Democrats Must Be Adults As GOP Redefines ‘Tax Increase’
OK, this isn’t exactly asking what the meaning of “is,” “is,” but it is close.
What is a tax increase? Is it letting a previous, temporary tax cut expire and go back to the earlier tax? Is it the “closing of a loophole” to remove a favorable tax break put in place for a specific industry? Is it the imposition of a fee or the increase in a fee? Is it really anything that results in an increase in revenue?
We can go on and on here, but what we are really talking about is not an esoteric debate. If you listen to Republicans right now, particularly Rep. Eric Cantor, who picked up his marbles and went home from White House negotiations, you would think that everything is a “tax increase.”
The sad aspect of the current debate is that what many Republicans are espousing is that added revenue should be “off the table.” This is clearly a nonstarter for truly solving our problems.
It also is inflexible and holds to the absurd notion that taxes can never go up; they can only go down. That sort of reminds me of: Housing prices can only go up; they don’t go down! Hmmm…
Democrats, to be honest, have to be the responsible party when it comes to providing balance to the cuts/revenue equation. They need not fear the boogeyman crying “tax raiser!”
Americans, by large majorities, understand that the richest 2 percent of their fellow citizens have seen rapid and large increases in their wealth of late, and asking them to pay their fair share is a no brainer. Americans understand that providing huge tax breaks to oil companies already making huge profits makes no sense. Americans understand that rewarding companies for parking their profits overseas or exporting jobs is untenable, and such behavior should not entitle them to special tax “incentives.”
In short, most Americans know that adequate revenue is part of the critical balance that will create and keep jobs as well as attack our debt problem. It is not about eviscerating government and tearing apart our social fabric. Republicans as conservative as Ronald Reagan have known the meaning of a tax increase and have not hesitated to use it.
By: Peter Fenn, U. S. News and World Report, June 27, 2011
Corporate Tax Cuts Don’t Stimulate Job Growth
Prevailing conservative wisdom dictates that businesses need tax cuts—and investors need capital gains tax cuts—to get the economy moving. But two very well-executed articles on wages and taxes published recently suggest that targeting tax cuts at business executives may do little to improve the dismal unemployment picture.
The Washington Post offers a startling analysis of income disparity, noting that the gap between the very rich and the rest of us has grown dramatically in the past few decades, reaching current levels that have not been seen since the Great Depression. In 2008, the Post reports, the top one-tenth of one percent of earners took in more than a tenth of the personal income in the United States. But the moneyed class is not dominated by professional athletes or big-name artistic performers or even hedge fund managers, the Post found. Instead, it is due to a big increase in executive compensation, even as real wages for some of their workers have dropped:
The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.
The New York Times has a fascinating story that serves as an unwitting companion piece to the Post story. Corporate executives, the paper reports, are clamoring for a tax holiday to encourage them to bring their offshore profits back to the United States. And the money in question is big, the Times notes: Apple has $12 billion in offshore cash, while Google has $17 billion, and Microsoft, $29 billion. The companies with money sitting offshore argue that if the federal government were to offer them a huge tax break—say, a one-year drop from 35 percent to 5.25 percent—the businesses would bring the money home and operate as a private-sector economic stimulus.
However, the Times notes:
(T)hat’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage. Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.
Who needs a tax cut, then? The U.S. economy is very much consumer-driven; companies aren’t hiring, many business owners say, because people aren’t buying. The past behavior of corporations that have received huge tax cuts has not necessarily been to use the money to hire more people; the Bush-era tax cuts have been in place for a decade, and the unemployment rate is still 9.1 percent. And executive compensation has grown. Executives may feel entitled to earn more and more if their companies are doing well and expanding. But without customers, those companies will go bust.
By: Susan Milligan, U. S. News and World Report, JUne 20, 2011
Gov. Chris Christie: Earn $6,000 A Year? No Medicaid For You!
If you live in the state of New Jersey and are earning $118 a week, congratulations!
According to Gov. Chris Christie, you have escaped the bonds of poverty and no longer are in need of the state’s Medicaid program.
Never mind that $118 a week is but a fraction of the poverty line as defined by the United States of America. Pay no attention to the fact that New Jersey battles California for the mantle of having the highest cost of living of any state in the nation.
Chris Christie, everyone’s favorite no-nonsense, “tell it like it is” governor, has decided that you can manage quite nicely on this paltry sum while remaining fully capable of paying for your own medical care.
Sound like a joke?
It’s not. And it is difficult to imagine anything less humorous. Under the Christie plan, adults with a family of four who earn more than $6,000 a year would no longer qualify for the state’s Medicaid program. Currently, the cut-off to qualify is $30,000.
Think about that for a moment.
A single mother raising three kids on a weekly salary of $118 will no longer be eligible to take advantage of the medical social safety net should she fall ill.
I can hear my conservative friends rising in chorus – mom should have thought about that before having all those kids she couldn’t afford! Maybe she should have. If only there were some place these women could turn to for family planning advice so that they might avoid this problem.
But wait – there is such a program in New Jersey. Or, to be more precise, there was such a program in New Jersey. It turns out that women’s clinics are disappearing from the New Jersey landscape as Governor Christie uses the budget pen to wipe out women’s health programs that might also provide abortion services as a small part of what they make available to women so badly in need of their health care and counseling services. This, despite the fact that no state or federal taxpayer money went towards paying for any such abortion services long before Christie began his assault on women’s health.
In his last budget, Christy sliced $7.5 million from family planning clinics – a cut his new budget proudly continues. As a result, health and planning services so vital to low income women are becoming very hard to find in New Jersey- not to mention the many other states where Governors are using the budget to enact their social, anti-abortion agenda’s.
What do we call powerful people when they pick on the weakest among us?
We call them bullies. And Governor Chris Christie exemplifies the modern-day bully. Is it any wonder, then, that the GOP sees Christie as the man they would so gladly follow into the 2012 election battle?
Christie’s proposal to cut over $500 million from the state’s Medicaid program would not only affect parents earning far too little to support their families. Some of the deepest cuts would leave seniors, who require full-time, in-facility nursing home care, literally out in the cold as the funding that supports their ability to get the medical attention they need disappears.
I suppose these elderly can move back into the homes of their children – many of whom are the ones earning over $6,000 a year, but well below the national poverty line, who will no longer be able to care for their own health needs let another find a way to pay for the care of their sick parents.
There is some good news in this otherwise bleak story.
Come 2014, when the federal government steps in to play a larger role in financing the state Medicaid programs (they already pay for about half of the costs), it will be illegal for these people to be denied care. Accordingly, all these folks need do is see to it they do not get sick between now and 2014.
How hard can this be?
As New Jersey U.S. Senator Robert Menendez put it, “The state is effectively telling these families to wait until 2014 to get coverage again. Unfortunately, there is no
such thing as a waiver for getting cancer.” Certainly, some deal can be cut between man, woman and God resulting in that cancer scheduled to show up next year holding off until 2014 when care will be available.
And how much damage can uncontrolled diabetes really do when untreated for a three year period? So, maybe you lose a couple of toes as the diabetes ravages your body.
As Chris Christie would no doubt remind you, forfeiting a few digits for the common good of wealthy millionaires for whom Christie continues to cut taxes, is a small price to pay.
After all, those tax cuts might just result in your getting a better job in the future – assuming you’re still alive.
And if you aren’t, at least you will die in the knowledge that you will have given your life to improve Chris Christie’s chances of becoming President of these United States some day.
So, at least you’ve got that going for you.
By: Rick Ungar, The Policy Page, Forbes, June 12, 2011
Taxpayer Protection Pledge And The Grover Norquist Ethanol Trap
Tom Coburn has sprung a plan to force the Senate to vote on the ethanol subsidy:
Sen. Tom Coburn has pulled the trigger and is forcing a long-sought vote on an amendment repealing billions in annual tax incentives for ethanol.
The Senate will vote Tuesday afternoon on Coburn’s motion limiting debate on his amendment that would do away with the 45 cent blender tax credit for ethanol — worth about $6 billion this year — and the 54 cent tariff on imported ethanol.
Wait, don’t go to sleep, there’s something going on here. The press coverage doesn’t say so, but this is actually not about ethanol. It’s about Republican anti-tax dogma.
I wrote about this a few months ago, but for those readers who haven’t committed my blog to memory — shame on you! — I’ll refresh. Nearly all Republicans have signed a Taxpayer Protection Pledge, which is enforced by Grover Norquist. The pledge forbids the signer from approving any increase in tax revenue under any circumstances whatsoever.
Coburn and a handful of Republicans are trying to get around this pledge. Their tactic is to negotiate revenue increases that take the form of closing loopholes and exemptions rather than raising rates. This would clearly violate the Pledge. But Coburn is trying to expose the silliness of the Pledge. He’s holding a vote on eliminating the ethanol subsidy. Now, conservatives oppose the ethanol subsidy. But since the subsidy is a tax credit, then eliminating it is a tax increase, and forbidden by the Pledge.
So Coburn’s goal here is to drive a wedge between conservative doctrine and Norquist’s anti-tax dogma. If Norquist opposes a vote against ethanol, he reveals how absurd his pledge actually is. If he supports it, then he proves that it shouldn’t be taken literally. Either way, it creates a talking point that Republicans could use to support revenue increases. And since the GOP’s theological opposition to revenue increases has been driving budget policy for more than two decades, this is a pretty important development.
By: Jonathan Chait, The New Republic, June 10, 2011
Slow Learners: Social Security Privatization Still A GOP Goal
Congressional Republicans have faced all kinds of heat recently for their misguided campaign to end Medicare and replace it with a privatized voucher system. It’s tempting to think the GOP would not only back away from this crusade, but would also learn a valuable lesson about Americans’ appreciation for bedrock domestic social programs.
Alas, that’s not the case. A few days ago, Rep. Pete Sessions of Texas, a member of the House Republican leadership, unveiled the “Savings Account For Every American Act,” which would allow Americans to withdraw from the Social Security system and opt into a privatized system.
Of course, with Social Security functioning as a pay-as-you-go program, if workers “opt out” of the system, Social Security would either (a) crumble with insufficient funds; or (b) need Congress to spend more money to make up the difference. How would Sessions address this? By all appearances, he hasn’t thought that far ahead.
Democrats, not surprisingly, were only too pleased yesterday to go on the offensive.
Democratic Congressional Campaign Committee Chairman Steve Israel (D-N.Y.) on Tuesday predicted that House Republican plans to let workers opt out of Social Security would fail as voters realize how it will threaten their retirement.
“Seniors who have paid into Social Security through a lifetime of hard work shouldn’t end up in a risky privatization scheme to gamble their retirement on Wall Street,” Israel said. “The public has rejected this kind of Social Security privatization in the past and will again.”
Israel accused Republicans of looking to resolve the government’s fiscal crisis by scaling back Medicare and Social Security, while ignoring higher corporate taxes.
In fairness, I should note that “Savings Account For Every American Act” (or, “SAFE Act”) isn’t exactly on a fast track to the House floor. After being introduced late last week the bill, H.R.2109, has an underwhelming six co-sponsors. That’ll likely increase, but Social Security’s supporters probably don’t need to leap into action to defeat the bill just yet.
Still, there’s something truly amazing about the fact that any Republican officials would pursue this at all. The American mainstream has shown, over and over again, that Social Security privatization is a non-starter. The very idea pushed Bush’s presidency into a downward trajectory in 2005, and it never recovered. Even Paul Ryan, when shaping the radical House GOP budget plan, left Social Security out of the equation.
For that matter, after the economy crashed in 2008, I assumed it’d be a long while until Republicans started talking up Social Security privatization again.
Perhaps Pete Sessions and his cohorts are slow learners?
I suppose the real fun would be putting the Republican presidential field on the spot. “Mr. Romney, a member of the House Republican leadership is pushing legislation to privatize Social Security. If such a bill reached your desk as president, would you sign it?”
Inquiring minds want to know.
Update: One of the six co-sponsors is Republican Caucus Chairman Jeb Hensarling of Texas. This is relevant because it means two members of the GOP leadership are on board with this proposal.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, June 8, 2011
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