Why I Support “The Ronald Reagan Tax Reform Act of 2011”
Ten years ago today, the wealthiest Americans caught a multi-billion dollar break from their benefactor, then-president George W. Bush. In the decade since, through two wars, natural disasters, a plummeting economy and a soaring debt, the wealthiest Americans have gotten to keep those Bush tax cuts. Happy birthday, everybody!
As the Republican Party now lines itself up behind Rep. Paul Ryan on his mission to cut the resulting deficit on the backs of working people and the elderly, I find myself surprisingly and strangely nostalgic for another GOP hero, whose legacy, at least when it comes to taxes, has become woefully misunderstood. Can it be that I find myself nostalgic for Ronald Reagan?!
Of course, I’m not alone in my nostalgia. I’m joined by the entire Republican leadership in this, but I think our reasons may be quite a bit different. In the spirit of unity, I’d like to suggest to Republicans in Congress that they look closely at the record of their favorite 20th century hero and adopt yet another policy named after the Gipper. I’m no fan of much of President Reagan’s legacy, but in a new spirit of bipartisanship, and historical accuracy, I’d like to present Republicans in Congress with an idea: the Ronald Reagan Tax Reform Act of 2011.
A key element of the Reagan lore believed by today’s GOP is that Reagan’s embrace of “trickle-down economics” is what caused any and all economic growth since the 1980s. In fact, after Reagan implemented his initial tax-slashing plan in 1981, the federal budget deficit started to rapidly balloon. Reagan and his economic advisers were forced to scramble and raised corporate taxes to calm the deficit expansion and stop the economy from spiraling downward. Between 1982 and 1984, Reagan implemented four tax hikes. In 1986, his Tax Reform Act imposed the largest corporate tax increase in U.S. history. The GDP growth and higher tax revenues enjoyed in the later years of the Reagan presidency were in part because of his willingness to compromise on his early supply-side idolatry.
The corporate tax increases that Reagan implemented — under the more palatable guise of “tax reform” — bear another lesson for Republicans. The vast majority of the current Republican Congress has signed on to a pledge peddled by anti-tax purist Grover Norquist, which beholds them to not raise any income taxes by any amount under any circumstances, or to bring in new revenue by closing loopholes. This pledge, which Rep. Ryan’s budget loyally adheres to, in effect freezes tax policy in time — preserving not only Bush’s massive and supposedly temporary tax cuts for the wealthiest Americans, but also a vast mishmash of tax breaks and loopholes for specific industries won by well-funded lobbyists.
The problem has become so great that many giant American corporations have become so adept at exploiting loopholes in the tax code that they paid no federal income taxes at all last year — if Republicans in Congress follow their pledge to Norquist, they won’t be able to close a single one of the loopholes that are allowing corporations to avoid paying their fair share.
Even Reagan recognized the difference between just plain raising taxes and simplifying the tax code to cut out loopholes that subsidize corporations. In 1984, he arranged to bring in $50 billion over three years, mainly by closing these loopholes. His 1986 reform act not only included $120 billion in tax hikes for corporations over five years, it also closed $300 billion worth of corporate loopholes.
These kinds of tax simplification solutions are available for Congress if they want them. As I wrote in April, nixing Bush’s tax cut’s for the wealthiest Americans would help the country cut roughly $65 billion off the deficit in this year alone. Closing loopholes that allow corporations to shelter their income in foreign banks would bring in $6.9 billion. Eliminating the massive tax breaks now enjoyed by oil and gas companies would yield $2.6 billion to help pay the nation’s bills.
But before Republicans in Congress change their math, they have to change their rhetoric — and embrace the reality of the economic situation they face and the one that they’d like to think they’re copying. In 1986, during the signing ceremony for the Tax Reform Act, Reagan explained that “vanishing loopholes and a minimum tax will mean that everybody and every corporation pay their fair share.”
It’s time for the GOP to take a page from their hero’s playbook. If they do so, they might be able to find some allies that they never thought possible. It’s time for “everybody and every corporation to pay their fair share.” We can all get along. Sign me up for “The Reagan Tax Reform Act of 2011.”
By: Michael B. Keegan, President, People For The American Way, Published in Huffington Post Politics, June 7, 2011
Bush Tax Cuts Turn 10: Wall Street Celebrates, Americans Suffer
Break out the bubbly, because there will be celebrations today on Wall Street and in corporate boardrooms and mansions all across America. Why? Because today is the 10th anniversary of the big Bush tax breaks for bankers and billionaires and the businesses that bankroll their big-budget campaigns.
Today is an opportunity to ponder these questions: If the Bush tax cuts are so great, why has the economy been so bad since they became law 10 years ago? And how about this brain teaser: If the GOP theology of cutting taxes for the rich brings in more revenue, why is Democratic President Bill Clinton the only president in the last generation to leave a surplus behind for the next president?
In 1980, President George H.W. Bush called it voodoo economics. Bush 41 conveniently changed his position when he became Ronald Reagan’s running mate that year. But the first President Bush was right the first time. The idea that tax revenues will go up when you cut taxes has cast an evil spell over the U.S. economy going all the way back to Ronald Reagan. In 1981, the new GOP math became 1 + 1 = 3. With this kind of fuzzy math, it’s no wonder that President Reagan left behind a massive budget deficit.
George W. Bush may have had George H.W. Bush for a father, but Ronald Reagan was his role model. The latest incarnation of voodoo economics was the creation of the second President Bush. The tax cuts for bankers and billionaires that became law in 2001 quickly turned the Clinton surplus into the Bush budget deficit as big as Donald Trump’s ego. Voodoo is what Republicans do so well.
But Bush 43 did not stop there in handing out goodies to Wall Street. In 2008, the president asked his Treasury Secretary, Henry Paulson, the former CEO of Goldman Sachs, to bail out Goldman Sachs and other Wall Street investment firms to the tune of three quarters of a trillion dollars. Of course, President Bush never even considered an attempt to rescue the millions of working Americans who first lost their jobs and then their homes because of malfeasance on Wall Street.
Last month, the Center for Budget Priorities released a study that demonstrated that the two biggest reasons for the current budget deficit were the Bush tax cuts and the wars in Afghanistan and Iraq. So what do the Republicans do? Do they vote to cut Pentagon spending or end dole welfare for wealthy Americans? Of course they don’t. They gut Medicare. Genius!
Yesterday, Frank Patitucci, CEO and Chairman of NuCompass Mobility Service, called on Republican Speaker John Boehner to increase taxes on Americans making more than $1 million a year. Patitucci explained his position by saying businesses need a strong middle class to prosper.
But I don’t want to be a party pooper or rain on Wall Street’s parade, so party hardy, guys. Don’t scrimp on the Dom Perignon and the caviar. Santa Claus comes only once a year. Let’s worry about the GOP cuts in healthcare for seniors and nutrition programs for women and their infant children another day.
By: Brad Bannon, U. S. News and World Report, June 7, 2011
A Plea To Fellow Republicans — Stop Defending Sarah Palin
As a Republican, it pains my heart to watch the response to Sarah Palin’s latest gaffe. Like so many times before, Palin has put herself on the hot plate and shown that she does not know when to be quiet.
From the beginning, Republicans have squirmed through every public appearance she makes. From the 2008 debates to this current joke of a bus tour, Palin has shown she lacks the basic skills to handle pressure.
This is not a good sign in a potential candidate for the Republican nomination for president.
Why then, does Palin continue to get support from Republicans?
The latest situation with Palin messing up the history of Paul Revere is a perfect example. It is clear to anyone that saw the video that Palin had no clue what she was talking about.
It was a moment of verbal vomit that made her seem like she had never attended grade school. The entire episode could have been prevented any number of ways. Palin could have simply ignored the question and kept walking. Palin could have changed the subject.
More importantly, Palin could have actually took a moment to read about Revere before visiting so that she would be prepared for the gaggle of reporters that were sure to follow her. That would have been novel for her.
What makes the entire situation so bad, however, is the aftermath. Like so many Palin “situations” in the past, Palin is now coming out and saying she was right. She is trying to use semantics to say that the British were warned because Revere confessed to them.
Republicans are actually following suit and trying to latch onto that argument for her. That makes the party look completely ignorant right beside her.
Revere did not warn the British. Revere warned the colonists and confessed to the British. Revere did not ring bells or shoot warning shots, as this would have drawn attention and squashed the revolt before it even began.
It is clear that Palin simply tried to fake her way through this and messed up like she always does when she attempts such folly.
After a couple of years of defending and trying to make sense of Sarah Palin, it is time for Republicans to say enough. Sarah Palin had a chance to come out and say she messed up. Sarah was too arrogant to do so.
Perhaps it is time that we Republicans simply admit we messed up in backing Palin and move forward. Liberals are not afraid of Sarah Palin. That is wishful thinking to say the least.
They pray for her nomination.
By: Rodney Southern, Yahoo Contributor Network, June 6, 2011
Not Resting On Their Laurels, Wisconsinites Establish Walkerville
Walkerville, Wisconsin
After the huge wave of protests throughout February and March, the focus of activists in Wisconsin moved to the impending recall elections this summer. The winter actions erupted as a result of an anti-union bill which threatened to remove essentially all collective bargaining rights for public employees as well as hamstring unions by requiring the almost impossible tasks of annual recertification and individual opt-in dues collecting. In response, besides assembling in numbers reaching nearly one-hundred thousand, Wisconsin citizens amassed signatures on petitions to facilitate the recall of numerous state senators who had voted for Governor Walker’s duplicitous legislation.
In the past two months, though a presence of protesters has remained – with their t-shirts, buttons, signs, banners, vuvzelas – around the vicinity of the capitol building, it appeared the united front of thousands had waned. Groups still came to meet for solidarity sing-a-longs and to attend governmental committee hearings on the many new regressive, pro-corporate, anti-human bills being forwarded by the Wisconsin legislature. But with the recall elections on the horizon and with the recent small victory of the Dane County circuit court dismissing the anti-collecting bargaining law (as it had been passed so hastily as to not adhere to common legislative requirements), it appeared that Wisconsinites might be done with the fight, resting on their own laurels and those of the Democrats they hoped to elect via the recall.
Of course, the corporate media, who operate under the same anti-human system that fosters plutocracy and redistribution of wealth from the many to the few, would like nothing better than to make it appear that all is “back to normal” in the cheese state. So, perhaps few people outside of Wisconsin and even outside of Madison realize that we were serious when we said that this was not a protest but a movement. There is much yet to be accomplished.
As of 7pm on Saturday, June 4th, a diverse group of citizens, representing unionists, non-union workers, students, teachers, immigrants, farmers, families and people with no formal affiliation (save for being a part of the empathetic class who truly seeks liberty and justice for all) laid down their tents and founded “Walkerville” around the perimeter of the Wisconsin capitol building. With a nod to the Hooverville tent cities of the Great Depression, these activists are demonstrating that we are not only opposed to the aforementioned anti-union bill, but that we are opposed to the entire regressive budget of this state, which wholly removes the rights and social safeties for the most vulnerable members of our society and shifts all of the state’s bounty to the wealthiest and most anti-social corporate oligarchs. The police state enacted by the Walker administration has severely hampered the lawful and peaceful assembly of citizens in our own statehouse, so Walkerville exists to re-establish the constant presence and occupation by the people of the state, whose voice is being muted within the capitol.
Most importantly, Walkerville demonstrates that we in Wisconsin are not going to let up. Just as we are being attacked on all fronts as citizens, we will be fighting back on all fronts. Though the Democrats in our state legislature have stepped up to the plate and helped to support the will of the people, it is unlikely that they would have done so had their feet not been held to the fire. If we had not gathered in the capitol clearly proclaiming our will, our presence, and our solidarity, it is not clear the state Democrats would have had the impetus to help us fight. Thus we know that simply electing new officials will never be enough to ensure justice for the people from the government.
States like New York and California serve as prime examples of how the Democratic agenda is just as corporate as the Republican. Governor Andrew Cuomo, the son of a man once considered one of the strongest liberals in NY State history, is promoting many of the same brutal and unnecessary cuts to education and poverty programs. The underserved of California are faring no better under Jerry Brown. If we citizens fail to realize that we must pressure ALL politicians of all politician affiliations, and we must be prepared to fight indefinitely against the bipartisan corporate takeover of our local, state, and federal our government, we are sure to lose.
Walkerville signifies the fortitude of the Wisconsin people, and the recognition that our struggles as citizens are not soon to end. Our actions may take new forms or may morph as they are reassessed for utility, but they are far from over.
For those of us in Wisconsin who cannot camp out day and night around the capitol but still want to volunteer with the movement, there are numerous opportunities to be present for more protests and actions against the state budget, which will be negatively affecting all of us. (See Defend Wisconsin for full details.) For those in other states who will likely see similar developments, please know that we are still fighting, as you will surely have to fight too. The more we acknowledge that this struggle against the ruling class will be ongoing, that it affects us all, and that we may not ever be able to “return to normal,” the more likely we may have a fighting chance for our future.
Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?
During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.
According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.
While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”
In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.
Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.
This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.
Using this standard alone, Rep. Ryan would have a point.
Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.
However, there is a more important distinction between premium support plans and vouchers.
In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.
Not so with RyanCare.
Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.
This, by anyone’s definition, is a voucher program.
In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.
While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.
According to Aaron-
If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.
Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.
We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.
However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.
It is not the President who is demagoguing on this one – it is Paul Ryan.
By: Rick Ungar, The Policy Page, Forbes, June 5, 2011
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