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 theyre against conservation of our environment?
Why do they demand compromise then refuse to consider alternate ideas?
Category Archives: Taxes
A Primer On The National Debt From Reagan’s Economic Advisers.
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 dont 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 MSNBCs Hardball with Chris Matthews, The dirty secret is that Obamas a moderate conservative. Further, he noted that $7 trillion of the national debt is due to George W. Bushs 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 Obamas 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
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, its difficult to know where to begin. But Ill 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 nations 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 heres 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, its 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)
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.
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?
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
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).
Another WTF? Vote.
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?
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.
Its 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 wont spend the extra money on their businesses. As a small business owner, I know thats 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 dont just take my word for it. Lets 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. Its 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.