reform

5 Ways The Republican Tax-Reform Plan Hits Black Folks The Hardest

Published by Anonymous (not verified) on Wed, 06/12/2017 - 5:00am in

Tags 

Racism, reform, Taxes

Above Photo: House Speaker Paul Ryan (second from left) and U.S. House members gather after passing a tax reform bill Nov. 16, 2017, in Washington, D.C. (Getty Images) Google is blocking our site. Please use the social media sharing buttons (upper left) to share this on your social media and help us break through. Right now, at this very moment, the single biggest threat to the group of people already in a compromised position because of their race is the congressional Republicans’ tax-reform plan. Not the sound of the police. Not lead in your water and not a jail cell. The tax-reform plan that both Congress and the White House are pushing seems obscure. It’s that thing only geeky Washington, D.C., insiders pass crush notes over, so you glance away from the television screen because it sounds irrelevant. It’s so innocuous, you ask, “What’s a tax cut got to do with me?” especially when shit is already tight. So long as you get that refund check for a down payment on that next car, you could care less. As the latest YouGov poll (pdf) shows, you are among the vast majority of Americans who hate Congress, yet you’re probably in that 46 percent who don’t follow what congressional lawmakers do, including the nearly 70 percent of whom are black. But black folks should be paying the most attention because we’ll feel the most hurt as congressional Republicans, along with an oligarchic Trump White House, try to make the plan into law (House Republicans passed their version of the bill on Thursday). Not only is black America the least likely to see a tax cut, but it’s also the most likely to see future tax increases, shredded safety nets, and a flurry of fines and fees to make up the difference. If there ever was an issue to march against, it’s the ominous specter of a trickle-down tax-reform scam that’s about to decimate an already fragile black quality of life—not the imprisonment of a probation-violating rapper who’ll end up riffing an album off your tweets. Priorities, fam, priorities. As Congress attempts to ram its tax-reform plan through to presidential signature, here are the five big ways this will screw everyone, but black folks the most: 1. Starving the Beast so It Can’t Protect You Anymore It’s the resurgence of a decades-old hat trick by conservative Republicans to use fiscal policy as a weapon for diabolical political aim. The “beast” is the federal government. This term of snarky elegance appeared during the Reagan years as neocons mandated less government spending through a reduced federal budget, thereby setting up the last big tax overhaul in 1986. As economist William Cunningham of Creative Investment Research said during an episode of WURD’s Reality Check, “This has always been about limiting the federal government’s ability to protect the most marginalized communities. The fewer resources the federal government has, the less responsive it is to the needs of the vulnerable.” This is chilling for black folks considering the historic role of federal intervention on our behalf—even, ironically, when the feds sued Donald Trump himself back in 1973 for housing discrimination. A tax-code overhaul, which complements Trump’s budget cuts (by the way), completes the erosion of everything from Medicare to Pell Grants to regular federal enforcement of civil, voting and labor rights. Much of that has accelerated in less than a year under the new sheriff. Have a problem with hate crimes or a local plant spewing toxic fumes or racist management at your workplace or the school district underfunding your kids’ school because it’s majority black and brown? Good luck with getting the feds to investigate or enforce rules because budgets will be slim. 2. Making Us Pay for Wealthy White People’s Tax Cuts Straight, no chaser: This tax-code overhaul is a sophisticated, modern plantation play. But instead of working the fields, society will permit you to sharecrop your way to the appearance of middle-class normalcy through smartphones and selfie-induced materialism while the increase on your taxes pays for the boss’s tax cut. As the Center on Budget and Policy Priorities points out, “Households with annual incomes over $1 million would see their after-tax incomes increase by 3.2 percent, 16 times the percentage increase for any income group in the bottom half of the income distribution” by 2027. Those with incomes between $20,000 and $40,000 would see an actual 2 percent tax increase by 2023, and “filers with incomes between $20,000 and $30,000” would see increases in 2027. Why does that matter to black folks? Our median income in 2016, according to the U.S. census, was $39,490—a drop of 4 percent since 2000 while whites, Latinos and Asians saw modest income gains. 3. The Confederacy Strikes Back: Red States Get Paid, Blue States Get Mugged The funny thing about this tax-reform bill is that it’s clearly a bloodless Confederate coup with less-populated red conservative Republican states (formerly in the Confederacy) engaging in a clever 150-years-later payback by drying up blue liberal Democratic states (formerly in the Union). Political scientists Jacob Hacker and Paul Pierson put this on blast in their recent New York Times piece, arguing it’s a “Republican two-step: redistribute upward, then sideways.” The last time this happened, the authors note, was after the Civil War, when Northern Republicans (anti-slavery at the time) imposed punishing tariffs on Southern Democratic states to pay for Union veteran pensions. Today Republicans—most of whom are from those formerly Confederate, now red states—run the union, which is why it pays to know the history. And the congressional Republicans in charge are proposing the elimination of popular state and local tax deductions, a $1.3 trillion cost over 10 years that hurts blue states while the benefits get transferred to the red states. It’s comical because red states already get the most federal dollars, since they’re the poorest—and play-it-safe President Barack Obama made sure the Affordable Care Act took care of red Republican states, even while Republicans spit in his face the whole time. But that’s just because red states would rather keep their poor and black population largely...

Current Taxes And Tax Reform Undermine Social Security & Medicare

Published by Anonymous (not verified) on Fri, 27/10/2017 - 2:00am in

Above Photo: (Photo: 401(K) 2012/Flickr) If You Want to Collect Social Security, Trump’s Tax Plan Is an Outrage You probably pay about four times more of your income to Social Security than millionaires, who want to cut their taxes and your benefits. How much did your paychecks total last year? You know the answer, of course. So does the Social Security Administration. The totals for every American’s paycheck income are sitting in Social Security’s computers. Once every year, Social Security does a serious data dump out of those computers to let us know just how much working Americans are actually making. The latest totals — covering 2016 — have just appeared. Most of us, the new numbers show, are simply not making all that much. In fact, nearly half of our nation’s employed — 49.3 percent — earned less than $30,000 in 2016. A good many of these Americans lived in poverty. In 2016, families of four that earned less than $24,339 ranked as officially poor. We don’t have an “official” figure for middle class status. But the Economic Policy Institute has calculated the costs of maintaining a no-frills middle class existence in various parts of the United States. In Houston, one of our nation’s cheaper major cities, a family of four needed $62,544 in 2016 to live a bare-bones middle class lifestyle. Nationally, according to the new Social Security payroll income numbers, over three-quarters of working Americans — 76.4 percent — took home less than $60,000 in 2016. Some Americans, on the other hand, took home a great deal more. The Social Security Administration counts 133,119 Americans who pocketed over $1 million in paycheck income last year. Now which of these two groups — the millionaires or the under-$60,000 crowd — do you think paid a greater share of its income in Social Security taxes? The millionaires could certainly afford to pay the bigger share. But they didn’t. Individuals who took home $1 million in 2016 had $16,265 deducted from their paychecks for Social Security and Medicare. Those deductions totaled a meager 1.6 percent of their paycheck income. Working Americans making $60,000 last year, by contrast, had 7.65 percent of their take-home deducted for Social Security and Medicare. In other words, Americans making $60,000 paid over four times more of their income for Social Security and Medicare than Americans who made $1 million. How could that be? Our tax code currently has a ceiling on earnings subject to the Social Security tax. That ceiling this year rests at $127,200. All paycheck income up to that level faces a 6.2 percent tax for Social Security and a 1.45 percent tax for Medicare. Income above that ceiling faces no Social Security tax at all. Until the Obama years, income above the earnings ceiling faced no payroll tax for Medicare either. But President Obama succeeded in getting that changed. Individual income over $200,000 now faces an additional 0.9 percent Medicare tax. If all income over $200,000 faced a Social Security tax as well, we’d have enough new revenue to significantly improve Social Security benefits. The Trump administration is moving in the opposite direction. Earlier this year, the White House tried and failed to get the Obama Medicare tax on the rich repealed. Now the administration is pushing a tax “reform” that totally ignores the unfairness of the current Social Security payroll tax and instead hands America’s wealthiest a stunningly generous assortment of tax giveaways. If this Trump tax plan passes, Americans making $60,000 will still be paying over four times more of their income in payroll taxes than Americans who make $1 million. And America’s millionaire-packed top 1 percent will get 80 percent of the new Trump tax cuts, the Tax Policy Center calculates. The Trump tax plan, in other words, makes the U.S. tax code even more millionaire-friendly than the current code. The White House calls that “reform.” The rest of us ought to call it an outrage.

Economics in Wonderland

Published by Anonymous (not verified) on Thu, 31/08/2017 - 10:00pm in

polyp_cartoon_Jobs_Profits

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be master—that’s all.”

Alice in Wonderland (pdf) is the key to understanding much of what is happening in the world today—especially the language of economics.

For example, we’re going to hear and read a great deal about tax reform in the days and weeks ahead. But, based on the proposals I’ve seen, nothing in the way of tax reform is being proposed.

The usual meaning of reform is that it involves changes for the better. Most of the so-called reforms that are being proposed by the Trump administration—including the vague speech by Donald Trump yesterday—are just cuts in the tax rates that will directly benefit wealthy individuals and large corporations.

fredgraph

Supposedly, the rest of us will eventually benefit because of increased investment. However, as is clear from the chart above, both corporate profits and private domestic investment are doing just fine without a cut in tax rates. But the benefits to the rest of us simply haven’t appeared.

Moreover, as I have explained before, U.S. corporations are not losing out in the competitive battle with foreign corporations because they face tax rates that are much too high.

And, no, as I have also explained, repatriating corporate profits will not lead to more investment, government revenues, and jobs.

In fact, as Patrician Cohen makes clear, the whole idea of repatriating profits held abroad makes no sense.

That’s because repatriation is not really about geography. Most of the money is not stashed in some underground vault overseas, but already in American financial institutions and capital markets. Repatriation is in effect a legal category that requires a company to book the money in the United States — and pay taxes on it — before it can be distributed to shareholders or invested domestically.

The whole notion of earnings trapped offshore is misleading, Steven M. Rosenthal, a tax lawyer and senior fellow at the Urban-Brookings Tax Policy Center. “The earnings are not ‘trapped,’” he said. “They’re not offshore. They’re not even earnings. They’re accounting gimmicks that allow earnings to be shifted abroad.”

What’s more, companies already get something akin to tax-free repatriation by borrowing against those funds, with the added bonus of being able to deduct the interest paid on those loans from their tax bill.

What if corporations are induced to book their overseas profits in the United States? We probably won’t see much if any increase in private investment, since corporations aren’t facing any kind constraint in profits or their ability to borrow beyond their current profits. What is much more likely is some combination of more mergers and acquisitions, more stock buybacks, more payouts to shareholders, and more compensation distributed to CEOS.*

And that’s going to lead to even more inequality in the United States.

Alice surely would have seen through the meanings of all these misleading words concerning tax reform.

 

*AT&T is a good example of a company that already passes a low effective tax rate by exploiting tax breaks and loopholes. However, according to Sarah Anderson,

Despite the enormous savings AT&T has realized, the company has been downsizing. Although it hires thousands of people a year, the company, by our analysis at the Institute for Policy Studies, reduced its total work force by nearly 80,000 jobs between 2008 and 2016, accounting for acquisitions and spinoffs each involving more than 2,000 workers.

The company has also spent $34 billion repurchasing its own stock since 2008, according to our institute report, a maneuver that artificially inflates the value of a company’s shares. This is money that could have gone toward research and development or hiring.

Companies buy back their stock for various reasons — to take advantage of undervaluation, to reward stockholders by increasing the value of their shares or to make the company look more attractive to investors. And there is another reason. Because most executive compensation these days is based on stock value, higher share prices can raise the compensation of chief executives and other top company officials.

Since 2008, [AT&T CEO Randall] Stephenson has cashed in $124 million in stock options and grants.

Many other large American corporations have also been playing the tax break and loophole game. Their huge tax savings have enriched executives but not created significant numbers of new jobs.

Boeing is another good example. As Justin Miller explains,

Boeing has received a tax refund in five of the past ten years. It saves itself $542 million a year using a special domestic manufacturing tax break, and $1.8 billion in further cuts thanks to a research and development tax credit. Boeing also benefits from the immensely favorable depreciation schedules on capital that has saved it billions of dollars over the past decade.

Boeing also entered into a $9 billion tax incentive deal with Washington state back in 2013—the largest corporate subsidy ever—to “maintain and grow its workforce within the state.” But, as Michael Hiltzik points out in the Los Angeles Times, the company has since cut nearly 13,000 jobs (about 15 percent of its Washington workforce) as it sets up shop in cheaper states that offer incentives of their own.

It still manages to enrich its shareholders though. On the same day that it announced a production slowdown in December, Hiltzik notes, Boeing also announced a 30 percent increase in its quarterly dividend and a new $14 billion share-buyback program.

Tagged: corporations, inequality, investment, profits, reform, tax cuts, tax reform, taxes, Trump, United States

The Rise of Solitary

Published by Anonymous (not verified) on Tue, 08/08/2017 - 11:00pm in

In the early 1990s Pelican Bay Prison was a cesspool of brutality. But in ending its worst years, did a judge civilize the cruel practice of solitary confinement?

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‘Skinny Repeal Bill’ — A Trojan Horse for Broader ACA Repeal and Deep Medicaid Cuts

Published by Anonymous (not verified) on Fri, 28/07/2017 - 1:59am in

This post originally appeared at the Center for Budget and Policy Priorities.

Senate Republican leaders have tried and failed this week to pass two measures to repeal the Affordable Care Act (ACA) — a modified version of their “repeal-and-replace” bill and a straight ACA repeal bill. Both measures, like all previous versions of ACA repeal that Congress has considered, would cause tens of millions of people to lose their health coverage and millions more to pay much more, get skimpier coverage or both.

Now, Senate Majority Leader Mitch McConnell is promoting a new version, referred to as a “skinny repeal” or a “least common denominator” bill. It reportedly would repeal the ACA’s individual and employer mandates, along with its medical device tax.

But no one should be fooled. As Senate Republican leaders have made clear, their goal in advancing the “skinny repeal” is simply to pass something that will advance health legislation to a conference with the House, which passed its own repeal-and-replace bill in May. That way, a House-Senate conference committee could produce a modified version of repeal-and-replace legislation for final votes in the House and Senate this fall.

GOP leaders would craft that version behind closed doors during Congress’ August recess and in early September. They would then present it to the House and Senate for final votes later in September, with limited debate and no amendments allowed — and with GOP leaders applying maximum pressure on Republican senators and House members to fall in line.

The “skinny repeal” bill is a Trojan horse designed to resuscitate the effort to repeal large parts of the ACA and impose big Medicaid cuts that would jeopardize coverage for millions of the nation’s neediest people.

In short, the “skinny repeal” bill is a Trojan horse designed to resuscitate the effort to repeal large parts of the ACA and impose big Medicaid cuts that would jeopardize coverage for millions of the nation’s neediest people. Indeed, when asked today whether Medicaid cuts would be in the “skinny repeal” bill, Senate Majority Whip John Cornyn replied, “No, I think people understand we’ll address the Medicaid issue when we conference with the House.”

Sen. John McCain called yesterday for a return to “regular order,” with hearings and a bipartisan process on health reform. But a vote for Sen. McConnell’s “skinny repeal” bill is a vote to quash such a process — indeed, to move further away from it. Under the course that Sen. McConnell wants the Senate to embark on now, the most consequential piece of domestic legislation in years — with a strong potential to hurt tens of millions of people and destabilize the nation’s health insurance markets — would almost certainly be written in secret by Republican leaders and sprung on rank-and-file members in September. GOP leaders would then undoubtedly tell Republican senators and House members that if they had the temerity to vote no, they should expect to be pummeled for months (or years) for enshrining Obamacare as a permanent piece of law — and to expect to face well-funded primary challengers.

By contrast, if the Senate rejects the “skinny repeal” gambit this week, the bipartisan process that McCain and various governors and members of Congress of both parties are advocating could finally commence.

 
“Skinny Repeal” Considered

To be sure, a “skinny repeal” itself would be a very damaging piece of legislation if enacted. Based on prior Congressional Budget Office analyses, repealing the individual and employer mandates would likely trigger an extensive disruption of insurance markets, add millions to the ranks of the uninsured and cause premiums to rise sharply. But that’s not where Republican congressional leaders want the process to end up.

Under the strategy that Senate leaders are clearly pursuing, House and Senate leaders would officially appoint a conference committee, but the full conference committee — including its Democratic members — would virtually never meet.

Instead, under the strategy that Senate leaders are clearly pursuing, House and Senate leaders would officially appoint a conference committee, but the full conference committee — including its Democratic members — would virtually never meet. Instead, House and Senate GOP leaders (and those they would hand-pick) would meet in secret to craft a new repeal-and-replace bill, without hearings and without making the drafts of their legislation available for public scrutiny and review by health care experts. And in doing so, they almost certainly would use the House’s harsh bill as their starting point. As Sen. Cornyn said this morning, “We [would] use the template of the House bill that addresses all of these issues and come up with the best of the ideas we’ve developed…”

The bill that emerges from this process almost certainly would include the major structural features that every version of repeal-and-replace bills in the House and Senate to date has included: effectively ending the ACA’s Medicaid expansion, which has extended coverage to 11 million low-income adults; imposing a “per-capita” cap that would fundamentally alter Medicaid’s financing structure and fuel hundreds of billions of dollars in Medicaid cuts and cost shifts to the states, with the cuts growing deeper with each passing year and ultimately jeopardizing coverage for many seniors, people with disabilities and children; making stiff cuts in financial assistance to help consumers with modest incomes buy coverage and meet deductibles and copayments in the individual insurance market; and weakening important consumer protections, such as protections for older Americans and those with pre-existing conditions. Because every repeal-and-replace bill has included these features, they won’t suddenly vanish in the closed-door GOP bill-drafting sessions that will ensue if the Senate approves “skinny repeal” this week.

Finally, the process of writing a repeal-and-replace bill in secret and unveiling it in September for a final up-or-down vote would give Republican leaders added leverage to muscle the legislation through Congress. Yesterday’s Senate vote on the “motion to proceed” (allowing the Senate to begin debate on health care legislation) showed how leaders can apply pressure on both moderate and conservative dissenters to vote for measures they might otherwise oppose.  And the conference process that Senator McConnell now would use would only strengthen his hand. A conference report on a reconciliation bill (which the final health legislation would constitute) receives only ten hours of debate and — most important — is not open for amendment. House members and senators would have only two choices: vote yes or vote no. The threats that leaders and outside groups would level at Republicans who were considering voting no would almost certainly exceed anything we have seen to date.

Thus, everyone should see the “skinny repeal” proposal for what it is. It’s not a serious policy proposal, but a clever device to move to the next step of the ongoing effort to undo the ACA — one that would give GOP leaders their maximum leverage. Senators who vote for the “skinny repeal” proposal would be creating the conditions for deep cuts that aren’t in the “skinny” bill itself but would emerge from the conference.

For senators concerned about the potential impacts on hundreds of thousands, if not millions, of their constituents with low or modest incomes or pre-existing conditions, the appropriate path now is not to support a maneuver to open the door for enacting legislation in September that would harm their constituents.  Instead, those concerned about the millions of Americans whose health coverage is at risk should bring this reconciliation process to a close — and, instead, pursue an open, bipartisan approach to strengthening the nation’s health care system.

The post ‘Skinny Repeal Bill’ — A Trojan Horse for Broader ACA Repeal and Deep Medicaid Cuts appeared first on BillMoyers.com.

Turning Outward for Community-Wide Change

Published by Anonymous (not verified) on Thu, 30/10/2014 - 10:46am in