“Moneyed Elites Get Richer The Old-Fashioned Way; Stealing”: Preferential Tax Treatment For The Narcissistic Money Manipulators
With the 2016 presidential campaigns in full swing, the burdens of the working middle class have taken center stage. And believe it or not, there is bipartisan support from the frontrunners on a key issue brought up over and over again. Donnie Trump is for it. Hillary Clinton is for it. Jeb Bush is for it. Bernie Sanders is for it. Even Barack Obama is for it. And the American people are overwhelmingly for it.
The “it” that’s drawing such broad support is the idea of ending a ridiculous tax loophole that was written by and for the richest, most pampered elites on Wall Street. An obscurely titled “carried interest” tax break allows billionaire hedge-fund hucksters to have their massive incomes taxed at a much lower rate than the one retail workers, Main Street businesses, carpenters, and other modest-income people must pay.
Keep that carried interest tax loophole in mind when I tell you this number: 158,000. That’s the number of kindergarten teachers in America. Their combined income in 2013 was $8 billion. Here’s another number for you: 25. That’s the number of America’s highest-paid hedge fund operators whose combined income in 2013 was $21 billion. Yes, just 25 Wall Street greedmeisters hauled off $13 billion more in pay than was received by all of our kindergarten teachers — the people we count on to launch the education of the next generation.
Which group do you think is rewarded by law with the lowest rate of income tax? Right: the uber-rich Wall Streeters! Incredibly, Congress (in its inscrutable wisdom) gives preferential tax treatment to the narcissistic money manipulators who do practically nothing for the common good. Even flamboyant celebrity narcissist Donnie Trump sees through the gross inequality of this tax scam: “The hedge fund guys didn’t build this country,” The Donald recently barked. “These are guys that shift paper around, and they get lucky. The hedge fund guys are getting away with murder.” Indeed, while dodging through this loophole, they pay about half the tax rate that kindergarten teachers are assessed. In effect, Wall Street’s puppets in Congress let this tiny group of moneyed elites steal about $18 billion a year that they owe to the public treasury to finance the structure and workings of America itself.
This privileged treatment of pampered paper- and money shufflers over people who do constructive work in our society adds to America’s widening chasm of inequality. It’s so unfair and unpopular that even Donald, Hillary, Jeb, Bernie and others are saying that it has to go. So it’s bye-bye, loophole, right?
Ha — just kidding! Trump can mouth all he wants, but no animal hath such fury as a hedge funder whose special tax boondoggle is threatened. Trump had barely gotten the word “unfair” out of his puffy lips before the tax-loophole profiteers deployed battalions of lobbyists, PR flacks, and front-group operatives out to defend their precious carried-interest provision. One group, with the arcane name of Private Equity Growth Capital Council, rushed a dozen Gucci-clad lobbyists to Capitol Hill to “inform” lawmakers about the virtues of coddling Wall Street elites with tax favors.
Of course, “informing” meant flashing their checkbooks at key members of Congress. After all, even the loudest blast of political talk is cheap — and it’s the silent sound of a pen writing out a campaign check that makes Washington World keep spinning in favor of the rich.
Sure enough, Rep. Paul Ryan (R-WI) and Sen. Orrin Hatch (R-UT) , the two lawmakers who head Congress’ tax-writing committees, quickly announced that — the will of the people aside — there would be no repeal of the hedge-fund loophole anytime soon. The inequality that is presently ripping our society apart is not the result of some incomprehensible force of nature, but the direct result of collusion between financial and political elites to rig the system for the enrichment of the few — i.e., themselves — and the impoverishment of the many. There’s a word for those elites: thieves.
By: Jim Hightower, The National Memo, September 30, 2015
“Why The GOP Is The True Party Of ‘Free Stuff'”: Bush’s Logrolling Directs Almost All The Benefits To People Who Don’t Need It
While other candidates are a lot crazier, Jeb Bush is clearly the most fumble-brained option in the presidential race. He can’t seem to string two words together without committing a grievous political faux pas. Whether it was his call for “phasing out” Medicare, or his scorn for women’s health issues, or his claim that Asians are the real anchor babies, he’s got a serious case of foot-in-mouth disease.
Now he’s out with a fresh clunker, this time about how Republicans, unlike Democrats, won’t try to lure black voters with “free stuff.” Primary voting is months away, and already Bush is flirting with language that may have lost Mitt Romney the election.
Bush’s argument — that Democrats cynically use welfare to buy black votes and thereby trap them in a cycle of dependency — is seriously mistaken, as well as deeply hypocritical. But a more fundamental mistake is the picture of government Bush envisions. Put simply, handing out “free stuff” of one sort or another is perhaps the most important job governments can do.
First, let’s tackle why black people vote Democratic. I think the answer can be illustrated best in two words: Strom Thurmond. He was a South Carolina Democrat when he broke the record for the longest Senate filibuster ever trying to stop the 1957 Civil Rights Act. But after a much more aggressive civil rights bill passed in 1964, he switched parties, eventually followed by most of the other Dixiecrats. As Philip Bump demonstrates, blacks unsurprisingly did the opposite at the same time, shifting very heavily towards the Democratic Party.
In other words, government benefits play, at best, an incidental role in black support for the Democrats. Republicans today are not segregationists, but they are the inheritors of a legacy of outright white supremacy. Thurmond was in the Senate until 2003. At his 100th birthday party in 2002, then-Senate Majority Leader Trent Lott (R-Miss.) praised Thurmond’s 1948 run for president under a third party apartheid ticket. (Lott later resigned as leader after his comments were made public.) Democrats have not been the finest stewards of black fortunes, but it’s pretty obvious that they’re better than the alternative.
That brings me to the hypocrisy. While Democrats support social benefits in a wishy-washy way, conservatives are absolutely obsessed with directing huge monetary benefits to their favored constituencies — namely, the rich.
George W. Bush’s tax cuts were violently skewed towards the wealthy — over 73 percent of the benefits went to the top income quintile, and fully 30 percent to 1 percenters alone. Jeb Bush aims to pull the same trick, proposing another corpulent set of tax breaks — only this time, over half of the benefits would accrue to the top 1 percent alone. You can’t win an election solely with the support of billionaires, of course, but Bush and his allies have also already raised over $120 million. Not, one suspects, a coincidence.
Overall, welfare benefits for the top income quintile — largely a result of conservative policymaking — cost roughly $355 billion yearly. Meanwhile, what passes for new policy in Republican circles — a child tax credit — is a government benefit for middle- and upper-class parents that carefully and deliberately excludes the poor.
But it would be a mistake to stop here. Good government types often rail against the blatant cronyism of Bush family politics — i.e., you give me hundreds of millions of dollars for my presidential campaign, and I’ll cut the capital gains tax so you can better loot your company — but making good policy isn’t as simple as being against patronage in general. As Francis Fukuyama points out in Political Order and Political Decay, Boss Tweed-style patronage politics can also be a first step towards an efficient, decent modern state. There is no bright line between handing out jobs to one’s ethnic community in return for votes, and constructing a modern bureaucracy that provides universal social benefits like clean air and water, low crime, a safety net, and so forth.
For what are governments good for, if not providing universal security and prosperity for as many citizens as possible? Even in a jalopy country like the U.S., the vast majority of state activity is dedicated towards this end, at least ostensibly. The military, to defend the nation; Social Security, to provide for the retired and disabled; Medicare, Medicaid, and ObamaCare, to provide universal access to health care; various safety net programs like food stamps and the Earned Income Tax Credit, to keep people from destitution — these together, plus interest on the national debt, account for 84 percent of direct federal spending. Many of these could be improved, or are badly misused, but that’s their bedrock ideological justification. Other nations with better versions of similar policies show that universal high-quality health care and an end to poverty are easily within our grasp.
So the problem with Bush’s logrolling — and Republican policy in general — is mainly that it directs almost all the benefits to people who don’t need it.
By: Ryan Cooper, The Week, September 28, 2015
“Ornery People R Us”: Anxiety Is Pervasive On Both Sides Of Political Spectrum
In achieving their improbable surges in presidential polling, Bernie Sanders and Donald Trump have profited from the same wellspring of anxiety, a deep-seated fear about the future that is rising across the land. Their answers to that anxiety are very different — as their followers are very different — but they have both tapped into an undercurrent of unease that affects a broad swath of American voters.
And that unease is well-founded. In mid-September, the U.S. Census Bureau issued its annual report on wages, poverty, and health insurance. Its findings come as no surprise: Though the official unemployment rate is down to its lowest level in seven years, the percentage of people living in poverty — around 14 percent — hasn’t budged in four years.
Equally worrisome is the stagnation in wages, which haven’t risen significantly for more than a decade. “Anyone wondering why people in this country are feeling so ornery need look no further than this report. Wages have been broadly stagnant for a dozen years, and median household income peaked in 1999,” Lawrence Mishel, president of the Economic Policy Institute, a research group, told The Associated Press.
And ornery people are. That’s the only thing that explains Trump, who for weeks has enjoyed the top spot in GOP presidential primary polls. Full of bombast, narcissism, and blame, the real estate titan has pinned Mexican immigrants as the purveyors of all that is destructive to the American way of life. It’s astonishing how much support he’s received for his proposal to deport the estimated 11 million who are here illegally.
There’s no doubt a good portion of racism and xenophobia among the Trump crowd; they are largely voters uncomfortable with the country’s increasing diversity. But they are also anxious about a future in which the American dream is out of reach for their children and grandchildren.
On the other side of the political spectrum, Sanders, Vermont’s self-described socialist in the U.S. Senate, is giving Hillary Clinton a run for her money, attracting large crowds, and leading in New Hampshire, which holds the first presidential primary vote. His answers, at least, are not xenophobic: Among other things, he would increase taxes on the wealthy and end some longstanding trade agreements.
Sanders has long warned about income inequality, which has been growing for decades but was exacerbated by the Great Recession. Suddenly, ordinary workers saw their jobs disappear, their savings evaporate, their homes taken by the bank. Many of them have not recovered the ground they lost, and their traumas have invited fear bordering on panic.
Meanwhile, the rich have only gotten richer. The top 1 percent own 40 percent of the nation’s wealth, and they hold a larger share of income than at any time since the 1920s and the Great Depression.
These trends are evident throughout the industrialized world; they’re not the fault of any single politician or ideological philosophy. According to economists, they’ve grown from a convergence of factors, including the technological revolution and the globalization of labor.
Still, the wealth gap is quite worrisome. It’s a recipe for revolution, the sort of gulf between the haves and have-nots that is characteristic of developing countries, where the ties of the civic and social fabric do not bind. It’s hard to overstate the potential for upheaval in a country such as this, where a diverse population is not held together by a single language or race or religion, but rather by the belief that opportunity is available to all. What happens when a majority of the people no longer believes that?
You’d think, then, that income inequality would dominate the campaign trail. But the subject was hardly mentioned during Wednesday’s marathon GOP presidential primary debate, where such pressing priorities as possible Secret Service code names were discussed.
That’s not good. While it’s hard to see either Trump (his bubble may already be bursting) or Sanders as a presidential nominee, the voters they represent aren’t going away. Neither is their anxiety, which could prove a disruptive force in American political and civic life.
By: Cynthia Tucker Haynes, Pulitzer Prize for Commentary in 2007; The National Memo, September 19, 2015
“Why Progressives Must Stay United”: A Split Would Only Play Into The Hands Of The Right
A new report finds more U.S. children living in poverty than before the Great Recession. According to the report, released Tuesday from the Annie E. Casey Foundation, 22 percent of American children are living in poverty (as of 2013, the latest data available) compared with 18 percent in 2008.
Poverty rates are nearly double among African-Americans and American Indians. Problems are most severe in South and Southwest. Particularly troubling is a large increase in the share of children living in poor communities marked by poor schools and a lack of a safe place to play.
Which brings me to politics, power, and the progressive movement.
The main event at the Netroots Nation conference in Phoenix, Arizona last weekend was a “Presidential Town Hall” featuring one-on-one discussions between journalist and undocumented American Jose Antonio Vargas and presidential candidates Governor Martin O’Malley and Senator Bernie Sanders.
It was upstaged by #BlackLivesMatter activists who demanded to be heard.
It’s impossible to overcome widening economic inequality in America without also dealing with the legacy of racial inequality.
And it is impossible to overcome racial inequality without also reversing widening economic inequality.
They are not the same but they are intimately related.
Racial inequalities are baked into our political and economic system. Police brutality against black men and women, mass incarceration disproportionately of blacks and Latinos, housing discrimination that has resulted in racial apartheid across the nation, and voter suppression in the forms of gerrymandered districts, voter identification requirements, purges of names from voter registration lists, and understaffed voting stations in black neighborhoods – all reveal deep structures of discrimination that undermine economic inequality.
Black lives matter.
But it would be a terrible mistake for the progressive movement to split into a “Black lives matter” movement and an “economic justice” movement.
This would only play into the hands of the right.
For decades Republicans have exploited the economic frustrations of the white working and middle class to drive a wedge between races, channeling those frustrations into bigotry and resentment.
The Republican strategy has been to divide-and-conquer. They want to prevent the majority of Americans – poor, working class, and middle-class, blacks, Latinos, and whites – from uniting in common cause against the moneyed interests.
We must not let them.
Our only hope for genuine change is if poor, working class, middle class, black, Latino, and white come together in a powerful movement to take back our economy and democracy from the moneyed interests that now control both.
By: Robert Reich, The Robert Reich Blog, July 22, 2015
“Jeb And His Vassals Lose Sight Of The Serfs”: It’s The Lash, Always The Lash
“In the feudal system,” The Oxford English Dictionary says, a vassal is “one holding lands from a superior on conditions of homage and allegiance.”
The system lives on in modern American politics, forsooth in changed form. No longer is it local lords providing military support to a king in return for grants of land. Nowadays, the vassals show their loyalty in the form of large campaign checks. In return, they are promised various economic privileges, among them protection from taxation.
The ritual in all its pageantry has been on display at the Bush family compound in Kennebunkport, Maine. There former president George Herbert Walker Bush, his wife, Barbara, and other members of the Bush dynasty hold court to advance Jeb Bush’s quest for the presidency. The object is to make Jeb the second son of H.W.’s, after George W., to capture the White House.
Picture the Bush clan treating CEOs, sports-team owners, and other modern-day vassals to lobster rolls and consenting to pose in the courtiers’ selfies. Imagine the splendor: the many houses, including a new one for Jeb, perched on the rocks of Walker’s Point, the Atlantic crashing at their feet.
Such invites are “the prize for members of the vaunted Bush fund-raising operation,” writes political reporter Nicholas Confessore. They are why Jeb has raised as much money for his campaign as the other Republican presidential candidates and their SuperPACs combined.
Spending so much time in this closed society may also help explain Jeb’s politically awkward remark that Americans “need to work longer hours.”
In olden times, the serfs were regarded as beasts of burden, to be whipped into higher productivity. Conditions are much improved, but one can assume the conversations at the Bush compound do not linger long on the common folk’s economic interests.
A big reason Donald Trump is matching or passing Jeb in the polls is that he is talking to the serfs. He may be saying stupid things, but at least he recognizes their existence.
Bush complained that his views are being taken out of context and elaborated. He really said that sustained growth requires that “people work 40 hours rather than 30 hours.” That way, they have more money and can “decide how they want to spend it rather than getting in line and being dependent on government.”
Another way of stimulating growth would be to have Americans work the same hours but get paid more. That, too, would put more money in their pockets, prompting more spending and saving. This solution might require employers to share more of the profits with their laborers as they used to do. Such scenarios don’t cross the royal mindset, the key to growth always being to crank up the serfs’ stress level.
The reality is that lots of Americans would love a 40-hour job but are instead stuck working two 30-hour jobs, neither offering such luxuries as health coverage and vacation time. That’s the sad reality of today’s job market and one reason the Affordable Care Act was so necessary. It subsidizes health coverage for workers who can’t get it through their employment.
But economic security in some eyes is dependency in others’. One conservative argument goes that repealing Obamacare would force workers into the 40-hour jobs they’re alleged to be turning up their noses at. It’s the lash, always the lash.
Over at Walker’s Point, donors are meeting a new set of Bushes, known as “P’s crowd.” That would be George P. Bush, a son of Jeb’s apparently looking to claim the family political inheritance. Some of P’s followers have parents who back P’s parent.
Me thinks the show goes on.
By: Froma Harrop, Featured Post, The National Memo, July 16, 2015
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