Statement by AFL-CIO President Richard Trumka on Baucus Corporate Tax Proposal
We believe corporate tax reform must do three things: (1) eliminate the tax incentive to shift profits and send jobs to other countries; (2) increase employment and investment in domestic manufacturing; and (3) raise significant amounts of tax revenue over the long term.
Eliminating the tax incentive to send jobs overseas would accomplish all three of these objectives, generating $583 billion over 10 years and much more in the long term. This is the standard against which any proposal for corporate tax reform should be held.
The discussion draft released today by Sen. Baucus falls short of this standard. While it does close some of the most egregious tax loopholes that lead companies to shift profits and send jobs overseas, it still leaves too many of those incentives intact.
Moreover, while the Baucus proposal generates tax revenue temporarily with a one-time-only tax (at a reduced rate) on the earnings that U.S. companies are holding outside the country, it does not generate any tax revenue over the long term. Instead, it uses the tax revenue generated from closing loopholes to lower the corporate tax rate, an approach that was supported by only 9% of respondents in a recent poll.
Unless corporate tax reform generates significant amounts of tax revenue over the long term, working people will have to pay the price, one way or another.
Like many of my neighbors, I was relieved when the government shutdown ended. Yet unless Republicans in Congress stop throwing temper tantrums to get what they want, these fights will not be going away. They aren’t cheap: This 15-day shutdown cost our government $24 billion, and that doesn’t include the cost to New Hampshire’s economy. Navy yard contractors and Portsmouth businesses took a huge hit.
It is ridiculous that Sen. Kelly Ayotte harps on the value of fiscal responsibility but does nothing to reign in Tea Party excesses. Her Tea Party leaders nearly destroyed America’s credit rating while wasting billions of dollars. When she was sworn into office she promised to represent the interests of New Hampshire families, yet under her watch her own party has enacted policies that have cost New Hampshire families jobs and income. She has done nothing to stop them. She is, in fact, doing the opposite by putting forward so-called solutions that will perpetuate the Tea Party’s job killing agenda.
Ayotte’s priorities are backward. New Hampshire’s families should come before her Washington buddies.
Manchester – Last night at the Mayor’s Youth Advisory Council debate at City Hall, Alderman Patrick Arnold scored a decisive victory in his race for mayor.
Major Gatsas gaffes include the following points:
· Mayor Gatsas failed to recall that Alderman Arnold had voted against budgets in the last four years. Alderman Arnold, in fact, voted against the most recent city budget because it raised taxes while at the same time cutting services.
· Mayor Gatsas exclaimed, “the budget process couldn’t be more transparent,” while demonstrating confusion himself about Alderman Arnold’s votes.
· Mayor Gatsas defended the mayor’s office getting pay raises while at the same time cutting other departments and budgets.
· Mayor Gatsas repeated several times that there have been no cuts to the school district under his watch, despite the fact that over 160 educators have been laid off leading to increased class sizes.
· Mayor Gatsas blamed Alderman Arnold for failing to provide a budget proposal, when in fact it is the mayor’s duty and responsibility to provide a vision and a long-term plan for the city.
· Mayor Gatsas continues to take sole credit for successes such as the Manchester School of Technology, which was a Board of School Committee decision, while at the same passing the buck on failed challenges, such as increases in violent crime and robberies and overcrowded classrooms in our schools. He wants to take credit for the city’s successes while overlooking his responsibility for the shortcomings.
· Mayor Gatsas praised the first day of school this year as the best first day in a long time, ignoring the fact that teachers were shuffled around within the first month – weeks after the school year had begun.
Voters are encouraged to watch the debate in its entirety on Manchester Public Television.
Today, Congresswoman Carol Shea-Porter (NH-01) introduced the Reimburse Educators Who Pay for Academic Year Supplies Act of 2013, or REPAY Supplies Act. The bill would help teachers who pay for educational supplies out of their own pockets.
“Teachers come to school early, stay late, and give up their own time and money,” Shea-Porter said. “Due to budget cuts, teachers are now forced to dig deeper into their own pockets for necessary supplies. This legislation mitigates the financial sacrifices they make on behalf of their students and their communities.”
The REPAY Supplies Act would permanently extend the Classroom Expense Deduction, a $250 deduction offered to teachers who pay out of their own pockets for educational supplies. The popular above-the-line deduction is available to all teachers, regardless of whether they itemize their taxes.
The legislation comes in response to a letter Shea-Porter received from Dr. Margaret Morse-Barry, a Derry educator who, over the summer, urged Shea-Porter to look into extending the expiring tax credit.
“Educators often reach into our own pockets to purchase classroom supplies because we want to make sure students have what they need to succeed,” said Dr. Morse-Barry. “The introduction of this legislation makes us feel appreciated; like someone in Washington is listening.”
Local, state, and federal budget cuts have hit many teachers and school districts hard. Without passage of the REPAY Supplies Act of 2013, the deduction will expire at the end of December.
“When I heard from Dr. Morse-Barry, I knew this had to be fixed, so I’m pleased to introduce this legislation,” Shea-Porter added.
Shea-Porter’s legislation has been endorsed by the National Education Association (NEA), National Association of Elementary School Principals (NAESP), National Association of Secondary School Principals (NASSP), Association for Career and Technical Education (ACTE), National Science Teachers Association (NSTA), American Federation of Teachers (AFT), NEA–New Hampshire Chapter, AFT–New Hampshire Chapter, and New Hampshire School Administrators Association.
When gun manufacturer Sturm, Ruger & Co. announced in July that they would not be locating their new manufacturing plant in New Hampshire, Republicans blamed it on the legislature’s failure to enact a right-to-work law.
“Despite Legislative Democrats’ mantra that no business considers right to work laws in coming to a state or staying in a state…” wrote former state House Speaker Bill O’Brien, “here’s direct evidence, and a demonstrable loss of great manufacturing jobs in New Hampshire, that they do.”
An Associated Press behind-the-scenes analysis puts that notion to rest. North Carolina gave the gun manufacturer more than 15 million reasons to locate the plant in the Tar Heel State that had nothing to do with right-to-work.
As early as March, the report notes, Sturm Ruger had selected a former textile mill in North Carolina as the likely site for their new plant. “Yet Ruger dangled the possibility it still could go elsewhere” in order to extract financial concessions from the state. And extract they did:
Gun manufacturer Sturm, Ruger & Co. made clear early and publicly that North Carolina was its preferred location for a new factory and the hundreds of jobs it would bring. But the company kept alive enough doubt that state officials raised their offer of tax breaks and other sweeteners three times.
The state and company ended a nearly five-month courtship in mid-August by agreeing on a package of incentives that could be worth $13.7 million if Ruger meets investment and hiring goals. Including additional incentives from the town of Mayodan and Rockingham County, the total package could be worth $15.5 million.
For many years our state and local governments have been looking for ways to save money in their budgets. Some have turned to privatization as a way to reduce cost. Privatization ultimately ends up costing taxpayers more money in the long run no matter how much they save up front. The private prison industry is no different.
Private prisons have been popping up all across the country. They offer to build a new prison and then lease it back to the state. Also part of this agreement is that the state will pay the private prison company to operate the prison.
The initial savings come from the fact that the private prison company coughs up some of the money to cover the cost of constructing a new building. Many state’s budgets are so thin that they cannot afford to do major investments like building a new prison. This may save the taxpayers money in the actual construction, but the private prison industry makes their money back and more on the occupancy of the prison.
The study documents the shocking prevalence of contract language between private prison companies and state and local governments that either guarantees prison occupancy rates (“lockup quotas”) or forces taxpayers to pay for empty beds if the prison population falls due to lower crime rates or other factors (“low-crime taxes”).
That’s right, you are paying a corporation for empty beds in private prisons.
Nationally we all have been working to reduce the number of prisoners in our penal system. Reducing the number of inmates would also help reduce our state budgets, right? Wrong. With ‘Lockup Quotas’ it does not matter how many people are in the prison, the corporation still gets a minimum fee.
In The Public Interest, who released the above report, found “nearly two-thirds (65 percent) include occupancy guarantees and force taxpayers to pay for empty prison beds if the lockup quota is not met.”
ITPI research also found that “lockup quotas in private prison contracts range between 80 percent and 100 percent; 90 percent is the most frequent occupancy guarantee requirement. Arizona, Louisiana, Oklahoma and Virginia have the highest occupancy guarantee requirements, with quotas requiring between 95 percent and 100 percent occupancy.”
Image from ITPI Report
Donald Cohen, Executive Director of ITPI stated: “Private prison companies are gaming the system to guarantee themselves profits at the expense of taxpayers and, worst of all, at the expense of people’s freedom. Governments should cease working with this corrupt industry and reclaim public control of corrections.”
Alex Friedmann, Managing Editor of Prison Legal News, a project of the Human Rights Defense Center stated: “As a private prison expert who began researching the industry while incarcerated in a for-profit prison, I can tell you firsthand that private prison companies are profitable only because they are ethically bankrupt, with taxpayers footing the bill.”
The story does about the private prison industry does not stop there. One of the largest private prison corporations, Corrections Corporation of America (CCA), uses inmates as slave labor. Forcing inmates to work for as low as $.50 an hour.
Arizona inmates working for private agricultural companies are paid a “whopping fee” of “more than 50 cents an hour.” Read “How US prison labour pads corporate profits at taxpayers’ expense” in The Guardianhere.
Liz Iacobucci talked about these atrocities before in the NH Labor News post, “Another thing that went wrong in the Bush Economy.” That post describes how inmates in Arizona are forced to work for $2.00 an hour while CCA takes 30% to offset their incarceration costs and the state takes another 30% for legal costs. That means inmates are being forced to work for about $.80 cents and hour. Do you think that CCA gives that 30% back to the state to reduce the taxpayer cost of incarceration?
What do you do with an entire prison full of slave labor; you sell it to the highest bidder. During the G.W. Bush administration the Department of Justice teamed up with the National Corrections Industry Association to promote this idea. They even produced a recruitment video (circa 2004) to draw manufactures to set up shop in the prisons.
“I asked an NCIA spokesperson how private companies can get away with what could reasonably be described as forced labor. He explained that the PIE program classifies certain work functions as a ‘service’ rather than an actual ‘job’, and therefore is not subject to [restrictions in a 1979 federal law]. Conveniently, then, the backbreaking work of picking crops in the blistering sun counts as a ‘service’, so prisoners can be paid even less than the immigrants who have traditionally performed this work.”
The private prison industry is very lucrative for those at the top. CCA brought in $178 million in 2012 and GEO brought in $78 million. Over 40% of CCA’s total revenue comes from federal contracts. That is your tax dollars lining the pockets of these companies.
It is obvious to see that the private prison industry is a loss for taxpayers. We are overpaying for services with ‘lockup quotas’, while they collect massive profits from slave labor camps inside the prisons.
As fiscally responsible taxpayers why would we continue to let our tax dollars fuel this corporate machine?
At a time when the 1% have demanded so much sacrifice from working people in the name of deficit reduction, we must ask something of big corporations. That means “revenue positive” corporate tax reform that raises significant amounts of new tax revenue. We must start by ending all tax incentives for outsourcing jobs overseas, which would raise more than $583 billion in tax revenue over 10 years.
For many years, the AFL-CIO has called for Wall Street and multinational corporations to pay their fair share in taxes to help pay for the investments we need to make in jobs here at home. However we are concerned that several recent proposals for corporate tax reform do not raise nearly enough revenue because they squander huge sums of money on lowering tax rates for profitable Wall Street corporations.
Wall Street has not been asked to contribute a dime in the name of “shared sacrifice,” while working people have already sacrificed far too much. The suggestion that tax reform should let Wall Street and big corporations get away with paying no more than they pay now is offensive. The suggestion that such “revenue neutral” corporate tax reform should be coupled with cuts to Medicare, Medicaid, or Social Security benefits is an obscenity.
We are especially concerned that proposals to lower the corporate tax rate by a specific amount could lead to cutbacks on tax expenditures, such as the domestic production activities deduction, that encourage manufacturing in the United States. Limiting such expenditures could discourage investment, production, and employment here in America even if the corporate tax rate is lowered.
Finally, we reiterate that the AFL-CIO opposes cuts to Medicare, Medicaid, or Social Security benefits, no matter what form they take and no matter who proposes them.
Last night the Skagit River Bridge (WA) collapsed sending a semi-truck into the frigid waters below.
How long until we have another serious situation like this here in New Hampshire? A little over a year ago the Memorial Bridge in Portsmouth was closed down after is started to fall apart.
In February the Telegrapgh reported that ”almost a third of state bridges, 31 percent, show some wear or don’t meet current design standards. Without further funding, that number will rise 16 percent by 2016.”
This is a great risk to the public safety of Granite Staters. Yet our State Senate, who refuses to raise any revenue to fix this problem, has pushed the problem aside. By tabling the proposed ‘gas tax’ increase they are telling Granite Staters that fixing our crumbing infrastructure is not a concern to them. It is a problem that can wait yet another year.
What will it take for these Senators to see that our bridges and roads must be fixed and we need a serious plan to make that happen. We needed that plan yesterday not next year.
It was good to hear that nobody was injured in the bridge collapse in Washington last night but next time we may not be so lucky. What are they waiting for, another highway bridge collapse like the one in Minnesota a few years back, before they take action? I hope it does not come to that before the NH Senate comes to their senses and develops a serious comprehensive plan to fix our crumbling infrastructure.
Today the NH House voted to kill the expanded gambling bill, SB 152. SB152 was a bill about creating new jobs. The same jobs that many of these House members campaigned on. This also means that NH is going to continue to starve our budgets. SB152 would have added $80 million dollars in new revenue to the NH Budget. After todays vote, that is gone.
After the vote Governor Hassan released the following statement:
“It is disappointing to see the House of Representatives break from the New Hampshire tradition of open and thorough debate on key issues by voting against moving forward with full consideration of SB 152 and the thoughtful, bipartisan amendments being offered by members.”
“I remain committed to working with the legislature to finalize a balanced budget that restores the priorities that the people of New Hampshire support: job creation, higher education, economic development, strengthening our mental health system and protecting the health and well-being of our communities. Without passing SB 152, the path will be more difficult, but the people of New Hampshire expect us to do difficult things. We must work together to keep our state moving forward and to ensure a brighter, more innovative economic future for all Granite Staters.”
This vote is just another blow to the workers of NH and the NH’s low income families.
“Morse released a list of $28 million potential reductions in health and human service programs Tuesday which include $4 million to reduce the developmentally disabled wait-list for services. The reduction represents about 25 percent reduction in the money Hassan and the House included in the budget to eliminate the wait-list.
Other reductions in House-approved spending include $3 million for community health centers and $4 million of the $24 million increase Hassan included for the mental health system, which is the subject of a lawsuit brought by patients and the federal government.
Morse’s plan would also delay the restarting of the CHINS program which was eliminated in the last biennium budget except for about 50 of the most at-risk individuals who are a threat to themselves or others.”
After all the backlash of O’Brien’s draconian budget NH is headed down a path that is even worse. The Senate already rejected the tax increase on the tobacco tax. The only significant increase in revenue left is the ‘gas tax’, which is currently sitting in a Senate committee.
It is sad that the NH House rejected SB152 because thousands of working families were relying on the addition revenue, not to mention the hundreds of new jobs.
Here is a short due diligence report for anyone considering supporting the voucher tax credit program enacted over the governor’s veto last year.
To date, only one “scholarship organization” has been approved to collect millions of dollars in potential business donations and then, after taking up to 10 percent off the top, to select the schools and children who will get the money. That’s a California group called the Alliance for the Separation of School and State. They opened an office in New Hampshire a couple of years ago, guided the sponsors in writing the legislation and lobbied for its passage.
They say their mission is “ending government involvement in education.” Here’s how they describe their beliefs:
“Our society has become a slave to the state by virtue of government-controlled schools. Children suffer, parents feel helpless, and scores of good educators feel trapped in a system that never should have existed in the first place. …
“Why shouldn’t the government be involved in education? The short answer: Government schooling stands in direct opposition to the liberty this country was founded on. It fosters unquestioning obedience, acceptance of authority, herd mentality, and dependency …;
“Please join us in exploring the problem of state-controlled schooling and the exciting solutions available this very day!”
They have hired local staff, changed their name to the more benign sounding Network for Educational Opportunity and are out raising money from New Hampshire businesses.
We are now in the perverse position of having made a group whose purpose is to shut down public education our sole agent to manage millions of dollars funded by state tax credits.
And what about the schools that would get the money? One will surely be the unaccredited, 340-student Tri-City Christian Academy in Somersworth. Tri-City was the second main lobbyist for the program, is probably the most active school in marketing the vouchers and works with the California group to defend the program against repeal. Here is some of what they say in their philosophy statement, an essay called “The Education Battlefield:”
“The role of Christian education is to acknowledge … the existence of God, and allow the ‘facts’ of the universe to follow, to His glory. …
“Government schools have assumed a virtual monopolistic influence over the lives of the vast majority of American families with school-aged children. … The use of centralized, publicly-financed, government-owned schools was imported from authoritarian Prussia, and we ‘lived without it’ throughout the formative years of our nation …
“The Unitarian liberals … rejected God the sovereign … King of the universe, and replaced Him with a hapless, helpless God. …
“The centerpiece institution for implementing … a cultural coup de tat (sic) would be universal public education. … The kind of ‘education’ they had in mind … would … replace … Christian theism with the moral relativism of secular humanism. …
“The micro-managers of the secular State cannot tolerate … competition. … Meanwhile, the student-conscripts of the government education corps have become the equivalent of human guinea pigs.”
Tri-City is one of 71 religious schools in New Hampshire, many of which share nationally syndicated coursework that integrates a conservative Christian theology into every lesson, every day. There is no academic accountability in the voucher program, so they can teach whatever they want. Here’s a sample from widely used textbooks:
A Bob Jones University science book says, “Bible-believing Christians cannot accept any evolutionary interpretation. Dinosaurs and humans were definitely on the earth at the same time and may have even lived side by side within the past few thousand years.”
A popular history book says, “The Klan in some areas of the country tried to be a means of reform, fighting the decline in morality and using the symbol of the cross to target bootleggers, wife beaters and immoral movies.”
From a current events book: “(Homosexuals) have no more claims to special rights than child molesters or rapists.”
Marketed as “school choice for poor kids,” the voucher program grants an almost dollar-for-dollar tax credit (a $10,000 donation costs the business only $429 out of pocket) for supporting this project to replace our public schools with religious schools teaching creationist science.
If you’re a business that wants to help low-income kids, there are better alternatives. You could support New Hampshire’s public charter schools. They are well managed by the state, use credible curricula — and are free to every child in the state.
The program is being challenged in court but, constitutionality aside, there is no legitimate public purpose for voucher tax credit.
Voucher repeal has already passed the House.
Please urge Sen. Nancy Stiles to change her position and support voucher repeal when it comes to the Senate.
If you would like to help keep the NH Labor News going please give us a donation. Money goes to keeping the website running and more.
Search The NH Labor News Older Posts
Advertise on the NH Labor News
NHLN Supported Charity
The Second Wind Foundation is a non-profit charity that donates 100% of their earnings. The organization is run by retired union activist and friend of the NHLN. Click the image above to go directly to their site to learn more.