Taxing The Poor: The Only Tax Increase Republicans Support
Throughout the debate about raising the federal debt ceiling, Republicans have denied deal after deal because Democrats insist on adding new revenues to trillions of dollars in spending cuts. Republicans have opposed repealing oil and gas subsidies, removing a tax loophole for corporate jet owners, letting the Bush tax cuts expire, and all other forms of revenue Democrats have suggested. Raising taxes in a weak economy, they argue, is unthinkable — even if conservative patriarch Ronald Reagan did just that.
But there is one tax increase some Republicans seem to favor: raising taxes on the working poor, senior citizens, and other low-income Americans.
While they fight the expiration of the budget-busting Bush tax cuts, Republicans have continually cited a report that shows that 51 percent of Americans don’t pay income taxes, even admitting that middle- and lower-class Americans need to shoulder a larger burden in deficit reduction efforts. Here is a sample of Republicans who have made that argument:
Sen. Orrin Hatch
(R-UT): In a May 5 appearance on MSNBC, Hatch said, “The place where you’ve got to get revenues has to come from the middle class,” saying the poor needed to understand “that there’s a civic duty on the part of every one of us to help this government to, uh, to be better.” On the Senate floor July 7, Hatch said the poor “need to share some of the responsibility” for deficit reduction.
Sen. John Cornyn
(R-TX): Cornyn also cited the report on the Senate floor July 7, when he said Congress needed to address tax reform to make the system “flatter, fairer, and simpler.” He then cited the report, saying, “51 percent — that is — a majority of American households — paid no income tax in 2009. Zero. Zip. Nada.”
Sen. Dan Coats
(R-IN): Coats echoed the talking point last weekend, saying “everyone needs to have some skin in the game.” He added: “I realize that some with low incomes and not much money are not paying much in taxes. Nonetheless, we all have a stake in this country and what needs to be done. I think it’s important that this burden not just fall on 50 percent of the people but falls on all of us in some form.”
House Majority Leader Eric Cantor
(R-VA): Cantor was among the first Republicans to begin hitting this particular talking point, doing so in April on CNBC’s Squawk Box. “We also have a situation in this country where you’re nearing 50 percent of people who don’t even pay income taxes,” he said.
Republicans, of course, ignore why most of the 51 percent do not pay income taxes and the myriad ways in which they are subject to other forms of taxation. The majority who do not pay federal income taxes simply do not make enough money to qualify for even the lowest tax bracket. But they do contribute through payroll, state, and sales taxes. Less than a quarter of Americans don’t contribute to federal tax receipts, and the majority of those are students, the elderly, or the unemployed.
Meanwhile, the richest Americans are paying less than they were a generation ago, leaving the United States with one of the largest income gaps in the industrialized world.
By: Travis Waldron, Think Progress, July 25, 2011
Boehner’s New Proposal Could Produce Greatest Increase In Poverty And Hardship Of Any Law In Modern U.S. History
House Speaker John Boehner’s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.
The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.
This may sound hyperbolic, but it is not. The mathematics are inexorable.
The Boehner plan calls for large cuts in discretionary programs of $1.2 trillion over the next ten years, and it then requires additional cuts that are large enough to produce another $1.8 trillion in savings to be enacted by the end of the year as a condition for raising the debt ceiling again at that time.
The Boehner plan contains no tax increases. The entire $1.8 trillion would come from budget cuts.
Because the first round of cuts will hit discretionary programs hard — through austere discretionary caps that Congress will struggle to meet — discretionary cuts will largely or entirely be off the table when it comes to achieving the further $1.8 trillion in budget reductions.
As a result, virtually all of that $1.8 trillion would come from entitlement programs. They would have to be cut more than $1.5 trillion in order to produce sufficient interest savings to achieve $1.8 trillion in total savings.
To secure $1.5 trillion in entitlement savings over the next ten years would require draconian policy changes. Policymakers would essentially have three choices: 1) cut Social Security and Medicare benefits heavily for current retirees, something that all budget plans from both parties (including House Budget Committee Chairman Paul Ryan’s plan) have ruled out; 2) repeal the Affordable Care Act’s coverage expansions while retaining its measures that cut Medicare payments and raise tax revenues, even though Republicans seek to repeal many of those measures as well; or 3) eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities. There is no other plausible way to get $1.5 trillion in entitlement cuts in the next ten years.
The evidence for this conclusion is abundant.
The “Gang of Six” plan, with its very tough and controversial entitlement cuts, contains total entitlement reductions of $640 to $760 billion over the next ten years not counting Social Security, and $755 billion to $875 billion including Social Security. (That’s before netting out $300 billion in entitlement costs that the plan includes for a permanent fix to the scheduled cuts in Medicare physician payments that Congress regularly cancels; with these costs netted out, the Gang of Six entitlement savings come to $455 to $575 billion.)
The budget deal between President Obama and Speaker Boehner that fell apart last Friday, which included cuts in Social Security cost-of-living adjustments and Medicare benefits as well as an increase in the Medicare eligibility age, contained total entitlement cuts of $650 billion (under the last Obama offer) to $700 billion (under the last Boehner offer).
The Ryan budget that the House passed in April contained no savings in Social Security over the next ten years and $279 billion in Medicare cuts.
To be sure, the House-passed Ryan budget included much larger overall entitlement cuts over the next 10 years. But that was largely because it eviscerated the safety net and repealed health reform’s coverage expansions. The Ryan plan included cuts in Medicaid and health reform of a remarkable $2.2 trillion, from severely slashing Medicaid and killing health reform’s coverage expansions. The Ryan plan also included stunning cuts of $127 billion in the SNAP program (formerly known as food stamps) and $126 billion in Pell Grants and other student financial assistance.
That House Republicans would likely seek to reach the Boehner budget’s $1.8 trillion target in substantial part by cutting programs for the poorest and most vulnerable Americans is given strong credence by the “Cut, Cap, and Balance” bill that the House recently approved. That bill would establish global spending caps and enforce them with across-the-board budget cuts —exempting Medicare and Social Security from the across-the-board cuts while subjecting programs for the poor to the across-the-board axe.
This would turn a quarter century of bipartisan budget legislation on its head; starting with the 1985 Gramm-Rudman-Hollings law, all federal laws of the last 26 years that have set budget targets enforced by across-the-board cuts have exempted the core assistance programs for the poor from those cuts while including Medicare among programs subject to the cuts. This component of the “Cut, Cap, and Balance” bill strongly suggests that, especially in the face of an approaching election, House Republicans looking for entitlement cuts would heavily target means-tested programs for people of lesser means (and less political power).
In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations.
President Obama has said that, while we must reduce looming deficits, we must take a balanced approach. The Boehner proposal badly fails this test of basic decency. The President should veto the bill if it reaches his desk. Congress should find a fairer, more decent way to avoid a default.
By: Robert Greenstein, President, Center on Budget and Policy Priorities, July 25, 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
In America, Being Poor Is A Criminal Offense
It takes a special kind of bully to target the most vulnerable and neediest families in society, which millionaire politicians like to argue are draining America’s treasury. I am referring to Rep. Charles Boustany (R-LA), who recently introduced a bill that would require states to implement drug testing of applicants for and recipients of the federal Temporary Assistance for Needy Families (TANF) program. This is reminiscent of Sen. Orrin Hatch’s (R-UT) failed legislation last summer to drug test the unemployed and those receiving other forms of government cash assistance, which ultimately died in the Senate. So far, Boustany’s proposal is following the same fate as Hatch’s, but around the country states are taking matters into their own hands.
In at least 30 state Legislatures across America, predominately wealthy politicians are quite impressed with themselves for considering bills that would limit the meager amount of state help given to needy families struggling to make ends meet. Many have proposed drug testing with some even extending it to recipients of other public benefits as well, such as unemployment insurance, medical assistance, and food assistance, in an attempt to add more obstacles to families’ access to desperately needed aid.
Florida’s Legislature has passed a bill that will require welfare applicants to take drug tests before they can receive state aid. Once signed into law by Republican Gov. Rick Scott, which is likely, all adult recipients of federal cash benefits will be required to pay for the drug tests, which are typically around $35. In Maine, Republican lawmakers introduced two proposals that would impose mandatory drug testing on Maine residents who are enrolled in MaineCare, the state’s Medicaid program for low-income and disabled residents. Under a similar bill that passed both the House and Senate in Missouri, recipients found to be on drugs will still be eligible for benefits only if they enter drug treatment programs, though the state wouldn’t pick up the tab for their recovery.
In Massachusetts — where about 450,000 households receive cash or food assistance — a bill introduced by state Rep. Daniel B. Winslow (R-Norfolk) would set up a program requiring those seeking benefits to disclose credit limits and assets such as homes and boats, as well as the kind of car they drive. His reasoning is “If you have two cars and a snowmobile, then you aren’t poor. If we do this, we will be able to preserve our limited resources for those who are truly in need and weed out fraud, because we know there’s fraud and we’re not looking for it.” State Rep. Daniel K. Webster (R-Pembroke) filed a budget amendment requiring the state to verify immigration status of those seeking public benefits. Webster made it clear that his proposal does not mean he dislikes poor people or immigrants, but “this is all unsustainable and the system is being abused.”
This is rather shocking because I can’t recall any Republicans or Democrats demanding that the CEO of Bank of America or JP Morgan disclose inventory of their vacation homes, private jets, and yachts before bailing them out in what amounts to corporate welfare. Nor did they insist that these CEOs submit to alcohol and drug screenings before receiving taxpayer money. No objections were made regarding the immigration status of the people running these companies or whether they happen to employ undocumented workers for cheap labor.
Some would argue that corporations are different, in that they create jobs. To that I will point out that corporations are making record profits, even as they layoff workers and pay next to nothing in Federal income taxes. And this doesn’t even begin to scratch at the surface of corporate abuse by the very entities that are soaked in taxpayer money. Just contrast these proposals with the way the rich are treated in this country with billions of dollars in subsidies and tax breaks.
This is simply an extension of a conversation that began in 1996, when President Bill Clinton and House Speaker Newt Gingrich passed bipartisan welfare reform, whose results have been tragic to say the least. The 1996 Welfare Reform Act authorized, but did not require, states to impose mandatory drug testing as a prerequisite to receiving state welfare assistance. Back then, unproven allegations of criminal behavior and drug abuse among welfare recipients were the rationales cited by those in support of the bill’s many punitive measures that were infused with race, class, and gender bias.
The majority of the proposals for drug testing require no suspicion of drug use whatsoever. Instead they rest on the assumption that the poor are inherently inclined to immoral and illegal behavior, and therefore unworthy of privacy rights as guaranteed under the Fourth Amendment. These proposals simply reaffirm the longstanding concept of the poor as intrinsically prone to and deserving of their predicament. Jordan C. Budd, in his superb analysis Pledge Your Body for Your Bread: Welfare, Drug Testing, and the Inferior Fourth Amendment, demonstrates how the drug testing of welfare recipients is part of what’s called a “poverty exception” to the Constitution, particularly the Fourth Amendment, a bias that renders much of the Constitution irrelevant at best, and hostile at worst, to the American poor.
Kaaryn Gustafson extensively documents the trend toward the criminalization of poverty. She demonstrates how, in her words “welfare applicants are treated as presumptive liars, cheaters, and thieves,” which is “rooted in the notion that the poor are latent criminals and that anyone who is not part of the paid labor force is looking for a free handout.” I would argue that given the disdain that has been shown for “entitlements” over the years, it won’t be long before this treatment extends to Social Security, Medicare, and even Financial Aid recipients.
The notion that the poor are more prone to drug use has no basis in reality. Research shows that substance use is no more prevalent among people on welfare than it is among the working population, and is not a reliable indicator of an individual’s ability to secure employment. Furthermore, imposing additional sanctions on welfare recipients will disproportionately harm children, since welfare sanctions and benefit decreases have been shown to increase the risk that children will be hospitalized and face food insecurity. In addition, analysis shows that drug testing would be immensely more expensive than the acquired savings in reduced benefits for addicts
With regard to welfare legislation, it’s beneficial to highlight where on the class ladder members of Congress stand. According to a study by the Center for Responsive Politics released late last year, nearly half of the members in congress — 261 — were millionaires, compared to about 1 percent of Americans. The study also pointed out that 55 of these congressional millionaires had an average calculated wealth in 2009 of $10 million dollars and up, with eight in the $100 million-plus range. A more recent study released in March, found that 60 percent of Senate freshman and more than 40 percent of House freshmen of the 112th congress are millionaires.
Why is this so important? Because very few of our lawmakers understand what it’s like to struggle financially. Millionaires can generally afford healthcare without grappling with unemployment, foreclosure, or an empty refrigerator. The majority of our representatives haven’t a clue what the daily lives of the people they represent are like, let alone the constant struggle of single mothers living below the poverty line. They are constantly arguing that we all must sacrifice with our pensions, our wages, our education, the security of our communities, and with the belly’s of our children, while they sit atop heavily guarded piles of money.
With the ranks of the underclass growing and the unemployment level at a staggering 9%, it’s more clear than ever that the wealth divide between “we the people” and our representatives has caused a dangerous disconnect. State and federal legislators claim to be acting fiscally responsible, but they support budgets that create unimaginably difficult circumstances for the lives of the most vulnerable people, especially children. There is no question that these newest proposals amount to class warfare, and the longer we ignore it, the more it will spread.
By: Rania Khalek, CommonDreams.org, May 14, 2011
Republican Budget Cuts Promote ‘Trickle Up’ Poverty
How appropriate that Washington’s most challenging budget crisis in decade coincides with the Republican Party’s centenary birthday celebration of Ronald Reagan, whose attacks on “welfare queens” and the social safety net in the name of deficit reduction caused indisputable collateral damage to middle class Americans. The Ronnie-like budget cuts that Republican leaders are proposing today—against unemployment insurance, food stamps, Medicaid and subsidized housing—all boast the potential to carry on the Reagan tradition of hurting the very middle class they aspire to help.
Why? Because the cuts to the programs the Republican leadership in the House of Representatives are targeting would increase poverty, and more poverty lowers property values, diminishes the quality of life, and drives up family taxes and expenses of middle class Americans.
Cuts to federal housing programs will increase homelessness. Combine increased homelessness with vacant public housing and you have a cancer that will spread, reducing property values in communities across our nation. Or consider cuts to unemployment and food stamps. These are likely to cause grocery stores in urban, suburban, and rural areas—many of which serve the middle class—to either close or lower the quality and selection of their wares, just to preserve profit margin.
A persistently high unemployment rate may well also translate into desperation and increased property and personal crimes. Not only will more crime lower our quality of life, it will drive up the cost of local policing. That could mean higher local taxes meet crime-fighting demands.
Public schools were once the first choice of middle class families; these schools are the first to fail as poverty rises. Where school was once free, poverty forces many middle class families today to shell out thousands of dollars to educate their children. These new costs are a fact of life for more and more middle class Americans as poverty spreads across the country. Sadly it’s at just the time they can least afford it.
Let’s be clear. No one rejoices at the prospect of spending billions of dollars for subsidized housing or food stamps or Medicaid. And Glenn Beck acolytes and progressives alike can agree that good paying jobs are better for families than a plethora of government subsidies. But the problem is that our economy and the policies that drive it are not creating enough decent paying jobs for all able-bodied Americans to cover their basic household expenses. Federal subsidies for basic needs make up for the shortcomings in our economy. And they help a surprising number of people.
To be sure, we can find ways to run these programs more effectively and more efficiently. And that’s where the hard work of budget cutting should concentrate. The ubiquity of technology, even in low-income communities, presents a huge opportunity to shed administrative costs. We should also find ways to better align these programs so that they enable workers and their families to more successfully move out of poverty. If we are serious about protecting and expanding the middle class, then the tough discussions on how to overhaul the delivery of these income-support programs need to commence.
But it’s simply not in the interest of most Americans to swing an ax at these programs amid a nascent economic recovery. Today, over 10 million Americans are collecting unemployment, and nearly that many citizens are in apartments with rents subsidized by the federal government. More than 40 million Americans put food on the table with the aid of food stamps. Fifty million Americans are able to go to the doctor or the hospital because of the Medicaid program. And fully one in six Americans is dependent on federal and state support for their basic necessities of life.
The consequences of reducing federal income supports will be devastating on the poorest among us. But the impact will not be contained to them. Remember: Ronald Reagan tried to convince us that wealth trickles down. His enduring legacy, however, is that poverty trickles up.
By: Donna Cooper, Senior Fellow-Center for American Progres, February 14, 2011
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