Why The Republicans Want To Raise Your Taxes
House Majority Leader Eric Cantor’s recent assertion that any disaster relief for Hurricane Irene would have to be offset with spending cuts elsewhere sparked a great deal of outrage, especially in the progressive sectors of the blogosphere.
On one level Cantor’s position is no surprise. Paying for emergency disaster relief used to be standard operating procedure in Washington, because it would be inconceivable that the federal government would force the states and individuals to shoulder the burden alone. But with the new GOP House majority, Washington has new rules. Now when there’s a policy objective that enjoys bipartisan support—avoiding a government shutdown or default, for example, or providing disaster relief—the GOP will use it as a hostage to extract their partisan policy objectives.
More broadly, people look askance at Cantor and the GOP for previously supporting (but not paying for) disaster relief, a pair of foreign wars, an expansion of Medicare, and the Bush tax cuts, and then finding their inner fiscal hawks when a Democrat entered the White House. (Robert’s 10th Rule of Politics: A party’s dedication to fiscal responsibility is inversely proportional to its political power.)
Of course the GOP still wants to make the Bush tax cuts permanent, at a cost of $4 trillion over 10 years. If pushing budget-busting tax cuts while carrying the banner of fiscal austerity on issues like disaster relief seems like cognitive dissonance, it is. But that’s today’s GOP.
Take taxes. Last month’s Iowa GOP presidential debate provided a defining moment for the party. The assembled would-be nominees were asked if they would accept tax increases if there were $10 in spending cuts for every dollar of new revenues. To a person, they refused. This came days after the conclusion of the debt ceiling crisis, which had been deliberately manufactured by House Republicans, and which had turned on their flat refusal to accept any tax increase. And it came after months of pious declarations that one never, ever, ever raises taxes on a soft economy (the experiences of Presidents Reagan in 1982 and Clinton in 1993 apparently notwithstanding).
And yet the GOP now wants to raise taxes, both in the immediate term and as a broader matter of principle.
They oppose, for example, President Obama’s call to prolong the payroll tax cut enacted last year when the (temporary) Bush tax cuts were extended. Ordinarily, American workers pay 6.2 percent of their wages in a tax that funds Social Security, with their employers matching the amount. For 2011, that rate was cut to 4.2 percent. The logic is simple: The poor and working class are most likely to pump extra disposable income back into the economy, making the tax cut a more efficient stimulant than, say, rate cuts for the wealthy. It’s as broad-based a tax cut as can be imagined, as it benefits virtually everyone who works, even those who don’t earn enough to pay income taxes. So of course Republicans oppose its extension, preferring to allow a broad-based tax hike to go into effect in the new year. “Not all tax relief is created equal,” Rep. Jeb Hensarling, the House’s fourth-ranking Republican, told the Associated Press, while others cited fiscal concerns. Extending the tax holiday, which cost $67.2 billion this year and a total of $111.7 billion over 10 years, would be fiscally irresponsible while extending the Bush tax cuts is sound policy? Not all tax cuts are created equal indeed.
And this isn’t an isolated instance of the GOP breaking from its usual anti-tax orthodoxy. The truth is that many leading Republicans yearn to raise taxes on working-class and poor Americans.
“We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Texas Gov. Rick Perry intoned last month when announcing for president. What to do? Here’s Minnesota Rep. Michele Bachmann: “We need to broaden the base so that everybody pays something, even if it’s a dollar.” More recently, former Utah Gov. Jon Huntsman approvingly cited Florida Sen. Marco Rubio as saying we don’t have enough people paying taxes in this country. The GOP as stalwart fighters against taxes? No more. That more Americans should pay taxes is, according to the Wall Street Journal, “the new Republican orthodoxy.”
And who is it Republicans would like to raise taxes upon? According to the Tax Policy Center, 46 percent of U.S. households won’t pay income taxes this year. The elderly (who are mostly retired, have a larger deduction, and often don’t have their Social Security benefits taxed) make up a plurality of 44 percent of the nonpayers, while people whose income tax liability is wiped out by the child tax credit, child and dependent care tax credit, and the earned income tax credit—all of which were enacted with Republican support—make up an additional 30 percent of the group. (The rest of the nonpayers get a handful of smaller tax credits, including education credits, itemized deductions, and even capital gains benefits.)
Keep in mind that these people not having any income tax liability does not mean that they don’t pay taxes (as is often implied in GOP talking points). They pay state and local taxes, not to mention federal payroll taxes, which of course the GOP wants to see rise.
So Republicans worry about the wealthy paying too much in taxes while fretting about freeloading lower classes. They talk a big deficit game but are more concerned about cutting government spending, specifically on programs that benefit the nonrich. Perhaps this isn’t cognitive dissonance but the logical evolution of the modern GOP into an Ayn Rand-ian coalition explicitly focused on freeing a wealthy elite from the parasitical depredations of everyone else.
By: Robert Schlesinger, U. S. News and World Report, September 7, 2011
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Quality Vs Quantity: Yes, We Need Jobs. But What Kind?
On Thursday, President Obama will deliver a major speech on America’s employment crisis. But too often, what is lost in the call for job creation is a clear idea of what jobs we want to create.
I recently led a research team to the Rio Grande Valley in Texas, where Gov. Rick Perry, a contender for the Republican presidential nomination, has advertised his track record of creating jobs. From January 2000 to January 2010, employment in the Valley grew by a remarkable 42 percent, compared with our nation’s anemic 1 percent job growth.
But the median wage for adults in the Valley between 2005 and 2008 was a stunningly low $8.14 an hour (in 2008 dollars). One in four employed adults earned less than $6.19 an hour. The Federal Reserve Bank of Dallas reported that the per capita income in the two metropolitan statistical areas spanning the Valley ranked lowest and second lowest in the nation.
These workers aren’t alone. Last year, one in five American adults worked in jobs that paid poverty-level wages. Worker displacement contributes to the problem. People who are laid off from previously stable employment, if they are lucky enough to find work, take a median wage hit of over 20 percent, which can persist for decades.
To understand the impact of low wages, in the Valley and elsewhere, we interviewed a wide range of people, including two directors of public health clinics, three priests, a school principal and four focus groups of residents. Everyone described a life of constantly trying to scrape by. One month they might pay for the phone, another, for utilities. Everyone knew how long each company would carry unpaid bills before cutting service. People spoke not only of their fear of an unexpected crisis — an illness, a broken car — but also of the challenge of paying for basic needs like school supplies. Many used the phrase “one paycheck away from homelessness.”
Because their parents cannot afford child care, children move among relatives and neighbors. They watch too much TV. They don’t finish their homework. Older children grow up too fast from parenting their younger siblings. As one person observed, “All you think about is which bill is more important.”
Economic stress strains marriages. Parents cannot afford quinceañeras for their daughters. In church youth groups, teenagers ask why they should stay in school if all they can get are low wages.
Many children are latchkey kids. Accidents are frequent; we heard of an elementary school student who badly burned himself in a science experiment, with his older brother watching. Their father couldn’t take time off from work to visit his son in the hospital. Children come to school sick. Parents miss teacher conferences because they can’t afford time off. Type 2 diabetes is a scourge in the Valley. Since Type 2 diabetics can be asymptomatic for years, many don’t buy medicine; as time passes, they become severely ill, often losing sight or a limb.
The director at one clinic, with nearly 70,000 visits a year, estimated that half of its patients had anxiety or depression. Often people can’t get to the clinic because they cannot afford to lose work time or because gas costs too much. When they go, they take their families, because they have no child care.
And yet the Valley is not hopeless. Teachers stay late to help with homework. They make home visits to meet parents. Health clinic employees work overtime. The community organization Valley Interfaith has pushed for training opportunities and living-wage jobs. There is no “culture of poverty,” but the low-wage economy has corrosive and tragic consequences.
Must we choose between job quality and quantity? We have solid evidence that when employees are paid better and given more opportunities within a company, the gains outweigh the costs. For example, after a living wage ordinance took effect for employees at the San Francisco International Airport, in 1999, turnover fell and productivity rose.
Contrary to the antigovernment rhetoric, there is much that the public sector can do to improve the quality of jobs.
A recent analysis by the Economic Policy Institute reported that 20 percent of federal contract employees earned less than the poverty level for a family of four, as opposed to 8 percent of traditional federal workers. Many low-wage jobs in the private sector (notably, the health care industry) are financed by taxpayers. The government can set an example by setting and enforcing wage standards for contractors.
When states and localities use their zoning powers to approve commercial projects, or offer tax incentives to attract new employers, they can require that workers be paid living wages; research shows this will not hurt job growth.
Labor standards have to be upgraded and enforced, particularly for those employers, typically in low-wage industries, who engage in “wage theft,” by failing to pay required overtime wages or misclassifying workers as independent contractors so that they do not receive the benefits to which they are entitled.
Americans have long believed that there should be a floor below which job quality does not fall. Today, polls show widespread support for upgrading employment standards, including raising the minimum wage — which is lower, in inflation-adjusted terms, than it was in 1968. It’s time for the federal government to take the lead in creating not just more jobs, but more good jobs. The job-growth mirage of the Rio Grande Valley cannot be our model.
By: Paul Osterman, Op-Ed Contributor, The New York Times, September 5, 2011
Yes, Perry And Bachmann Are Religious Radicals
While few in either the mainstream media or the conservative commentariat have been so bold as to deny that the Republican Party is a lot more ideologically rigid than it was four or twelve or thirty years ago, there has been some regular pushback against attaching such terms as “radical” and “extremist” to the party’s views. Some conservatives like to claim that they just look extreme when compared to a Democratic Party dominated by a radical socialist president. Others admit their party is in an ideological grip unlike anything seen since Barry Goldwater’s 1964 campaign, but argue the whole country’s moved with them. (Just observe Michele Bachmann’s recent statement that the Tea Party represents the views of 90 percent of the U.S. population). But more common is the effort, which extends deep into the media, to push back against charges of Republican extremism on grounds that, well, a party that won over half the ballots of 2010 voters cannot, by definition, be anything other than solidly in the mainstream. And so it becomes habitual to denigrate even the most specific text-proofs that something odd is going on in the GOP as “liberal hysteria” or mere agitprop.
This 45-million-Americans-can’t-be-wrong meme has been deployed most recently to scoff at those progressive writers who have drawn attention to the rather peculiar associations of presidential candidates Michele Bachmann and Rick Perry. The most typical retort came from Washington Post religion columnist Lisa Miller, who deplored those scrutinizing Bachmann’s legal training at Oral Roberts University or the “dominionist” beliefs common among many key organizers of Perry’s recent “day of prayer and fasting” as “raising fears on the left about ‘crazy Christians.’” New York Times columnist Ross Douthat offered a more sophisticated but functionally equivalent rebuke, suggesting that Bachmann and Perry were representing a long Republican tradition of co-opting religious extremists with absolutely no intention of giving them genuine influence.
But the recent resurgence of militant Christian Right activism, alongside its close cousin, “constitutional conservatism,” is genuinely troubling to people who don’t share the belief that the Bible or the Constitution tell you exactly what to do on a vast array of political issues. From both perspectives, conservative policy views are advanced not because they make sense empirically, or are highly relevant to the contemporary challenges facing the country, or because they may from time to time reflect public opinion. They are, instead, rooted in a concept of the eternal order of the universe, or in the unique (and, for many, divinely ordained) character of the United States. As such, they suggest a fundamentally undemocratic strain in American politics and one that can quite justifiably be labeled extreme.
Consider the language of the Mount Vernon Statement, the 2010 manifesto signed by a glittering array of conservative opinion-leaders, from Grover Norquist to Ed Fulner to Tony Perkins:
We recommit ourselves to the ideas of the American Founding. Through the Constitution, the Founders created an enduring framework of limited government based on the rule of law. They sought to secure national independence, provide for economic opportunity, establish true religious liberty and maintain a flourishing society of republican self-government. …
The conservatism of the Declaration asserts self-evident truths based on the laws of nature and nature’s God.
An agenda speaking with the authority of “self-evident truths based on the laws of nature and nature’s God” and advancing the “enduring framework” of the Founders is, by definition, immutable. And in turn, that means that liberals (or, for that matter, their RINO enablers) are not simply misguided, but are objectively seeking to thwart God and/or betray America. Think that might have an impact on the tone of politics, or the willingness of conservatives to negotiate over the key tenets of their agenda?
From this point of view, all the recent carping about liberal alarm over the religious underpinnings of contemporary conservatism seems to miss the big picture rather dramatically. Both Michele Bachmann and Rick Perry have conspicuously offered themselves as leaders to religio-political activists who, whatever their theological differences, largely share a belief that God’s Will on Earth requires the repeal of abortion rights and same-sex relationship rights, radical curtailment of government involvement in education or welfare, assertion of Christian nationhood in both domestic and international relations, and a host of other controversial initiatives. Does it ultimately matter, then, whether these activists consider themselves “dominionists” or “reconstructionists,” or subscribe to Bill Bright’s Seven Mountains theory of Christian influence over civic and cultural life? I don’t think so.
Similarly, the frequent mainstream media and conservative recasting of the Tea Party as just a spontaneous salt-of-the-earth expression of common-sense attitudes towards fiscal profligacy is hard to sustain in light of the almost-constant espousal of “constitutional conservative” ideology by Tea Party leaders and the politicians most closely associated with them. Perhaps Rick Perry, just like his Tea Party fans, really is personally angry about the stimulus legislation of 2009 or the Affordable Care Act of 2010, and that’s fine. But no mainstream conservative leader since Goldwater has published a book challenging the constitutionality and morality of the entire policy legacy of the New Deal and (with the marginal exception of the Civil Rights Act of 1964) the Great Society. Ronald Reagan, to cite just one prominent example, justified his own conservative ideology as the reaction of a pure-bred New Deal Democrat to the later excesses of liberalism. Reagan also largely refrained from promoting his policy ideas as reflecting a mandate from God or the Founders, and he treated Democrats with at least minimal respect.
In that sense, major presidential candidates like Perry and Bachmann really are something new under the sun. They embody a newly ascendant strain of conservatism that is indeed radical or extremist in its claims to represent not just good economics or good governance, but eternal verities that popular majorities can help implement but can never overturn. They deserve all the scrutiny they have attracted, and more.
By: Ed Kilgore, Special Correspondent, The New Republic, August 31, 2011
Texas-Style Tort Reform: Rick Perry’s Texas Health Care Hoax
In his quest to win the Republican presidential nomination, Texas Gov. Rick Perry is perpetuating a convincing hoax: that implementing Texas-style tort reformwould go a long way toward curing what ails the U.S. health care system.
Like his fellow GOP contenders, Perry consistently denounces “Obamacare” as “a budget-busting, government takeover of healthcare” and “the greatest intrusion on individual freedom in a generation.” He promises to repeal the law if elected.
Unlike those in the “repeal-and-replace” wing of the Republican Party, however, Perry has emerged as leader of the “repeal-and-let-the-states-figure-it-out” wing that believes the federal government has no legitimate role in fixing America’s health care system.
“To hear federal officials tell it, they’ve got all the answers on health care and it’s up to the rest of us to sit, wait and embrace whatever solution — if any — they may eventually provide,” Perry wrote in a newspaper commentary in 2009. “I find this troubling, since states have shown they know a thing or two about solving problems that affect their citizens.”
Even as he points with pride to the alleged benefits of malpractice and other tort reforms that have been enacted during his tenure as governor of Texas, Perry says he is opposed to tort reform at the federal level. He cites the 10th Amendment to the Constitution, which states-rights advocates say limits the role of the federal government.
But if Perry had his way, all the states would do as Texas did in 2003 when lawmakers enacted legislation, which he championed, limiting the amount of money juries can award patients who win malpractice lawsuits against doctors and hospitals. The legislation capped non-economic (pain and suffering) damages at $250,000 in lawsuits against doctors and $750,000 against hospitals. A few months after he signed the bill into law, the state’s voters narrowly passed a constitutional amendment, also endorsed by Perry, which had the same effect. Proponents of the amendment wanted to be sure the new law would be constitutional.
Texas, he wrote in that 2009 commentary “stands as a good example of how smart, responsible policy can help us take major steps toward fixing a damaged medical system, starting with legal reforms.”
As a result of the 2003 tort reform law, malpractice liability insurers reduced their rates in Texas and, according to Perry, the number of doctors applying to practice medicine in the state “skyrocketed.”
He says that in the first five years after tort reform was enacted, 14,498 doctors either returned to practice in Texas or began practicing there for the first time.
Tort Reform Backfires in Texas
That certainly sounds impressive — so long as you look at that number in isolation. But when you look at how Texas stacks up with the rest of the country in terms of physician growth in direct patient care, tort reform appears to have given Texas no leg up in competition with others states for doctors. In fact, according to statistics compiled by the American Medical Association and other physician organizations, Texas has actually lost ground when it comes to the number of doctors practicing in the state since tort reform was enacted. Big time.
In 2008, the number of physicians in patient care per 10,000 civilian population in the United States was 25.7. At just 20.2 doctors per 10,000 people, Texas ranked near the bottom of the 50 states. In fact, only nine states fared worse. In 2000, three years before tort reform, Texas was still bringing up the rear, but not as badly. Back then, 11 states fared worse than the Lone Star state.
Even more revealing, the number of doctors in patient care increased 13.2 percent nationwide from 2000 to 2008. It increased only 12.8 percent in Texas. The rate of growth was actually greater in 41 other states and in Washington, D.C. than it was in the Lone Star state.
It is true that malpractice insurance rates dropped in Texas after tort reform was enacted, but Texans would be hard pressed to claim any direct benefit from that drop — except, that is, Texans who are doctors.
The Dallas Morning News published a chart earlier this year showing that the average malpractice rate charged ob/gyns in Texas by the state’s largest domestic insurer of physicians fell from $53,752 in 2003 to $33,881 in 2011. The paper reported drops of similar percentages for doctors in family practice and general surgery.
Advocates of tort reform have long claimed that one of the reasons for escalating health care costs is the “defensive medicine” doctors practice, such as over-treating and prescribing more medications and diagnostic tests than necessary, out of fear of being sued. Well, if Texans believed their own health insurance rates would go down once tort reform made defensive medicine less prevalent, they have by now been disabused of that notion. The chances of a Texas family saving a few bucks on premiums would actually be greater if they moved to another state.
In 2010, the average premium for family coverage in Texas was $14,526. That’s $655 higher than the U.S. average. Those numbers seem to indicate that doctors have not passed on their own insurance savings to their patients and that they are not practicing medicine any less defensively than before tort reform was enacted.
Not only are Texans paying more for their own insurance while doctors are paying less for theirs, their chances of getting employer-subsidized coverage is less than it would be if they lived in another state. The Dallas Morning News, citing statistics from the Agency for Healthcare Research and Quality and other sources, reported that a smaller percentage of employers in Texas offered coverage to their workers last year than in the U.S. as a whole (51 percent and 53.8 percent, respectively). And the Texans who do have coverage through the workplace are contributing far more out of their own pockets for that coverage than people who live in most other states. In Texas last year, the average employee contribution toward company-sponsored coverage was $4,500. The U.S. average was much lower: $3,721.
Another statistic Perry is not likely to mention when he talks about the benefits of tort reform is the number of Texans who are uninsured. The U.S. Census Bureau reports that Texas continues to be the state with the highest percentage of its residents without coverage, a whopping 25 percent last year, compared to about 16 percent nationwide. It was dead last in 2003 and it is dead last now.
All this should leave us wondering what “thing or two” states have come up with to solve the problems that affect their citizens. Considering the dismal state of health care in Texas, perhaps Perry had Massachusetts in mind.
By: Wendell Potter, Center for Media and Democracy, September 1, 2011
Morally Inept: The New GOP Resentment Of The Poor
In a decade of frenzied tax-cutting for the rich, the Republican Party just happened to lower tax rates for the poor, as well. Now several of the party’s most prominent presidential candidates and lawmakers want to correct that oversight and raise taxes on the poor and the working class, while protecting the rich, of course.
These Republican leaders, who think nothing of widening tax loopholes for corporations and multimillion-dollar estates, are offended by the idea that people making less than $40,000 might benefit from the progressive tax code. They are infuriated by the earned income tax credit (the pride of Ronald Reagan), which has become the biggest and most effective antipoverty program by giving working families thousands of dollars a year in tax refunds. They scoff at continuing President Obama’s payroll tax cut, which is tilted toward low- and middle-income workers and expires in December.
Until fairly recently, Republicans, at least, have been fairly consistent in their position that tax cuts should benefit everyone. Though the Bush tax cuts were primarily for the rich, they did lower rates for almost all taxpayers, providing a veneer of egalitarianism. Then the recession pushed down incomes severely, many below the minimum income tax level, and the stimulus act lowered that level further with new tax cuts. The number of families not paying income tax has risen from about 30 percent before the recession to about half, and, suddenly, Republicans have a new tool to stoke class resentment.
Representative Michele Bachmann noted recently that 47 percent of Americans do not pay federal income tax; all of them, she said, should pay something because they benefit from parks, roads and national security. (Interesting that she acknowledged government has a purpose.) Gov. Rick Perry, in the announcement of his candidacy, said he was dismayed at the “injustice” that nearly half of Americans do not pay income tax. Jon Huntsman Jr., up to now the most reasonable in the Republican presidential field, said not enough Americans pay tax.
Representative Eric Cantor, the House majority leader, and several senators have made similar arguments, variations of the idea expressed earlier by Senator Dan Coats of Indiana that “everyone needs to have some skin in the game.”
This is factually wrong, economically wrong and morally wrong. First, the facts: a vast majority of Americans have skin in the tax game. Even if they earn too little to qualify for the income tax, they pay payroll taxes (which Republicans want to raise), gasoline excise taxes and state and local taxes. Only 14 percent of households pay neither income nor payroll taxes, according to the Tax Policy Center at the Brookings Institution. The poorest fifth paid an average of 16.3 percent of income in taxes in 2010.
Economically, reducing the earned income tax credit and the child tax credit — which would be required if everyone paid income taxes — makes no sense at a time of high unemployment. The credits, which only go to working people, have always been a strong incentive to work, as even some conservative economists say, and have increased the labor force while reducing the welfare rolls.
The moral argument would have been obvious before this polarized year. Nearly 90 percent of the families that paid no income tax make less than $40,000, most much less. The real problem is that so many Americans are struggling on such a small income, not whether they pay taxes. The two tax credits lifted 7.2 million people out of poverty in 2009, including four million children. At a time when high-income households are paying their lowest share of federal taxes in decades, when corporations frequently avoid paying any tax, it is clear who should bear a larger burden and who should not.
By: Editorial, The New York Times, August 30, 2011
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