Why We Must Raise Taxes on the Rich - Reich

Why We Must Raise Taxes on the Rich, ASAP!

America's wealthiest are paying a pittance in taxes, while the country is chipping away at its central foundations to meet budget shortfalls.

 It’s tax time. It’s also a time when right-wing Republicans are setting the agenda for massive spending cuts that will hurt most Americans.

Here’s the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich. Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma – even if we cut back on our bloated defense budget – it wouldn’t be nearly enough.

The vast majority of Americans can’t afford to pay more. Despite an economy that’s twice as large as it was thirty years ago, the bottom 90 percent are still stuck in the mud. If they’re employed they’re earning on average only about $280 more a year than thirty years ago, adjusted for inflation. That’s less than a 1 percent gain over more than a third of a century. (Families are doing somewhat better but that’s only because so many families now have to rely on two incomes.)

Yet even as their share of the nation’s total income has withered, the tax burden on the middle has grown. Today’s working and middle-class taxpayers are shelling out a bigger chunk of income in payroll taxes, sales taxes, and property taxes than thirty years ago.It’s just the opposite for super rich.

The top 1 percent’s share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent’s share has tripled. And they’re doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly-traded Wall Street banks and securities firms hit a record in 2010 — $135 billion. That’s up 5.7 percent from 2009.

Yet, remarkably, taxes on the top have plummeted. From the 1940s until 1980, the top tax income tax rate on the highest earners in America was at least 70 percent. In the 1950s, it was 91 percent. Now it’s 35 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II.

The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it’s 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They’re now taxed at 15 percent.

If the rich were taxed at the same rates they were half a century ago, they’d be paying in over $350 billion more this year alone, which translates into trillions over the next decade. That’s enough to accomplish everything the nation needs while also reducing future deficits.

If we also cut what we don’t need (corporate welfare and bloated defense), taxes could be reduced for everyone earning under $80,000, too. And with a single payer health-care system – Medicare for all – instead of a gaggle of for-profit providers, the nation could save billions more.

Yes, the rich will find ways to avoid paying more taxes courtesy of clever accountants and tax attorneys. But this has always been the case regardless of where the tax rate is set. That’s why the government should aim high. (During the 1950s, when the top rate was 91 percent, the rich exploited loopholes and deductions that as a practical matter reduced the effective top rate 50 to 60 percent – still substantial by today’s standards.)

                 Read the entire piece at Robert Reich.com

Cut head start while giving tax subsidies to big oil ?

Robert Creamer 

Earth to Boehner... come in! When you look carefully at Republican Speaker John Boehner's spending proposal for the rest of 2011 you'd think these guys must have been hanging out on one of those newly-discovered exo-planets on the outer edger of our solar system.

The Republican proposal, HR1, actually proposes cuts in the Head Start program that would mean:

• 218,000 children from low income families will lose Head Start/Early Head Start services;
• 16,000 Head Start/Early Head Start classrooms will close;
• 55,000 Head Start/Early Head Start teachers and staff will lose their jobs;
• 150,000 low-income families and their children will lose assistance in paying for child care.

They say they need to make these cuts because we must "tighten our belts" to cut spending because "America is broke." But at the very same time they voted to cut Head Start, the Republicans voted tocontinue $4 billion worth of subsidies to Big Oil. That's right, they want to continue to hand over $4 billion of the taxpayers' money to companies like Exxon-Mobil, the most profitable company in human history.

These subsidies are suppose to provide an incentive for them to produce more oil -- as if the price of oil that closed yesterday at $105.02 per barrel does not do the trick.

In the last quarter of 2010, Exxon-Mobil's profits surged 53% to $9.25 billion on the strength of rising oil prices and increased demand for petroleum products. That means Exxon-Mobil is earning profit at a rate of about $37 billion per year.

How much is $37,000,000,000? It's what 740,000 average American families make for working all year long.

So while the Republicans have proposed to cut back on providing a critical educational boost for the future generation, they have voted to have a tag day for the most profitable company that has existed since the dawn of humanity. Now I'd call that seriously out of touch with the priorities of everyday Americans.

Of course that's not all. The Republicans in the House voted to cut Pell Grants, that help middle class kids go to college, by 25%.

They voted to kill a program that helps low-income families weatherize their homes and permanently reduce their energy bills. Guess we just have to tighten our belts!

They voted to cut funds for employment and training service for jobless workers -- so much for "jobs, jobs, jobs."

They voted to cut funding for clean, safe drinking water by more than half, to cut funding for the Centers for Disease Control and Prevention by 10% and to cut funds for the Food and Drug Administration by another 10%. All the while handing out billions to the oil companies.

And remember, they are giving handouts to the oil companies at the same time that oil and gas prices have been skyrocketing.

Increases in gas prices siphon money from the pocketbook of ordinary families. The New York Timesreports that some economists calculate that, "each $10 increase in the price of a barrel of oil knocks 0.2 to 0.3 percentage points off the growth rate of the economy." According to a report by Morgan Stanley investments earlier this month, "... a US$1 sustained increase in gasoline prices will act like a US$120-130 billion tax hike, equal to 1.1% of disposable income."

There are, however, two big differences in the "tax hike" caused by gas price increases and a real tax hike. First, most of the money comes from the pockets of ordinary middle class Americans. Second, it all goes into coffers of Big Oil companies instead of paying for things like education, public safety, roads, bridges, subways and health care. It goes instead into the pockets of these huge companies and their shareholders -- who are overwhelmingly the wealthiest people on the planet.

Then, of course, Exxon-Mobil has to be able to afford to pay its CEO, Lee R. Raymond, who last year made $25.7 million dollars. In case you're counting, Mr. Raymond earns 514 times the salary of the average $50,000 per year worker. He is paid $12,355 per hour (for a 40 hour work week). Which means he is paid as much as a minimum wage worker makes all year long in the first hour and half of his first day of the year.

Mr. Raymond made more money before he had a coffee break on January 3rd this year than many moms who get on a bus at 5 AM every day, take no vacations, and scrub floors for eight hours every day -- and repeat that drill for 260 work days all year long.

And with all of that, the Republicans think the taxpayers should reach into their jeans and hand over yet another subsidy from the federal treasury, while at the same time they are cutting slots in Head Start because, Boehner claims, "America is broke." I guess unless you happen to be an oil company -- or a Wall Street speculator.

Increasing oil prices not only benefit oil companies -- whose reserves of oil skyrocket in value with every increase in world oil prices. They also benefit Wall Street speculators who are the proximate cause of current world oil price inflation.

At the moment, the supply of oil is adequate to meet world demand. We are not experiencing an oil shortage. The price of oil has gone up because Wall Street speculators are betting the turmoil in many Arab counties will disrupt oil supplies and make oil scarcer in the future. It's their bets -- and their trading strategies -- that are making world prices rise, not short-term fluctuations in supply and demand.

The influence of speculators on oil prices could be limited if the Commodities Futures Trading Commission (CTFC) were to vote to impose position limits that restrict the ability of speculators to influence oil prices. The CTFC was mandated by Congress to set those limits by the first of this year, but have not yet done so. They have dragged their feet because Republican Commissioners and Republicans in Congress oppose tough position limits since they would also limit the amount of speculative profit that can be made by the base of the Republican Party: Wall Street.

The latest spike in oil prices shows us once again, that our dependence on oil is a grave danger to our economy and our national security. That uprisings half a world away can threaten our economic stability -- at the same time they enrich oil giants -- should send a clear signal. America has to free itself from our addiction to oil.

It also demonstrates the danger posed to our economy by failure to effectively regulate Wall Street speculation.

But the Republicans not only want to give subsidies to the oil companies, their spending plan would cut our investments in clean energy that would allow us to throw off the yoke of foreign oil. H.R. 1 slashes key Department of Energy (DOE) programs that promote clean energy by about $1.7 billion -- approximately a 23 percent decrease from current levels. What's more, they have included non-budget "riders" that gut the clean air act.

The Republicans are not only endangering our economic security. They are endangering our national security by guaranteeing we are held hostage by whoever happens to control the oil fields thousands of miles from our shores.

In fact, a good case can be made that the Republican Party should register with the Justice Department as an agent of a foreign power: international oil companies that operate across the world's borders, owe no allegiance to any country -- and are perfectly happy to compromise America's economic and national security so they can continue to make more and more money by siphoning dollars from the pockets of America's middle class.

Boehner's Republican Party is certainly out of touch with everyday Americans -- and its spending priorities endanger America's future.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

It was a hold up. Hostages were taken.

It was a hold up.  The rich held us all hostage.  In order to get the votes needed to extend unemployment benefits for the out of work and to keep the current tax rates for 95% of families, the Republican Party and 4 Democrats and Joe Lieberman blocked passage of reasonable bills for unemployment extensions and tax extensions.

The current deficit was caused by three major items, the Bush era tax cuts, the two wars,  and the economic crisis.

Finance capital- that is to say rich people- caused  the crisis, this recession and this unemployment. Now, they continue to insist on profiting from their heist.  They insist on tax breaks for millionaires.

End Tax Cuts for the rich !

by Tula Connell
A majority of the American public thinks Bush’s tax cuts should continue for families that make less than $250,000 a year but should rise to the previous level for those making more than that amount, according to a new CNN poll. Some 51 percent say the tax cuts, which expire at the end of this year, should end for the rich.

Wise. Because as Dave Dayen points out, George W. Bush’s tax cuts for the wealthiest Americans are thought to cost $830 billion over 10 years, adding massively to the nation’s budget deficit. Overall,

it’s generally considered that extending all the tax cuts would increase the deficit by $3.1 trillion dollars over the next 10 years.

Former Labor Secretary Robert Reich is among those calling for an end to Bush’s tax cut for the rich, noting it has been a “huge windfall for the wealthy. About 40 percent of its benefits went to the tiny sliver of Americans earning over $500,000.”

A final reason for allowing the Bush tax cut to expire for people at the top is the most basic of all. Although Wall Street’s excesses were the proximate cause of the Great Recession, its fundamental cause lay in the nation’s widening inequality. For many years, most of the gains of economic growth in America have been going to the top—leaving the nation’s vast middle class with a shrinking portion of total income. (In the 1970s, the top 1 percent received 8 to 9 percent of total income, but thereafter income concentrated so rapidly that by 2007 the top received 23.5 percent of the total.)

The only way most Americans could continue to buy most of what they produced was by borrowing. But now that the debt bubble has burst—as it inevitably would—the underlying problem has reemerged.

Extending the tax cuts for the rich would exacerbate the already massive income gap between the rich and the rest of us, and so, to end with Reich:

Why make it worse?

From the AFL-CIO blog.

Barack Obama on costs of health care

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California Budget Crisis: Business tax breaks

Business the big winner in California budget plan
Firms would get nearly $1 billion in breaks, while the average person would pay higher taxes five ways. Republicans say the plan would create jobs, but others dispute the claim.
By Evan Halper
February 14, 2009
Reporting from Sacramento -- The average Californian's taxes would shoot up five different ways in the state budget blueprint that lawmakers hope to vote on this weekend. But the bipartisan plan for wiping out the state's giant deficit isn't so bad for large corporations, many of which would receive a permanent windfall.

About $1 billion in corporate tax breaks -- directed mostly at multi-state and multinational companies -- is tucked into the proposal. Opponents say the breaks will do nothing to create jobs, and the Legislature has rejected such moves repeatedly in the past. But now, to secure enough Republican votes to pass a budget that would raise taxes on everyone else, the Legislature is poised to write them into law with no public hearings at a time when the state treasury is almost out of cash.


The tax breaks were inserted into the spending plan during private meetings between legislative leaders and Gov. Arnold Schwarzenegger. Less than 24 hours before today's scheduled vote, the proposals had not yet been printed in bills and made available to the public, but legislative leaders acknowledged them.

Most of the cost to the state -- or $690 million -- would come from changes in the way corporate taxes are computed, lowering the amount owed by many large companies. Smaller tax breaks are included for Hollywood production companies and small businesses that hire new employees.

"This is a pure giveaway for the vast majority of corporations that will benefit," said Lenny Goldberg, executive director of the California Tax Reform Assn., a union-backed nonprofit. "They will walk away with a great deal of money at everybody else's expense."
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