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The Road to Jobs and Economic Growth

2:03 pm in Uncategorized by Lee Saunders

Road

Road

One of the great lies of our time is that raising taxes on the wealthy hurts job creation and undermines economic growth. There is absolutely no evidence anywhere in the world that this claim is true. In fact, all the evidence points to the exact opposite being true: When the wealthy are taxed fairly, jobs are created and economic growth is encouraged. Back in the 1950s and 1960s, for example, when the economy boomed and the middle-class expanded, the top bracket for high-income earners was 90 percent. Today, the top bracket is at 35 percent, but the top 1 percent are paying an effective tax rate of less than 30 percent.

In 1993, when President Clinton proposed raising taxes on the wealthiest Americans, he was roundly criticized by the corporate-controlled politicians on Capitol Hill and the Wall Street barons who always oppose higher taxes on the rich. They claimed the economy would suffer and jobs would be lost. Yet, when President Clinton won that tax increase, just the opposite happened. The nay-sayers were wrong. Job creation skyrocketed and we ushered in nearly a decade of strong economic growth.

A dozen years ago, however, that growth came to a halt with Pres. George W. Bush’s program of tax cuts for the rich and the deregulation of Wall Street. Instead, we were left with the lowest job creation of any Presidency in modern times. There is a reason for this result: When the wealthy get massive tax cuts, they don’t spend the money. Neither do corporations. In fact, corporations are now sitting on more than $1 trillion in cash.

On the other hand, when working families get a tax break, they spend it – creating more demand for products and giving corporations an incentive to produce more and hire more people. That is why President Obama makes such a strong case for keeping taxes low on the working middle class while allowing the Bush-era tax cuts for the wealthy to expire. Yet the same, age-old arguments are made by the wealthy to keep their taxes low.

They’ve even got a corporate CEO-funded front group, called Fix the Debt, arguing that we need to cut programs that help the poor, seniors and the sick in order to finance more tax cuts for the richest people in the country. That kind of thinking won’t put America back to work. And it won’t finance the important investments in infrastructure and education that we need to remain competitive in the future. All it will do is give the rich a tax break that they don’t need.

That is one reason why the 2012 election was the most important one of our lifetime. Big issues were debated, including whether we would return to Bush-era policies or enact the kind of Clinton-era tax policies supported by President Obama. The voters sent a clear signal that they supported President Obama’s plan to move the country forward by raising taxes on the wealthy and protecting vitally important programs that the poor and middle-class rely upon, such as Social Security, Medicare and Medicaid.

Some on Capitol Hill – such as Sen. Lindsay Graham of South Carolina – say they will only accept a revenue increase if the President will agree to major cuts in Social Security, Medicare or Medicaid. But Congress and President Obama have already cut more than $1.5 trillion in government spending. Now, the focus must be on revenue.

More than 40 members of the House have indicated their opposition to any cuts in Social Security, Medicare or Medicaid. Sens. Jay Rockefeller and Tom Harkin underscored the opposition to unnecessary cuts in a letter they circulated earlier this week. They urged President Obama to “reject changes to Medicare, Medicaid and Social Security that would cut benefits, shift costs to states, alter the structure of these critical programs, or force vulnerable populations to bear the burden of deficit reduction.”

The taxes on the richest people in America have been too low for too long. Our economic recovery is being damaged by this fundamentally flawed policy. Just this week, billionaire Warren Buffet made this clear in an op-ed published in The New York Times. In his column, Buffet called on Congress to immediately “enact a minimum tax on high incomes.”

Buffet also suggests a 30 percent rate for income between $1 million and $10 million, and a 35 percent on amounts above that. “A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultra-rich paying rates well below those incurred by people with income just a tiny fraction of ours,” Buffet wrote.

We need to mobilize and demand that the Congress raise taxes on the wealthy and protect vital programs. It is the only way to avoid a fiscal disaster while encouraging job creation and greater economic growth.
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Labor Day and the Future of America

11:41 am in Uncategorized by Lee Saunders

Labor Day '08

(Photo: aflcio/flickr)

Labor Day 2012 comes at a turning point in American history. At a time when the wealthiest have prospered beyond the wildest of dreams, the vast majority of working Americans struggle to make ends meet. Millions have seen their incomes flatten, their jobs outsourced, and their hopes for retirement security put on hold, if not quashed completely. At the same time, Wall Street and the politicians who conspire with them have worked overtime to destroy the ability of American workers to join unions and bargain collectively for better wages and benefits.

Across the country today, union members and our allies are pulling together to create a different future for our country. We are playing an active role in campaigns at every level of government that will determine whether America will continue on the perilous, amoral road of inequality or get back on track to expand the middle class and opportunity for all.

This is not a new role for the American labor movement. For more than a century, our members have stood up against tremendous odds to fight for values that all Americans cherish. We ended child labor and promoted the minimum wage. We closed sweatshops and struggled for unemployment insurance. We fought for sick leave and retirement security. We have built programs to expand the American Dream for all.

We have helped create insurance programs that benefit all Americans, including Social Security, Medicare, Medicaid and Obamacare. We have pushed legislation promoting civil and human rights at home, including the Voting Rights Act, the Fair Housing Law and the repeal of Don’t Ask, Don’t Tell. Union members have fought for education programs, from pre-school to college, because we knew that a broadly educated workforce is necessary to create a thriving middle class and a healthy democracy.

During the Republican National Convention this week, the cause of working people has been subjected to numerous attacks designed to undermine public support for unions and the role unions play in promoting an economy that works for all. On the opening night of the convention, South Carolina Gov. Nikki Haley accused President Obama of sacrificing American workers “to pacify the bullying union bosses he counts as political allies,” when he stood up for union members in the manufacturing sector. New Jersey Gov. Chris Christie denounced teacher unions while falsely claiming that unions oppose high standards and accountability.

The New York Times reports that the GOP platform “calls for numerous steps that could significantly weaken America’s labor unions — public-sector and private-sector ones — and help speed organized labor’s overall decline.” The platform calls for a nationwide Right to Work for Less law and encourages all states to eliminate the right of public employees to engage in collective bargaining. The platform opposes the right of unions in the private sector to organize through majority sign-up, even though that has been the law of the land since the 1930s.
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Mitt Romney’s “Fake-Facts”

11:32 am in Uncategorized by Lee Saunders

Senator Daniel Patrick Moynihan once famously told an opponent in a debate: “Everyone is entitled to his own opinion, but not his own facts.” I was reminded of that last Thursday when former corporate raider Mitt Romney, who made millions out-sourcing American jobs to foreign countries, expressed his opinion on the Supreme Court’s decision upholding Obamacare. In just one paragraph of his speech, Romney made six claims that bear no relation to the real world. He created “fake-facts” about health care reform and totally distorted the law’s real impact. This is an old Karl Rove campaign tactic – make things up – on steroids. It needs to be exposed.

Mitt Romney (Photo: Austen Hufford / Flickr)

1. Romney said Obamacare “cuts Medicare, by approximately $500 billion.” This claim is meant to scare seniors, but it is simply false. PolitiFact.com has this to say about this bogus claim: “The bill doesn’t take money out of the current Medicare budget but, rather, attempts to slow the program’s future growth, curtailing just over $500 billion in anticipated spending increases over the next 10 years.” Those savings come from a variety of administrative changes and things like requiring Medicare Advantage plans to reduce their inflated costs. The law makes no cuts to guaranteed Medicare benefits. In fact, it increases Medicare benefits by improving the prescription drug benefit and by making cancer screenings and other preventive services available without a co-pay.

2. Romney said Obamacare “raises taxes on the American people by approximately $500 billion.” False. In fact, families across the nation will save money as a result of the Obamacare reforms, such as state-based exchanges that come online in 2014. Families who purchase private health insurance through these exchanges will save up to $2,300 each year on their health care spending. Millions of Americans already see real savings as their out-of-pocket costs go down to zero for preventive care like flu shots or cancer screenings.

3. Romney says Obamacare “adds trillions to our deficits and to our national debt.” False. In fact, the non-partisan Congressional Budget Office estimates that Obamacare will reduce the national deficit by $210 billion over the next 10 years.

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