds to restore their budgets. The loss of 680,000 teaching, police, transit, and other public-sector jobs over the last three years has contributed measurably to the downturn.

The second step would be direct programs to create new full-time jobs for the unemployed - at the median wage of $16.27 an hour - in areas where the need is obvious: in schools (e.g., teachers, school maintenance and enrichment programs); human services (e.g., child care, home care and health care); and energy conservation (e.g., retrofitting homes and public buildings).

To this should be added a third step: financing large-scale public works programs to build schools, bridges, a "smart" electrical grid, zero-emission buses, high-speed rail, wind farms and affordable housing. The pathetic state of our national infrastructure has been decried for years by the American Society of Civil Engineers, which gives the country a D grade, and the United States ranks 32nd in the world in infrastructure, according to McKinsey Global Institute.

A substantial increase of government spending for public works will create expanded opportunity for youth, women and minority workers to enter state-certified apprenticeship programs in the construction trades and to earn a middle-class income.

How to Pay for Such a Jobs Program?

First, the federal government can run temporary deficits. While the federal deficit is relatively high at 10 percent of gross domestic product (GDP) in 2010, it is still dramatically lower than the peak of 30 percent of GDP during World War II. Contrary to popular thinking, government spending in a recession can lower the deficit by taking people off the unemployment roles and putting money in the hands of ordinary people to bolster consumer demand, which stimulates business and returns more tax revenues.

But since we are worried about the current federal deficit and the budget woes of state and local governments, we must heed investor Warren Buffett's call to "stop coddling the rich" by raising taxes on millionaires and closing corporate loopholes.

The upper 1 percent's share of national income increased from 9 percent in 1976 to 24 percent in 2007, according to a report by UC Berkeley economist Emmanuel Saez. Nearly half of total income went to the upper 10 percent in 2007, compared to 33 percent 30 years earlier. The top income tax rate on the highest earners was 70 percent between 1940 and 1980 - when the economy was performing much better than it is today - and now it is just 35 percent.

Moreover, corporate profits increased at an annual rate of $1.6 trillion in 2010 - a record for the postwar period. The Tax Policy Center reports that federal revenue from corporate taxes has dropped by half over the last 60 years, while corporations like Verizon, Bank of America and General Electric pay essentially no taxes due to loopholes in the tax code.

The Congressional Budget Office estimates that a 5.6 percent surcharge on incomes exceeding $1 million, as proposed by the Obama administration, will raise $40 billion a year. Ending the Bush-era tax cuts for the upper 2 percent, set to expire in 2012, will generate more than $80 billion a year, according to the Economic Policy Institute. Economists Robert Pollin and Dean Baker estimate that a 0.5 percent transaction tax on the transfer of stocks and securities will yield $175 billion annually from the largest financial institutions and speculators. The Center for Tax Justice calculates that federal tax revenue will increase by $365 billion a year if corporate tax loopholes and subsidies are eliminated.

Republicans oppose taxing the rich, just as they did in the 1930s. It will take popular mobilization by labor, faith, civil rights, women's and youth organizations to overcome such resistance - just as it did then. Occupy Wall Street may be the beginning of a movement for a new New Deal. Collective action worked in the 1930s and it could work again now.

Patriotic Millionaires: Tax the Wealthy

Socialism For the Rich Should End

11.18.11

by Abby Zimet - Common Dreams

Two dozen members of the Patriotic Millionaires for Fiscal Strength were in D.C. this week begging the deficit supercommittee and other members of Congress to kill the Bush tax cuts and raise their taxes dammit because that's obviously how to help the economy. Wow. How dysfunctional is Congress that these guys had to come to them with this eminently reasonable argument?

"It's a Las Vegas economy where regular Americans put their money on the table and the richest 1 percent own the house. And if the 1 percent happen to lose money, the 99 percent bails them out – covers their losses and then stands by watching while the house does it all over again." - Patriotic Millionaire Robert Johnson, former chief economist of the U.S. Senate banking committee.

Tax the One Percent -- Make Wall Street Fund America

Wednesday, November 2, 2011 by Huffington Post

by Van Jones

 

The giant cries of protest sweeping across the country are starting to reverberate in the halls of Congress. Senator Tom Harkin (D-IA) and Representative Peter DeFazio (D-OR) are proposing a Wall Street Tax. Their bill would establish a tiny financial transaction tax of 0.03% on every single trade of stocks, bonds, options, futures, swaps, and credit default swaps.

Notably, a Wall Street Tax is in the Contract for the American Dream, the 10-point plan to fix our economy that more than 131,000 people created earlier this year, through a grassroots, bottom-up process. To date, more than 300,000 people have signed the Contract for the American Dream. In other words, the idea of a Wall Street Tax is already popular.

The Wall Street Tax would be a tiny cost for those of us socking away our savings for retirement or our children's education -- the average person paying into a 401(k) would pay only one dollar per year.

But Wall Street traders could no longer bet thousands of times a second for free. Much of the risk in today's market comes from rapid-fire "flash trading," where financial firms use computer algorithms to make thousands of trades per second. This doesn't add any real value to the market or to our economy.

When we buy something of real value, like a winter coat for our kids, we pay a sales tax, and rightly so. Yet these Wall Street speculators pay zero taxes while making a fortune passing electrons back and forth millions of times a day, all the while destabilizing our economy.

The Harkin-DeFazio Wall Street Tax is common sense. The concept has been around for a while. Hundreds of economists and responsible investors have long called for it, including Nobel Laureates Paul Krugman and Joseph Stiglitz, plus stock market billionaire Warren Buffett and former Goldman Sachs Chairman John Whitehead.

This idea is already law in several countries, including financial centers like the UK and Hong Kong. And the European Union is currently considering a much steeper version of what's on the table in the U.S.

The Wall Street Tax would raise somewhere between $700 billion and $1.2 trillion over ten years, critical funds we need to create jobs and protect vital programs.

Meanwhile, the Super Committee has been charged with finding $1.5 trillion in deficit reductions and has floated the idea of targeting Social Security, Medicare, and Medicaid. Notice: the Wall Street Tax would cover nearly all of the Super Committee's mandated deficit reductions.

Congress is about to face a telling choice. Will they vote to tax Wall Street gamblers in the 1%, or cut the Social Security checks of senior citizens in the 99%?

Members of Congress should take note: If they vote against the 99% on this bill, they should be prepared for the 99% to vote against them next November.

The Tea Party vs. Occupy Wall Street

Tuesday, October 25, 2011 by On the Commons

Finally, a truly populist uprising

by David Morris

 

 

Host David Gregory complained about Occupy Wall Street protestors “demonizing banks” and wondered, “Is this not a reverse tea party tactic?”

Gregory is right. In many respects Occupy Wall Street (OWS) is indeed a mirror image of the Tea Party. To the Tea Party government is the enemy. To OWS the huge corporation is the enemy. OWS wants to raise taxes on billionaires. The Tea Party wants to considerably reduce them. OWS wants to rebuild and strengthen the safety net. The Tea Party wants to weaken it.Which stands up for the majority of Americans? 

Both OWS and the Tea Party are mass movements but their attitude toward the masses couldn’t be more different. OWS and the other #Occupy protests lack leaders and a formal platform, but their demands clearly emerge from the thousands of individual grievances expressed in homemade signs and letters. Mike Konczal at Rortybomb.org did a statistical analysis of 1000 personal statements posted at We are the 99% TUMBLR and found them far less ideological than practical. Their demands effectively boil down to these. “(F)ree us from the bondage of our debts and give us a basic ability to survive.”

From his analysis, Konczal sees the outlines of a program, “Upon reflection, it is very obvious where the problems are. There’s no universal health care to handle the randomness of poor health. There’s no free higher education to allow people to develop their skills outside the logic and relations of indentured servitude. Our bankruptcy code has been rewritten by the top 1% when instead, it needs to be a defense against their need to shove inequality-driven debt at populations. And finally, there’s no basic income guaranteed to each citizen to keep poverty and poor circumstances at bay.”

As one would expect, given its longevity and political impact, the Tea Party does have leaders and a relatively clear program. Probably the best expression of that program occurred when Houston-based attorney Ryan Hecker created a website and invited people to propose ideas for a platform patterned on the Contract for America the Republicans effectively used in 1994 to gain control of the House of Representatives. Some 1,000 ideas were submitted. Ultimately 450,000 people voted online for the final 10 that became the Contract from America.

All parts of this new Contract are intended to shrink government. “Identify the constitutionality of every new law.” “Audit federal agencies for constitutionality.” Demand a federal balanced budget amendment. Reduce taxes.

Starkly absent is any mention of the dangers associated with concentrated private wealth and power.

Faux Populism vs. True Populism
Both OWS and the Tea Party might be described as populist but their definitions of populism wildly diverge. That divergence has been clear from their founding. Occupy Wall Street began on September 7, 2011 with hundreds converging on Wall Street. The Tea Party began on February 19, 2009 with a rant from the floor of the Chicago Mercantile Exchange.

CNBC Business News editor Rick Santelli loudly condemned the government’s plan to help people stay in their homes. “(D)o we really want to subsidize the losers’ mortgages”? he asked. Santelli suggested holding a tea party for traders to dump derivatives into the Chicago River. Floor traders around him cheered his proposal. The video went viral after the Drudge Report publicized it. Within days, Fox News was discussing the appearance of a new “Tea Party”. A week later coordinated protests under the Tea Party banner took place in over 40 cities.

Santelli’s insistence that those who lose their homes are “losers” who have only themselves to blame is a sentiment widely shared among Tea Party Republicans and most recently expressed by Republican Presidential candidate front runner Herman Cain. When asked about Wall Street protestors Cain, former CEO of Godfather’s Pizza declared, “Don’t blame Wall Street. Don’t blame the big banks. If you don’t have a job and you’re not rich, blame yourself.”

During a recent CNN televised Republican presidential debate held in front of a Tea Party audience, the moderator asked Representative Ron Paul what he would do if a healthy 30 year old man decided not to buy health insurance and then had an injury or disease that required hospitalization and surgery. Who would pay for that? Ron Paul said the man was responsible for his actions. He had taken a risk and would have to suffer the consequences. The moderator asked, “Should society just let him die?”. While the Congressman pondered the question, audience members vocally expressed their approval.

This lack of empathy for what OWS would call the 99% is palpable wherever Tea Party Republicans come to power,

In Michigan conservative Republicans gained control last November. The state is home to nearly 2 million people, about 20 percent of the state’s population, who depend on food stamps. Until last month, eligibility was based on income. But this year, even while the state remains mired in the worst recession since the 1930s the Republicans made it much more difficult to qualify for food assistance. Eligibility is now based on assets. Those with assets of more than $5,000 in the bank or who own a vehicle worth more than $15,000 will no longer be eligible.

For Michigan Republicans it is not enough to be poor and needy to qualify for food assistance. You must be destitute. 

In the Tea Party era, policy makers in three dozen states have proposed drug testing for people receiving benefits like welfare, unemployment assistance, job training and food stamps.

In 2011, Florida succeeded in passing legislation requiring the drug testing of welfare applicants at the urging of its Governor Rick Scott, who rode to office on a wave of Tea Party support. The roughly 113,000 Florida welfare recipients must pay for their own drug test. People who fail the test become ineligible for a year. A second failed test makes them ineligible for three years. The Economist magazine’s headlines conveyed the elation Tea Party members must have felt with their legislative victory. Drug testing in Florida: their tea-cup runneth over.

Despite Governor Scott’s rhetoric, the poor are not drug addicts. Only about 2 percent of Florida’s welfare applicants are failing the test, according to Florida’s Department of Children and Families. After adding up the savings derived from not paying welfare to this 2 percent and subtracting the cost of testing 100 percent of the applicants the Tampa Tribune concluded that Florida may save “up to $40,800 to $60,000 for a program that state analysts have predicted will cost $178 million this fiscal year.

But in Florida or Michigan or a dozen other states, it’s not about saving money. It’s about punishing those who teeter on the economic edge. It’s about making clear that we are not our brothers’ keeper.

OWS does demonize powerful banks. The Tea Party demonizes the poorest and weakest of us all.

For OWS unfairness means taxing billionaires at half the rate their secretaries pay and allowing the top 1% of the population to “earn” as much, collectively, as the bottom 60 percent. For Tea Party Republicans taxes themselves are unfair and inequality is desirable. Indeed, they want to give the 1% even a greater share of the nation’s wealth.

All Republican presidential candidates promise to lower taxes on the rich. Herman Cain has captured the popular conservative imagination with his 9-9-9 plan, a flat tax of 9 percent on the rich and corporations and the imposition of a 9 percent national sales tax on everyone. This would result in a 50-75 percent cut in taxes paid by the richest 1% while imposing a hefty new tax on the 99%. The Citizens for Tax Justice estimates that under Cain’s plan, the bottom 60 percent of taxpayers will pay about $2,000 more in taxes while the richest 1% will pay about $210,000 less.

The Tea Party vision of a future America may have been best expressed by the budget introduced last spring by Tea Party darling Representative Paul Ryan (R-WI) last spring and passed enthusiastically by the Republican House. “This is not a budget,” Ryan declared at the time. “This is a cause.”

Indeed it was, and is. Ryan’s plan would cut about $4.3 trillion from programs that primarily benefit the 99% while cutting taxes by about and equal amount, $4.2 trillion, cuts that would overwhelmingly benefit the 1%. According to Robert Greenstein of the Center on Budget and Policy Priorities Ryan’s plan “would produce the largest redistribution of income from the bottom to the top in modern U.S. history, while increasing poverty and inequality more than any measure in recent times and possibly in the nation’s history.”

Even when they agree that federal spending is profligate, OWS and the Tea Party violently disagree on what should be cut. Signs and speeches at #Occupy events often target the exorbitant military spending and foreign wars. But despite the fact that the Pentagon is the poster child for government waste and incompetence, not to mention corruption, it is also the only part of the government the Tea Party considers all but off limits.

As soon as Republicans took over the House of Representatives in November 2010, they changed the rules so that military spending does not have to be offset by reduced spending somewhere else, unlike any other kind of government spending. It is the only activity of government Republicans believe does not have to be paid for. The Tea Party’s ascendance has only strengthened the Republicans’ resolve that the Pentagon’s budget is untouchable. An analysis by the Heritage Foundation of Republican votes on defense spending found that Tea Party freshmen were even more likely than their Republican elders to vote against cutting any part of the military budget.

The Use and Abuse of Government
The Tea Party hates the very idea of government, embracing Ronald Reagan’s famous dictum, “Government is the problem.” OWS also sees government as an enemy when democracy has been corrupted by money and government has been captured by corporations. The Declaration of Principles adopted by the general assembly of Occupy Wall Street in its first days makes this clear, “…no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments.”

As Nobel laureate economist Joseph Stiglitz observes government increasingly is the 1%.

Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office….When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

But OWS also knows that government is the only vehicle through which the majority can fashion rules that increase personal security and restrain unbridled greed and private power. If we give up on government we give up on our ability to collectively influence our future.

Which is why high on the list of demands by OWS protestors is to minimize the impact of money on politics and increase the number of people voting.

Tea Partiers again take the opposite position. They defend the right of global corporations to spend unlimited amounts of money to influence elections and they advocate policies that suppress voter turnout.

“Since Republicans won control of many statehouses last November, more than a dozen states have passed laws requiring voters to show photo identification at polls, cutting back early voting periods or imposing new restrictions on voter registration drives,” the New York Times reported a few weeks back.

A recent study by the Brennan Center for Justice at New York University School of Law analyzed 19 laws that passed and 2 executive orders that were issued in 14 states this year. The report concludes that these policy changes “could make it significantly harder for more than five million eligible voters to cast ballots in 2012.”

Today the Tea Party has the upper hand. With the backing of some of the world’s richest men and most powerful corporations, it has successfully converted the justifiable anger at Wall Street and government inaction into an unprecedented and ahistorical form of populism: a mass uprising against the masses. The Occupy Wall Street movement proposes a populism more compatible with other mass protests, one that doesn’t turn its back on neighbors, one that fights against massive inequality and concentrated private power, and that urges reforms that can once again allow us to have a government of the people, by the people and for the people.