“Trickle Up Economics”: Americans Favor Extending Tax Cuts For Those Making Under $250,000
I would hardly characterize President Barack Obama’s proposal as a “gambit.” The proposal has been a consistent theme with this administration, which recognizes that Americans want the president to focus on the issues that affect them most—how to create jobs, provide opportunities to advance, and secure a better future for their children.
On Monday, President Obama laid out a vision for the fiscal policies he will pursue to ensure for a better tomorrow—offering additional middle-class tax cuts while asking some to pay a little more. Some might call it risky or foolish to ask to raise taxes during an election, but I believe the American people are often ahead of politicians in understanding what is fair, what works, and want to be offered a choice. For the eight years of “Bushonomics,” those in the middle class got a clear picture of what didn’t work as they lost their jobs, their incomes shrunk, and their homes were devalued or lost while corporate profits rose and executive pay increased.
In the latest National Journal/United Technologies poll, 60 percent favored extending tax cuts for those making $250,000 and below. They understand that economic growth will not come from more failed trickle-down economic theories, but instead by responsibly balancing the need to cut spending, increase revenue, and make sound investments in our future, especially in areas like education, new market development, and infrastructure.
In contrast, Mitt Romney continues to offer ideas that advance little meaningful change and instead, a return to the failed policies from the past of cutting taxes for those who can most afford them, while exploding the deficit, increasing our future debt obligations, and leaving no means to invest in growth.
The president’s proposal, along with an offer to discuss real tax reform after the election, put Republicans back on the defensive and elevated the debate to a referendum for the American voter in November—49 percent of independents in a recent Washington Post poll said the president’s vision for the future is more important to them than what he did in his first term. By proactively controlling the debate and focusing the attention on the “do-nothing” Congress and Romney’s policies of the past, the president will continue to look like the true leader and that is a winning formula. Focusing on America’s future is Obama’s strength and greatest political weapon.
By: Penny Lee, Washington Whispers, U. S. News and World Report, July 11, 2012
“Ricochet Pander Approach”: Romney Spins Economic Lies To The NAACP
On Wednesday morning Mitt Romney addressed the NAACP, the nation’s oldest civil rights organization. In most recent years Republican presidents and candidates have avoided speaking to the NAACP. That makes sense, since they oppose civil rights.
But Romney is pursuing the ricochet pander approach to the general election that George W. Bush laid out in 2000. He pretends to reach out to blacks and Latinos, but the real purpose is making white suburban soccer moms feel like they are not intolerant if they vote for him. That’s why he released an education agenda that mimics much of Bush’s education rhetoric about offering a fair shot to disadvantaged youth.
Unfortunately, Romney did not tell the truth in his speech on Wednesday. Consider this key section:
The opposition charges that I and people in my party are running for office to help the rich. Nonsense. The rich will do just fine whether I am elected or not. The President wants to make this a campaign about blaming the rich. I want to make this a campaign about helping the middle class.
I am running for president because I know that my policies and vision will help hundreds of millions of middle-class Americans of all races, will lift people from poverty, and will help prevent people from becoming poor. My campaign is about helping the people who need help.
This is simply a lie. It is a demonstrable fact that Romney’s economic policies—cutting taxes on the rich and cutting spending on programs that aid the poor—is designed to help the rich get even richer. Now, Romney may subscribe to the discredited supply side theory that ultimately increasing wealth at the top will increase investment and generate economic growth that lowers unemployment. But there is no question he is running for office to help the rich. (If you don’t believe me, read today’s analysis of Romney’s tax plans from Wall Street veteran Henry Blodget.)
In his remarks Romney emphasized his education reform plan, something he has almost never talked about since he announced it. Rather than showing that he is serious about improving social mobility, this reaffirms that he is simply copying the Bush playbook on how to pretend you care about poor urban children while promising to cut programs they depend on, such as Medicaid.
The rest of Romney’s speech was the same pitch he makes to every group: the economy is stagnant, and I will grow it. You could do a find-and-replace for “Latinos,” “women,” “African-Americans” or, for that matter, “Inuits” and his speech would be the same.
There is no question that the economic downturn has been especially hard on black families. But Romney seems to either not know or not care that people have other political interests besides macroeconomic indicators. The NAACP was set up to advocate for legal equality for African-Americans. The last Republican president, George W. Bush, eviscerated legal protections against racial discrimination. His Equal Employment Opportunity Commission only concerned itself with “reverse discrimination” while he appointed federal judges who are hostile to civil rights. Will Romney do the same? He did not say.
Nor did Romney have anything to say about the fact that his own church, in which he became a prominent leader, openly discriminated against blacks until 1978. Romney never, to anyone’s knowledge, did anything to condemn the Mormon Church’s racism. The only thing he is reported to have ever said about it was that he thought it rude of other schools to boycott playing Brigham Young University in sports as an objection Mormonism’s racist policies. In other words, he was against using a classic device of the civil rights movement, a boycott, to promote integration.
No wonder he did not want to discuss civil rights on Wednesday. But the least he could have done is told the truth about his economic agenda.
By: Ben Adler, The Nation, July 11, 2012
“Bootstrapping Your Way To The Top”: The Myth Of Rags To Riches
In the latest version of SimCity, a computer game that let’s you pretend to be an urban planner, city residents are born into an economic class and there they remain for life. This may have been done for simplicity’s sake, but the scenario makes the popular computer game disturbingly similar to the situation of most Americans.
The latest report from Pew Charitable Trusts, “Purusing the American Dream,” deals a stunning blow to any romantic notions of bootstrapping your way to the top. It turns out only 4 percent of those raised in the bottom 20 percent ever climb into the top 20 percent. Rather, people raised on one rung of the income ladder are likely to stay pretty close to it as adults. As the report notes, “Forty-three percent of Americans raised in the bottom quintile remain stuck in the bottom as adults and 70 percent remain below the middle class.”
The report, from a non-partisan group that’s far from ideological, shows that while in absolute numbers, the vast majority of Americans are making more than their parents, those increases are rarely enough to help move Americans up the class ladder. In other words, even after adjusting for inflation, most Americans make more than their parents—but few have actually been able to change their socio-economic class. (The report uses the ladder analogy, and the rungs represents 20 percent marks.) That’s because the rich are getting richer faster; income growth has been disproportionately high among those who are already in the top 20 percent. That makes the distribution of classes significantly uneven, finds the report. “The difference between the size of the rungs between the two generations means that while the vast majority of Americans exceeded their parents’ family incomes, the extent of that increase—particularly at the bottom—was not always enough to move them to a different rung of the income ladder.” For 20 percent of Americans, they’re making more money than their parents but are still in a lower class rung.
Among African Americans, the cycle of poverty is even worse. They’re more likely than whites to get stuck in the bottom income quintile—more than half of blacks born in the bottom rung of the income ladder stay there as adults, compared with 33 percent of whites. Even more disturbing: Fifty-six percent of blacks raised in middle class families fall to the bottom two quintiles as adults.
The report confirms what many see in their daily lives: if you’re born rich or born poor, you’ll probably stay that way for the rest of your life. Right now, the American Dream seems to be just that—a myth with little relation to the reality. The implications are impossible to overstate. Our country’s identity is heavily rooted in the idea of economic mobility, and as far back as Alexis de Toqueville, commentators have discussed the importance of that belief. Conservative political rhetoric goes cheerfully on, of course, assuring us that anyone can be successful in this great country if they so choose. Meanwhile our public institutions are increasingly punitive to the poor: Whether it’s the humiliations of getting welfare or the difficulties of escaping student loan debt, we make the poor (and increasingly, the middle class) pay for the sin of not getting born in the right rung of the ladder.
Unlike a computer game, however, a static class system isn’t inevitable and doesn’t have to be permanent.
By: Abby Rapoport, The American Prospect, July 11, 2012
“Mitt’s Gray Areas”: We Can Only Assume He’s Hiding Something Seriously Damaging
Once upon a time a rich man named Romney ran for president. He could claim, with considerable justice, that his wealth was well-earned, that he had in fact done a lot to create good jobs for American workers. Nonetheless, the public understandably wanted to know both how he had grown so rich and what he had done with his wealth; he obliged by releasing extensive information about his financial history.
But that was 44 years ago. And the contrast between George Romney and his son Mitt — a contrast both in their business careers and in their willingness to come clean about their financial affairs — dramatically illustrates how America has changed.
Right now there’s a lot of buzz about an investigative report in the magazine Vanity Fair highlighting the “gray areas” in the younger Romney’s finances. More about that in a minute. First, however, let’s talk about what it meant to get rich in George Romney’s America, and how it compares with the situation today.
What did George Romney do for a living? The answer was straightforward: he ran an auto company, American Motors. And he ran it very well indeed: at a time when the Big Three were still fixated on big cars and ignoring the rising tide of imports, Romney shifted to a highly successful focus on compacts that restored the company’s fortunes, not to mention that it saved the jobs of many American workers.
It also made him personally rich. We know this because during his run for president, he released not one, not two, but 12 years’ worth of tax returns, explaining that any one year might just be a fluke. From those returns we learn that in his best year, 1960, he made more than $660,000 — the equivalent, adjusted for inflation, of around $5 million today.
Those returns also reveal that he paid a lot of taxes — 36 percent of his income in 1960, 37 percent over the whole period. This was in part because, as one report at the time put it, he “seldom took advantage of loopholes to escape his tax obligations.” But it was also because taxes on the rich were much higher in the ’50s and ’60s than they are now. In fact, once you include the indirect effects of taxes on corporate profits, taxes on the very rich were about twice current levels.
Now fast-forward to Romney the Younger, who made even more money during his business career at Bain Capital. Unlike his father, however, Mr. Romney didn’t get rich by producing things people wanted to buy; he made his fortune through financial engineering that seems in many cases to have left workers worse off, and in some cases driven companies into bankruptcy.
And there’s another contrast: George Romney was open and forthcoming about what he did with his wealth, but Mitt Romney has largely kept his finances secret. He did, grudgingly, release one year’s tax return plus an estimate for the next year, showing that he paid a startlingly low tax rate. But as the Vanity Fair report points out, we’re still very much in the dark about his investments, some of which seem very mysterious.
Put it this way: Has there ever before been a major presidential candidate who had a multimillion-dollar Swiss bank account, plus tens of millions invested in the Cayman Islands, famed as a tax haven?
And then there’s his Individual Retirement Account. I.R.A.’s are supposed to be a tax-advantaged vehicle for middle-class savers, with annual contributions limited to a few thousand dollars a year. Yet somehow Mr. Romney ended up with an account worth between $20 million and $101 million.
There are legitimate ways that could have happened, just as there are potentially legitimate reasons for parking large sums of money in overseas tax havens. But we don’t know which if any of those legitimate reasons apply in Mr. Romney’s case — because he has refused to release any details about his finances. This refusal to come clean suggests that he and his advisers believe that voters would be less likely to support him if they knew the truth about his investments.
And that is precisely why voters have a right to know that truth. Elections are, after all, in part about the perceived character of the candidates — and what a man does with his money is surely a major clue to his character.
One more thing: To the extent that Mr. Romney has a coherent policy agenda, it involves cutting tax rates on the very rich — which are already, as I said, down by about half since his father’s time. Surely a man advocating such policies has a special obligation to level with voters about the extent to which he would personally benefit from the policies he advocates.
Yet obviously that’s something Mr. Romney doesn’t want to do. And unless he does reveal the truth about his investments, we can only assume that he’s hiding something seriously damaging.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 8, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 