Category Archives: Taxes

Another WTF? Vote.

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For some time, I’ve wondered why my Republican friends continue to vote against their own self-interest.  I do have a few wealthy friends who benefit from Republican policies.  But the majority are more often harmed by Republican initiatives.

For example, Republicans talk about tax cuts for the rich being good for small business owners who generate most of the jobs in this country.  That may sound reasonable.  However, you have to look at what Republican leaders consider small businesses.  By their definition of limited ownership, Cargill (the world’s largest privately-held corporation) and Koch Industries (the world’s second-largest privately-held corporation) are “small” businesses.  And, of course, extending the Bush-era tax cuts would be very good for them.

The reality is that eliminating the Bush tax cuts for the wealthy would affect only 3% of small business owners.

Republicans have also been at the forefront of providing tax breaks for corporations that ship jobs overseas.  They refuse to entertain penalties for large American corporations that move their “headquarters” off-shore to avoid U.S. taxes.  Republicans rail against common sense regulations that prevent greedy corporations from destroying our environment and robbing our citizens.  Indeed, Republicans actually apologized to BP when the Obama administration demanded it pay for damages to those affected by the massive Gulf oil spill.  And virtually all Republicans voted against reform of Wall Street after it collapsed our economy!

So what have Republicans done to earn my friends’ loyalty?  Social Security?  Nope.  That was passed by Democrats over the protests of many Republican.  Medicare?  Nope.  That was passed by Democrats with little to no help from Republicans.  Corporate-provided health care and profit-sharing?  Wrong again.  Employee benefits are the result of labor union fights (literally) against greedy company owners.

So what does the Republican Party do to deserve the undying loyalty of those who work for a living?  They lie.  And they are very good at it.

Okay, Republicans, now what?

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You lied, cheated and spent your way into control of the House of Representatives.  You took control of more governors’ offices.  And you took control of 19 more state legislatures.

Much of your success was the result of massive corporate donations and your filibustering of legislation that could have helped turn this economy around – the economy that collapsed on your watch due to your lack of oversight and regulation.  Remember?

You blamed your mess on President Obama, Nancy Pelosi and Harry Reid.  Then you talked about “taking your country back,” resorting to 2nd Amendment remedies, if necessary.

You won on promises of less government and lower taxes.  So what next?

Plan to cut the size of government?  Maybe you haven’t noticed, but the downsizing of state, county and local governments is one of the primary reasons our economy is so slow to recover.  We’re losing government jobs faster than private industry can add jobs.  Moreover, the lack of government oversight of Wall Street is one of the main reasons we’re in this predicament.

Plan to cut taxes by renewing the ill-conceived Bush tax cuts for the wealthy?  Then plan on adding $80 billion to our deficit over the next two years.  Want to repeal “Obamacare?”  Then plan on adding yet another $138 billion to our deficit over the next 10 years.  (Not to mention the fact that you’ll be denying health care access to more than 30 million Americans.)

Plan on cutting the deficit?  You could cut half of our bloated $663.7 billion defense budget (not including the Iraq and Afghan wars).  But what will you do about the defense contractor jobs you eliminate?

The most radical Republicans talk about eliminating or privatizing all “entitlements” such as Social Security, Medicare and Medicaid.  They want to get rid of the Department of Education, the Environmental Protection Agency, and the National Science Foundation, as well.  All of that combined would save $1.48 trillion a year, completely offsetting the deficit and leaving us with a surplus of more than $200 billion each year (not including tax cuts for the wealthy, rising health care costs, increased military spending and increased border security).

But we’d have a nation of uneducated, unheathy children and heavily-armed, destitute senior citizens.  Try running on that platform in future elections.  Or will you do as some Tea Party candidates suggest, and limit voting to landowners or those already in office?

Tax Cuts As An Economic Stimulus.

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It’s one of the most important issues that will be debated in the coming months. Democrats, including President Obama, want to let the Bush tax cuts for the wealthiest two percent of our population expire. They claim that we can no longer afford these tax cuts and letting them expire would reduce the deficit and create more fairness for the middle class.

Republicans, on the other hand, claim that the majority of those making $250,000 or more per year are small business owners and that raising their taxes would cost us thousands of jobs. Indeed, they would not only make the Bush tax cuts permanent. They would cut taxes even further as a stimulus for creating jobs.

There are a couple of things I find troubling with the Republican logic. Most small business owners make far less than $250,000 per year. And those who make more than $250,000 likely won’t spend the extra money on their businesses. As a small business owner, I know that’s just not how things work. While some will put the extra money back into their business, most will invest the money in securities, save it or spend it on themselves.

But don’t just take my word for it. Let’s look at how most economists view tax cuts as a form of stimulus: They estimate that tax cuts have a return of 32 cents of economic growth for every dollar spent. On the other hand, programs like food stamps (which many Republicans oppose) have much higher rates of return. It’s estimated that such programs generate $1.71 of economic growth for every dollar spent. And, according to Mark Zandi, John McCain’s economic adviser during the 2008 presidential campaign, those unemployment benefits that Republican teabaggers so oppose are estimated to generate $1.61 in economic growth for each dollar spent.

As the nonpartisan Tax Policy Center put it: ” The tax cuts of 2001 and 2003 provided much less stimulus to the economy than other policies of equal cost would have. The underlying reason is that although the tax cuts were well-timed to provide a short-run economic stimulus, they were poorly designed for this task.”

They did, however, provide a nice windfall for the wealthiest Americans while adding billions to our deficit.

If Democrats Renew Bush Tax Cuts, They Deserve To Lose Congress!

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Yesterday, on the McClatchy website, there was a story that many Democrats are leaning against repealing the Bush tax cuts for the wealthiest Americans. The reason? Despite the fact that renewing the tax cuts will add billions to the deficit, some Democrats are worried that it will make their re-election more difficult.

So they’d rather cause long-term damage to our nation than risk losing their seats in Congress? Really?

If that’s how they feel, it’s time for them to go! Their attitude only proves what many progressives have thought for some time. A large number of Democrats are gutless wimps who cower at the first challenge from a Republican. Yet these same Democrats speak in general terms about the damage conservative Republicans are doing to this nation.

Personally, I’m sick of it! I’m sick and tired of the Grand Old Party of Liars who represent big business. I’m sick of the Fox Noise machine. I’m sick of the “I’ve got mine, you can’t have yours” whiners otherwise known as the tea party movement. I’m tired of the greed and influence of large corporations. I’m tired of obscenely wealthy conservative puppet masters like the Koch brothers who attempt to control our elections through donations to “think” tanks like the American Enterprise Institute, Americans for Prsoperity, the Cato Institute, FreedomWorks, etc.

But most of all, I’m sick of the cowards who give the Democratic Party a bad name.

The Growing Underclass In America.

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There are currently 14.6 million Americans who are out of work, and that number likely doesn’t include millions more, such as the self-employed, who have seen their businesses diminish to virtually nothing. But before you blame the current Administration, take a look at the monthly unemployment claims beginning in January 2008. By the time President Obama was inaugurated, the new claims had grown to more than 750,000/month. Yet despite having to fight Republicans every step of the way, President Obama and Congress began to turn things around. In fact, in May of this year, we added 433,000 jobs.

The real question is, without enormous structural changes to our nation, what kind of jobs will be available?

Even before the Great Recession, most of our jobs were in the so-called service sector. And most of these jobs pay less than $25,000/year. The list includes fast food workers, restaurant workers, hosts and hostesses, dishwashers, cashiers, amusement park attendants, movie theater ushers and ticket-takers, farm workers, gaming dealers, bartenders, personal and home care aides, parking lot attendants, lifeguards, ski patrol, garment pressers, laundry & dry-cleaning workers, child care workers, maids, and elderly caregivers, receptionists, secretaries and maintenance “engineers”.

The result is that approximately 35 percent of the U.S. workers make $25,000/year or less! (The national poverty level is $21,756 for a family of four.) And many careers that were once considered good jobs, such as construction, don’t pay much better. Construction workers make only $11/hour to $15/hour.

Our nation has been bleeding relatively high-paying manufacturing jobs since the 1980s (7.7 million between 1986 and 2001). However, under the Obama Administration, the U.S. economy has actually begun to reverse that trend. New data shows that we have added more than 180,000 manufacturing jobs in 2010. Still, the majority of good jobs are in medicine, law and government. Indeed, of the top 15 highest paying jobs in America, 14 are in medicine.

Lowering taxes for corporations and the wealthy as Republicans demand won’t help create new higher-paying jobs. That will only ensure that the wealthy will make even more money and pay fewer taxes. It will also relegate even more of our citizens to the growing underclass.

A better option is to follow the path of FDR, Truman and Eisenhower – raise taxes on the wealthy and the “too big to fail” by allowing the Bush tax cuts to expire then use the additional revenue to rebuild our infrastructure and to create energy alternatives to foreign oil. That would create opportunities for construction companies, manufacturers and suppliers of materials. It would also incentify our corporations to invest their hoards of cash, and it would encourage our banks to open their vaults and make loans to small businesses. More important, it would put people back to work.

$3.4 Trillion Reasons To Not Vote Republican In November.

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According to the non-partisan Congressional Budget Office (CBO), that’s the amount tax cuts being proposed by Republicans will add to the national deficit over 10 years.

The proposed tax cuts include permanently extending the 2001 and 2003 Bush tax cuts which represent $2.3 trillion. Of course that’s just an estimate. But the CBO found that the unfunded Bush tax cuts, which primarily benefit the wealthy, added $539 billion to the deficit in 2005 alone.

On top of that deficit-ballooning idea, Republicans want to eliminate the Alternative Minimum Tax along with Estate Taxes and Gift Taxes which, according to projections, will add another $1.1 trillion to the deficit over 10 years. Again, these tax cuts are aimed at benefitting the wealthiest part of our society.

Just to be clear, the $3.4 trillion would be added to the annual deficit over the next ten years and the effect on the total national debt would be cumulative. In other words, they would likely add another $3.4 trillion to the national debt each and every decade after their passage!

In case you’ve been living in a vacuum, the people promoting these tax cuts are the very people who claim to be so concerned about adding to the deficit that they’re willing to filibuster the extension of unemployment benefits for people who are out of work.

What’s particularly fascinating about this debate is that the Republican leaders don’t think cutting revenue will have an impact on the deficit.

Senate Minority Dimwit, Mitch McConnell is on record for saying, “There’s no evidence that the Bush tax cuts actually diminished revenue. They increased revenue.”

Hmmm…if you believe that, maybe you should try this experiment at home: If your household expenses exceed your income, then look for a job with a lower salary. According to McConnell, fellow Senate Dimwit, Jon Kyl, and other Republicans, that will reduce your debt!

That’s the kind of thinking that took us from an economy that generated 22 million jobs and a budget surplus in the Clinton administration to an economy that almost entirely collapsed under the Bush administration and gave us a huge deficit.

Yeah, who wouldn’t want to put those people in charge again?

The Other Offshore Disaster.

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For more than two months, the nation’s attention has been focused on the gusher in the Gulf. But there’s another offshore disaster that has been going on for at least 50 years. I refer to the large U.S. corporations that have created subsidiaries and “headquarters” off-shore to avoid U.S. taxes.

But I found it difficult to obtain a list of the companies that have taken advantage of the loophole. Now, thanks to Ariana Huffington’s recent article on the Huffington Post, I have a better idea. In her article, she cited a Government Accounting Office (GAO) report from 2008 that showed 83 of the 100 largest publicly–traded companies in the country had operations in tax havens.

The report cited AIG, AT&T, American Express, Boeing, Chevron, and Dow to name a few. Many set up P.O. boxes in the Caymans and Bermuda. And Halliburton chose to move its “headquarters” to Dubai. That’s disturbing enough. Yet, according to the GAO, 74 of those 83 corporations received government contracts. And, of course, taxpayers were asked to rescue two of those companies (AIG and American Express) through billions in government loans.

So these companies are not only avoiding paying their fair share of American taxes. They are filling their coffers with money from taxpayers like you and me!

At a time when our national economy is struggling and when we’re engaged in two protracted wars, closing this gaping loophole would seem one of the top priorities for Congress. But that would mean that our Representatives and Senators would have to vote against some of their largest campaign contributors. Indeed, according to Ariana Huffington’s article, Washington has been trying to address the issue for nearly 50 years. But each time the issue comes before Congress, the corporate lobbyists prevail.

So while Congress debates the impact on the national debt by extending unemployment benefits for working people, they continue to permit corporations to avoid paying billions of dollars in taxes through loopholes. In fact, the latest figures available show that these corporations pay roughly $16 billion in taxes on $700 billion in foreign active earnings – a tax rate of approximately 2.3 percent!

Of course, politicians (especially Republicans) excuse such welfare by saying that corporations create jobs, and that jobs have never been more needed than now. That may be true. But where are those jobs being created? For nearly 40 years, many of these corporations have been creating more jobs offshore than in the U.S.

That being the case, what do we have to lose by forcing them to pay up?

A Tea Party Preview.

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If you had any doubts of the consequences of allowing the Tea Party to influence our elections, all you need to do is look at Arizona.  For the past several years, the state legislature has caused an already conservative state to take an extreme right turn.  Some of the most reasonable Republican legislators were defeated in the last election because they weren’t viewed as conservative enough.  And since the election, the state has completely slid into the dumpster.

To wit, the state is bankrupt, yet the wingnuts continue to cut taxes for corporations and ignore calls for closing $10 billion in corporate tax loopholes.  Arizona’s public school funding now ranks 51st out of 50 states (Washington, DC is also ahead of Arizona) yet the state continues to cut funding for public schools while, at the same time, increasing tax credits for private and parochial schools.  Tourism is a huge source of revenue for Arizona, yet the state is closing its state parks and is even considering closing its Department of Tourism.  The film industry brings millions into the state each year, yet the Arizona legislature has cut the Film Board’s budget.   

Now the state is asking citizens to vote for a temporary one percent increase in sales tax.  But, at the same time, the wingnuts in the legislature are pushing through another one percent tax cut for corporations and the wealthy!  And, if the sales tax increase doesn’t pass, the legislature is promising to make even more draconian cuts to public schools.  (One educator recently told me that the class sizes could easily exceed 50.)  Arizona even threatens to cut thousands of jobs from the Department of Public Safety.  After all, the state doesn’t really need them, since the legislature just passed a bill that allows anyone to carry a concealed weapon without a permit.  It’ll be just like the Old West with a shootout on every street and in every bar.

Still not scared? 

Then consider the state’s new immigration law.  SB 1070 has already resulted in the cancellations of at least six conventions and hundreds of hotel rooms.  The Los Angeles City Council voted to boycott Arizona which will likely have an even more chilling impact on Arizona’s film industry.  San Francisco has also voted to boycott the state.  And the Mexican government has put out a travel warning for Arizona.  If you don’t think that’s meaningful, consider the fact that Mexico represents the single largest source of tourists to the state – a source that also represents tens of millions of dollars to state revenue. 

Most recently, the Arizona legislature has passed a bill that bans ethnic studies classes in public schools (equating them with treason) and forbidding any teacher with a strong accent from teaching English.  And the legislative session hasn’t ended yet!

Yes, this is the future promised by the Tea Party.  God save America!

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The Black & White Case Against President Obama

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The Tea Party members say their anger has nothing to do with racism.  Well, if their issues are big government, big deficits and corporate bailouts as they suggest, why all the anger now?  Why not aim the fury at the people who created our recession and debt?  Why not direct their fury at Ronald Reagan, George W. Bush and the Republicans who created trillions of dollars of national debt?  Why no anger against George W. Bush for drastically increasing the size of government with his Department of Homeland Security?  Why no fury against George W. Bush for bailing out Wall Street?  Why the belief that President Obama was not born in the U.S.?  Why did no one demand to see Ronald Reagan’s, George H.W. Bush’s and George W. Bush’s birth certificates?  And why were they so willing to look the other way when Richard “The Dick” Cheney was allowed to skirt the Constitutional prohibition on the President and Vice-President being residents of the same state by claiming Wyoming as his residence instead of Texas where he actually lived? 

What has this President done to generate such anger? 

Since taking office, he has brought the nation out of the worst economic times since the Great Depression.  Since taking office, he has actually lowered taxes.  Indeed, taxes have rarely been lower.  Since taking office, President Obama has rebuilt our relationships and stature with all of our allies.  He has rid the world of more nuclear weapons to protect us from terrorism.  He has certainly not tried to ban guns as the Tea Party suggests.  As a matter of fact, he signed a bill permitting guns in National Parks, an act that prompted the Brady Center to Prevent Gun Violence to give Obama an “F” with regard to gun control issues. 

Then why the Tea Party claims that President Obama is un-American, a Socialist, a Communist and a Nazi? 

What is so unique about this President to generate so much anger and hate?  Hmmm, let me think … maybe it has to do with the fact that he is part Irish.  No?  Well, it certainly couldn’t be that he is half African-American.  That would be racist, wouldn’t it?

What kind of country do Republicans envision?

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Given the Republican response to President Obama’s initiatives, one has to wonder exactly what the Republican vision for our nation actually is.  To try to determine that, let’s look at recent events.  If Republicans had prevailed on their opposition to the TARP bailouts of Wall Street banks, most economists believe that the entire world economy would have collapsed and we would be in the midst of a 2nd Great Depression.  Republicans argued against bailouts to General Motors and Chrysler which likely would have forced both into bankruptcy putting up to 10 million workers on unemployment.  Republicans fought the stimulus plan which, by even the most conservative estimates, has saved or created up to 2 million jobs.  And they have continued to whine about the growing deficits under Obama while lionizing Reagan for tripling our national debt.

The Republican alternative to Obama’s attempts to save our economy?  Tax cuts for the wealthy despite the fact that most economists believe such cuts would do nothing to alleviate our situation.  In fact, many feel that the tax cuts could make things worse!

Republicans have fought any form of banking regulation.  They have voted to keep the status quo on an unsustainable health care system that results in 33,000 deaths each year for lack of access.  They have voted against increasing benefits for military veterans.  Republicans refuse to allow the federal government to negotiate lower prices for pharmaceuticals as Canada and many other nations have done.  They are opposed to spending money to encourage the development of reasonable alternatives to fossil fuels.  They dismiss the international scientific community’s warnings of global climate change.  They have long stated their disdain for “entitlements” such as Medicare, Medicaid and Social Security.  They are vehemently opposed to labor unions.  They are opposed to social services for the poor, saying that they should be the responsibility of faith-based organizations.  Republican-appointed Supreme Court justices voted to corrupt our election process by permitting corporations (even those based overseas) to spend unlimited amounts of money in support of candidates who favor their positions. 

Under the Bush/Cheney regime, Republicans started two wars with no clear plan on how to win them, and no plan to pay for them.  (Indeed, they intentionally obscured the actual cost of the wars – in terms of dollars and lives.)  And they awarded billions to Halliburton and other corporations through no-bid contracts. 

The Democratic Congress has shown a decided lack of unity and will.  But based on the Republican record, why would anyone want to return the Republican Party to power?  Or their even less-pleasant brethren – the members of the Tea Party?