“The Poor Are Too Rich”: Kansas Republicans Working Hard To Stick It To The Poor
Kansas Republicans, under the leadership of “compassionate conservative” Sam Brownback, are working hard to stick it to the poor:
A Kansas House tax committee passed a bill in which anyone making less than $25,000 a year — roughly half a million of the state’s 2.9 million residents — will pay an average of $72 more in taxes, while those making more than $250,000 — about 21,000 people — will see a $1,500 cut, according to Kansas Department of Revenue estimates cited by the Kansas City Star.
The hike would come from the elimination of tax credits typically benefiting the poor.
I can’t help but see this as a continuation of the conservative meme that its the poor who don’t pay their “fair share.” Last fall, as the Occupy movement gained steam, it became common for conservatives to complain about the 47 percent of Americans who “don’t pay taxes.” Presidential candidates like Michele Bachmann and Rick Perry complained about it in speeches and debate performances, while conservative activists (Redstate’s Erick Erickson comes to mind) touted it in response to the Occupy movement.
Of course, the claim was misleading to the extreme; all Americans pay something to the government—sales taxes, payroll taxes, and various state taxes—but only some make enough money to owe federal income taxes. Those that don’t, as Annie Lowrey explained for Slate, are either poor, or benefit from a variety of tax deductions:
About half of households within that 47 percent do not end up paying federal income tax because they qualify for enough breaks to cancel their tax obligations out. Of that group, 44 percent are claiming tax benefits for the elderly, like an exemption for Social Security payments. And 30.4 percent are claiming credits for “children and the working poor,” like the child-care tax credit. The remainder get breaks for investment income, spending on education, itemized deductions, and a mish-mash of other things. When combined, it’s all enough to cancel out their income tax requirements.
Because of facts like this, and the declining visibility of the Occupy movement, conservatives began to back off on the rhetoric of tax increases for low-income Americans and others who benefit from social services. That said, both policies have always been part of conservative proposals for reform—see Paul Ryan’s roadmap, for example—and in states like Kansas, Republicans are actively working to increase the burden on the least well-off.
One last thing: Kansas Republicans say that this proposal is to make the state more competitive. “Our goal is for our economy to look more like Texas, and a lot less like California,” said Brownback. If that’s the case, then the Kansas GOP should spend less time trying to raise taxes on poor people, and more time trying to encourage immigration. More than anything, Texas has been a beneficiary of the fact that people want to live there. As it stands, however, conservatives in Kansas would rather joke about shooting immigrants than work to bring them to the state.
By: Jamelle Bouie, The American Prospect, February 24
“Money And Morals”: The GOP’s Attempt To Divert The Inequality Conversation
Lately inequality has re-entered the national conversation. Occupy Wall Street gave the issue visibility, while the Congressional Budget Office supplied hard data on the widening income gap. And the myth of a classless society has been exposed: Among rich countries, America stands out as the place where economic and social status is most likely to be inherited.
So you knew what was going to happen next. Suddenly, conservatives are telling us that it’s not really about money; it’s about morals. Never mind wage stagnation and all that, the real problem is the collapse of working-class family values, which is somehow the fault of liberals.
But is it really all about morals? No, it’s mainly about money.
To be fair, the new book at the heart of the conservative pushback, Charles Murray’s “Coming Apart: The State of White America, 1960-2010,” does highlight some striking trends. Among white Americans with a high school education or less, marriage rates and male labor force participation are down, while births out of wedlock are up. Clearly, white working-class society has changed in ways that don’t sound good.
But the first question one should ask is: Are things really that bad on the values front?
Mr. Murray and other conservatives often seem to assume that the decline of the traditional family has terrible implications for society as a whole. This is, of course, a longstanding position. Reading Mr. Murray, I found myself thinking about an earlier diatribe, Gertrude Himmelfarb’s 1996 book, “The De-Moralization of Society: From Victorian Virtues to Modern Values,” which covered much of the same ground, claimed that our society was unraveling and predicted further unraveling as the Victorian virtues continued to erode.
Yet the truth is that some indicators of social dysfunction have improved dramatically even as traditional families continue to lose ground. As far as I can tell, Mr. Murray never mentions either the plunge in teenage pregnancies among all racial groups since 1990 or the 60 percent decline in violent crime since the mid-90s. Could it be that traditional families aren’t as crucial to social cohesion as advertised?
Still, something is clearly happening to the traditional working-class family. The question is what. And it is, frankly, amazing how quickly and blithely conservatives dismiss the seemingly obvious answer: A drastic reduction in the work opportunities available to less-educated men.
Most of the numbers you see about income trends in America focus on households rather than individuals, which makes sense for some purposes. But when you see a modest rise in incomes for the lower tiers of the income distribution, you have to realize that all — yes, all — of this rise comes from the women, both because more women are in the paid labor force and because women’s wages aren’t as much below male wages as they used to be.
For lower-education working men, however, it has been all negative. Adjusted for inflation, entry-level wages of male high school graduates have fallen 23 percent since 1973. Meanwhile, employment benefits have collapsed. In 1980, 65 percent of recent high-school graduates working in the private sector had health benefits, but, by 2009, that was down to 29 percent.
So we have become a society in which less-educated men have great difficulty finding jobs with decent wages and good benefits. Yet somehow we’re supposed to be surprised that such men have become less likely to participate in the work force or get married, and conclude that there must have been some mysterious moral collapse caused by snooty liberals. And Mr. Murray also tells us that working-class marriages, when they do happen, have become less happy; strange to say, money problems will do that.
One more thought: The real winner in this controversy is the distinguished sociologist William Julius Wilson.
Back in 1996, the same year Ms. Himmelfarb was lamenting our moral collapse, Mr. Wilson published “When Work Disappears: The New World of the Urban Poor,” in which he argued that much of the social disruption among African-Americans popularly attributed to collapsing values was actually caused by a lack of blue-collar jobs in urban areas. If he was right, you would expect something similar to happen if another social group — say, working-class whites — experienced a comparable loss of economic opportunity. And so it has.
So we should reject the attempt to divert the national conversation away from soaring inequality toward the alleged moral failings of those Americans being left behind. Traditional values aren’t as crucial as social conservatives would have you believe — and, in any case, the social changes taking place in America’s working class are overwhelmingly the consequence of sharply rising inequality, not its cause.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 9, 2012
“Compassionate Conserative”: Gov. Sam Brownback’s Anti-Poor Agenda
The Kansas governor appears to be waging war against low-income families in his state.
The GOP presidential primary has offered some odd debates on who cares about the “very poor” and whether there should be a “safety net” or a “trampoline” to help people get out of poverty. Meanwhile, in Kansas, it seems Governor Sam Brownback is hoping to dig a bigger hole for the poor fall into. Between his tax plans and his approaches to school funding, Brownback’s agenda overtly boosts the wealthy and makes things harder for the poor. While many liberals speculate this to be a secret goal, Brownback is hardly making a secret of his agenda.
Currently, the Kansas Legislature is examining Brownback’s plan to redesign education funding. The plan removes extra dollars for students who are more expensive to educate—those who must learn English or come from challenging backgrounds. Instead of providing funding based on the actual costs of education, Kansas would allow counties to raise property taxes and keep the revenue. That’s great for wealthy districts with high property values and seriously damaging for poor districts where the tax base is relatively small. The plan would likely create enormous disparities between school districts, leaving students in poor communities with few good options among traditional schools. Meanwhile, wealthy school districts can likely spend more and more to make their schools top-notch.
While low-income kids would attend schools getting outpaced by wealthy counterparts, their parents would get to pay more in taxes. That’s because the governor is also pushing a tax plan, approved by Reaganite Arthur Laffer, that would actually raise the total tax burden on those who make less than $25,000 a year. For the record, that’s more than 40 percent of filers in the state. As I wrote last week, the plan not only raises taxes on the poor but also cuts government programs that target low-income Kansans, compounding the hit. Meanwhile, the biggest tax cut in the plan would go to the wealthiest residents, those making more than $250,000.
But perhaps most galling is that Brownback will not object to a new decision by the state’s welfare officials that cuts off food-stamp benefits for U.S.-born children of undocumented workers. The decision leaves hundreds of American children without access to the program.
I should also mention that Brownback has long considered himself a “compassionate conservative.” With his level of compassion, who needs safety nets, or as Newt Gingrich would say, “trampolines”?
By: Abby Rapoport, The American Prospect, February 8, 2012
“Empathy Gap”: Mitt Romney Rejects Concern For The “Very Poor”
Just two weeks ago, Mitt Romney told voters in South Carolina, “I’m concerned about the poor in this country.” This morning, Romney reversed course and said the exact opposite.
“I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich, they’re doing just fine. I’m concerned about the very heart of America, the 90%, 95% of Americans right now who are struggling and I’ll continue to take that message across the nation. […]
“You can focus on the rich, that’s not my focus. You can focus on the very poor, that’s not my focus. My focus is on middle-income Americans.”
The Republican frontrunner added, “We will hear from the Democrat Party, the plight of the poor.”
When Romney’s rivals were hammering him on Bain Capital — and the fact that he got extremely rich by firing American workers and leading a vulture-capitalist firm — he shifted rhetorical gears in order to seem sympathetic towards those struggling most.
With his new “I’m not concerned about the very poor” line, it appears Romney has abandoned this tack altogether.
Regardless, as a matter of substance, Romney’s line this morning is just a mess.
For one thing, it’s tone-deaf to a breathtaking degree. When a hyper-wealthy politician boasts about taking pleasure in firing people, he probably shouldn’t tell national television audiences he’s “not concerned about the very poor.”
For another, Romney’s candid admission underscores a larger policy problem: he’s not only unconcerned with the plight of the very poor, he also pursuing an agenda that would make their lives considerably more difficult. If elected, a Romney administration intends to slash public investments that benefit working families, while raising taxes on those at the bottom of the income scale.
Let’s also not forget that while Romney insisted this morning that he’s “not concerned about the very rich,” either, there’s ample evidence to the contrary. Indeed, the presidential hopeful has already presented a plan to give the very wealthy yet another massive tax break.
And as for Romney’s purported concern for the middle class, what the former governor neglected to mention this morning is that his tax plan largely ignores the middle class. By his own admission, Romney doesn’t plan to do much of anything for middle-income earners.
Taken together, in one interview, Romney managed to sound callous towards those struggling, lie about his agenda’s focus on the wealthy, and ignore the relevant details of his disregard for the middle class.
Not bad for a morning’s work.
By: Steve Benen, The Maddow Blog, February, 1, 2012
“A Huge Benefit For The Rich”: Warren Buffett Is Right
The revelation that Mitt Romney received an income of $21 million in 2010 and paid just 13.9 percent of that in federal income taxes has highlighted an enormous problem in our tax code. Income from investments (or income that is manipulated to appear to come from investments) is taxed at lower rates than income from work. And this is a huge benefit for the rich.
Technically, the breaks that Romney enjoys are available to anyone with investment income, but the vast majority of this type of income goes to the rich. We recently calculated that about a third of taxpayers with incomes exceeding $10 million get the majority of their income from investments and consequently pay an average effective tax rate of 15.3 percent.
We then looked at taxpayers with incomes between $60,000 and $65,000 and found that just over 2 percent get the majority of their incomes from investments. In fact, over 90 percent of the $60,000-$65,000 group get less than a tenth of their income from investments, and consequently pay an average effective tax rate of 21.3 percent. That’s a higher effective tax rate than those multimillionaires who get most of their income from investments.
How do multimillionaires justify their low effective tax rates? Many, like Warren Buffett, admit that there is no justification at all, and have asked the president and Congress to reform the tax code. Buffett finds it offensive that he pays federal taxes at a lower effective rate than his secretary does.
Others argue that special breaks for investment income are necessary to encourage investment. This is absurd, given that people with money invest in order to profit and that is motivation enough. But this argument is even more absurd in the case of wealthy fund managers like Romney, who use a loophole to characterize even their income from work as investment income to enjoy the lower tax rates. (This is the loophole for “carried interest.”)
Still others, including Romney himself, argue that much of their income represents corporate profits that have already been subject to the corporate income tax of 35 percent before they were paid out as stock dividends. This is nonsense. At least a third of Romney’s income took the form of “carried interest,” which is actually compensation for his work in managing other people’s money, and this is certainly not corporate profits.
Even in the unlikely event that all of the rest of Romney’s income did come from corporate stock dividends or gains on the sales of those stocks, there’s no reason to think that the corporations involved paid 35 percent of their profits in corporate income taxes. We recently studied most of the Fortune 500 corporations that have been profitable for each of the last three years and found that their average effective tax rate over the three-year period was just 18.5 percent. Thirty of these companies paid nothing at all.
Warren Buffett is right. People like him, and Mitt Romney, should pay more to support the society that made their fabulous fortunes possible.
By: Scott Wamhoff, Legislative Director of Citizens for Tax Justice, Published in U. S. News and World Report, January 31, 2012
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