We Don’t Have A Spending Problem, We Have A Fraud Problem
Conservatives seem to have a knack for changing the subject whenever their backs are up against the wall. Over the last several weeks, there has been an orchestrated chorus by the House Republicans in particular to define the so-called “deficit problem” in terms of a wild spending binge by the federal government and the Obama administration. They seem to have easily forgotten who got us into this mess in the first place. That aside, everyone from Speaker John Boehner to Sen Mitch McConnell have been bellowing throughout the halls of Congress and at every available microphone that “We don’t have a revenue problem, we have a spending problem”.
It’s amazing how we all have bought into this line. The media, in its usual rush to get a headline or sound bite, immediately picked up this line and has been the waterboys for the GOP by enabling this hoax on the American people. The focus in most circles has been on spending cuts. Well, we need to re-characterize what is actually going on here. We don’t have a spending problem..we have a fraud problem.
This fraud has been played on the American people by an ideologically depraved Republican party for at least the last ten years. They have made everybody believe that if we just make the wealthy wealthier, somewhere down the road, we will all benefit. There would be job creation with full employment, small businesses would thrive, home prices would fall, gas would cost less than two dollars a gallon and there would be a chicken in every pot. And we believed it hook, line and sinker. Now we are back to square one. None of these things have happened except the fact that we have indeed made the wealthy wealthier. In 2010, the 400 Americans with the highest adjusted gross revenue incomes averaged $345 million. The average federal income tax was 17%, down from 26% in 1992. The income gap just keeps getting wider. Why does this continue to happen? Because we let it happen.
Just last week, Standard and Poor’s accentuated the Republican clarion that the sky is falling. This call comes from the same S&P who supported every toxic waste subprime security under the sky, the same S&P who sold its ratings to the highest bidder. Regulators have also assisted the GOP in their fraud. The Office of the Currency has gone out of its way to protect its clients, ie the banks. Efforts to reign in the banks and stop their predatory loan practices have been foiled at every turn. Even the banks are too big to fail. Profits for banks, corporations, CEO’s, Wall St and the wealthy just keep soaring. There is a lot of back scratching going on here, by and for a lot of wealthy people.
Now that the cat is out of the bag, all of these wealthy people are trying to figure out a way to take the spot light off themselves. They are beginning to see that they may not be able to stave off demands any longer that they pay their fare share. People who have been adversely affected for so many years are now demanding that this fraud be stopped. Teachers and other low wage earners, the poor, seniors, students and union members have all come to believe that they have sacrificed enough. Even some tea party members are beginning to see the light.
For too many years, the Republicans and their wealthy friends have had their hands in everybody’s pockets. Your pocket was the revenue stream for them. General Electric and the Koch Brothers were probably happier than anyone. The Republicans were also happy because their happy friends provided the cover that allows them to do whatever they want to in terms of policy. Being the ideologues that they are, this protection gives them unimpeded opportunity to push forward with their agenda, from dissolving women’s rights, overturning the Affordable Care Act, union busting, replacing Medicare with vouchers and completely eliminating any sense of environmental protection just to name a few. With happy and contented wealthy backers behind you for so many years, how could you go wrong. My, how things are changing.
The revenue stream that the Republicans have depended on for so long is now drying up…that stream is you. They are finding that when they put their hands in your pockets now, they are feeling the seam of the sewn pocket. There just isn’t any more money there. They become flushed and filled with extreme panic, finally realizing that they are going to have their taxes raised after all these years. Their backs are against the wall. So what do they do now? Change the debate..”Let’s raise taxes on everybody”. Nice try!
It’s well past time that shared sacrifice mean exactly what it says. It is no longer acceptable that the poor, under privileged, seniors and the disenfranchised continue to carry the load for corporations, Wall St and their deadbeat tax-evading friends. No, let’s not raise taxes on everybody. Let’s end the fraud and insist that the wealthy start paying taxes just like everyone else. This being Easter Sunday, this may be a good symbolic time to increase taxes only for the rich. We should leave that rate in place for oh say, the next 40 years. Besides, they have accumulated a fair amount of wealth over the years and should easily be able to live off that profit during that time. Perhaps take a trip or two or just wander around the world enjoying their spoils. We will pledge to re-visit this issue after that time. If, and only if, the middle class has reached a level playing field, then we can talk about lowering the tax rate for the wealthy. I think Moses and the Pharaoh’s would be happy with this compromise. So it is written, so let it be done.
By: raemd95, mykeystrokes.com, April 24, 2011
Yes, Paul Ryan Does Cut Taxes For The Rich
A number of conservatives have asserted that, contrary to what I’ve written, the House Republican budget written by Paul Ryan does not cut taxes for high earners. (See John McCormack, Ramesh Ponnuru, Charles Krauthammer, and McCormack again quoting Ryan.) Here’s the argument. Ryan keeps overall tax levels the same as they are right now by making the tax cuts permanent. He would then reduce the corporate tax rate and the top income tax rate by ten percentage points, from 35% to 25%. But he would make up for that additional revenue loss by closing “loopholes and deductions,” many of which benefit the rich. Therefore, his plan doesn’t really cut taxes on the rich.
There are four problems with this claim, each of them fatal.
First, the argument simply reflects a legitimate difference in baselines. Under current law, the Bush tax cuts are in full effect, but expire at the end of 2012. Keep Bush-era tax levels in place is not a tax cut compared with the tax code now, but it is a tax cut compared with the tax code in 2013. Which is the true baseline? I think both sides have a point, and Congressional scorekeepers have taken to using both baselines.
When President Obama accuses Ryan of cutting taxes for the rich, he’s using the post-2012 baseline. I consider that the best point of reference because the most important force in our political system is inertia. Given our multiple veto points, it takes great effort to enact a policy change that the parties disagree upon. Ryan proposes to make that change. Therefore, I think it’s fair to describe him as “cutting taxes,” even if revenues did remain at present levels (which I dispute, but more on that later.) I do think there’s merit in both baselines. The argument that Obama is lying about Ryan — that calling him a tax-cutter is, in Krauthammer’s characteristically understated phrasing, “scurrilous” — rests upon the assumption that the current-policy baseline is not only more preferable but the only remotely honest point of reference. That seems like a huge stretch.
Second, even if we accept Ryan’s preferred baseline, his description of his plan is hard to accept at face value. Tax reform is a trade where you take away deductions (that’s hard) and use the money to reduce rates (that’s easy.) The rate reductions are specified. The reduced deductions aren’t. Another way to put this is that Ryan has proposed a specific tax cut that would benefit the affluent, accompanied by utterly vague promises to find offsets. At the very least, the rate-lowering portion ought to carry more weight than the deduction-closing portion.
Third, even if we accept both Ryan’s baseline and assume he will match every dollar in lost revenue from the rate cuts with another dollar in reduced deductions, he will almost certainly wind up cutting taxes for the rich relative even to the post-Bush tax code. Ryan implies that his plan would leave the rich paying the same effective tax rates as they do now because he’s “getting rid of loopholes and deductions, which by the way are enjoyed by the top [tax] rate filers, the people in the top two brackets.” But he hasn’t put out any details. In 1995, House Republicans loudly promised to promote shared sacrifice by rooting out corporate welfare in the tax code. The actual savings they produced turned out to consist of proposals that hurt the poor (by cutting the Earned Income Tax Credit), benefited business (by letting them swipe funds from employee pensions, keeping the money as profit and thus increasing corporate tax revenue), or other reverse-Robin Hood measures.
Now, Ryan was not around then. But we can get a measure of his intentions from the more specific tax plan laid out in his “Roadmap” from 2010. That plan constituted a massive tax cut for the rich, combined with a tax hike on the middle class.
The Tax Policy Center examined various proposals to reduce tax deductions while using the revenue to lower rates across the board. All the plans decreased the tax burden for the top-earning 1%. The problem is that tax deductions are just not worth as much to very rich people as low tax rates.
It’s true that the Bowles-Simpson deficit reduction plan includes proposals that would lower rates to around 25% while increasing the effective tax rate paid by the very rich. To do that, you have to do things like raise the estate tax rate and completely eliminate the preferential treatment of capital gains. But Ryan’s budget promises instead — and this is the only specific policy commitment in its tax section, other than lowering rates — to expand the preferential treatment of income from wealth:
Raising taxes on capital is another idea that purports to affect the wealthy but actually hurts all participants in the economy. Mainstream economics, not to mention common sense, teaches that raising taxes on any activity generally results in less of it. Economics and common sense also teach that the size of a nation’s capital stock – the pool of saved money available for investment and job creation – has an effect on employment, productivity, and wages. Tax reform should promote savings and investment because more savings and more investment mean a larger stock of capital available for job creation. That means more jobs, more productivity, and higher wages for all American workers.
Fourth — almost there! — even if you reject everything I’ve written to this point, Ryan’s plan includes the repeal of all the taxes in the Affordable Care Act, including the taxes on the affluent. Here’s the Path to Prosperity’s description of health care taxes he proposes to undo:
The new law imposes a 0.9 percent surtax on wages and a 3.8 percent surtax on interest, dividends, and capital gains. Both taxes only apply to filers in the top two income brackets, but as discussed elsewhere in this section, those filers include small businesses employing millions of Americans, and the new taxes on capital will reduce the pool of capital available for investment and job creation.
There. Per Paul Ryan, these are upper-bracket taxes he proposes to lower. He could keep those taxes in effect, and cover a few of the uninsured people he throws off their coverage, or make the progressively-more-inadequate health care vouchers he uses to replace Medicare slightly less inadequate. But he chooses not to do that, because he believes it’s more important to tax capital at lower rates. It’s fine for him to believe that. But he and his defenders have to stop insisting that he doesn’t propose tax cuts for the rich. He indisputably does so.
By: Jonathan Chait, The New Republic, April 20, 2011
Teaparty Republican Governors Seek Big Cutbacks To De-Regulate The Environment
Gov. Paul LePage wants three million acres of North Woods forests opened to development. Weeks after he was sworn in as governor of Maine, Paul LePage, a Tea Party favorite, announced a 63-point plan to cut environmental regulations, including opening three million acres of the North Woods for development and suspending a law meant to monitor toxic chemicals that could be found in children’s products. Mr. LePage said workers’ and businesses’ interests should be defended “with the same vigor that we defend tree frogs.”
Another Tea Party ally, Gov. Rick Scott of Florida, has proposed eliminating millions of dollars in annual outlays for land conservation as well as cutting to $17 million the $50 million allocated in last year’s budget for the restoration of the dwindling Everglades.
And in North Carolina, where Republicans won control of both houses of the Legislature for the first time in 140 years, leaders recently proposed a budget that would cut operating funds to the state’s Department of Environment and Natural Resources by 22 percent.
In the past month, the nation’s focus has been on the budget battle in Washington, where Republicans in Congress aligned with the Tea Party have fought hard for rollbacks to the Environmental Protection Agency, clean air and water regulations, renewable energy and other conservation programs. But similar efforts to make historically large cuts to environmental programs are also in play at the state level as legislatures and governors take aim at conservation and regulations they see as too burdensome to business interests.
Governor LePage summed up the animus while defending his program in a radio address. “Maine’s working families and small businesses are endangered,” he said. “It is time we start defending the interests of those who want to work and invest in Maine with the same vigor that we defend tree frogs and Canadian lynx.”
When Republicans wrested control across the country last November, they made clear that reducing all government was important, but that cutting environmental regulations was a particular priority. Almost all state environmental budgets have been in decline since the start of the recession, said R. Steven Brown, executive director of the Environmental Council of the States, which works with environmental agencies across the country. What has changed this budget season is the scope and ambition of the proposed cuts and the plans to dismantle the regulatory systems, say advocates who are already battle-hardened. “Historically, we’ve taken pride in being a leader in environmental quality in the Southeast,” said Molly Diggins of North Carolina, director of the state chapter of the Sierra Club. “But there is now such fervor to reduce the size of the environmental agency. The atmosphere is the most vitriolic it’s ever been.”
David Guest, the managing attorney for the Florida office of Earthjustice, a national environmental law firm, said Governor Scott’s budget was “the most radical anti-environmental budget” he had seen in two decades of environmental work. Comparing Mr. Scott’s proposed changes with those of Florida’s previous Republican governors, including Jeb Bush, he called them “a whole new world.”
The strategies have been similar across the affected states: cut budgets and personnel at regulatory agencies, prevent the issuing of new regulations, roll back land conservation and, if possible, eliminate planning boards that monitor, restrict or permit building development.
In New Jersey, for example, Gov. Chris Christie, another favorite among Tea Party loyalists, has said the Highlands Water Protection and Planning Act, which preserves more than 800,000 acres of open land that supplies drinking water to more than half of New Jersey’s residents, is an infringement on property rights. Mr. Christie has moved to shift power from planning boards and government agencies to administrative judges, political appointees who, environmentalists say, tend to rule more often in favor of developers’ interests.
In Florida, Governor Scott has asked to cut staff members to 40 from 358 at the Department of Community Affairs, which regulates land use and was created to be a control on unchecked urban sprawl. Lane Wright, a spokesman for Governor Scott, said the cuts would enable businesses to grow again in Florida. The governor “does care about the environment,” Mr. Wright said, “but feels it is more important to get people back to work.”
In the first round of federal budget fights, Republicans appear to have won some of what they sought: $1.6 billion in cuts from the E.P.A. and $49 million from programs related to climate change. But they fell short in other areas. Daniel J. Weiss, director of climate strategy at the Center for American Progress, a liberal Washington policy group, said that by his calculation the Republicans had sought nearly $10 billion in cuts related to efficiency and renewable energy but got less than $3.7 billion. “The Democrats successfully defended investments in clean energy,” Mr. Weiss said.
The eventual outcome at the state level is much less clear. Florida and North Carolina’s budget battles are in the early stages. In New Jersey, where Governor Christie has been in office since 2010, he has held up stricter drinking water standards, saying he is waiting for further research by the E.P.A. And yet, in Maine, Governor LePage’s agenda has engendered such an angry response that the newly elected Republican majority in the State Legislature seems to be backpedaling from many of its strongest components. Mr. LePage’s proposal to open the woodlands has not yet been introduced as a bill. And this month the Legislature made a point of enacting a ban on a chemical detected in sippy cups. All but three legislators voted for it. (Mr. LePage has questioned whether the science is strong enough to support such a ban.) Adrienne Bennett, the governor’s press secretary, acknowledged that Mr. LePage had not gotten everything he wanted, but pointed to some victories. The governor just signed a law that will reduce restrictions for building on sand dunes, and his proposal to provide incentives to businesses to police themselves on a variety of environmental regulations is still in the Legislature. “‘We will continue to move forward,” Ms. Bennett said.
By: Leslie Kaufman, The New York Times, April 15, 2011
Looming Government Shutdown Reminds Us That Congress Is Not A Business
It’s become common to bash large public institutions with the phrase, “if I ran my business the way they run [government/public schools/whatever], I’d be bankrupt.”
Maybe so. But Congress and law making are not businesses (the high-cost business of campaigning and lobbying aside). And public schools are not businesses, either.
Still there’s a tendency to think that putting corporate executives or small business owners in leadership positions at public institutions will somehow make those entities profitable or successful. That accounts for the election of some businesspeople to Congress, and the appointment of former magazine magnate Cathie Black as New York City schools chancellor.
Just a few months after her appointment by New York City Mayor Michael Bloomberg, Black is out. It was hardly a surprise, her approval rating among city residents had been an anemic 17 percent, according to a Quinnipiac University poll released last month. She had made some foolish comments, such as suggesting that birth control was the solution to schools overcrowding, and she upset some parents with her proposal to install an “elite” new high school inside an existing Park Slope high school.
Black had no education experience, which might have contributed to her troubles. She may be great at bottom-line decisions, but such calculations are nearly impossible in a public school. You can’t fire your students to improve your graduation rate. You can call a school “failing” for not reaching certain testing standards, but the school can’t do anything about the challenges–such as poverty, substance abuse in the home, or language barriers–that make certain student populations more difficult to teach.
And ironically, the business model on Wall Street doesn’t follow the market approach being imposed on schools. Financial big-wigs who helped run the economy into the ground got big bonuses, despite their poor performance. Their businesses weren’t closed for incompetence; they were given government bailouts. There is indeed an argument to be made that letting those businesses fail would have done tremendous damage to innocent parties, such as people whose IRAs are dependent on the performance of stocks over which they have no control. So why are schools not given the same “business” courtesy?
The same goes for the federal budget. Sure, one couldn’t run a business budget in the same way. But then, the government can’t fire Social Security recipients. It can’t–not without planning and consensus–decide to shutter “underperforming” enterprises such as the Afghan war. The government is meant to take care of everyone, to some degree, and unlike a business, the government can’t pick and choose which customers to target.
As stubbornness in Congress threatens a government shutdown, lawmakers tethered to a business model approach should remember their roles. A CEO or small business owner can dictate; a House member is one of 435 and must accept the needs and perspectives of the rest of the chamber. Businesses can price items high enough to cut out low-income consumers. Government has an obligation–though to what degree is a valid discussion–to protect the neediest. Having former businesspeople in Congress provides a valuable perspective in a diverse institution. But Congress is not a business.
By: Susan Milligan, U.S. News and World Report, April 7, 2011
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