Category Archives: Taxes

Teapublican Lie #1.

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Today begins a series intended to de-bunk the many Teapublican lies that will be repeated over the coming election season. Primary amongst them is this pants-on-fire whopper:  “Cutting taxes creates jobs.”

This whopper has been repeated so often by so many that voters have come to believe it’s true. Yet when you examine the evidence, you find that it defies belief.  For example, if cutting taxes created jobs, then why was there negative job creation during the Bush administration despite the vaunted Bush tax cuts? (And that was even before the economy was driven off a cliff during the last few months of 2008.)

If cutting taxes created jobs, why did the economy flourish under the Clinton administration despite higher taxes?

And if cutting taxes creates jobs, why is our unemployment now so high despite the fact that US citizens are paying the lowest share of their income for taxes – all taxes – since 1958?

Truth is, the only thing cutting taxes on corporations and the rich does for our economy is to increase wealth for those who need it least.

What If FDR, Truman Or Eisenhower Faced This Congress?

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Despite the fact that our economy was in freefall when President Obama entered office, people are fond of blaming him for our current misery.  Instead of supporting Obama’s attempts to right our sinking ship, Teapublicans have chosen to fight him every step of the way. 

No matter that the record number of Senate filibusters paralyzed our government.  No matter that the cries of “Socialist” have further divided our nation.  Teapublicans seem only to care about ensuring that Obama is a one-term president.

And just when it appeared that the economy was growing again, Teapublicans chose to turn the debt ceiling into a “crisis” resulting in a downgrade of US Treasury Securities and further despair.

All this got me wondering: What if today’s Teapublicans had been around following the Great Depression? Would they have been willing to fund Social Security? Would they have opened the US Treasury to build our infrastructure? Would our nation’s most iconic structures have ever been funded? Would there be a Hoover Dam? Would the Tennessee Valley Authority exist?

What if Teapublicans had been around following WWII? Would they have approved the post WWII-era top tax rate of 91 perecent? Would they have approved of the billions spent to expand our Universities? Would they have supported the GI Bill? Would they have approved of Eisenhower’s interstate highway system?

Looking at more recent history, would they have approved of raising the debt ceiling as Reagan was tripling the national debt? Would they have approved of his tax increases?

I think you know the answers. 

Now ask yourself this: What would have become of the US if today’s Teapublicans had been around during the founding of our nation? Would they even have been willing to spend their money to fund the Revolution?

World’s Greatest Nation? Really?

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Although many Americans are fond of calling the US the greatest nation on Earth, that hasn’t been true for many years. Certainly we have the world’s most powerful military, but that’s no criteria for greatness. Neither is the fact that we are still the world’s richest nation, despite the downgrade in our credit rating by Standard & Poors.

But greatest?

Does a great nation tolerate an ever-widening gap between billionaires and the working poor? Does a great nation leave tens of millions of its citizens without access to health care? Does a great nation allow millions of its children to be homeless? Does a great nation allow its education system to become third-rate? Does a great nation allow its infrastructure to decay and collapse merely to give another tax cut to large corporations and the wealthy?

Does a great nation use its financial and military power to prop up brutal dictatorships around the world? Does a great nation bankrupt the small farmers of neighboring countries by subsidizing corporate farms then demonize those farmers when they cross the border looking for jobs? Does a great nation demean those who labor to build things with their hands, to put out fires, or to teach its youth? Does a great nation begrudge a comfortable retirement to its elderly? Does a great nation allow large corporations and the wealthy to elect its politicians?

How can a nation be called great when it rewards greed and corruption? When its judicial system rules that corporations have rights superior to those of its citizens? When its financial institutions are allowed to grow so large they are immune to failure from their own mistakes? When its corporate lawyers are tasked with seeking out financial and legal loopholes that allow their clients to game the system? When its politicians are more concerned with scoring political points than the welfare of its voters? When its citizens are more interested in the antics of its celebrities than those of its government? When it allows its previous leader to run up a huge debt, and then blames the leader who inherited it?

We didn’t need Standard & Poors to tell us that our nation is on the verge of bankruptcy. When it comes to fairness, ideas and ethics, the US has been on the verge of bankruptcy for many years.

If Teapublicans Have Such Great Ideas, Why Do They Lie So Much?

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Why do they generate and circulate a seemingly endless number of blatantly false and misleading chain emails that demean our President?
Why do they try to shout down everyone with whom they disagree?
Why do they parrot talking points instead of rationally debating issues?
Why do they protect the obscenely wealthy and attack the poor?
Why do they complain about immigration then hire illegal immigrants to do their landscaping or repair their roofs?
Why do they preach small government then pass laws giving government power to prevent gay marriages and lawful abortions?
Why do they fight to ban abortions while, at the same time, fighting against sex education and the contraceptive practices that would help avoid them?
Why do they revere police and firefighters for responding to 9/11 then try to take away their right to collective bargaining and health care?
Why do they praise those in the military and ignore veterans in need of help?
Why do they revere President Bush for adding $7 trillion to our national debt and crashing our economy then attack President Obama for adding $1.4 trillion in trying to fix it?
Why do they complain about the excesses of Wall Street bankers while trying to block laws that will regulate them?
Why do they slash budgets for education while complaining that the US is falling behind other nations?
Why do they complain about unemployment as they cut federal budgets to force even more layoffs?
Why do they complain about government health care while telling the government to keep its hands off their Medicare?
Why do they complain about passing health care reform after a 10-month debate then pass a bill to kill entitlements with virtually no debate.
Why do they talk about helping small businesses then undercut them with policies that only benefit large corporations?
Why do they refuse to eliminate tax loopholes for corporations that claim an offshore P.O. Box as their corporate headquarters?
Why do they subsidize big oil companies and refuse to subsidize renewable alternatives?
Why do they call themselves conservatives when they’re against conservation of our environment?
Why do they demand compromise then refuse to consider alternate ideas?

A Primer On The National Debt From Reagan’s Economic Advisers.

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Teapublicans have elevated Ronald Reagan to God-like status. They have named a Washington D.C. airport after him. They worship at his presidential library. They even want to add his image to Mount Rushmore National Monument.

So why don’t they follow his economic example?

This has never been more puzzling than during the current debt ceiling debate. Under Reagan, Congress was forced to raise the debt ceiling 17 times. But under Obama, Teapublicans refuse to raise the debt limit even once. To save Social Security, Reagan raised the income cap on FICA deductions. But under Obama, Teapublicans want to destroy Social Security, Medicaid and Medicare. Reagan raised capital gains taxes to 28 percent. But under Obama, Teapublicans consider the current rate of 15 percent too high. Under Reagan, the highest income tax rate was 50 percent or more. But under Obama, the highest rate is 35 percent. And under Reagan, tax revenues averaged 18.2 percent of GDP. But under Obama, tax revenues are just 14.9 percent of GDP as reported by the conservative Heritage Foundation.

Indeed, former Reagan Policy Adviser, Bruce Bartlett, recently stated on MSNBC’s Hardball with Chris Matthews, “The dirty secret is that Obama’s a moderate conservative.“ Further, he noted that $7 trillion of the national debt is due to George W. Bush’s policies and tax cuts. $2 trillion is due to the Great Recession that President Obama inherited. And only $1.4 trillion of the debt is due to Obama’s policies, including the measures taken to keep our economy from sliding into the abyss.

And speaking about the Teapublican refusal to increase revenues as part of their plan to cut the deficit, the father of “Reaganomics” and former Reagan Budget Director, David Stockman, said, “When I look at the Republican plan, I have to say I think it’s half right on some things, and it’s half-baked on a lot of others… you’re telling the people of America that we can solve this issue – which is very dangerous, the deficit that we’re facing and the debt we’re building up – by not raising taxes on anyone. That, in my judgment, is a big lie.”

Bartlett was even stronger in response to a question about the Teapublican-dominated Congress. “A good chunk of the Republican caucus is either stupid, crazy, ignorant, or craven cowards who are desperately afraid of the Tea Party people. And rightly so,” he said.

An Economic Lesson For Teapublican Nincompoops

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Upon discussing the debt crisis with some conservative friends, I realized that few of them know the difference between the national debt, the budget and the deficit. Like Michelle Bachmann and other Teapublicans, they wrongly believe that refusing to increase the debt ceiling will result in cutting spending and reducing taxes.

Faced with such stupidity, it’s difficult to know where to begin. But I’ll start with some definitions:

Budget – The annual spending plan authorized by Congress based on anticipated revenue and anticipated spending needs. (For Teapublicans, a budget is the money that Congress authorizes the President to spend.)

Deficit – The negative difference between actual spending and actual revenue.

Surplus – Thanks to Bush, we haven’t seen one of these since the Clinton era. But just for the sake of conversation, a surplus is the positive difference between actual revenue and actual spending.

National Debt – The accumulation of deficits from our nation’s history. It is money that has already been spent.

Debt Ceiling – This is an arbitrary number established by Congress based on paranoia. Since the 1970s, the debt ceiling has been raised more than 70 times; 17 times by Reagan and 7 times by George W. Bush.

Now here’s where it gets really difficult. Failing to raise the debt ceiling will cut spending. But only because there will not be enough money to pay our bills. It forces the Secretary of Treasury to decide which bills to pay; money that Congress already agreed to spend. Failing to raise the debt ceiling will effectively cause the US to default on its bills. (For Teapublicans like Bachmann, Cantor and Palin, it’s as if you went on a spending spree at Walmart and then decided not to pay your credit card company.)

In effect, failure to raise the debt ceiling turns the US into a bunch of deadbeats. Other nations and individuals will not want to invest in our country. Interest rates will rise dramatically. And world stock markets will crash. Indeed, most experts say default will make the Great Recession of 2008 seem like…well…like a tea party.

Republicans In Denial (As In Denial Of Any Democrat Proposal)

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Today, Congressional Republicans pulled out of negotiations to resolve the deficit.  And (here’s a shocker) they blamed Democrats.  Their reasoning is that Democrats insist on tax increases rather than merely relying on more than $1 trillion in cuts to Medicare and other programs. 

“Let me be clear.  Tax hikes are off the table,” said House Speaker John Boehner. 

So, according to Republicans, even though the major cause of the deficit is the Bush era tax cuts (primarily for the wealthy), the only way to cut the deficit is by cutting spending for Medicare, Medicaid, Social Security, Planned Parenthood, Public Broadcasting, the Environmental Protection Agency, the Consumer Protection Agency, the Department of Education, etc.  At the same time, Republicans refuse to consider cuts to subsidies for Big Oil and corporate agriculture which they say would be tax hikes.  Of course, they also want to repeal the Affordable Care Act and repeal regulations on the financial industry.

So according to Republicans, when it comes to deficit negotiations, everything is on the table.  Except anything that Democrats want.

I guess that’s what passes for “bipartisan negotiations” these days.

The Real Reagan Legacy.

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On the occasion of Ronald Reagan’s 100th birthday, Republicans and other conservatives simply could not contain their myopic admiration for “The Great Communicator.”  In reality, he should have been called “The Great Propagandist.”  Or, perhaps, “The Great Bullsh***er.”

For, I believe, the collapse of the middle class can be traced directly to the decisions made during his terms in office.  Take the assault on labor unions.  It was Reagan who decided that he could not be troubled with the PATCO strike.  So he fired most of the nation’s air traffic controllers and replaced them with new, more obedient controllers.

Or take “Reaganomics,” AKA “Voodoo Economics” and “Trickle-down Economics.”  Under Reagan, the administration began the biggest transfer of wealth in the nation’s history.  All upward.

He began by paving the way for interstate banking, which effectively did away with usuary laws that limited the interest rate banks could charge for loans.  And he ended tax deductions for the interest paid on loans.  (For those too young to remember, prior to Reagan, all of the interest paid on loans for education, cars, credit cards, etc. was tax deductible.)  The effect was to enact a huge tax increase on the poor and the middle class while, at the same time, cutting taxes for corporations and the wealthy.

Reagan’s economic disciples, such as George W. Bush, have not only further cut taxes for corporations and the wealthy, they have continued the assault on labor unions by providing tax incentives for corporations to ship jobs overseas.  They have dramatically cut the estate tax and capital gains taxes.  They have provided subsidies for some of the world’s most profitable corporations – oil and pharamceutical companies.  They have attacked Social Security, Medicaid, Medicare and even public education as “entitlements.”  And people like Wisconsin Governor Walker are trying to put an end to collective bargaining.

The result of the policies of all these Reaganophiles is that the 400 wealthiest people in the nation now control 50 percent of the nation’s wealth.  To be clear, that means 400 people now have as much money as the bottom 110,000,000 Americans combined!  Even Reagan’s own budget director now admits that “Reaganomics” was a disaster for the middle class.

So pardon me if I choose not to celebrate the Reagan legacy.  To me, that would be akin to celebrating the legacy of influenza.  Or measles.  Or polio!

Who Do Republicans Really Represent?

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As most of you know, the Republican mantra is “lower taxes, less government.”  But for whom?  The past couple of years have revealed the Republican agenda as never before.

Take the Bush taxes cuts.  Democrats want the tax cuts for millionaires to expire, which would save $700 billion over the next 10 years.  But Republicans have made an extension of tax cuts for the wealthy their top priority.  And Republicans are willing to filibuster an extension of unemployment benefits to get their way.

This past election cycle, Republicans and their phony Tea Party candidates ran as populists, claiming to represent all Americans.  Yet Republican legislative votes tell another story.Just today, Republican Senators voted against a bill that would provide health care to 9/11 responders.  They have consistently voted against extensions of unemployment benefits for those struggling in the recession created by Republican policies.Republicans fought against regulation of Wall Street.  They fought against health care reform that would limit the obscene profits of large pharmaceutical companies and giant health insurance while providing health care access to more than 30 million working Americans.  They fought against stricter regulation of oil companies following the Gulf oil spill, and even apologized to BP when the Administration held BP accountable.

Republicans have successfully fought to eliminate estate taxes on large inheritances.  They have fought to lower capital gains taxes on investments.  They have voted against closing tax loopholes on large corporations that ship jobs to other countries.  They have fought against regulations against large corporations that create P.O. Box “headquarters” in other countries in order to avoid paying U.S. income taxes.  They have promoted no-bid contracts for private contractors to take over military functions such as “security”, transportation and food preparation.

Republicans have reduced funding for public schools while increasing funding for private and parochial schools.   They have made it easier for corporations to clear-cut our forests, for large mining operations to remove mountain tops, and for large electric generating companies to pollute our air and lakes.  At the same, they have refused to support alternative energy that would create competition for Big Oil and Big Coal.

Republicans claim that all of these actions create jobs and reduce taxes – a theory that has been thoroughly disproven.  So why do working class Americans continue to support the party that has so obviously sold its soul to large corporations and the wealthy?

You tell me.

The Corporate Takeover Of America

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It’s really nothing new.  For many years, large corporations have been given special privileges by our governments.  After all, it’s believed that they expand the tax base and fuel our economy.

But do they really?

The vast majority of jobs in the U.S. are created by small businesses.  And, while it is true that large corporations are responsible for large contributions to local, state and federal taxes, the contributions are largely the result of their employees’ tax payments.  Fact is, given the resources they consume, the pollution they create, and the expensive infrastructure they require, large corporations pay relatively little in taxes.

What large coporations and their executives do contribute are donations to the political campaigns of those who will give them what they want – government access, influence and power.  And those donations have paid off handsomely in recent years.

Despite the fact that government deficits have increased dramatically over the past 30 years, corporate taxes have routinely diminished.  Indeed, city, county, state and federal governments have bent over backwards to attract and appease large corporations.  For example, cities have provided Tax-Increment Financing (TIF) to large corporations, allowing them to avoid paying property taxes on large buildings.  And when the TIF expires, another large corporation purchases the building with the help of (you guessed it) Tax-Increment Financing.

Counties and states often provide no-interest loans and exemptions from regulations to attract large corporations.  And the federal government often creates tax loopholes to the benefit of corporations.  Many have been given tax breaks for setting up a P.O. box offshore to create a new “headquarters.”  And many have been given tax breaks for exporting manufacturing and tech-support jobs to other countries.

So how have large corporations repaid these favors?

They routinely pull up stakes at the first hint of increased taxes or regulations.  And they fund political campaigns against any elected official who has the temerity to oppose them.  Of course, corporate meddling in our political process will only increase now that the Republican-controlled Supreme Court has ruled that corporations enjoy the Constitutional rights of individuals (a startling decision given the fact that a corporation is little more than a piece of paper that creates a corporate “veil” protecting its founders from creditors in the event of failure).