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Presidential Race: Different Tax Policies Would Have HUGE Effects On Working People

Underneath all the headlines about emails and wandering hands, there are some very important policy differences between the two presidential candidates.  Let’s start with tax policies.

Donald trump 5 (Gage skidmore Flikr)Donald Trump:

  • His plan would give highest-income taxpayers – those with incomes of more than $3.7 million – an average tax cut of $1.1 million.
  • About 8 million large families and single parents would see their taxes increase under his proposals.
  • His tax plan would add about $7.2 trillion to the national debt over the next decade.
  • His plan would cut taxes for hedge fund operators and other money managers by more than a third — allowing them to use a special 15% “pass-through” tax rate.

hillary clinton (WisPolitics.com FLIKR)Hillary Clinton:

  • Her plan would reduce taxes for low- and moderate-income households by an average of $100.
  • High-income taxpayers would see an average tax hike of $118,000.
  • Her tax plan would increase federal revenue by $1.4 trillion over the next decade (which could be used to lower the federal debt, or to offset spending).

Donald Trump is old enough to remember what happens when the rich get tax cuts:

  • Ronald Reagan’s 1981 tax cut: “Despite the tax cuts, business investment remained weak… The ballooning budget deficit forced Mr. Reagan to give ground” and taxes were raised again in 1986. And the deficit kept growing, until George H.W. Bush broke his “no new taxes” pledge in 1990.
  • George W. Bush’s 2001 tax cut package was supposed to create enough new jobs to pay back the entire federal debt.  Instead, those tax cuts contributed to record-setting federal deficits.
  • Bush’s 2003 tax cut package didn’t fix the economy, either; and as the deficit kept rising, Federal Reserve Chairman Alan Greenspan suggested reducing Social Security to pay for the cuts.
  • By 2006, even the US Treasury was saying that tax cuts for the rich don’t do much of anything… other than cut taxes for the rich.

But here we are, just three weeks from the election, and the mainstream media is focused on leaked emails and wandering hands… and there’s almost no mention of the fact that Trump wants to give the highest-income taxpayers an average $1.1 million tax break

There’s almost no mention of the fact that his proposal would add $7.2 trillion to the national debt.

There’s almost no mention of the fact that these sorts of tax cuts never, ever generate the kind of job growth that they’re supposed to.  (Why?  Maybe because corporate decision-makers keep spending their extra money on Wall Street rather than hiring workers.  Just last year alone, corporations spent more than $5.5 trillion buying shares of stock in their own or other companies.  That same amount of money could have created more than 70 million median-wage jobs.)

Three weeks out from the election, and almost no-one in the mainstream media is looking at how Trump’s “greatest tax cut ever!” would actually affect our country.  So if you think your friends might be interested in this, please use social media to share it.

The Tax Policy Center analysis of the presidential candidates’ tax policies is available here.

“Party for the Planet” this Wednesday at Redhook Brewery!

Party_for_Planet_BenStampStampede.org founder Ben Cohen will “Party for the Planet” with the Green Alliance at Redhook Brewery in Portsmouth this Wednesday, April 22 from 6:00 pm to 9:00 pm.

The party follows an “Earth Day Clean Up” organized by the Green Alliance, which will be held earlier in the day.

The Green Alliance represents over 100 green-certified Business Partners and 4,000 community members, working to increase the profits of companies that have the least impact on the environment.

Redhook has been a green-certified Business Partner with the Green Alliance since 2011.

Ben Cohen, co-founder of Ben & Jerry’s Ice Cream, is the founder and “Head Stamper” of the Stamp Stampede.  The Stampede is a grassroots movement now including more than 30,000 Americans who are legally rubber-stamping anti-corruption messages onto US currency.  The stamped bills become “miniature billboards” supporting a Constitutional amendment to overturn Citizens United.  Each stamped dollar bill is seen by an estimated 875 people as it circulates through the local economy.

More than 60 small businesses in the Granite State have joined the Stamp Stampede by hosting “Stamping Stations” where their customers can legally stamp anti-corruption messages on their money and learn more about the issue of #MoneyInPolitics.  Almost 1,000 people in New Hampshire have their own stamps to beautify their bucks with messages like “Not to Be Used for Bribing Politicians.”  The Stamp Stampede plans to stamp 10% of the currency circulating in New Hampshire, to bring attention to the problem and make it an issue in the presidential campaign.

“This is where the collaboration really becomes powerful,” says Green Alliance Director Sarah Brown. “A business like Redhook is ahead of the curve when it comes to sustainability and is thrilled to be hosting green business leaders, citizens and Ben Cohen. We want folks to connect the dots between responsible business practices and protecting the environment; all three of our organizations share these values.”

“In order to create a sustainable future, we need to put a stop to pay-to-play culture. Progressive green business leaders are part of that,” adds Cohen. “Too often, big oil and special interest groups use campaign contributions and lobbying muscle to block common-sense pro-sustainability legislation. I’m excited to work with the Green Alliance community to help stamp big money out of politics.”

US government policies on the environment, sustainability and energy are among the issues most affected by special interest spending.

  • Big Oil spent more than $141 million on lobbying last year, according to the Center for Responsive Politics.  The industry spent another $30 million in contributions to political campaigns.  A study of the top 20 oil and gas companies show that they not only get special tax breaks, but also the privilege of delaying or deferring $175 Billion in tax payments.
  • A study released earlier this year found that grassroots efforts to restore Clean Water Act protections have been hampered by political spending by some of the worst polluters.  “The same companies that are polluting our waterways with toxic chemicals are also polluting our politics with their spending,” said Ally Fields, clean water advocate at Environment America and author of the report.
  • Environmental groups including Greenpeace have joined the movement to demand corporate disclosure of political spending to stockholders. “Publicly traded corporations, including many in the fossil fuel industry, are getting away with hiding their political spending from shareholders and the public, polluting not only our climate, but our democracy. The public deserves to know how corporations are spending investor cash to influence elections,” according to Greenpeace Democracy Campaigner Rachel Rye Butler.
  • A 2013 study showed the “Climate change denial” movement is largely funded by “dark money” from undisclosed contributors.  Dark money groups have become a major force in elections, paying for almost half of the television ads aired in the 2014 Senate races.   New IRS regulations on dark money have been delayed, and now are not expected to be finalized until after the 2016 presidential campaign.
  • The Sunlight Foundation recently studied the 200 most politically active corporations in the country. According to the report, for every dollar spent influencing politics, the corporations received an average of $760 in tax breaks, contracts and other support from the government.

At the grassroots level, there is broad bipartisan support for overturning Citizens United and ending the influence of special interests. Four out of five New Hampshire Republicans think Congress is more interested in special interests than its constituents.  More than two-thirds of New Hampshire voters support a Constitutional amendment that would overturn Citizens United.

So far, 68 of the state’s cities and towns have passed measures calling for a Constitutional amendment to overturn Citizens United.

The New Hampshire Legislature is now considering two measures about Citizens United.  Last month, the House passed a bipartisan measure calling for a Constitutional Convention.  The Senate unanimously passed a bill calling for an amendment, and setting up a study committee to recommend which proposed amendment to support.  So far, 16 other states have called for a Constitutional amendment to overturn Citizens United and get special interest money out of politics.

Wednesday night’s “Party for the Planet” is open to the public and guests will enjoy live music and complimentary eats. The $5 entry donation and $2 from every beer purchased goes to the local environmental non-profit Hodgson Brook Association. There will also be free Ben & Jerry’s ice cream, compliments of Cohen.

The Party tops off a drop-in Earth Day clean-up, which runs from 4:00 pm to 6:00 pm.  Cleanup participants meet at Redhook to get their collection bags and location, and are urged to pick up as much trash as possible.  Clean-up participants get free raffle tickets for every bag of trash collected.  While Redhook and the Green Alliance encourage folks to participate in both the clean-up and the after-party, they are also separate events and visitors are welcome at either or both.

Redhook has an extensive facility-wide recycling and composting program, reuses water from the brewing process, and sends spent grains to local farmers. Early in 2015 they began purchasing wind energy credits and recently installed an electric car charging station, high-efficiency lights, motion sensors and EnergyStar appliances.

Tietjen Hynes is head of Redhook’s Sustainability Committee, and Operations Project Engineer and has coordinated a cleanup for Pease Tradeport, home to a growing number of environmentally-minded companies. Set up as a corporate participatory Earth Day activity, a number of companies on the Tradeport have already committed employees to the cleanup.

“Lots of Pease companies are participating; many of our neighbors are stepping to the plate. We also welcome individuals and have had some smaller green-minded businesses like Aucella commit to both the clean-up and the party,” says Hynes.

With the help of other Pease Tradeport businesses, Hynes organized the Earth Day cleanup to focus on the Tradeport grounds and nearby Hodgson Brook.  “Hodgson Brook not only runs along the Redhook property, but also throughout the Tradeport and is listed as an impaired waterway,” said Hynes. “Land use and urbanization have degraded the freshwater stream, altered the natural makeup of the brook, and created serious pollution problems. We hope to improve the condition of the brook by reducing the amount of litter.”

Party for the Planet
Wednesday, April 22
6:00 pm to 9:00 pm
REDHOOK BREWERY PORTSMOUTH

1 Redhook Way
Pease International Tradeport
Portsmouth, NH 03801

————————

The Stamp Stampede is tens of thousands of Americans legally stamping messages on our nation’s currency to #GetMoneyOut of Politics. As more and more stamped money spreads, so will the movement to amend the Constitution and overturn Citizens United.

You can get your own stamp online at www.stampstampede.org. Or, if you’re a member of CWA, you can get a stamp from your LPAT coordinator. The average stamped bill is seen by 875 people – which makes stamping a highly-effective way to get the message out about how money in politics is corrupting our government.

It’s time to #GetMoneyOut of politics and take back our government.

At Manchester Small Business, Shaheen Highlights Her Record Of Putting New Hampshire Jobs First

Shaheen Continues ‘GOTV-New Hampshire Tour”, Contrasting Her Record With Scott Brown’s Pro-Outsourcing Agenda

Shaheen-021109-18432- 0009Manchester – Senator Jeanne Shaheen continued her “GOTV-New Hampshire Tour” this morning at Dyn in Manchester, where she discussed how her record of supporting New Hampshire small businesses stands in stark contrast to Scott Brown’s record supporting out-of-state corporate interests, including companies that outsource American jobs. The Senator also held a Q and A with Dyn employees.

“New Hampshire deserves a Senator who is going to stand up for our small businesses, not someone who fights for corporate interests at the expense of the middle class,” said Shaheen. “I’ve fought to close special tax loopholes for companies that outsource American jobs and instead led the fight to pass legislation that cut taxes for our small businesses because I know that’s how we ought to be supporting our economy here in New Hampshire.”

“Scott Brown’s record is clear. He championed billions in tax giveaways to Big Oil companies, special breaks for Wall Street banks, and even voted for tax breaks for companies that ship jobs overseas. That’s just further proof that he’s not for New Hampshire,” Shaheen added.

Jeanne Shaheen has been a champion for New Hampshire small businesses. She led the fight to pass the Small Business Jobs Act, which cut taxes for small businesses, increased businesses’ access to credit, and helped companies export their products overseas. That legislation has helped countless New Hampshire businesses grow and create jobs but as a Senator from Massachusetts, Scott Brown voted against it.

Meanwhile, Scott Brown supported special breaks for Big Oil, Wall Street and companies that offshore American jobs. Since losing in Massachusetts, Brown has made over a quarter million dollars as a board member of a company that touts outsourcing American jobs to China and Mexico as part of its business plan. Legal documents dated just two days before Brown entered the U.S. Senate race in New Hampshire bear Brown’s signature endorsing the company’s outsourcing strategy.

Nightmare on Wall Street? Are Stock Buybacks Creating Another ‘Financial Bubble?’

An American flag festooned with dollar bills and corporate logos flies in front of the Supreme Court during oral arguments in the case of McCutcheon v. Federal Election Commission.  Image by JayMallin.com

Image by JayMallin.com

Some blog posts are easy to forget. But the one I wrote last week is beginning to give me nightmares.

Here’s why: the stock market keeps hitting record highs. But the so-called “economic recovery” – which started in June 2009 – is just beginning to “trickle down” to us average Americans.

And oh, such a sloooooow trickle! “Although the economic recovery officially began in June 2009, the recovery in household income did not begin to emerge until after August 2011. …Median income in February 2014 [was only] 3.8 percent higher than in August 2011.”

And we’re not anywhere near “recovered” from the damage caused by the last two recessions. “The February 2014 median was [still] 6.2 percent lower than the median of $56,586 in January 2000.”

So in last week’s blog post, I took a look at the research UMass Professor Bill Lazonick and his team have done, about how top US corporations have been distributing their net income to shareholders rather than reinvesting money in their business (or workers).

What Professor Lazonick found: since 2004, the surveyed companies have returned 86% of net income to stockholders through dividends and stock buybacks. In 2013, those companies spent an average of $945 million just buying back their own stock. Repeat: $945 million is the average. That’s per company. In one year.

So I took a closer look at that, using a couple of companies as case studies. I keep hoping that I’m completely wrong. I’m not an economist, I’m not an expert. I’m just a blogger who looks at things from my own personal perspective.  And when I looked, here’s what I found:

FedEx:

  • CEO Fred Smith owns more than 15 million shares of FedEx (not counting shares held by his wife, his family holding company or his retirement plan.)
  • Last October, FedEx announced plans to buy back 32 million shares – more than 10% of its stock.
  • FedEx borrowed $2 billion to help pay for that stock repurchasing program. Those bonds run from 10 to 30 years.
  • In the past year, FedEx stock has gained over 44 percent. That translates into a huge increase in net worth for Mr. Smith… somewhere between a half-billion dollars (as of my post last week) and $600 million (the stock price kept going up). Yeah… FedEx borrowed $2 billion… and its CEO personally benefited by a half-billion-plus.
  • But maybe there’s a reason why FedEx stock soared by 44%? Let’s see… according to the International Business Times, its ground shipping business grew by 13% and it is trimming employee benefit costs by 13%; and so the overall corporate profits grew by 24%.
  • Corporate profits grew by 24%… but the stock price grew by 44% (benefiting “company executives who receive stock-based compensation”).
  • But of course there are fewer shares of stock now than there were last year, because of the buyback program. So I looked at the company’s “market cap” – or, the total value of all the outstanding shares. And that also grew: from $39.03 billion when the stock buyback was announced last October… to $50.35 billion as of Friday. So the market cap grew by $11.32 billion – or about 29% – during roughly the same time that profits grew by only 24%.
  • Let me recap: The company grew its business a bit, while at the same time cutting employee costs. It borrowed to buy back stock, enriching its CEO. And Wall Street rewarded this behavior. Stock value grew – at a much faster rate than the company’s profits were rising.

wall_streetThat difference between 24% growth in profits and 29% growth in market value? Isn’t that just a “Wall Street bonus” for taking part in this borrow-and-buyback scheme?  But why is Wall Street is rewarding FedEx for moving toward a “loot the company” model of business behavior?

It’s not just FedEx.

One analysis, from June 2014:

Since the end of 2012, using the DOW (NYSEARCA:DIA) companies as a large cap company market proxy, share buybacks in dollar volume have exceeded the actual level of after tax profits recorded by the 30 companies in the index. What this means is that somewhere in the DOW there must be more than a handful of companies, which are either borrowing money or deferring capital expenditures in a potentially harmful manner for the sole purpose of buying their shares back in the market to boost share price.

From last week’s Wall Street Journal:

Companies are buying their own shares at the briskest clip since the financial crisis, helping fuel a stock rally amid a broad trading slowdown.

Corporations bought back $338.3 billion of stock in the first half of the year, the most for any six-month period since 2007, according to research firm Birinyi Associates. Through August, 740 firms have authorized repurchase programs, the most since 2008.

No, it’s not just FedEx.

Cisco:

Back in February, Cisco announced an $8 billion bond issue “to help finance stock buybacks after the shares lost almost 6 percent over six months.”

  • Cisco CEO John Chambers owns about 2 million shares of Cisco stock.
  • Cisco stock was trading at $22.12 when that bond issue/buyback was announced. Now, it’s trading at $25.20. Do the math: that’s about a 14% increase in per-share price; and more than a $6 million increase in Mr. Chambers’ net worth.
  • Cisco’s market cap was $113.95 billion when the bond issue/buyback was announced.   Now, it’s $128.7 billion. Do the math: that’s about a 13% increase in Wall Street’s assessment of the company’s total value.
  • But what’s going on with the actual company?   Last month, Cisco released an earnings statement “that illustrated its troubles as one of the tech industry’s giants competing in a rapidly changing environment.”  Profits are down, compared to last year. And it is planning to eliminate 6,000 jobs.
  • Let me recap: Profits are down, layoffs are pending. But the company borrowed $billions to buy back stock, enriching its CEO and other executives.   And Wall Street rewarded this behavior.

Want to know what worries me most about Cisco? It looks like Cisco’s CEO is selling his stock. According to the filings, he owns a lot less Cisco stock now than he did when the bond issue/buyback was announced. Doesn’t he have any faith in his corporation’s long-term prospects?

It’s not just Cisco.

Bloomberg News:

American companies have seldom spent more money than they are now buying back shares. The same can’t be said for their executives. … While companies are pouring money into their own stock because they have nothing better to do with it, officers and directors aren’t… Insiders buying stock have dropped 8 percent from a year ago, poised for the fewest in more than a decade.

wall street bullAnd even worse? That perspective that companies “have nothing better to do” with their money than buy back stock.

As of a couple of weeks ago:

In total, US companies have announced USD309bn worth of share repurchases year-to-date, up from USD259bn for the same period a year ago, according to Thomson Reuters data.

Do the math. Nine months of stock buybacks equals about 6 million median-wage American jobs.

Let me rephrase that.

The money that US corporations are spending buying back their own stock “because they have nothing better to do with it” could give a $52,000-a-year job to two-thirds of unemployed Americans.  

Or: a job paying more than twice minimum wage to all unemployed Americans.

Instead… Cisco’s cutting 6,000 jobs. FedEx is cutting employee benefits. And who knows what all the other companies in Professor Lazonick’s survey are doing?

Here’s the thing: buying back stock doesn’t add any intrinsic value to a company. It’s not a new product line, it’s not a new factory, it’s not any kind of investment in the company’s future. All it does is concentrate the stock ownership. Same everything else – just fewer shares of stock. (Sort of like ultra-concentrated dish soap… same basic thing, just in a smaller bottle.)

So, aren’t these rising market caps at least somewhat artificial? Why should a company be worth more, just because it has fewer shares of stock?

Cisco may have declining profits… but its market cap is growing. FedEx may be growing, but its market cap is growing faster. Why?

Here’s the other thing: To accomplish this concentration of stock ownership… corporations are bonding untold billions of dollars. (Yes, that’s another thing I couldn’t find tracked anywhere.)

So yeah, they’re borrowing against the future… to improve stock prices today.

soap bubbleAnd Wall Street is encouraging this.

There’s a technical term for those sorts of artificial increases: they’re called “bubbles.”

And that’s why I’m starting to have nightmares.

I’m wondering when this latest Wall Street bubble is going to burst.

Why the Economy Doesn’t Work for the 99%: Massive Payouts to Corporate Stockholders

We Are the 99 Percent photo by Gawain Jones via Flikr Creative Commons license

Photo by Gawain Jones via Flikr Creative Commons License

Wondering what happened to America’s Middle Class? UMass Lowell professor William Lazonick has some numbers for you.

  • Since 2004, top US corporations have paid 86% of their net income to stockholders through dividends and stock buybacks.

Why that’s important: Money paid out to stockholders is not available for long-term growth investments such as R&D, opening new facilities, updating equipment or hiring new employees. It’s also not being used to give raises to current employees. But I’m digressing. Back to Professor Lazonick:

  • And 86% is just the average return to stockholders. Professor Lazonick names 15 corporations that spent more than their net income on dividends and stock buybacks, including: Time Warner (280%); DirecTV (192%); Hewlett-Packard (168%); Pfizer (137%) and Home Depot (134%).

Wonder how corporations can pay more out to stockholders than they receive in net income? Here’s one possible answer: they can borrow the money. From May 20, 2014 Time Warner Inc. Prices $2.0 Billion Debt Offering: “The net proceeds from the issuance of the notes and debentures will be used for general corporate purposes, including share repurchases.” (Remind you of…say, What Mitt Romney Taught Us About America’s Economy?)

But I’m digressing again. Back to Professor Lazonick, again:

  • The top corporations kept paying dividends through the recent recession, with a barely-noticeable drop between 2008 and 2010. “[T]hrough boom and bust, dividends were stable, and on the rise from 2010. In 2004 mean dividends were $349 million; in 2013 double that amount at $685 million.”

Repeating that: an average of $685 million in dividends per company. Paid out to stockholders, not reinvested in the business. Just in 2013.

Wondering what effect that has on America’s economy? Here’s one example, using a company that paid out much less than $685 million in dividends:

http://2bgr8stock.deviantart.com/art/Money-Cash6-117258936 By 2bgr8STOCKLast year, we estimated what FedEx CEO Fred Smith received – personally – in dividend income: “According to SEC filings, he owns about 15 million shares of the company.  Last year, FedEx paid out a total of 55 cents per share in dividends.  Do the math… and it looks like Mr. Smith received about $8.5 million in dividends (not counting dividends to his family holding company, his wife, or his retirement fund).” Also last year, we estimated what that meant in the larger scheme of things: “his 15 million shares in the company represent only a fraction of the outstanding stock. For Mr. Smith to receive $8.5 million in dividends, personally, the company has to pay out well over $100 million in total dividends – money that could have been invested in new hires, or new planes, or new facilities (or improved employee benefits).”

Now, compare that $8.5 million that we calculated he received as dividends with his $13.7 million “compensation package” that was reported about the same time.

Hey, maybe we did the math wrong. Maybe Mr. Smith didn’t actually get two-thirds again as much in dividends as he got in official “compensation.” It’s really, really hard to track dividend payments to corporate CEOs – that information is not reported anywhere that we have been able to find.

But doesn’t it seem possible that Mr. Smith’s decisions about how FedEx treats its workers… could perhaps be influenced by the fact that he gets a substantial share of the dividends paid out to stockholders? Read FedEx And The Real Reason Why There’s No Jobs: Cut Back On Worker Hours And Raise Profits. Also remember that a federal appeals court just ruled that FedEx improperly classified 2,300 California drivers as “independent contractors” rather than “employees”… to the tune of “hundreds of millions of dollars.”

BTW, it’s not just difficult to track dividend payments to CEOs… it’s also hard to track the effect of stock repurchasing programs on CEOs.

Going back to Mr. Smith… Late last year, FedEx announced plans to buy back up to 32 million shares – or, about 10% of outstanding stock. Since then, the market price of its stock has risen by about $35 a share. Multiply $35 per share by the roughly 15 million shares Mr. Smith owns… and you’re talking some serious numbers.

Not to repeat myself (again), but: that type of information isn’t tracked anywhere. At least, not anywhere we could find.

Going back to Professor Lazonick:

  • The corporations in his survey spent 51% of net income on stock buybacks.

Yep, must be lookin’ real rosy up there in the corporate offices. Extrapolating from our FedEx example, can you imagine how much all those different stock buybacks have enriched America’s CEOs?

EGTRRA signingAnd as near as I can tell, it’s going to keep lookin’ rosy in corporate offices as long as our federal tax system encourages this sort of thing. Ever since the Bush tax cuts, investment income has been taxed at a much lower rate than wage income. Are we really surprised that CEOs are taking more compensation in stock options and awards, rather than traditional wages?

 – – – – – – – – – – – –

Meanwhile, yesterday’s New York Times hosted a “Room for Debate” on the policy implications of Professor Lazonick’s research.

Want to know how deeply ingrained the “No New Taxes” ceiling has become, in our public discourse?

Not a single policy expert quoted in that “debate” even suggested that America should return to taxing investment income at the same rate as wages.

 – – – – – – – – – – – –

#dejavu

My “Why the Economy Doesn’t Work for the 99%” post from last year is available here.

Study in Contrasts: Who’s feeding the hungry?

Community Center of St Bernard Photo by Billy Brown via FlikrIn May, postal workers collected 74.4 million pounds of food through the “Stamp Out Hunger” food drive.  Since it started 21 years ago, this project of the National Association of Letter Carriers has collected more than a billion pounds of non-perishables to restock food banks, pantries and shelters around the country.

Right now, federal employees around the country are collecting food as part of their annual “Feds Feed Familes” campaign.  The program “started when Rep. Frank Wolf (R-Va.) and former Office of Personnel Management Director John Berry realized that food donations were dropping during the summer months.” It has run each summer since 2009, restocking food pantries across the US.  Last year was a record year for donations — but so far, they are on track to double last year’s total.

Meanwhile, in Congress…

Before leaving for their August recess, House GOP leaders floated a plan to cut at least four million Americans from the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).  Here in New Hampshire, nearly 116,000 people depend on SNAP benefits to eat.

But they’re still feeding the hungriest beast of all.  Corporations are receiving just as much in special tax breaks as they are paying in taxes.

At last report, corporate tax breaks were running at about $181 billion a year45 times what the GOP plans to cut from food stamps.

But unlike millions of children, corporations aren’t exactly starving here in the United States.  And corporations aren’t getting any of their special benefits cut, to help with the federal deficit.

(Guess Mitt was wrong with his “corporations are people, too” declaration. Can’t help thinking: if corporations were “people”, surely the House GOP would have gone after them by now.)

——-

Special thanks to all our postal workers and federal employees… who are not only feeding hungry Americans, but are also keeping Congress from hitting the debt limit (again, just like back in January).  Yes, “fed-bashing has risen to unprecedented levels in recent years.”  But here at NH Labor News, we truly appreciate you!

Why the economy doesn’t work for the 99%

Today’s New York Times has a really good picture of what’s happened to America’s economy over the past 50 years.

Please take a few minutes to look at it, and pay particular attention to what’s happened since the Bush tax cuts started going into effect in 2001.

  • Corporate profits are at their highest level ever.  After-tax corporate profits were 5% when the Bush tax cuts started taking effect — now they’re at 9.7%.
  • Wages are at their lowest level level ever.  When the Bush tax cuts started taking effect, 46.7% of the gross domestic product was paid to workers as wages — now it’s 42.6%.
  • Corporate taxes are at almost-record lows.  Corporations paid 30% of their profits as taxes, when the Bush tax cuts started taking effect — now they pay 21.6%.
  • Personal taxes have also dropped.  Taking all taxpayers together (the 1% as well as the rest of us), individuals paid 17.8% of their incomes as taxes when the Bush tax cuts started taking effect — now, it’s 14.1%.

Remember, the Bush tax cuts were supposed to be temporary.  They were supposed to “stimulate the economy” and then expire in 2011.

Instead, the Republicans in Congress have used one fiscal crisis after another to keep most of those tax cuts in place.

Top Tax Rates 1952-2008And now they’re talking as if those Bush-era tax rates are a ceiling, not a floor.  (Read “Corporate Tax Cuts are almost twice the Sequester cuts” here.  Read about the $161 billion annual cost of the dividend and capital gains tax cuts here.)

Republicans in Congress keep agitating about the federal debt — but they’re not willing to raise revenues by returning to historical tax levels.  No, the GOP keeps insisting that the only way to address the debt is by cutting “entitlements”.

Let’s use real words, here, so everyone knows what the choice comes down to.  Translated from GOP-speak, “entitlements” are Social Security, Medicare and Medicaid.  (Remember, you have paid into the Social Security and Medicare trust funds with every paycheck, for as long as you’ve been working.)

So here’s the choice:

  1. Congress can continue to let the federal debt grow.
  2. Congress can return taxes to historical levels.
  3. Congress can cut Social Security, Medicare and Medicaid.

Congress is going to be making this choice over the next two and a half months.  The current federal budget expires on September 30th — about the same time that the federal government will hit the debt limit (again).

Go back and look at those New York Times “what happened to the economy” charts again.

Don’t you think it’s time to finally end the Bush tax cuts?

 

If Congressman Ryan Could Save $161 Billion A Year, Would He? The Answer May Shock You

DSC_9969Tax Credits or Spending? Labels, but in Congress, Fighting Words

The New York Times has a story about Washington lobbyists’ effectiveness in convincing Congress to pass tax breaks that benefit the wealthy.

Just one of those tax breaks – capital gains and dividends – costs an estimated $161 billion a year.  That would pay not just for the Sequester cuts, but also for all the additional cuts that House Budget Committee Chairman Paul Ryan wants to make in next year’s federal budget.

No surprise, the top 1% get 75% of the benefit of that particular tax break.  (The bottom 60% of taxpayers get only 1% of the benefit.)

Another way to look at it?  The amount the 1% gets from the unearned income tax break – just in a single year – would pay for 10 years of Paul Ryan’s cuts to Medicare.

Read the story here.  Dig into the graphic here.

If you haven’t already, read Sunday’s post about corporate tax breaks.

Wondering why you should take the time to learn about this?  The next few budget battles are going to come down to questions of revenue versus cuts, and corporate welfare versus Social Security and Medicare.  Basically, it’s going to be a question of whose interests our government will serve:  the people who can afford to hire lobbyists? Or the very tired and distracted middle class?

The House GOP is still marching to the same drummer they have been following since 2001.  Nothing much is going to change in Washington, unless we the people work to change it.

Who’s counting? Corporate tax breaks are almost twice the Sequester cuts

US CapitolTax lobbyists help businesses reap windfalls: While Congress fights over ways to cut spending and the deficit, generous breaks for corporations pass with little notice

Today’s Boston Globe looks at the $154 billion a year that Congress has approved in special corporate tax breaks.

(Paying attention here? Those corporate tax breaks are worth almost TWICE as much as the infamous “Sequester” budget cuts.)

The Globe also begins to quantify the “return on investment” for corporate lobbying expenses. For instance,

  • Multinational corporations with overseas investments spent about $134.5 million lobbying on various issues. What did they get for their money? An estimated $11.2 billion, just in one tax break (special treatment of certain foreign investment income).
    Approximate return on investment: 8,200%

Here’s how one observer described it: “What we’re doing is running a Soviet-style, five-year industrial plan for those industries that are clever enough in their lobbying to ask all of us to subsidize their business profits.’’

It’s a long read, but worth taking the time. Read the story here. Dig into the graphic here.

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