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AFL-CIO Outlines a Debt Reduction Plan that Would Actually Work

4:56 am in Uncategorized by Bill Egnor

AFL-CIO Headquarters

AFL-CIO Headquarters by samirluther

Here we are in mid-September with 10 weeks of the “Super-committee” drama ahead of us. We’ll be waiting to see the posturing, the demands, the breath holding, the capitulations and, most likely, the intransigence of the Republicans forcing this whole exercise into failure.

The really sad part is that there is a plan out there which would actually reduce the debt by more than the 1.2 trillion this committee is charged with. That plan was laid out by the AFL-CIO and it does not require cuts to Medicare, Social Security or Medicaid.

The Hill is reporting that the venerable union has sent around a plan that outlines where trillions in deficit reduction savings could be found. If the real goal, as both Republicans and Democrats claim, is to reduce our national debt and get our people working then these are the ideas that should be discussed before we talk about cutting Social Security (which does nothing to add to our debt) or military retirement benefits.

The proposals run the gamut and they are pretty much what you would expect from a Labor Union; establish the public option as way to control costs for health care by competition with a plan that does not put profit first. Allow Medicaid to negotiate drug costs with pharmaceutical companies (why the hell we have not done this yet is a national shame) and allow the re-importation of prescription drugs from other countries. The AFL-CIO estimates that these three measures would save a total of $299 billion over the next ten years. As they say, that ain’t hay.

But that is not all the plan suggests. There are tax revenue ideas that make sense and are perfectly compatible with economic growth. The plan includes a changing the tax code so that capital gains are taxed at a rate just like income, a millionaires surtax, and the big Kahuna a small financial transaction tax on all trades on our stock markets. These measures are estimated by the union to provide, $168 billion, $400 billion and a $1 trillion dollars respectively over the next decade. That is more than the “Super-committee” is looking for in one fell swoop!
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Friday Constitutional 17- 15th, 16th And 17th Amendments

5:43 am in Uncategorized by Bill Egnor

FridayConstitutional

Happy Friday and welcome to Friday Constitutional! This is the repost of my series from 2008-2009 looking at the U.S. Constitution section by section and discussing them from a layman’s point of view. The intent here is to give everyone in the community the chance to look read through the whole Constitution and think about it as a whole instead of just the individual Articles and Amendments. If you’ve missed a section or want to go back and read something again, below are links to all of the previous installments:

Friday Constitutional 1 – Preamble, Article One, Sections 1 And 2
Friday Constitutional 2 – Article One, Sections 3 And 4
Friday Constitutional 3 – Article One, Sections 5 And 6
Friday Constitutional 4 – Article One, Sections 7 And 8
Friday Constitutional 5 – Article One, Sections 9 And 10
Friday Constitutional 6 – Article Two, Section 1 (Part One)
Friday Constitutional 7 – Article Two, Sections 1 (Part Two), 2, 3, And 4
Friday Constitutional 8 – Article Three, The Judicial Branch
Friday Constitutional 9 – Article Four, Relationships Between The States
Friday Constitutional 10 – Articles 5, 6 And 7
Friday Constitutional 11 – 1st And 2nd Amendments
Friday Constitutional 12 – 3rd And 4th Amendments
Friday Constitutional 13 – 5th And 6th Amendments
Friday Constitutional 14 – 7th, 8th, 9th And 10th Amendments
Friday Constitutional 15 – 11th And 12th Amendments
Friday Constitutional 16 – 13th And 14th Amendments

Last week we covered Amendments Thirteen and Fourteen, so we will kick this week off with the last of the Reconstruction Era Amendments.


Amendment Fifteen:

Section One:

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

This Amendment is seems very simple but it really was a critical step for the recently freed slaves. The Untied States did not just end their involuntary servitude, with this act they went on to make them, well the men anyway, full citizens by guaranteeing their right to vote. Of course it was not really that easy. Sadly laws are only any good when they are actually enforced the way that they were written. That took another 90 years or so, but it was still a major step forward.
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Robert Samuelson And The “Serious Trickle Down Fairy”

5:52 am in Uncategorized by Bill Egnor

I am having a problem with a word, it is one that we’re hearing a lot lately, seriousness. Now having been ‘round the block a few times I have come to the conclusion that when I hear Right Wing talkers like Robert Samuelson and Republicans using a word over and over then I tend to think they are in the process of redefining it.

Today’s little nugget of nothing from Samuelson is all about the false equivalence between the supposed lack of seriousness on both sides. Of course La Samuelson goes after the Dems first insisting that we look at cutting entitlement programs like Medicaid and Medicare and then conflating those two expensive and troubled programs with the much more solvent and non-deficit producing Social Security.

He does take a half hearted swipe at the Republicans and their abject failure to even consider increasing taxes at all to bring down our deficits. But Samuelson has a point that he wants to make in this “A pox on both your houses” column. Here, I’ll let him make it:

Our budget problem is conceptually simple. Government’s spending commitments, driven by more retirees and uncontrolled health costs, vastly exceed the existing tax base. There is an argument about how fast changes should be made to protect the economic recovery.

He is right as far as he goes. The problem is that Samuelson is not really, um, err, serious about this issue himself. Yes we do have a problem that we don’t have enough money for our commitments and yes health care costs are going up and that is squeezing the budget more as we keep our commitments to the poor and elderly to provide them with health care.

However, the solution is not finding a way to slash these programs so that they provide less care and do nothing to control costs. The solution is to fix the underlying problem, that our health care markets are fundamentally flawed.

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Time For A Bold And Ideological Democratic Budget!

5:32 am in Uncategorized by Bill Egnor

FY2011 Budget

FY2011 Budget by TalkMediaNews, on Flickr"

So, now that House Budget Committee Chair Paul Ryan has unveiled his steaming tightly coiled pile of a budget the argument in the media is starting. It is to be strongly hoped that the Traditional Media outlets will look at the facts of this budget.

You know the little problems like the draconian cuts are not going to actual deficit reduction because they are being used to pay for tax breaks for millionaires and billionaires. Just to raise your blood pressure a little this morning, let me give you and example. Under this budget a single person making $75,000 a year (a nice chunk of change) would pay the same tax rates as people who make multiple millions a year.

Another issue that has to be brought up again and again is that this budget would gut the newly minted financial regulations, would gut the EPA, would gut the Social Security Administration (setting up the argument that it is poorly run and needs to be ended all together) as well as ending Medicare and Medicaid as we know them within ten years.

As if all that shite were not enough, there is the fact that like all of the proposals that Rep. Ryan puts forward, the numbers don’t work. He assumes that if we pass his budget in 4 years, just 48 months, the unemployment rate will fall to 4%.

I’d love that to happen, but I have this mental defect, I can’t get behind something that has no basis in reality, or as in this case is actually counter factual. Over the last two years the only thing that has kept the economy afloat was major federal spending. Business is sitting on 1.4 trillion in cash and has shown no sign of wanting to use it to stimulate demand. Rep. Ryan wants to slash hundreds of billions from the budget every year for the next decade. Is there really anyone out there who thinks that the resultant loss of jobs is going to improve the growth rate or the unemployment numbers?
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Goverment Shut Down Looms, Time To End The GOP Hostage Habit

5:14 am in banality of evil, jerks by Bill Egnor

GOP Ostrich

GOP Ostrich by stormbear, on Flickr

There are many ways to fall into bad habits, but the easiest is when one tries a vice and then is rewarded for having done so. This is where the nation is with the Congressional Republicans. Their vice has been economic hostage taking, and like all successful hostage takers, when they want something they look around of the nearest economic crisis to grab a hold of and insist that they get their way.

Which is exactly where we are with the impending, and probably inevitable, government shut down; their least reasonable members, newly elected (thanks midterm voters) have been signaling for months that if they did not get every little mean spirited and economically moronic thing they wanted, they would shutter the Federal Government.

Now with Speaker Boehner (Putz-OH) reneging on his privately agreed to cuts, there is little chance that there will be an agreement and a vote. In fact there would have to be a bill published today in order to be able to follow the new House rule of 72 hours before a vote, for there to be anything to vote on by the deadline on Friday.

It is not like the Republicans think that the public is going to be kind to them on this issue. Their leadership remembers how it played out in 1995 and they don’t want to go into another presidential election with weak candidates and a sour taste for their party in the mouths of the electorate.

Which is why they are trying to do everything they can to pin this on the Democrats. Too bad the facts are all against them. Today they are going to introduce another Continuing Resolution that would extend spending for another week. Sounds good until you hear what the price tag is.

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Time To Fix The Corporate Alternative Minimum Tax

5:30 am in banality of evil by Bill Egnor

tax_the_rich

tax_the_rich by sandy_sanders, on Flickr

There is often a bit of cognitive dissonance when one finds oneself agreeing with even part of the agenda of ones political opponents. I find myself there, in small part, with the desire of the Republicans to simplify the tax code, at least in some areas. Of course the devil is in the details of what should be simplified and who pays the cost, and there, of course the Republicans and I part ways.

Pretty much everyone is familiar with the Alternative Minimum Tax. It is a tax provision that was put in place to prevent deductions from completely wiping out income tax obligations. It was enacted in its current form without an indexed increase for inflation, so it has been monkeyed with in an ad hoc basis as more upper middle class folks started making more money and running afoul of it.

What you might find shocking in the wake of the news that General Electric is not only paying no tax this year but getting around 2 billion in tax benefits (what a person would call a refund, but not really) is that it applies to corporations too.

In fact the threshold is rather low, with a corporation falling into the Corporate AMT at just $310,000 of income. The problem is that that companies like GE and B of A have all kinds of things they can do to avoid paying this tax.

A big part of it is moving profits off shore. They don’t have to pay taxes on that money until they repatriate it. But another one that makes me completely crazed is that we give them a credit against the AMT for taxes they pay in other countries!

Yeah, you got that right, they pay their taxes and fund some other nation, and we let them write that off against their taxes here! They get all the benefits of being an American corporation but they are not paying for those benefits. In fact is worse than that. They are actively helping other nations fund their infrastructure and social programs while denying that money to the US.
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Speaker Boehner Stop Lying, Broke Nations Can’t Borrow

6:28 am in Economy, jerks, Republican Party by Bill Egnor

Bank Of Montreal

Bank Of Montreal by Galt Museum & Archives on The Commons, on Flickr

We’re flat broke. What do you think of when you read that? Having been busted more than a few times in my life it means no money and no prospect of getting any. Pretty simple and straight forward, unless, of course, you are the Speaker of the House; then “broke” can be parsed and spun and twisted.

We have all seen the great orange Speaker saying “We’re broke” over and over again as he tries to sell a justification for what his masters (the Freshmen Republican “Tea Partiers”) insist on him doing with the budget. It is really an effective statement, powerful, short and direct. It would be perfect if it were not for the fact that it is flatly a lie.

The United States has a deficit. That is true. The United States also has a lot of debt, but to say that we are “broke” is ridiculous. It is just another half truth scare tactic from the party that has made a performance art-form of the practice.

Even Speaker Boehner’s office has had to admit that he is parsing the word. When they were challenged on the claim the U.S. is broke they came out with a statement that said when the Speaker says “broke” he means spending more than you have for an extended period of time. Sheesh! It is hard enough to communicate in this life without making twisted and tortured parses of common words.

What gets up right up my nose about this meme is that is completely ignores the fact there are two things to do when one does not have enough money. Spend less or get more money. As State Rep. Joe Gibbons (D-FL) put it so succinctly on NPR this morning:

If my family checkbook at home is short, you know what I do? I get a second job. I don’t just eat three days instead of seven. … What they’re telling us we got to do is, you got to eat three days.”

There is a lot of opportunity and in fact lot of desire on the part of the citizenry in the nation to raise taxes on the wealthy both at the state level and the national level. Nationally 88% of folks surveyed said they would rather raise taxes on millionaires and billionaires than cut programs in an effort to balance the budget. In Wisconsin where this fight is playing out on the smaller scale 67% percent said they would like to see higher taxes on people making $150,000 a year.

Of course this shows the basic Republican ideological bankruptcy. They have been trumpeting (that’s what Elephants do, trumpet, right?) about the freaking deficit for two entire years. Yet in that time they have not been willing to raises taxes on the ultra-wealthy. Just so it does not go down the memory whole, they were the ones that held the extension of unemployment benefits for millions of out of work Americans hostage to get an extension of the Bush Tax Cuts for the Paris Hilton’s and Koch Brothers of the nation.

They are also the ones that are now trying to claim that the modest job growth that we are seeing as the final bits of the stimulus money from the American Reinvestment Act are spent is due to keeping taxes at the same rate as when their deregulatory policy crashed the national and planetary economy.

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Paying Down The Debt, You Have To Increase Taxes

6:03 am in banality of evil, Economy by Bill Egnor

Buy war bonds

Buy war bonds by Duo de Hale, on Flickr

I know, I know, I should just stay out of the Washington Post business section if I want to keep my blood pressure in normal human boundaries but like a dog returning to its vomit I just can’t help myself. Today it is there on the front page, an article by Steven Mufson (think he got a lot a teasing about that last name?) talking about how the National Debt (not a new movie franchise by Nickolas Cage) is now at or above the level that we experienced post WWII.

We do have a huge amount of debt that we have incurred. When you fight two wars without a tax increase that happens. When you fight two wars on top of a massive give away to the top 2% of earners (who are way, way, way less than 2% of the population) you get the kind of giant red ink we are hearing the Republicans and Tea Partiers squeal about and sadly the President listening too.

Mr. Mufson then goes on to talk about how things are really different between 1947 and now. He notes that by the time Eisenhower was elected the 122% debt to GDP ratio had dropped to 87%. He found a Harvard Economist to quote who says that the major factors were pent up demand, the fact that we had the only working industrialized economy and a young work force, coupled with a pretty steep inflation rate allowed the U.S to reduce its debt in fast order. All that is true but it ignores one really important fact, that there were 27 marginal tax rates at the time with the top one being 90%.

This glaring omission just makes me nuts. Mufson’s tame professor laments:

But today the U.S. economy is in a polar opposite condition. The labor force is aging, U.S. manufacturing often lags behind Asian and European rivals, households are in hock up to their eyeballs, and consumer appetite for goods is tepid. In addition, inflation is tame and government spending locked into entitlement programs and debt service that will be hard or impossible to alter.

We’re not growing like we were after World War II, so the amount of debt you can bear and the trajectory are much worse,” Rogoff said.

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Rounds 2 And 3 Of Republicans Screwing The Little Guy – Austerity

6:46 am in 2010 election, banality of evil, Economy, Elections, Politics, Republican Party by Bill Egnor

To hear the Republicans tell it, the problem with things, the reason they are likely to take over the House of Representatives tomorrow is all the spending that the Obama administration has engaged in. Personally I think a big part of it is all the spending groups like the Chamber of Commerce and Cross Roads GPS have done, but that is for another post.

The big push from Republicans as the campaign season is ending has been about the need to cut spending. They look at our deficit situation and they say that the reason we have such high unemployment is the massive federal spending. Things like the COBRA subsidy and unemployment benefit extensions. Of course this includes the stimulus bill with its 300 billion (300,000 million) in tax cuts, which all but the ultra wealth have received some share of in terms of payroll tax reductions.

This is where you get prominent Republicans like Mississippi Governor Haley Barbour on TV saying things like this:

“The American people do not like Obama’s policies,” Barbour told anchor Harry Smith. “They don’t like all of this outrageous spending. They don’t like running up the deficits. They don’t like piling trillions of dollars of debt on our children and grandchildren, and they don’t think it works. They think it’s been bad for the economy, that it has made it harder to create jobs.

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Borrow And Spend Republicans Unveil Tax Cut Package

6:37 am in Politics, Republican Party by Bill Egnor

There is something about Washington and taxes that seems to destroy the ability of law makers to do simple math. This seems to afflict Republicans and Blue Dog Democrats the worst. The Washington Post is reporting about the roll out of the Republicans Orwellianly named tax plan, the Tax Hike Prevention Act. Sen. Mitch McConnell (the man voted most likely to turn into a snapping turtle in our lifetimes) has put the idea on the table permanently extend all of the Bush era tax cuts, including the ones for the ultra wealthy, that top 2% of all earners.

From the WaPo :

"We have a spending problem. We spend too much. We don’t have a taxing problem. We don’t tax too little," McConnell told reporters Tuesday. "And if we want to begin to get ourselves out of this economic trough that we’re in, the only way to do that is to grow the private sector."

This is insane. We are currently collecting tax revenues at the same we did in 1950. In 2009 taxes were 9.2% of all personal income, just like it was when Harry Truman was president. A lot of things have changed since that time, the population has doubled and unlike now, in 1950 the United States was running a surplus. For Senator McConnell to say we are taxing too much is just another example of Republican bizzaro world, where black is white and up is down.

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