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“More Conservative Demonology”: Countering The Minimum Wage With More Help For “Lucky Duckies”

One of the key contributors and promoters of the “reform conservative” cause (and the new “manifesto” Room to Grow), Ramesh Ponnuru, has a Bloomberg View column making the fairly obvious suggestion about how Republicans might respond to the drive for a higher minimum wage:

One way to do so is to support expanding the earned income tax credit, an earnings subsidy that targets poor households much better than the minimum wage does and poses no threat of destroying jobs. That credit may not be as easily understood as the minimum wage, but it would give Republicans a way to show that they want to help the poor — and that their stated objections to raising the minimum wage are sincere.

He might have added that the EITC used to be a very popular initiative among conservatives, from Ronald Reagan to George W. Bush.

But not any more, as both Jonathan Chait and Ezra Klein quickly pointed out. Here’s Ezra’s brisk summary of the Republican revolt against the EITC:

The most recent Republican budget lets a stimulus-era boost in the EITC to expire and, on top of that, includes huge cuts to the part of the budget (the “income security budget function,” for wonks) that houses the EITC.

But it’s worse than that: the EITC has been largely responsible for eliminating federal income tax liability among low-income Americans. And that has become a deep source of grievance, and even of conspiracy theories, among conservatives at both the elite and grassroots level. The classic slam at the EITC was articulated by the Wall Street Journal editorial board, which got into the habit of referring to poor people who didn’t owe federal income tax as “lucky duckies.” This in turn became integral to the popular conservative theory that people who didn’t pay income taxes didn’t bear the cost of governing (an argument, of course, that ignored all the other kinds of taxes the poor pay, often at regressive rates), and thus represented looters who voted themselves more and more of other people’s money.

I personally became convinced this had become an important part of conservative demonology when watching Rick Perry make his statement of presidential candidacy in 2011, at a RedState gathering in South Carolina. In the midst of an extended tirade about the need for lower taxes, Perry suddenly blasted “the injustice that nearly half of all Americans don’t even pay any income tax.” The crowd responded with what I described at the time as a “feral roar.” So it wasn’t surprising a year or so later when Mitt Romney got caught buying into the same idea in his “47 percent” comments, about “people who pay no income tax” but nonetheless receive federal benefits.

Even if they didn’t rely on EITC cuts to pay for upper-end tax cuts in their budget schemes, Republicans seem to have developed a moral aversion to the EITC that’s more important to them than finding a sensible alternative to minimum wage increases. So Ponnuru is almost certainly barking up the wrong tree.

 

By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, May 23, 2014

May 26, 2014 Posted by | Conservatives, Minimum Wage | , , , , , | Leave a comment

“Why Republicans Love Taxing The Poor”: This Hurts Us More Than It Hurts You

The reformist wing of the Republican Party, which has a new book of policy essays out today, is a coterie of right-leaning intellectuals engaged in the Lord’s work of reimagining a non-plutocratic agenda for the party. The eternal problem with the reformists, however, is that they’re all playing an inside game, vying for influence within the party and seeking the ear of its leading figures. The need to maintain the good graces of the powers-that-be causes them to couch their advice with a delicacy that routinely veers into outright fantasy.

Ramesh Ponnuru, one of the contributors to the new volume, provides a case in point. In his Bloomberg View column, Ponnuru argues that Republicans should counter the Democrats’ campaign to lift the minimum wage by proposing instead to increase the Earned Income Tax Credit, which “would give Republicans a way to show that they want to help the poor — and that their stated objections to raising the minimum wage are sincere.”

One problem with this plan to get Republicans to increase the Earned Income Tax Credit is that, as Ezra Klein points out, they’re currently fighting extremely hard to cut the Earned Income Tax Credit. Ponnuru’s column doesn’t mention this highly relevant detail.

What’s more, one of the main reasons the Earned Income Tax Credit exists is to cushion the impact of state taxes, which often force workers on the bottom half of the income spectrum to pay higher rates than the rich. And why are state taxes so regressive? Well, a main reason is that Republicans want it this way. The states that raise the highest proportion of their taxes from the poor are Republican states. The EITC is in large part a way of using the federal tax code to cancel out Republican-led policies of taking money from poor people, so naturally Republicans at the national level oppose it, too.

Should Republicans start endorsing plans to give poor people more money? Well, sure, that would be great. It would also be great if Boko Haram came up with some new policies to help educate girls. In the meantime, a more realistic goal might be to just stop hurting the poor.

Obviously, Ponnuru’s policy goal here is admirable. It would be lovely to have a Republican Party that was not monomaniacally focused on redistributing income upward. (How such a reform could be pulled off without upsetting the basic parameters of the party — no new taxes, high military spending, no cuts for current retirees — is a problem none of the reformists have answered and that probably has no answer.)

I can see why Ponnuru needs to present his idea, which is a 180-degree reversal of the Republican agenda, as “a way to show that they want to help the poor.” The trouble is they don’t want to help the poor, if you define “help” as “letting them have more money,” as opposed to “giving them the kick in the ass they need to stop being lazy moochers.”

 

By: Jonathan Chait, Daily Intelligencer, New York Magazine, May 22, 2014

May 23, 2014 Posted by | Poor and Low Income, Republicans | , , , , , , , | 1 Comment

“Warmed Over Reaganism”: Paul Ryan’s Poverty Trap; Stop Taking These Lame Makeovers Seriously!

McKay Coppins already told us that there’s a new Paul Ryan who really cares about poverty and the poor. Now Robert Costa has the details on the newest new Paul Ryan, who just released a report on poverty that is 204 pages long, which proves that he really cares about the poor, because when was the last time a Republican wrote that many words and sentences about them?

Last seen handing out neckties to poor kids, Ryan is now talking up his report, “The War on Poverty: 50 Years Later,” which enumerates roughly 100 federal anti-poverty programs that Ryan tells Costa “have actually created a poverty trap.”

Now, Ryan’s plan does one positive thing: It makes Sen. Marco Rubio look kind of lazy and insincere. Because Rubio gave a much-heralded speech on the anniversary of Lyndon Johnson’s declaring a War on Poverty, but it was only a few thousand words, it wasn’t 204 pages, and since then, he basically dropped the issue. Ryan says his report will provide the basis of his next budget. But the basic Ryan-Rubio message is the same warmed-over Reaganism: We fought a war on poverty and poverty won, so let’s give up.

But seriously, how many times are we going to be told that there’s a “new” Paul Ryan who really, really, really cares about the poor – and whose budget proposals consistently slash programs designed to help them. All that’s different about Ryan’s approach now is he’s telling the poor that cutting their programs is good for them, because it will free them from “the poverty trap.”

Also, how many generations of Republicans are going to rely on Bob Woodson’s self-promotion? Like Coppins, Costa tells us Ryan is looking to Woodson’s Center for Neighborhood Enterprise for new ideas about fighting poverty. But it’s been generations now that Woodson has been reassuring Republicans, with zero evidence, that unfettered capitalism can heal the inner city. Can’t they even trouble themselves to find a new Bob Woodson?

In fact, Think Progress found that buried in Ryan’s report, beneath the dark warnings about a “poverty trap,” are findings that actually, even by GOP standards, a lot of anti-poverty programs are doing a lot of good. From the Veterans’ Health Administration to the Earned Income Tax Credit, Ryan’s report identifies at least 16 major programs that in fact help the poor and are a good bet for government. You wonder whether he even read his own report.

And in several of the areas where Ryan found fault with programs, the Fiscal Times found that the economists behind the studies Ryan cited say he misrepresented their data.

To be fair, Ryan actually makes three good points. One, he supports the once-bipartisan, now-GOP-questioned Earned Income Tax Credit, which helps low-wage families out of poverty (but even better would be if he called for a major expansion). The EITC is actually a huge part of the story behind the “47 percent” Ryan’s running mate Mitt Romney slurred in 2012. Ryan doesn’t acknowledge the dissonance, but his EITC support is welcome.

Ryan’s second fair point is that federal anti-poverty programs are a sketchy patchwork of mostly uncoordinated initiatives that would certainly work better if anyone put time into pulling them together. But Ryan merely criticizes that patchwork in order to rip it apart, proposing to slash rather than coordinate the services that help poor people, admittedly inadequately.

The third is more complicated, and if taken seriously, subverts Ryan’s entire message. He complains, correctly, that too many anti-poverty programs are “means-tested — meaning that benefits decline as recipients make more money — [so] poor families face very high implicit marginal tax rates. The federal government effectively discourages them from making more money.”

Of course, the alternative to means-tested programs in other industrialized nations is universal programs that essentially set a floor for income, nutrition and health below which families can’t drop. Social Security and Medicare are rare American examples of universal program – ones that Ryan has repeatedly tried to gut (while most Republicans and even some conservative Democrats endorse “means testing” them). A guaranteed family income and a genuine national health insurance program could eliminate means-tested programs like Temporary Assistance for Needy Families and Medicaid – but Ryan and his GOP allies (and lots of Republicans) would never consider those notions.

Nor will they consider the other guaranteed anti-poverty program: a hike in the minimum wage. Raising the minimum wage to $10.10 an hour would lift almost a million Americans out of poverty immediately – but Ryan’s party is opposed to it. Indeed, more Republicans are coming out every day saying there should be no minimum wage at all.

There is, indeed, a poverty trap in the U.S., and the media fall into it again and again: taking seriously the warmed over Reaganism of conservatives like Paul Ryan, and pretending there’s something in it that will help the poor.

 

By: Joan Walsh, Editor at Large, Salon, March 4, 2014

March 6, 2014 Posted by | Paul Ryan, Poverty | , , , , , , , | Leave a comment

“Our Nation’s Biggest Shame”: How Much Money Would It Take To Eliminate Poverty In America?

Last week, the Census Bureau put out its annual income and poverty figures for 2012. The big news on the poverty front is that the percentage of Americans living in poverty is unchanged at 15 percent, which amounts to 46.5 million Americans. More than one in five kids under the age of 18 are in poverty, and nearly one in four kids under the age of six are impoverished as well. These are numbers we’ve all become accustomed to, but they can still shock the conscience if you make an effort to let them soak in again.

The sheer scale of poverty in the U.S. is so massive that it can seem as if eliminating or dramatically reducing it would be nearly impossible. After all, 46 million people is a lot of people. But in reality, if we stick to the official poverty line, the amount of money standing in the way of poverty eradication is much lower than people realize.

In its annual poverty report, the Census Bureau includes a table that few take note of which actually details by how much families are below the poverty line. A little multiplication and addition later, and the magic number pops out. In 2012, the number was $175.3 billion. That is how many dollars it would take to bring every person in the United States up to the poverty line. In 2012, that number was just 1.08 percent of the nation’s gross domestic product (GDP), which is to say the overall size of the economy.

To be sure, you probably don’t want to run a program that hunts out every family below the poverty line and brings them right up to it. Such a program would effectively involve imposing a 100 percent marginal tax rate for all income made below the poverty line. But, things like strategically expanding the Child Tax Credit, the Earned Income Tax Credit, SNAP, and related programs could make enormous strides toward poverty reduction. Implementing a mild basic income and a negative income tax would also help a great deal. The policy solutions for dramatically cutting poverty exist, they are used by countries elsewhere, and they could be used here, if we chose to do so.

It might be helpful to put the $175.3 billion magic number in perspective. In 2012, this number was just one-fourth of the $700 billion the federal government spent on the military. When you start hunting through the submerged spending we do through the tax code, it takes you no time to find enough tax expenditures geared toward the affluent to get to that number as well. The utterly ridiculous tax expenditures directed toward the disproportionately affluent class of people called homeowners—mortgage interest deduction, property tax deduction, exclusion of capital gains on residences—by themselves sum to $115.3 billion in 2012. Throw in the $117.3 billion in tax expenditures used to subsidize employer-based health care (also a disproportionate sop to the rich), and you’ve already eclipsed the magic number.

Eradicating or dramatically cutting poverty is not the deeply complicated intractable problem people make it out to be. The dollars we are talking about are minuscule up against the size of our economy. We have poverty because we choose to have it. We choose to design our distributive institutions in ways that generate poverty when we could design them in ways that don’t. Its continued existence is totally indefensible and our nation’s biggest shame.

 

By: Matt Bruenig, The American Prospect, September 24, 2013

September 26, 2013 Posted by | Politics, Poverty | , , , , , , , | Leave a comment

“His Centrisim Is Style And Tone”: There’s Absolutely No Reason For The GOP (Or Anyone) To Listen To Jon Huntsman

Former Utah governor, U.S. ambassador to China and failed presidential candidate Jon Huntsman has been making the media rounds recently, sitting down with the Huffington Post and CNN, sharing his big ideas about How to Save the Republican Party From Itself.*

Before we get into those ideas, and their merit, something should be made very clear: It doesn’t matter what Jon Huntsman thinks, at all. Conservatives should feel no obligation to listen to him, because he has no constituency in the Republican Party — no allies, supporters or acolytes. Liberals shouldn’t listen to him because for all his “the GOP must remake itself in my image” talk, he always conveniently forgets to mention that he’s precisely as conservative — on all the same issues — as Mitt Romney is. (Or as Mitt Romney became, as the case may be.) His “centrism” is entirely a matter of style and tone.

For the current budget showdown, he proposes … “entitlement reform,” along with a rhetorical openness to the possibility of maybe allowing the top marginal tax rate to rise, which is what makes him a big pinko now, apparently:

“You will have to have some compromise built in, and perhaps even on the marginal rates going up for a certain income category. My going-in position would be: Let’s work on phasing out all the deductions and loopholes. There is a trillion dollars there. Let’s see where that leaves us and move forward before you start willy-nilly raising taxes.”

Is this appreciably to the left of Mitt Romney’s position?

Jon Huntsman supported the Ryan Plan. During the campaign, Huntsman proposed what was probably the single most regressive, pro-rich tax plan of any Republican candidate. He called for the elimination of the Earned Income Tax Credit — which benefits poor people — along with the abolition of all taxes on capital gains and dividends, which would amount to a massive redistribution of wealth from poor and working people to rich people. This is the guy we’re looking to for serious soul-searching about how the Republicans can make themselves appeal to Americans outside the conservative bubble?

Huntsman’s actual prescription for the party is to make it more palatable to … Northeastern Elites. He wants to drop the “crazy talk” in order to focus more on the hardcore economic conservatism. Sure, he’s not going to be a Norquistian fanatic on the top marginal tax rate, but his plan is still austerity for most. The thing is, that sort of conservatism doesn’t appeal to anyone without money. Race-baiting, immigrant-hating, and war-mongering nationalism are what make the GOP’s economic agenda marketable to the masses. The best-case scenario for a Huntsman-led Republican Party is that they pick off some Dem-supporting “socially liberal” rich people in Maryland and Manhattan and maybe Silicon Valley. Enough to harm Democratic fundraising, but not to win national elections.

Since the end of the Reagan era we’ve essentially had two parties that pursue an economic agenda designed to benefit the rich people, as the poor survive on subsistence benefits and the middle class find themselves joining the poor. The rich people each party represents are generally in different (though often overlapping) industries and sectors — entertainment and finance for Democrats, energy and finance for Republicans — but they are the wealthiest all the same. The differentiating factor was that one party also supported welfare state policies that benefited the very poor and the other party also supported “social issues” that appealed to the religious white middle class. A party that did the opposite of Huntsman’s prescription — one that combined real economic populism with conservative religious appeals, as many pre-civil rights Democrats and populists once did — would almost certainly be much more popular than the current Republican Party. (The enduring popularity of Mike Huckabee, who used to frequently adopt the rhetoric of an economic populist, is evidence enough.) There’s a huge “soak the rich and burn the banks down” constituency out there, and the Democrats — who are terrified of soaking the rich — currently win it largely by default.

Unfortunately for the GOP (but probably fortunately for us secular social liberals), as Josh Barro pointed out last week, the money guys are going to push the “more secular but still pro-rich” brand makeover. And the money people have been in charge for so long that they’ve remade most of the Moral Majority people in their image.

Jon Huntsman, though, is not the man to save the party. Nor is his brother in rebranding hucksterism Bobby Jindal, unless he stops talking like a Rhodes scholar and starts acting more like the Kingfish.

*It bears mentioning that at no point does the Huffington Post’s Sam Stein disclose that his interviewee is the father of a fairly prominent Huffington Post employee.

 

By: Alex Pareene, Salon, December 3, 2012

December 5, 2012 Posted by | Politics | , , , , , , , , | Leave a comment

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