Category Archives: Taxes

How tea-baggers can eliminate the national debt.

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Since President Obama’s inauguration, the so-called tea-baggers have demonstrated, yelled at and threatened the administration. They claim the President is not a citizen. They believe he is trying to implement a socialist, or even communist, agenda. And they seem most angry over increases in the national debt. Never mind that the increases are the result of the previous administration’s policies. Never mind that much of the money allocated through TARP funds has been repaid. Never mind that GM seems on the road to recovery. And ignore the fact that, according to the CBO, the stimulus has saved or created 1.6 million jobs.

However, I think we can channel all that anger and energy to help pay off the national debt. Since the tea-baggers have driven up sales of guns and ammo following Obama’s election, they’re certainly well-enough armed to defend our shores. That would permit us to eliminate most of our national defense budget.

Just think, without a large military force, the tea-baggers would no longer have to fear that our government will take away their freedoms. Of course, we could keep a small professional military to operate, maintain and defend our enormous arsenal of nuclear tipped missiles. That would ensure that no foreign government would attack us. We’d bring home our troops from Afghanistan, Iraq, Germany, Japan and South Korea. Without an enormous military and all of its ships, planes, tanks and troop carriers, we would have less need for oil, so we would no longer need to project American power around the globe. And since most of our large, multi-national corporations have already exported most of our jobs, we should feel no obligation to protect corporate interests on foreign soil. Besides, those companies can afford to hire their own protection such as the likes of Blackwater, aka Xe.

What’s not to like? No more war. No more nation-building (other than on our own soil). No more national debt. All made possible by putting the tea-baggers’ guns and anger to better use.

Who’s really at fault for our nation’s predicament?

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Who is more at fault for the problems that face our nation?  Republican candidates?  Or the voters who are deceived into voting for them?  During campaigns, Republican candidates take a populist tone.  They talk about the issues that are important to ordinary Americans such as opportunity and personal freedom.  But when they are elected, they tend to focus almost exclusively on issues designed to benefit the elite. 

Despite promises of fiscal responsibility, Reagan and George W. Bush dramatically increase the deficit and national debt.  Despite promises of small government, Bush created the huge bureaucracy that is Homeland Defense.  And the Republican mantra of lower taxes has really proven to be nonsense.  They may occasionally offer a token tax cut for the middle and lower class, but the real cuts are reserved for the wealthy.   Republicans talk about creating jobs then make it easier for corporations to eliminate collective bargaining and ship jobs oversees.  They talk about getting government regulations out of the way then watch corporations create new scams to abscond with more of their consumers’ money. 

Why, then, do voters fall for these false promises over and over?  Often it’s because they aren’t curious enough to really examine the party’s platform and hold the candidates accountable.  And all too often it’s because they focus on a variety of wedge issues such as abortion, terrorism and same-sex marriage.  They fall victim to a sort of 3 card monte.  They’re mesmorized by the Republican distractions of fear, anger and religion.

How many lower and middle class voters actually benefited from Reaganomics?  How many benefited from George W. Bush’s “compassionate conservatism?”  I submit that instead of jobs, increased salaries and tax cuts, they were rewarded for their votes with war, massive deficits and decreased prosperity.  But the real Republican constituency consisting of CEOs, bankers, investors, oil executives and defense contractors is doing just fine, thank you.

The Bush Legacy: America in Decline

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A few weeks ago, economists Martin Wolf and Robert Shiller appeared on Fareed Zakaria’s GPS on CNN.  They said, “It is now clear that the Obama team has helped avert a complete meltdown of our financial markets.  But they warned that one of the greatest dangers facing our nation is the growing economic disparity between the rich and the poor.”  They went on to say, “This could create a country in which not even those with a great deal of money will want to live.”

There are other troubling effects of Bush’s tax cuts for the wealthy, deregulation and the Republican Party’s stubborn adherence to trickle-down economics. 

Although he draws no conclusions relative to party politics, Rick Newman talks about warning signs of American decline in a story published by U.S. News & World Report.  In the story he states, “…real household income in America has flat-lined, which means many middle-class families are barely keeping up with inflation. The exploding federal deficit hamstrings the government’s ability to help. Healthcare is too expensive, America’s manufacturing base is eroding, and two open-ended foreign wars are draining the national treasury.”

Newman goes on to point out that the annual “prosperity index“ published by Legatum Institute, a London-based research firm, now ranks the U.S. as the ninth most prosperous country in the world.  The same study ranks the United States 27th for the health of its citizens, a statistic that is all the more disturbing given the fact that we spend far more on healthcare per person than any other nation.

According to Newman’s article, the U.S. poverty rate of 17 percent ranks third worst among advanced nations above only Turkey and Mexico.  And since our future depends on the education of our youth, there is more disturbing news.  American 15-year-olds score below average among advanced nations on math and science.

There is one glimmer of positive news:  Newman points out that, according to a GfK Roper survey of how nations are viewed by others, “America rocketed from No. 7 in 2008 to No. 1 in 2009, largely because the world cheered the election of Barack Obama as U.S. president.”

The return of Dick Vader?

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Liz Cheney has stated that she hopes her father will run for President in 2012.  Even allowing for the admiration that a daughter naturally feels toward her father, I have to respond, “Are you out of your @%#^ing mind?! “

This week’s most popular movie at the box office is a disaster epic entitled “2012” which portrays the end of the Earth.  If Dick Cheney were to be elected President, reality could well be more awful than fiction. 

Just imagine, in a Cheney presidency, there would no namby-pamby diplomacy with other nations.  No dithering with our enemies.  Indeed, we’d likely attack every nation that wouldn’t kowtow to Cheney.  We’d treat all Americans as suspected terrorists and spy on their phone calls and emails.  We’d jail our political enemies and hold them for years without trial.  We’d cut taxes on the rich.  We’d virtually eliminate taxes on large corporations.  We’d transfer even more wealth to our overlords.  We’d conduct all government business with no-bid contracts.  We’d privatize our military.  We’d politicize everything.  And we’d centralize all power in the executive branch. 

Wait!   Isn’t that what happened when Cheney was running the country with Bush as a figurehead?

A simple plan for taking back our economy.

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It has been more than a year since Wall Street’s risky investments collapsed our economy.  Unfortunately, Congress still has not passed legislation to prevent such calamities in the future.  Instead of trying to craft new legislation, I suggest that Congress look to the past.  To wit:

1 – Reinstate, in its entirety, the Glass-Steagall Act.  The act created firewalls between commercial banks, investment banks and insurance companies following the Great Depression.  It was the unraveling of this act in 1994 that undoubtedly led to our current recession.

2 – Re-regulate derivatives to prevent highly risky investments resulting from the so-called “Enron exception.”  The “Enron exception” protected the company’s on-line commodity trading from federal regulation ultimately leading to Enron’s failure.  So, of course, Republicans couldn’t wait to expand the legislation which resulted in runaway crude oil prices and the housing-fueled financial collapse of 2008.

3 – Re-regulate banks by instituting a national usury law that would cap interest rates at 12 percent.   Prior to the Reagan-era deregulation, today’s interest rates would have resulted in prison sentences for loan sharking. 

4 – Restore the maximum income tax rates to pre-Bush levels.  Better yet, restore the maximum rates to pre-Reagan levels.  This could provide additional income to rebuild our infrastructure and/or reduce the national debt.

5 – Close tax code loopholes which encourage U.S. corporations to establish off-shore “headquarters” in order to avoid taxes.  At the very least, prevent such corporations from receiving government contracts.

6 – Use our anti-trust laws to break up any corporations deemed “too large to fail.”  If a company is so large that its failure would damage the nation’s economy, it automatically qualifies as a monopoly.

There is nothing new or Earth-shattering about any of these measures.  And that’s the point.  They have all been proven.  In fact, they kept our government and our businesses operating effectively for decades until Republicans undermined our nation’s economic security in order to deliver greater profits to their greedy corporate masters.

Taking back our country.

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No, I didn’t suddenly become a pitchfork wielding right-wing lunatic.  I don’t own a handgun or an assault rifle.  And I have no doubts that President Obama was born in Hawaii.  But I do believe our nation is in jeopardy. 

However, we don’t need violence to address the issues.  All we need is legislation.  And it’s not even new legislation.  Just return the U.S. to the tax structure and regulations that existed in the U.S. prior to Ronald Reagan. 

Want to prevent another financial crash like the one that happened in 2008?  Simply eliminate the Gramm-Leach-Bliley Act of 1994.  That legislation, sponsored by a Republican-controlled Congress and signed into law by President Clinton, permitted bank holding companies to co-mingle financial institutions of deposit, investment and insurance which contributed to the collapse of our financial system last year.  You might also fire those in the Federal Reserve who failed to exercise the oversight that’s already within its power.

Want to eliminate the predatory tactics of the banks which issue credit cards?  Simply nationalize usury laws which limit interest rates in many states.  These laws were allowed to be circumvented in the 1980s by large bank holding companies. 

Want to reduce our national debt?  Simply return the highest marginal income tax to pre-Bush rates.   

Want to rebuild the nation’s failing infrastructure?  Return the highest marginal income tax to Eisenhower administration rates of the 1950s.  After all, that was the last era when our nation made significant investments in infrastructure.

Want to bring back manufacturing jobs and diminish unemployment?  Undo the relaxation of tariff laws that enabled “globalization” by our large corporations.  In reality, “globalization” is just another term for exporting jobs, undermining worker benefits and wages, increasing profits and avoiding corporate taxes.  (How many U.S. corporations have created a mailing address in the Bahamas or the Caymans to avoid U.S. taxes?)

Want to calm the angry rhetoric on radio and TV?  Reinstate the Fairness Doctrine which existed prior to 1987.  That doctrine, enforced by the FCC, required the holders of broadcast licenses to present controversial issues of public importance, and to do so in a manner that was honest, equitable and balanced.  (Wouldn’t you like to see Rush Limbaugh, Glenn Beck, Fox News Network and Focus on the Family try to justify their existence under those rules?)The point is most of the problems in this country aren’t new.  We’ve addressed them all before.  We can do it again.

Rewarding unreasonable behavior.

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On the anniversary of 9/11, Republican spokesperson and renowned liar, Rush Limbaugh, chastised President Obama for trying to turn 9/11 into a day of public service.  Wow!  How dare the President want to commemorate the attacks on U.S. soil with something positive!  How dare the President try to encourage Americans to serve their nation! 

Certainly, the past President never encouraged public service and sacrifice.  In the wake of 9/11, Bush asked us to go shopping.  And while our young people were serving and dying in Afghanistan and Iraq, he pushed for tax cuts for the wealthiest Americans.  (I guess he believed that only the middle class and poor should sacrifice for their country.)  Bush refused to allow press coverage and photographs of the true cost of war.  Indeed, Republicans treated war much as the Wizard of Oz would.  “Pay no attention to what’s behind that curtain.”

But, in reality, Republican criticism has nothing to do with President Obama’s statements and actions.  He’ll be criticized by Republican pundits no matter what he says or does.   That’s not surprising.  After all, we’re talking about the same people who accused then-First Lady Hillary Clinton with murder relating to the so-called Travel-gate.  They’re the people who spent $60 million of taxpayers’ money to investigate Clinton’s investment loss in Whitewater.  They’re the same people who called Democrats “whack jobs” and “conspiracy nuts” for crying foul over the 2000 Florida election.   (Never mind the findings of an independent group of journalists who stated, “It’s clear that a significant majority of Floridians intended to vote for Al Gore.”)  And these are the same people who attacked the patriotism of a Vietnam War hero while supporting a candidate who got his powerful daddy to help him avoid the draft by getting him into the Air National Guard. 

Republicans are good at attacking.  In fact, they’re great at it.  Many of today’s Republican strategists learned at the knee of the masters; Tricky Dick Nixon and Spiro Agnew.  Republican attacks and tricks should not come as a surprise to anyone – least of all Democrats.

What is surprising is that Democrats continue to try to reason with them.  And, by doing so, they continue to encourage their bad behavior.  It’s astounding that Representative Joe Wilson can bellow “You lie” to President Obama in an address to a joint session of Congress.  It’s even more astounding that Democratic Senators reword the health care reform bill because of Wilson’s outburst.  (Despite the fact that the bill already clearly stated that health care coverage will be denied to illegal aliens, the wording was strengthened in response to Wilson.) 

The message to Republican extremists is that their extreme accusations and tactics work. 

So Republicans and their media supporters will continue to scare citizens with fabricated issues like “Death Panels”.  They’ll continue to raise fears that a Presidential speech to school children is an attempt to indoctrinate them.  And they’ll continue to compare a centrist African-American President who continues to search for bipartisanship to Adolph Hitler.  (How can anyone actually believe this stuff?) 

Someone once said, “You can’t reason with unreasonable people.”  Yet Democrats continue to try to reason with Republicans.  Why? 

The end of voodoo economics?

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I was never a big fan of President George H.W. Bush although, compared to his son, he was a fabulous president.  And he did get one thing right – his description of Reagan’s theory of trickle-down economics.  That’s right.  It was George, the elder, who first appropriately labeled it “Voodoo” economics. 

The idea that cutting taxes for the wealthy would somehow benefit the rest of us never really made any sense.  It was clear to me that the wealthy would simply spend the extra money on themselves or invest it in the stock markets.  I couldn’t see how the theory would result in more jobs or increased living standards for everyone else.

What did make sense to me was the idea of cutting taxes on companies that created jobs, and Reaganomics did do that.  Unfortunately, the Reaganists relaxed or eliminated many of the regulations and safeguards that controlled corporations.  The result was tax cuts and tax credits for large corporations that took their manufacturing jobs overseas.  And due to the lack of regulation, many corporations created phony “headquarters” in the Bahamas and the Caymans to avoid paying taxes altogether.  Amazingly, Republicans refused to even consider banning these off-shore companies from receiving U.S. government contracts. 

How on Earth were U.S. citizens, other than corporate officers, supposed to benefit from that?

The short answer is that we didn’t.

In an op-ed column for The New York Times, Nobel Prize-winning economist Paul Krugman summarized the real effect of Reaganomics.  “…real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007.  But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years“.  Krugman also points out that “most of whatever gains ordinary Americans achieved came during the Clinton years “, and that President George W. Bush “…had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains”.

Of course, Krugman’s statistics don’t include the fiascos of 2008 in which the Fed started bailing out banks long before the public noticed; when gasoline prices hovered around $4 per gallon; when foreclosures dragged down the entire economy; and when the Bush and Obama administrations had to bail out Wall Street.  All of these issues are likely to make the final cost of Reaganomics look even worse.

Yet despite all evidence to the contrary and despite the near-disastrous collapse of our entire financial system under their leadership, Republicans still cling to the notion that the failed economic policy of their former leader and idol can cure our present-day problems.  “Make the Bush tax cuts permanent,” they say, “that will bring our economy back.” 

If Republicans should somehow regain control of Congress during the 2010 mid-term elections, be afraid, my friends.  Be very afraid.  Like other apparitions of black magic, voodoo economics may be more difficult to kill than you think.

Return to the “Good Old Days?” Be careful what you wish for.

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I receive a lot of emails, mostly from my conservative friends, of the “Remember When?” variety.  Of course, they focus on the “Leave it to Beaver” days of the 1950 and 60s.  A recent one started me wondering why we look back on those days so fondly. 

After all, the 50s were pre-civil rights and pre-feminism.  They were also the days of Sen. Joseph McCarthy and impending doom from Soviet H-bombs.  And the 60s revolved around the Vietnam War.

So why do we remember those days so fondly?  I’m sure part of the reason is that we were kids and teens who didn’t worry about politics and the ills of the world.  In addition, there was a black and white honesty to those days when right and wrong seemed more clearly defined.  But I submit that one very big reason is that there was less disparity in income.  Around the small town where I grew up, it was more difficult to tell the “haves” from the “have-nots.” 

That was partly due to generational modesty – it just wasn’t polite to show-off. 

It also had a good deal to do with tax codes.  It might surprise you to learn that, during the Republican Eisenhower administration, the income tax rate for the top bracket was 91-92 percent.  In contrast, the tax rate for the bottom bracket was 22 percent.  By 1971, the top rate had dropped to 70 percent while the bottom rate dropped to 14 percent.  And today, the top rate is 35 percent while the bottom bracket is 10 percent.  

Given the fact that income taxes have dropped dramatically since 1951, you would think that most of us would be feeling pretty good about our taxes and government.  Unfortunately, there seems to be a growing anger as evidenced by the “tea-baggers” and “anti-health care reformists” who shout slogans and carry signs demanding their country back. 

Hmmm…I wonder how those people would feel about bringing back the tax structure of the “good old days?”

Those people seem to forget that many of the things we enjoy and take for granted were created by government and subsidized by taxes:  Education, Social Security, Medicare, Medicaid, V.A., the G.I. Bill, the interstate highway system and the national park system to name just a few. 

The truth is we have more than any of the generations before us.  In general, we keep a greater percentage of our earnings than before.  We have more time for recreation than ever before.  And in comparison to the days of McCarthyism and Jim Crow laws, there’s less government intrusion in our lives.  So why do conservatives think the 50s and early 60s were so wonderful?

My theory is that, we didn’t have people like Rush Limbaugh, Bill O’Reilly, Sean Hannity and Glen Beck ranting about how bad our government is and trying to pit one faction of our population against another.