Category Archives: Taxes

We Can’t Afford That Anymore.

Posted on by

Whenever someone proposes rebuilding our crumbling infrastructure, improving schools, funding research for chronic diseases, helping the unemployed, treating the mentally ill, paying pension obligations to public employees, etc., our politicians are quick to say that we can’t afford those things anymore.

Say what? The richest nation on Earth can’t afford to meet the needs of its own citizens?

In reality, it’s not that the US lacks the money to do these things. The federal budget for FY 2014 is $6.3 trillion and, for most Americans, our tax rates as a percentage of income are near all-time lows! So it’s not a lack of money. It’s a matter of priorities. We always seem to have money for military hardware and military interventions around the globe. It’s estimated that the wars in Afghanistan and Iraq will cost $6 trillion. It costs us $2.1 million per year to maintain just one soldier in Afghanistan, and current plans call for leaving up to 20,000 troops in Afghanistan after our “withdrawal.” Yet, some of the biggest budget hawks in Congress are calling for a larger presence in Afghanistan, military intervention in Syria, as well as confrontation in Crimea and the Ukraine. Some even hint at war with Iran.

Is it any wonder that we can’t afford to maintain our own nation?

These same budget hawks voted to dramatically expand funding for the F-35 jet fighter which is years behind schedule and hopelessly over budget. They even added funding to build more Abrams tanks, despite the fact that neither the Army nor the Marine Corps want them. As a result of such decisions, we will spend $820.2 billion on defense in FY 2014, not including Homeland Security. This money is not needed to defend our nation. It’s needed to maintain the American corporate empire; to maintain US control of resources in remote corners of the world; to maintain US access to Middle Eastern oil deposits; to maintain corporate access to global markets and to open new ones; to maintain massive profits and executive compensation.

Yet studies show that most Americans would rather bring our troops home. They would rather rebuild our own nation than one we bombed into submission. So why don’t our Congressional representatives listen? Why do so many continue to vote against the will of the people?

The answer, in a word, is money.

Large corporate interests take money from ordinary, hard-working people through various forms of scams and corporate subsidies. (You’ll find a great example detailed in a Rolling Stone article by Matt Taibbi linked here.) This leads to increased profits. The corporations then give a portion of that money to the election campaigns of politicians in order to buy access and influence. In return, those politicians pass laws to benefit the corporations. And the cycle starts all over again.

On the rare occasions when the politicians take their hands out of the pockets of their corporate sponsors, they pass laws to deregulate industries; to render the EPA and other regulatory agencies impotent; to increase welfare for large corporations while cutting their taxes; to privatize prisons, schools and public pension funds; to cut funding for parks, mental health facilities, public universities and public schools; to redirect taxpayer money to Wall Street hedge funds. All the while, they blame the nation’s resulting economic problems on labor unions, the unemployed and the working poor. To distract the public from their crimes, these fraudster politicians tell us that their actions are necessary to cut debt and create jobs.

What they don’t say is that the only jobs they’re concerned with are their own.

Unreasonable Trade-Offs.

Posted on by

After seeing a headline by David Suzuki “Trading Water for Fuel is Fracking Crazy,” I started thinking about all of the trade-offs we’re being asked to make.  Yes, as Suzuki points out, we are being asked to trade the purity of fresh water in our aquifers that took hundreds and thousands of years to accumulate for the profits of gas and oil companies through the use of toxic chemicals for fracking.

And that’s only one of the trade-offs we’re being asked to make in order to benefit big business.

We’re being asked to trade the beauty of the Appalachians and the area’s pristine waters for the profits of the coal industry through the use of mountaintop removal mining. We’re asked to trade the natural taste and nutrition of fresh fruits and vegetables for the profits of Monsanto, Walmart and large agribusiness companies by allowing the increased use of herbicides, pesticides, fertilizers and GMO (Genetically Modified Organisms) seeds. We’re asked to trade the effectiveness of life-saving antibiotics by allowing large cattle feeders, hog growers and poultry growers to increase profits by adding antibiotics to animal feeds.

In order to increase profits for manufacturers, we’re asked to purchase products made overseas that could be made by workers in the US. So that large corporations can pay employees less than a liveable wage, we are asked to help their employees with food stamps, child care and other safety net programs. In order to increase the profits of corporations, we are asked to lower their income taxes and increase ours.  In order to help billionaires avoid paying income taxes, we are asked to give them a large array of tax breaks, including greatly reduced capital gains taxes.

And, in what is probably the most questionable trade-off of all, we are asked to ignore the very real long-term consequences of climate change for the short-term profits of the fossil fuel industry.

All of these trade-offs and their consequences are avoidable. We simply need the will to change the way we allow corporations to operate. We should demand that they pay for all of the costs of their actions. And that the cost of government subsidies, including the costs to our environment and our health, be included in corporate expenses.

In other words, if corporations truly are people as the US Supreme Court has ruled, we should hold them accountable for their actions.

The Politics Of Division And Deception.

Posted on by

For many years, the GOP has used so-called “social” issues, such as proposed anti-abortion legislation and “sanctity of marriage” laws to divide the voting populace and fire up their base. The Democratic Party has focused on issues like social safety nets, minimum wages and availability of health care. And the debate has left our government largely paralyzed.

In some ways, arguing about the issues that divide the rank and file of the two political parties is akin to rearranging deck chairs on the Titanic. It’s not that the issues aren’t important. But compared to other issues, they are mere distractions…the political equivalent of a con artist bumping your shoulder while picking your pocket.

The con artists are working for large, multinational corporations and the very wealthy. In order to grow and thrive, these companies need two things: A plentiful supply of natural resources and cheap labor. Over the course of history, those needs have led the wealthy to finance exploration, nations to build wide-ranging empires, and corporations to destroy collective bargaining movements.

Following World War II, the desire for access to oil, rubber, timber, tin and other resources led the British, the US and the Soviet Union to attempt to divide much of the world culminating in the Cold War. The desire to acquire resources led us into conflicts in the Caribbean, Central America, South America, the Middle East and Southeast Asia. It was the cause of the Spanish-American War, the war with Japan, the war in Vietnam, and the war in Iraq. It led our CIA to orchestrate the overthrow of elected leaders in Brazil, Chile, El Salvador, Honduras, Indonesia, Iran, Iraq, Nicaragua and elsewhere.

Similarly, the need for cheap labor led mining companies to create company stores and to build entire towns designed to trap workers into becoming hopelessly obligated to the owners. It caused companies to hire thugs to brutally beat striking workers. It led to shooting wars between corporate interests and labor unions. More recently, it led corporations to move factories to Southern “right-to-work” states then on to Mexico to China to India, Pakistan and Sri Lanka.

The executives behind these actions aren’t evil. They’re just doing business. They claim that it’s not their responsibility to worry about social or environmental problems. They believe that their only responsibility is to increase the return on investment for shareholders by decreasing costs and increasing productivity. To them, picturesque mountains merely cover the precious minerals they covet. Pristine forests are merely the lumber needed for construction. Impoverished people in distant lands are simply motivated laborers.

And so it goes.

While we argue over the debt ceiling, corporations and billionaires quietly park their profits in off-shore tax havens then lobby for a tax “holiday” that will allow them to bring the money home at greatly reduced tax rates. While we argue over extending unemployment benefits, corporations lobby for more subsidies and government giveaways. While we argue over food stamps, corporate agribusinesses pocket billions in taxpayer funds. While we argue over Social Security retirement benefits, too-big-to-fail financial institutions steal trillions from 401ks, IRAs, pension funds and foreclosed homes. At the same time, all of these corporations continue to lobby for reduced government regulation and oversight.

It is because of our inattention that a mere 85 individuals now own as much wealth as half of the world’s population…the equivalent of the populations of China, India, the United States, Indonesia and Brazil combined. It’s why unemployment has grown and why most salaries have not. It’s why a few corporations now control most of our food supply. It’s why those same corporations are able to poison the food supply in search of ever larger profits. It’s why the incidence of chronic disease has skyrocketed despite government-funded technology and research that give us the ability to end it. It’s why our climate is rapidly changing while we continue to subsidize the companies responsible for changing it.

As long as we focus on the distractions instead of the actions, things will only get worse.

Congress Versus The American People.

Posted on by

Politicians, especially Republicans, are fond of saying that they have faith that the American people will always do the right thing. Hmmm…that raises a number of questions.

If politicians believe the American people are so smart, why don’t they do what the people want them to? Why have they refused to vote for universal background checks on all gun purchases when more than 90 percent of Americans demand them? Why has the House refused to support bills that would create the jobs Americans want? Why has the House delayed action on immigration reform supported by more than 70 percent of Americans? Why has the House refused to vote for equal pay for women? Why has it refused to raise the minimum wage? Why do Republicans refuse to vote for gay marriage? Why do they refuse to decriminalize marijuana? Why have they failed to vote for tax reform and equal enforcement?

Why do more than 80 percent of Americans despise Congress?

At least we have an answer for one of those questions.

An Irresponsible Corporation’s Last Resort.

Posted on by

Last Friday, it was announced that the company responsible for the chemical spill in West Virginia, Freedom Industries Inc., had filed for bankruptcy protection and is in the process of selling its assets to a newly created corporation headed by (you guessed it) the former CEO of Freedom Industries. What better way for a group of uncaring, money-grubbing individuals to maintain their incomes while avoiding the consequences of their actions? Or should it be inactions? After all, the chemical tank that leaked hadn’t been inspected in decades.

Not surprisingly, the company claims that the leak is not its fault. It claims that “an unidentified object pierced the affected tank” allowing the toxic, but largely unregulated chemical to flow into the river just upstream from the City of Charlotte’s water supply; a chemical that, if ingested, causes severe diahhrea and vomiting; a chemical that, in the words of West Virginia officials, is only good for “flushing.”

By filing for bankruptcy, the company owners are hoping to protect their assets while avoiding any lawsuits from those affected by the spill and fines from the Environmental Protection Agency. To be held accountable, courts will have to find that the former owners of Freedom Industries were guilty of negligence or malfeasance (difficult charges to prove). If not, the company owners will be able to go right back to doing what they were doing…soaking up large sums of money and sticking the public with any clean-up costs.

And that’s not all.

In its bankruptcy filing, Freedom Industries admits that it owes the IRS $2.4 million in back taxes. One assumes that sum is in jeopardy if the bankruptcy court allows the owners to abscond with the company assets while avoiding any and all liabilities. If nothing else, the corporation will likely be able to diminish its tax liabilities through a variety of tax write-offs. And don’t think for a moment that this situation is unique. This has become a common strategy for corporations facing lawsuits for irresponsible activities. Indeed, the advantage of incorporating a business is to create a “corporate veil” that the owners can hide behind if and when things go bad. The belief is that, without the corporate veil, no one would take the risk of starting a business…a belief that I don’t share.

It’s this very protection that belies the conservative fantasy that corporations are people. Yes, they are owned by people and they are run by people. But articles of incorporation give owners an opportunity to simply walk away from problems when they outweigh profits. Individuals and sole proprietorships have no such protections. And, as the result of the Citizens United Supreme Court decision, owners and managers of corporations now have more influence than ever before. They can contribute to political campaigns both as individuals and as corporate officers. Given this disproportionate influence, we are likely to see many more corporations like Freedom Industries.

That’s unlikely to generate any complaints from conservatives.

Conservative idealogues may insist on personal responsibility for individuals…especially those who ar impoverished. But they have no such demands for corporations. After all, they view corporations as “job creators” and they despise government agencies responsible for regulating corporations. Moreover, most corporate political contributions will benefit conservative candidates. Conservatives wouldn’t want to give up those.

Stop Blaming Bush?

Posted on by

On today’s edition of The Diane Rehm Show on NPR, a conservative asked the question, “Can we all admit that this is no longer George W. Bush’s economy?” It’s a fair question. We are, after all, about to begin the sixth year of the Obama administration. So I, for one, am more than willing to concede the point. Even though Bush’s policies crashed the economy, slashing federal revenue through tax cuts for the wealthy and leaving us mired in two unfunded wars with annual deficits in excess of $1 trillion along with massive unemployment, this is no longer Bush’s economy.

It is now quite clearly President Obama’s.

So let’s review what has happened over the past five years. To begin, President Obama signed a stimulus plan that helped stem the bleeding. He gave loans to GM and Chrysler to save the US auto industry and tens of thousands of jobs. He withdrew troops from Iraq and has promised to withdraw our troops from Afghanistan this year. He lifted American spirits by giving the order to kill or capture Osama bin Laden. He expanded health care access to millions more Americans and stemmed out-of-control inflation of health care costs.

Under President Obama, we have seen a consistent rise in GDP (Gross Domestic Product) and the stock markets. At the same time, we have seen a substantial drop in umemployment despite substantial cuts to the number of employees at all levels of government. Finally, under President Obama, we have seen the most rapid drop in the federal deficit in modern history!

And most of this has been accomplished despite a recalcitrant GOP-led House that would have us believe that the way to deal with a struggling economy is to cut federal spending and revenues. Counter to the advice of most every economist, the Teapublicans in Congress have voted against bills that would create jobs, bills that would rebuild infrastructure while interest rates are at historic lows, and programs that stimulate the economy while helping those who most need it.

So, yes indeed. This is President Obama’s economy. And it would be even better if the GOP would get out of the way!

Paying It Forward.

Posted on by

Renewing the Emergency Unemployment Compensation bill would add $25.2 billion to the current federal budget. Right wing politicians and media outlets tell us that we can’t afford such “giveaways” unless they are offset by other spending cuts. Oddly, they have no such requirements for subsidies to defense contractors, the oil industry, the financial industry, big Pharma, corporate agriculture and other large interests.

But for a program that will prevent 1.3 million people from falling into the abyss? Teapublicans believe that cost needs to be offset!

Certainly saving $25.2 billion sounds good. But, in government, saving money always comes at a cost. In this case, it’s not difficult to imagine the human cost of taking away the only source of income for 1.3 million people…people who have been unemployed for six months or longer. People who are discriminated against by employers who think there must be something wrong with someone who has been unemployed for so long.

And there are other costs.

As journalist Bill Moyers reports, “Harvard economist Lawrence Katz estimates that the expiration of benefits for the long-term unemployed is costing the economy $1 billion per week.” Others estimate the cost to our economy at $400 million a week. Whichever figure is correct, that means the cost of extended unemployment benefits is already offset by what the program contributes to the economy.

Economists confirm that money spent on such programs goes directly into the economy. After all, what else are the long-term unemployed going to do with the money? Save it? Obviously, they spend it. They use it to pay for food, gasoline, utilities and other necessities. It’s not enough to allow them to live comfortably. But it helps. And that money stimulates other portions of the economy. It contributes to sales taxes. It contributes to the profits of local businesses which, in turn, pay income taxes on the money. As a result, the money finds its way back into federal, state and local governments as revenues.

It’s a win-win. It’s taxpayers paying it forward to help their struggling neighbors. Anyone who would say otherwise is cruel and heartless.

Oh wait! I just described today’s GOP.

The Conservative War Against Labor.

Posted on by

In the years following the Great Depression, labor unions were popular and thriving. The Wagner Act of 1935, also known as the National Labor Relations Act, guaranteed workers the right to collective bargaining and the right to strike. As a result, union workers, particularly those in mining and manufacturing, experienced dramatic gains in salaries and benefits, along with safer working conditions.

Corporations didn’t give up these things without a fight. But public sentiment was temporarily on the side of workers and World War II demanded unity between corporations and unions.

The end of World War II and the beginning of the Cold War gave corporations a new opportunity to undermine unions with the rise of Sen. Joseph McCarthy (R-WI) and his House Un-American Affairs Committee (HUAC). Likely emboldened by President Truman’s loyalty program intended to discredit Democratic rival Henry Wallace (former V.P. to FDR, nuclear disarmament advocate and pro-labor candidate) prior to the 1948 presidential election, McCarthy launched a witch hunt in search of communist sympathizers. News of the Soviet Union’s growing nuclear capability spawned a national paranoia that allowed McCarthy to portray labor unions as a communist front .

By the time McCarthy’s lies and un-Constitutional tactics were exposed, hundreds of Americans had been imprisoned, thousands more had lost their jobs and tens of thousands had been investigated. The victims included those who had supported Wallace, civil rights leaders, union leaders…even the unions’ rank and file.

The unraveling of the HUAC may have posed another setback for corporations and the wealthy, but McCarthy’s accusations left many suspicious of organized labor, even as labor unions continued to help build the middle class. Finally, in the 1980’s, anti-union forces suceeded in electing a president sympathetic to their cause – Ronald Reagan. When the Professional Air Traffic Controllers Organization (PATCO) went on strike, violating a law banning strikes by government workers, Reagan fired all 11,345 members who failed to return to work.

Reflecting on the event, former Federal Reserve Chairman Alan Greenspan commented, “His [Reagan’s] action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers.”

The war against unions resumed in earnest.

Corporations began sending jobs offshore in search of labor willing to work for low wages and without benefits such as health insurance, disability insurance and unemployment insurance. The export of jobs also eliminated the need for worker pensions. (In the years since Reagan’s election, more than 85,000 defined benefit pension funds have been eliminated.) Many of the jobs that can’t be exported, like those at Walmart and McDonald’s, now pay so little that their employees require public assistance. And with fewer workers eligible to pay dues, many labor unions have been weakened.

Meanwhile, management compensation has soared. The savings on labor costs has resulted in million dollar annual salaries and bonuses for executives.

With money comes influence allowing corporations and industries to successfully lobby Congress for subsidies, tax write-offs and lower tax rates. In addition, many corporations have been allowed to avoid taxes by creating Post Office box “headquarters” in off-shore tax havens. The resulting drop in tax revenue led to increased deficits and greater debt. But, rather than rewrite the corporate tax code and raise taxes on those who could afford it, conservatives have seized the opportunity to cut social programs. They not only cut food stamps. They have targeted Medicaid, Medicare and Social Security, as well.

Not surprisingly, conservatives have also taken aim at the labor unions which represent government workers, such as teachers, firefighters and police. In particular, they want to eliminate government pensions. The argument is that, if private workers don’t have pensions and benefits, why should government workers? If successful, conservatives will have turned the clock back to the gilded age; the days prior to labor unions; the days of extreme wealth and extreme poverty.

Some say that we already have two Americas. I would argue three.

One is the America of the one percent; those who make lots of money and pay little to no income tax; those who can buy influence by donating to political campaigns and build new businesses with government subsidies financed with the taxes paid by others.

The second is the America of hard work, limited upward mobility and shrinking investments. In this America, you work ever longer hours in order to meet the corporate demands of increased productivity. Each year, you are forced to do more with less. For you, retirement may be little more than a dream. And for your children, college will become a financial burden they may never be able to repay.

The third America is one in which people work for so little money they can’t afford many of the necessities of life. According to the Working Poor Families Project, one in three American families are now among the working poor. One in six Americans and one in four children don’t know where the next meal is coming from, or even if there will be a next meal. In this America, more than 630,000 are chronically homeless and 3.5 million will experience homelessness in a given year. For many of these people, there is little hope that their circumstances will change. They not only lack political influence, many face new laws and obstacles intended to discourage them from voting.

Both President Obama and Pope Francis have recently called economic inequality the biggest problem we face. But President Obama can’t reduce inequality in America by himself. We will need a Congress that represents all Americans. We will need a sympathetic and unified citizenry. And we will need organized labor.

(As a footnote, I should make it clear that, having become part of middle management almost immediately following college graduation, I was ineligible for union membership. But, like most Americans, I was able to take advantage of the improved working conditions, salaries and benefits negotiated by labor unions.)

Why We Can Never Return To The Nostalgic Post-War US Of The Baby Boomers.

Posted on by

The Baby Boomers who comprise the majority of the Tea Party movement fondly recall the world of their youth; a world of cheap gasoline, muscle cars, rock ‘n roll, full employment and US world dominance. They want that world back. And they are convinced that the only thing standing between them and the world of their youth is a liberal, out-of-control government that wastes their money on freeloaders.

I have bad news for them. That world no longer exists. And it’s never coming back.

You see, following World War II, we were one of the few countries that had not suffered significant destruction. While much of Germany, Japan, Italy, France, Belgium, Poland, Great Britain and the Soviet Union had been flattened, the US was essentially unscathed. That led to unprecedented industrial production and wealth for the US. We produced an astounding 50 percent of the world’s goods and services…goods needed to rebuild much of the world. We held two-thirds of the world’s gold. And Americans were looking to the future by investing in education and infrastructure through increased tax rates.

For those in the US, life was good. Really good!

Now contrast that situation with today’s economy. Instead of making the materials to rebuild other nations, we must now compete with them. Instead of exporting manufactured goods, we have been exporting middle class jobs. Taxes are near 60-year lows, reducing revenues and forcing our government to borrow money in order to maintain our crumbling infrastructure. We are recovering from the worst economic conditions since the Great Depression and two unfunded wars. And, according to Teapublicans, it’s all the fault of President Obama and the Democratic-controlled Senate.

Say what?

The nostalgic world of the fifties and sixties was not the norm and never could be. Moreover, Americans got fat (literally) and lazy. We also got greedy. Instead of investing in our future, we cut taxes. Instead of maintaining our manufacturing base, our corporations became engaged in a race to the bottom looking for impoverished populations they could exploit in order to lower their labor costs. Instead of forcing multinational corporations to pay the true cost of energy and transportation, politicians enabled the export of jobs through government subsidies. And instead of promoting hard work and the American Dream, we eliminated estate taxes allowing the wealthy to create dynasties leading to unprecedented income disparity.

Truth is, today’s situation is the result of decades of bad political decisions…most originating during the Reagan administration. Doubling down on those policies, as the Tea Party demands, will not help. Instead of taking us back to the days of Leave It To Beaver, they’re more likely to take us back to the days of Oliver Twist and Scrooge.

Public Versus Private. Corporations Versus People.

Posted on by

Ever since President Ronald Reagan said, “The nine most terrifying words in the English language are I’m from the government and I’m here to help,” conservatives have attributed virtually all of our problems to the federal government. They believe that the government cannot do anything well. As a result, they have continually cut taxes in order to starve the government of revenue, making it less effective and less efficient so it better lives up to their expectations.

At the same time, conservatives have pushed to privatize many government functions. Private, for-profit contractors now handle many of the functions that our military once did, including food service, transportation, supply and security. Both state and federal governments have awarded contracts to private prison corporations. Public education now competes for funding with private charter schools. Even our most sensitive spying and surveillance programs have been outsourced to private companies as evidenced by the revelations surrounding Edward Snowden.

But are these private entities really better than the government? Is the government really the problem? Much of the evidence says no.

The jury is still out on whether or not privatizing our military is a good idea, but there have been numerous embarrassing incidents in which private contractors were accused of committing war crimes. As for private prisons, studies have shown that they cost far more per inmate than public prisons, even though private prisons refuse to accept high security prisoners and those with chronic illnesses. And a study by Stanford University has shown that private charter schools perform no better than public schools.

Moreover, the 2013 Customer Rage Survey by Customer Care Measurement and Consulting and the Arizona State University W. P. Carey School of Business found that the percentage of people with customer service problems grew from 32 percent in 1976 to 50 percent in 2013. And 56 percent of those who complained in 2013 remain unsatisfied. Most telling is the fact that 98 percent of the most serious customer service problems involved private companies. Only 2 percent were associated with the government!

How can that be? Is it possible Reagan was wrong?

The truth is, our government is ultimately accountable to us. It may seem big and uncaring, but one election can change everything. On the other hand, today’s giant financial institutions and multinational corporations have little accountability to customers. Certainly, you can move your account from a large bank to a smaller one, but the likelihood is that it, too, is controlled by a large holding company. You can switch insurance companies and find that the new company is just as difficult to deal with as the previous one. Likewise, you can get rid of your cable company, but your satellite provider may not be any more responsive. Indeed, it may be worse.

The problem is not a matter of public versus private. Most customer service problems stem from bureaucracy – both public and private.

But our most serious problem involves both public and private institutions. It centers on the alliance between government and large corporations based on disproportionate access and influence. Consider, for example, the alliance between the George W. Bush White House and Richard “The Dick” Cheney’s former company, Halliburton, which was awarded billions in no-compete military contracts for Iraq and Afghanistan; or the alliance between Ohio congressional representatives (both Republican and Democrat) and the Ohio contractor for Abrams tanks which was awarded a contract for additional tanks that the Army neither wants or needs; or the alliance between Arizona Governor Jan Brewer’s staff and a private prison company which led to the company receiving multi-million dollar contracts for private prisons. There are many, many more examples.

Not surprisingly, many of the government’s most outspoken critics are conservatives who will gladly spend money to enrich their districts, their states, their corporate friends and themselves.