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GOP Can’t Find “Job Creators” Against Surtax

 
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So, NPR had a story this morning about the “Millionaire Surtax” that Democrats have proposed to help pay for an extension of the payroll tax holiday that has been in place since last year.

The GOP‘s argument against the surtax is that it will harm “job creators” who will refuse to hire people.

So, NPR requested to speak to some of the potential “victims” of the surtax:

We wanted to talk to business owners who would be affected. So, NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview.

Undefeated, NPR next requested the same thing from business groups that have also fought the proposal. Again, no example could be produced.

Eventually, the reporters placed a request for business owners that would be affected by the tax to respond, and they did — only the answers they got were mostly like Jason Burger, co-owner of a company called CSS International Holdings.

Mr. Burger’s company is an international “infrastructure contractor”:

“If my taxes go up, I have slightly less disposable income, yes…But that has nothing to do with what my business does. What my business does is based on the contracts that it wins and the demand for its services.”

NPR added,

Burger says his Michigan-based company is hiring like crazy, and he’d be perfectly willing to pay the surtax.

“It’s only fair that I put back into the system that is the entire reason for my success,” said Burger.

So again, Republicans are manufacturing disastrous consequences for policy proposals that are quite sound.

Now, it is possible that the businesspeople who responded to NPR on Facebook are prone to be more liberal, but the fact that both the Republican party and business trade groups couldn’t provide a single example of an small entrepreneur who would decide not to hire based on his personal taxes is illustrative of how the conservative mind works.

Thinks are true because I feel they are true. Damn the evidence.

-Chris

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December 9, 2011 Posted by | Democrats, Economics, GOP, Politics, Republicans, Tax Debate, Uncategorized, Unemployment | , , , , , , , | Leave a comment

In Education, Money IS the Key

education

Image by Sean MacEntee via Flickr

David Sirota, writing at Salon.com examines the results of two new studies on education and found that the principle factor deciding of students perform well is — money.

What real education reform looks like

He summarizes:

The first report, from Stanford University, showed that with a rising “income achievement gap,” a family’s economic situation is a bigger determinative force in a child’s academic performance than any other major demographic factor. For poor kids, that means the intensifying hardships of poverty are now creating massive obstacles to academic progress.

Because of this reality, schools in destitute areas naturally require more resources than those in rich ones so as to help impoverished kids overcome comparatively steep odds. Yet, according to the second report from the U.S. Department of Education, “many high-poverty schools receive less than their fair share of state and local funding.” As if purposely embodying the old adage about adding insult to injury, the financing scheme “leav(es) students in high-poverty schools with fewer resources than schools attended by their wealthier peers.” In practice, that equals less funding to recruit teachers, upgrade classrooms, reduce class sizes and sustain all the other basics of a good education.

Put all this together and behold the crux of America’s education problems in bumper-sticker terms: It’s poverty and punitive funding formulas, stupid.

For years, private education corporations have consistently blamed teacher unions for poor results in our nations schools, but the reports shoot down this myth. Sirota:

We’ve also learned that no matter how much self-styled education “reformers” claim otherwise, the always-demonized teachers unions are not holding our education system back. As the New York Times recently noted: “If unions are the primary cause of bad schools, why isn’t labor’s pernicious effect” felt in the very unionized schools that so consistently graduate top students?

The conclusion is that in order to improve education for all students, we must combat poverty and reform the funding system:

Instead, America’s youth need the painfully obvious: a national commitment to combating poverty and more funds spent on schools in the poorest areas than on schools in the richest areas — not the other way around.

Within education, achieving those objectives requires efforts to stop financing schools via property tax systems (i.e., systems that by design direct more resources to wealthy areas). It also requires initiatives that better target public education appropriations at schools in low-income neighborhoods — and changing those existing funding formulas that actively exacerbate inequality.

I have been saying something similar for years.

My two-part proposal has been 1) to create an affordable model school infrastructure and make sure all schools meet the standards (physical plant, class size, resources, and 2) pool all school funds at the state level and distribute them based on a per-student amount to every school.

Schools in poverty-stricken areas would be given additional funds to meet needs (nutrition, etc.) not found in wealthier areas.

As Sirota notes, it’s a tough sell in the current political environment, but it’s one of the most important obstacles to ensuring the prominence of American for generations to come.

-Chris

December 9, 2011 Posted by | Democrats, Education, GOP, Politics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Basic Math

Tax

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“It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again” – Venture Capitalist Nick Hanaeur

Hanauer has put his name on a growing list of 1 percenters who are boldly stating what most economists already recognize.

Writing on Bloomberg’s website, Hanauer observed:

We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

A new post on ThinkProgress.org reports that even someone in the belly of the beast, Morgan Stanley Chief Financial Officer Ruth Porat, has awakened to this reality:

“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.

I hope this is the dawning of a new capitalist idea.

We have lived too long in the shadow of timid CEOs and their sycophants who look no further than the next quarter.

In order for capitalism to be sustainable, a robust middle class must exist.

The article goes on to note that one of the major factors driving income inequality is the outrageous compensation and bonuses given to the top tier of huge corporations.

Instituting practices that reward performance and sustainability would go a long way toward creating a healthy economy.

-Chris

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December 6, 2011 Posted by | Deficit, Economics, Politics, Tax Debate, Unemployment, Wall Street | , , , , , , , | Leave a comment

Robert Reich has a Sensible Plan

Economist Robert Reich has a sensible plan to fix our deficit and debt woes.

In a November 19 post, Reich gives the following advice to the Deficit Supercommittee (which has since disbanded, after failing to reach an agreement):

1. Make no cuts before unemployment is back under control (down to 5%).

2. Make the boost big enough. We need a huge jobs program with components like the New Deal’s Civilian Conservation Corps and Work Progress Administration to restore our infrastructure.

3. Raise taxes on the super rich and tax all income (capital gains included) at the same rate. Restore the tax structure to pre-1980 levels and put a 2% surcharge on income over $5 million.

4. Cut the real welfare — military spending and corporate subsidies. Savings = $400 billion annually.

Reich’s closing plea, of course,  fell on deaf ears:

Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.

Unfortunately, there’s not a chance any of this will get through in this political climate.

It seems like we are constantly in a battle to mitigate damage from bad policy and those actively on a misguided crusade to make things much worse, and not making any headway in actually fixing the problem.

-Chris

November 22, 2011 Posted by | Debt, Deficit, Democrats, Economics, Politics, Republicans, Tax Debate | , , , | 3 Comments

The lie of the tax holiday

Paul Krugman delivers again.

Commenting on the “new” plan being pushed to have a tax holiday for corporations, Krugman points out that it is again being sold as an answer to our job problems.

Cutting taxes for corporations does not and never has led to more jobs.

The cuts are never really designed for small businesses, and are the worst kind of trickle down wishful thinking.

Krugman:
 

As opponents of this plan point out, we’ve already seen this movie: A similar tax holiday was offered in 2004, with a similar sales pitch. And it was a total failure. Companies did indeed take advantage of the amnesty to move a lot of money back to the United States. But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock — pretty much everything except increasing investment and creating jobs. Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.

A nice piece on what really happens when we cut taxes on corporations, and the disincentive it is for them to invest in infrastructure and employees.

-Chris

July 5, 2011 Posted by | Lobbyists, Politics, Reagan, Republicans, Tax Debate, Unemployment | , , , , , , , , , | Leave a comment

Deficit Reduction and Social Security

Seal of the United States Social Security Admi...

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In reviewing the proposal by the president’s bipartisan deficit reduction committee, there is one portion that I cannot disagree with more.

To be sure, this is a serious proposal, with pain all around, but the delay in benefits for Social Security recipients until the age of 68 is wrong, wrong, wrong.

I have always been a huge advocate of the much-derided lock box for Social Security.  The current system is solvent until 2037, but will rack up huge losses going out to 75 years from now.

Treating Social Security as just another part of the overall budget is one of the accounting tricks that have gotten us into this mess to begin with.

This is the first year since the 1980s that the Social Security will start paying out more than it has taken in.

This is due to the large number of Americans expected to retire. The 75 year shortfall is calculated at $5.3 trillion. Insurmountable, right?

Wrong.

Senate report says tweaks can sustain Social Security

Social Security faces a $5.3 trillion shortfall over the next 75 years, but a new congressional report says the massive gap could be erased with only modest changes to payroll taxes and benefits.

There are a few options to fix Social Security:

1. Increase the age where retirees qualify (as proposed by the committee)
2. Curb cost of living adjustments
3. Raise payroll taxes on EVERYONE

Social Security isn’t an “entitlement”. Everyone pays into it. It is an insurance policy that provides a modest safety net for retirees.

I agree with this letter writer to the Baltimore Sun on this point:

Cutting Social Security benefits is as bad as raising taxes

Social Security is said to be an “entitlement,” but the difference between an “obligation” and an “entitlement” is just a matter of point of view. Those of us who have been paying into the Social Security system for years are entitled to our promised benefits. The U.S. government is obligated to keep its promises.

Social Security and it’s problems should be addressed separately from the concerns of the burgeoning Federal deficit.

For too long, legislators have counted on being able to dip into the Social Security revenues to work their accounting magic and prop up a wasteful budget.

It’s long past time to end that practice.

-Chris

November 11, 2010 Posted by | Debt, Deficit, Democrats, Economics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Deficit Rhetoric vs. Action

Rand Paul at Louisville forum by Gage Skidmore

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Two articles came to my notice today concerning the deficit.

The big news was that Obama’s bipartisan commission on the deficit released their report on cutting the budget deficit:
Panel Weighs Deep Cuts in Tax Breaks and Spending

The lead:

A draft proposal released Wednesday by the chairmen of President Obama’s bipartisan commission on reducing the federal debt calls for deep cuts in domestic and military spending starting in 2012, and an overhaul of the tax code to raise revenue. Those changes and others would erase nearly $4 trillion from projected deficits through 2020, the proposal says.

The recommendations are dead, dead, dead.

Why?

The plan would reduce Social Security benefits to most future retirees — low-income people would get a higher benefit — and it would subject higher levels of income to payroll taxes to ensure Social Security’s solvency for at least the next 75 years.

Italics are mine.

These are the tough choices that country faces, and this is a serious proposal to fix what’s broken. Politically, however, it’ll never fly.

The plan calls for a simplification –and tax cuts across the board– by cutting many popular tax loopholes. The overhaul of the tax code would net a projected $80 billion in 2015.

On the other hand, the Tea Party poster boy, Rand Paul, can’t specify exactly what he would do to slash the deficit:

In Tense Interview With Spitzer, Rand Paul Can’t Name Specific Cut To Balance Budget

Spitzer asked Paul to name specific programs he would cut from health care, Social Security, or defense. But Paul demurred, explaining that he would offer a balanced budget in the next Congress — over 1, 2, 3, 4 and 5 year increments, but was still unsure of what to cut to get there. At one point, Paul even suggested that rather than pressing him for specifics, Spitzer should invite liberals and ask “how do you continue to have these programs?”

In other words, complete and utter bullshit.

Serious debate about the deficit is important, but for the Tea Party crowd, allegedly fueled by their deep concern about the deficit, have absolutely no plan to make things better.

It reminds me of the Monty Python skit, “How To Do It”:

Simplistic solutions to complex problems with no understanding and no hard work — that’s the stock and trade of the Tea Party and the Republicans who are trying to channel their activism to continue their campaign to reward the wealthy.

Bolstered by their midterm wins, there’s little hope that the Tea Party Republicans will negotiate in good faith to address the deficit.

Many of them have expressed publicly and privately that they do not want Obama to have a legislative win that he can run on in 2012, so they are quite content to do absolutely nothing and block everything.

We’ll see how it plays out, but it doesn’t look promising.

-Chris

November 10, 2010 Posted by | Debt, Deficit, Democrats, Economics, Elections, Politics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Wealth and Taxes

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Andrew Sullivan posted a good exchange on wealth and taxes on his Daily Dish this Monday (sorry, I’m just getting caught up).

“The Successful, Ctd”

Sullivan makes a common argument against what he sees is excessive, punitive taxation of the rich:

After all, he is the person whose success makes taxation possible at all – or rather far more successful than if there were only Wal-Mart workers. But I am content with inequality as the price of freedom, and do not believe the government should punish people for being successful.

But one of his correspondents quotes conservative Ben Stein, and makes a key point:

But if they are superrich, they derive special benefits from life in the United States that the nonrich don’t. For one thing, they can make the money in a safe environment, which is not true for the rich in many countries. It is just common decency that they should pay much higher income taxes than they do.

Not addressed in the back-and-forth is the important fact that some of the rich have rigged the system to keep most people poor and the rich richer.

Sullivan closes nicely with a graph that I completely agree with:

I favor a return to Clinton era tax rates for the successful because we need to find some money somewhere and the hike is not that bad, given the debt we face. I’d like tax simplification and an end to the myriad loopholes and deductions in the tax code that the rich pay lawyers to exploit. I believe in an estate tax, in order to reward work not nepotism. I’ve made the same point about paying for the wars and supported the health insurance reform. I just think that wealthy seniors should pay more for Medicare and that social security could easily be means-tested and that the retirement age be raised. Not because I hate the old, but because we have to do something, or go into default. The successful already pay the bulk of the taxes. I just don’t see why tax hikes should be framed as some kind of revenge on them, or long-overdue comeuppance. It’s a necessary evil for the common good. And many liberals would fare better if they made their case that way, as, I might add, Obama generally does.

A good post that I encourage you to read.

-Chris

October 21, 2010 Posted by | Democrats, Economics, Politics, Republicans, Tax Debate | , , , , , , , | Leave a comment

Tax Cut Morality

Des Moines IA DSC_4086

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There’s a good post by Ned Resnikoff up at Salon.com. 

“The non-existent moral case for tax cuts” outlines the Tea Party and elite argument for cuts: 

It goes like this: We earned this money. We deserve it. It is therefore immoral to take it from us. 

Resnikoff correctly points out that the argument is silly because it is impossible to give an accurate accounting for how much of a role circumstance and environmental factors played in achieving that wealth, and how much of it was sweat equity. 

The word “deserve” is extremely loaded, and eminently debatable: 

When you control for environmental, genetic, social, historical, and biological factors, what differentiates my own distinguishing features from Charles Manson’s — or, for that matter, Obama’s, Palin’s, Lincoln’s or yours — is either imperceptible or completely nonexistent. And if that’s the case, I don’t see how you can argue that either of us deserve more or less than any of those people. 

What this suggests to me is that the only way you can coherently argue that a person inherently deserves a certain level of privilege or material comfort is to also argue that all persons deserve it, by virtue of their personhood. We already have language to describe these things that all persons innately deserve: we call them rights. 

If this is so, and I personally agree that it is, then the argument from the right is pure bluster and a manifestation of privilege. 

The conclusion is one that I am also convinced of. It is, however, not a subject  that you can discuss with extreme partisans: 

Mostly it falls back to a question of economics: how to balance the state’s ability to provide needed services for all citizens, including its most needy, while preserving a capitalist system which rewards achievement, and therefore (one would hope) innovation, productivity and excellence. 

-Chris 

October 1, 2010 Posted by | Deficit, Democrats, Economics, Politics, Republicans, Tax Debate, Tea Party | , , , , , , , | 2 Comments

Republicans Victorious – Will Send More Jobs Overseas

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From yesterday’s Washington Post:

Anti-outsourcing bill fails in Senate

In a vote of 53 to 45, Republicans and Joe Lieberman (and four Democrats) kept the bill, which punished companies that send jobs overseas, from passing.

…Senate Minority Leader Mitch McConnell (R-Ky.) dismissed the bill as “a purely political exercise” that never had a chance of becoming law.

This coming from someone whose party just released the “Pledge To America”.

In reality, this is the Republican game to stop the Democrats from accomplishing ANYTHING.

They don’t care who this hurts, as long as they can leverage it to try to get back into power so they can rack up the reforms and changes they achieved during the Bush years. Wait, what?

For those keeping score:

Democrats voting to block the bill were Ben Nelson (Neb.), Jon Tester (Mont.), Mark Warner (Va.) and Max Baucus (Mont.).

-Chris

September 30, 2010 Posted by | Democrats, Obama, Politics, Republicans, Tax Debate, Uncategorized, Unemployment | , , , , , , , | Leave a comment