10 reasons why Ronald Reagan was the worst president of our lifetime

Robert SobelOrlando Liberal Examiner

December 3, 2011

 

If you ever happen to come across a Republican on television these days, chances are that you will hear the name Ronald Reagan. Recent Republican debates are the perfect example of the love fest that the current Republican party has for Reagan as each candidate name drops the former president at every turn. If you only listened to conservatives you would think that Jesus Christ was the only person above Reagan on the totem pole of conservative love. They talk about his love of low taxes, less government and conservative family values.
The problem is that when you step out of the conservative dream and come back to reality, you find that not only was Ronald Reagan a bad president, but he was one of the worst presidents we've seen in modern times. Reagan's policies have destroyed the United States for three decades, and for the eight years he was in office, here are eight reasons why Ronald Reagan was the worst president of our lifetime.
1. Reagan cut taxes for the Rich, increased taxes on the Middle Class -
Ronald Reagan is loved by conservatives and was loved by big business throughout his presidency and there's a reason for it. When Reagan came into office in January of 1981, the top tax rate was 70%, but when he left office in 1989 the top tax rate was down to only 28%. As Reagan gave the breaks to all his rich friends, there was a lack of revenue coming into the federal government. In order to bring money back into the government, Reagan was forced to raise taxes eleven times throughout his time in office. One example was when he signed into law the Tax Equity and Fiscal Responsibility Act of 1982. Reagan raised taxes seven of the eight years he was in office and the tax increases were felt hardest by the lower and middle class.
2. Tripling the National Debt -
As Reagan cut taxes for the wealthy, the government was left with less money to spend. When Reagan came into office the national debt was $900 billion, by the time he left the national debt had tripled to $2.8 trillion.
3. Iran/Contra - (I break this down in more detail in the article linked here)
In 1986, a group of Americans were being held hostage by a terrorist group with ties to Iran. In an attempt to free the hostages, Ronald Reagan secretly sold arms and money to Iran. Much of the money that was received from the trade went to fund the Nicaragua Contra rebels who were in a war with the Sandinista government of Nicaragua. When the scandal broke in the Untied States it became the biggest story in the country, Reagan tried to down play what happened, but never fully recovered.
4. Reagan funded Terrorists -
The attacks on 9/11 by al-Qaeda and Osama Bin Laden brought new attention to international terrorism. All of a sudden, Americans coast to coast wore their American flag pins, ate their freedom fries and couldn't wait to go to war with anyone who looked like a Muslim. What Americans didn't realize was that the same group that attacked the United States on 9/11 was funded by Ronald Reagan in the 1980s. Prepping for a possible war with the Soviet Union, Ronald Reagan spent billions of dollars funding the Islamist mujahidin Freedom Fighters in Afghanistan. With billions of American dollars, weapons and training coming their way, the Taliban and Osama Bin Laden took everything they were given and gave it back to the United States over a decade later in the worst possible way imaginable.
5. Unemployment issues -
When Ronald Reagan came into office 1981, unemployment was at 7.5%. After Reagan cut taxes for the wealthy, he began raising taxes on the middle and lower class. Corporations started to ship more jobs out of the United States while hiring cheap foreign labor in order to make a bigger profit. While corporations made billions, Americans across the country lost their jobs. As 1982 came to a close, unemployment was nearly 11%. Unemployment began to drop as the years went on, but the jobs that were created were low paying and barely helped people make ends meet. The middle and lower class had their wages nearly frozen as the top earners saw dramatic increases in salary.
6. Ignoring AIDS -
By the time the 1980s came around, AIDS had become one of the most frightening things to happen to the country in recent memory. No one understood what AIDS and HIV really was and when people don't understand something, they become scared of it. The fear of the unknown was sweeping across the country and Americans needed a leader to speak out about this horrible virus, that leader never came. Instead of grabbing the bull by the horns and taking charge, Reagan kept quiet. Reagan couldn't say the words AIDS or HIV until seven years into his presidency, a leader not so much.
7. Reagan gave amnesty to 3 million Undocumented Immigrants -
In today's GOP, the idea of any immigrant staying in the United States whether they are legal or illegal isn't something that conservatives embrace. What might shock them is that in 1982 Ronald Reagan gave nearly 3 million undocumented workers amnesty. The biggest reason for undocumented workers coming to the United States is because corporations hire them at a cheaper rate than they would an American citizen. All the laws that would have cracked down on companies who hire undocumented workers were, of course, removed from the bill.
8. His attack on Unions and the Middle Class -
The Republican war on unions and the middle class has been heating up in states like Wisconsin and Ohio, but it has been going on for a long time. Unions are formed to give a united voice to the workers in an attempt to create fairness between the corporations and their employees. On August 3rd, 1981, PATCO (Professional Air Traffic Controllers Organization) went on strike in an effort to get better pay and safer working conditions. Two days later, taking the side of business, Ronald Reagan fired 11,345 workers for not returning to work.
*Bonus reasons against Reagan*
9. Reagan raided the Social Security Trust fund -
With Ronald Reagan cutting taxes so drastically, the U.S government was beginning to starve. Reagan added to the government and didn't make enough spending cuts to offset the tax cuts, so the money needed to come from somewhere. Ronald Reagan knew that his polices would create economic bubbles, unemployment would drop and some jobs would be created, but in time the bubble would burst leaving the economy in ruins. In order to counteract his own economic policies, Ronald Reagan needed to find somewhere else to get revenue.
Listening to Alan Greenspan and other advisors, Ronald Reagan raided the Social Security Trust Fund and replaced it with glorified IOU's. Ronald Reagan raised the Social Security tax rate which did add to the revenue, but because there is a cap on Social Security, currently no income over $113,700 is taxed for Social Security, the wealthy didn't feel the tax increase and the pain was pushed to the middle and lower classes.
10. Endless worship and never ending praise -
Ronald Reagan left office in January of 1989 and nearly 25 years later he is held up high by the modern Republican party. As nearly three decades have gone by since Ronald Reagan was in the White House, reality and history has faded with time. Conservative figures like anti-tax Grover Norquist created the "Ronald Reagan Legacy Project" with a goal of memorializing Reagan in all 50 states. As stated in this article, Ronald Reagan did a lot to hurt the United States, not just while he was in office, but in the years that have followed. What's scary about today's current Republican party is that while Reagan was one of the worst president's this country has had to endure over the last 100 years, he would be considered too moderate to be nominated by today's conservative standards.
(Revised and Updated: 12/3/2013)

10 reasons why Ronald Reagan was the worst president of our lifetime * http://t.co/TndHkRrnbA
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Non-Partisan Congressional Tax Report Debunks Core Conservative Economic Theory-GOP Suppresses Study

 Non-Partisan Congressional Tax Report Debunks Core Conservative Economic Theory-GOP Suppresses Study

via: Forbes

What do you do when the Congressional Research Service, the completely non-partisan arm of the Library of Congress that has been advising Congress—and only Congress—on matters of policy and law for nearly a century, produces a research study that finds absolutely no correlation between the top tax rates and economic growth, thereby destroying a key tenet of conservative economic theory?
If you are a Republican member of the United States Senate, you do everything in your power to suppress that report—particularly when it comes less than two months before a national election where your candidate is selling this very economic theory as the basis for his candidacy.
Initially released on September 14, 2012, the study—authored by Thomas Hungerford who is a specialist in public finance at the C.R.S.—correlated the historical fluctuations of the highest income tax rates and tax rates on capital gains dating back to World War II with the economic growth (or lack of the same) that followed.
The conclusion?
Lowering the tax rates on the wealthy and top earners in America do not appear to have any impact on the nation’s economic growth.
This paragraph from the report says it all—
“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”
These three sentences do nothing less than blow apart the central tenet of modern conservative economic theory, confirming that lowering tax rates on the wealthy does nothing to grow the economy while doing a great deal to concentrate more wealth in the pockets of those at the very top of the income chain.
Not surprisingly, the results of the study caught the attention of a great many conservatives—so much so that, according to a New York Times piece, Republican’s in the United States Senate successfully pressured the Congressional Research Service to withdraw the report shortly after it was released. The withdrawal came over the objection of the CRS economic team and the author of the study.
The Times further reports that, according to Senate Minority Leader Mitch McConnell’s spokesperson, Senator McConnell—along with additional GOP senators— “raised concerns about the methodology and other flaws,” adding that additional people outside of Congress were also criticizing the study.
The nature of these alleged flaws?
That the report included terms such as “the Bush tax cuts” and references to “tax cuts for the rich.”
Added Antonia Ferrier, spokesperson for the Republican members of the Senate Finance Committee, “There were a lot of problems with the report from a real, legitimate economic analysis perspective. We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”
While a spokesperson for the C.R.S. refused to comment on the discussions between the Senate Republicans and her agency, she did confirm that the report was no longer in ‘official circulation’. However, the New York Times reports that a source requesting anonymity confirmed that the decision to pull the study was done against the advice of the economics division and that the author, Mr. Hungerford, stood by the report’s findings.
On Thursday, Senate Democrats republished the study following a letter sent to the C.R.S. by the ranking Democratic tax expert in the House, Rep. Sander Levin (D-MI), which reads, in part—
“I was deeply disturbed to hear that Mr. Hungerford’s report was taken down in response to political pressure from Congressional Republicans who had ideological objections to the report’s factual findings and conclusion. It would be completely inappropriate for CRS to censor one of its analysts simply because participants in the political process found his or her conclusion in conflict with their partisan position. I would like your explanation as to why this report was removed from the CRS website, who made that decision and what considerations led to it.”
For almost 100 years, the Congressional Research Service has worked to assist Congress by providing well-researched and accurate data to be utilized in the creation of important public policy.  It has done so when Congress was controlled by Democrats and when Congress has been under the control of Republicans. No matter what party was in charge, the C.R.S. has always endeavored to keep politics out of their work in the effort to provide data that would inform and advance our public policy.
Apparently, solid, well researched data no longer matters—at least not when it comes to the Congressional Republicans.

Three of the Biggest Lies Republicans Tell About Themselves

Three of the Biggest Lies Republicans Tell About Themselves

November 25, 2013 By Allen Clifton  

 

When I talk with Republicans, I often feel like I’m speaking with someone who lives inside of a bubble where the outside world and all of its realities are simply unable to penetrate.  It’s the school teacher who votes Republican despite Republicans stripping teachers unions of collective bargaining power.  It’s the individual who’s soon to rely on Medicare and Social Security, claiming they don’t need the federal government.  The person on welfare who voted for the politician who just voted to cut their benefits.
But one area where Republicans excel at is propaganda.  They’re really good at it.  They’ve successfully convinced millions of people to be absolute hypocrites, vote against their own interests and believe that giving rich people more money benefits the rest of us.
Basically, they’ve convinced people to lie to themselves.
So I decided I would give a quick rundown of three of the bigger lies Republicans perpetuate about themselves (though there are far more than three).
1) They’re fiscally conservative 
This is probably the biggest joke of them all.  It’s amazing to me that this is real platform they actually run on, yet haven’t had a Republican president who’s actually balanced the budget since President Eisenhower in the 1950′s.  Hell, their “conservative hero” Ronald Reagan came close to quadrupling the national debt during his eight years.  How exactly is someone a “beacon for fiscal responsibility” when they almost quadrupled the national debt?
And I know some conservatives will do what they always do and blame Democrats for Reagan running up our national debt.  I love reading the asinine conclusion that the near quadrupling of our debt was the fault of Tip O’Neill, not Reagan.  I hate to break it to these people, but Reagan signed off on every single piece of legislation during his eight years in office that led to the massive growth of our national debt.  Congressional Democrats couldn’t simply enact legislation without Reagan’s approval.
Then again, conservatives who make this argument clearly don’t understand how government works.  They’re also the ones who give all of the credit for our balanced  budget in the 90′s to congressional Republicans.
Then look at George W. Bush.  He took a balanced budget and completely wrecked it.  It took him one year to send us back into deficits after President Clinton gave us a surplus.  And don’t even tell me that our budget surplus should be credited to the Republicans in Congress.  If they were the primary reason why we had a balanced budget, it would have continued after Clinton left the White House, when they were still in charge of Congress — but guess what?  It didn’t.
What Bush did was cut taxes, then started two wars.  That’s like buying an $80,000 sports car just after taking a massive pay cut at work.  He reduced our revenue then increased our spending.  How again is that being “fiscally conservative”?
The only area Republicans point to for this claim of “fiscal responsibility” is their opposition to tax hikes.  But guess what?  Cutting taxes has nothing to do with being smart with money.
Oh, but they’ll cut programs that help the poor and the needy, that’ll balance our budget, right?  But you damn sure better not mention cutting oil subsidies or closing tax loopholes for the rich — Republicans will have no part in eliminating either of those.
The only place Republicans are fiscally conservative is in their minds.
2) Small government 
This is another joke.  I love how the party which actively campaigns for president on the pretense of passing Constitutional Amendments that would define traditional marriage is somehow the party of “small government.”
Or the party that continues to pass laws in Republican-controlled states attacking the right for a woman to have an abortion, requiring ultrasounds or transvaginal probes before an abortion can be performed.  That’s small government? 
Hell, if they had their way there would still be a ban on homosexuals in the military.
The fact is, Republicans love government.  Well, as long as that government is supporting something they want.  The only time they’re advocates for “small government” is when the government forces them to do things like — give people civil rights.
I live in Texas, a highly Republican state, where you can’t even buy liquor on Sunday due to outdated laws passed decades ago.  Hell, there are some counties in Texas where you still can’t buy alcohol at all.  How “small government” of them.  Isn’t Texas supposed to be a beacon for “small government values”?  Right.
The truth is, Republicans love government when they can use it to try to enforce their bigotry and ignorance, but hate government when it prevents them from enforcing their bigotry and ignorance.
3) Pro-life 
Being anti-abortion doesn’t make you “pro-life.”  Just like supporting the right for a woman to have an abortion doesn’t make you “pro-abortion.”
Republicans constantly prove that they don’t give a crap about life the moment it’s out of the womb.  Sure, they’ll use a fetus to stir up anger within people to get votes, but the fact of the matter is once that baby is born — they couldn’t care less.
The GOP has consistently cut funding for programs that help the poor and the needy.  They’ve strongly stood against access to health care for all Americans.  There’s even a push now by many to privatize Medicare and Social Security so that these programs are handed over to greedy corporations that can gamble with the future of millions of Americans.
There are tens of millions of children who will have less to eat this holiday because of the Republican cuts to our nation’s SNAP program.  And if Republicans get their way, tens of billions more will be cut from the program.
In a state like Texas — where millions of its citizens go without health care — Rick Perry refused to expand Medicaid coverage so that millions of Texans could receive health care, some for the very first time.  This is a practice we’ve seen all over the country in many Republican-controlled states.
How “pro-life” of these Republicans to deny access to health care for millions of Americans who desperately need it.
And the sad fact is, Republicans only really “care” about a fetus because it helps them get votes.  Otherwise they wouldn’t oppose — and cut — funding to programs that would help millions of poor children all across the United States.
When Republicans say they’re “pro-life” all they really mean is they’re anti-abortion — that’s it.  To call Republicans “pro-life” is an absolute joke.  Because once that baby is born, they couldn’t care less what happens to it, as long as it votes Republican in 18 years.
Now of course these aren’t the only ways Republicans lie to themselves.  These are just three of the bigger “labels” they give themselves that I find completely absurd.
But I’m sure to any Republican reading this, I’m absolutely wrong.  Sure I am.  Of course, they’ve most likely never voted for a Republican president who’s balanced the budget, they probably support a Constitutional Amendment banning same-sex marriage, and you can bet they support massive cuts to welfare programs that feed millions of poor children.
Like I said, it’s like they live in a delusional bubble that reality is simply unable to penetrate.

Adam Smith Father of Capitalism on Taxing the Rich

Paul Ryan To Give 2016 Bid 'A Hard Look' At The End Of His Term

Catherine Thompson – November 13, 2013, 9:10 AM EST

For now, former vice presidential nominee Rep. Paul Ryan (R-WI) said he's focused on legislating -- but come 2014, he plans evaluate the odds for another shot at the White House.
“I’ve decided I will consider this later,” Ryan told the Des Moines Register in an interview published Tuesday. “Once I’m through with this term, then I’m going to give a hard look at it.”

This year Ryan has been asked repeatedly whether or not he's considering a run at the top of the Republican ticket in 2016, and he's repeatedly demurred in response.
Ahead of a trip to Iowa this weekend, the Wisconsin Republican told the Register that he is busy working on the federal budget and policy issues like health care and immigration reform, rather than "worrying about my own personal ambitions or career moves." The congressman has indeed been keeping busy, citing budget negotiations as the reason he took a pass on campaigning for the Republican gubernatorial candidate in Virginia, Attorney General Ken Cuccinelli.
Recent polls have shown Ryan towards the back of the potential 2016 pack, trailing Republican contenders like New Jersey Gov. Chris Christie, Texas Sen. Ted Cruz and Kentucky Sen. Rand Paul.

 

Parker: Can the Republicans handle prosperity?

Parker: Can the Republicans handle prosperity?

By Kathleen Parker

| The Washington Post

WASHINGTON — In spite of everything — the GOP’s internal scrimmages, the government shutdown, the party’s transparent attempts to derail Obamacare — Republicans keep getting second chances.

The question is, can they handle prosperity? Do they even know what to do with it?

With the myriad problems besieging Obamacare, from the non-rollout to the minuscule number of enrollees in the health insurance exchanges, this is no time for gloating. Rather, it is time for Republicans to get very, very busy with their own ideas for across-the-board reforms.

The party of "no" must become the party of "we can, too!" This doesn’t mean sacrificing core principles, though some could use a little shelf time. It does mean picking battles Republicans can win and avoiding skirmishes that further alienate centrists and minorities.

Forget building a larger tent, which increasingly looks like a pup for two white guys and a flashlight. Ditch the tent and build a coliseum. Install Doric columns, if you like, and grab an obelisk on your way to redemption. At no extra cost, here’s an inscription for the keystone: Waste not, want less. Waste not this moment; want less than perfection and aim for the possible.

This was always House Speaker John Boehner’s battle plan, but he finally concluded that leading his conference where it wanted to go was preferable to inciting a civil war. In a recent interview, Boehner told me he thinks at least some of the better-death-than-compromise caucus had come around to understanding that attaching Obamacare to the continuing resolution, resulting in the government shutdown, was the wrong tactic.

Even so, "at least some" may not be enough. And who knows what Sen. Ted Cruz, R-Texas, has up his sleeve as new deadlines loom for budget and debt-ceiling negotiations early next year?

In the meantime, House and Senate Republicans have a small window, while Obamacare is hugging the shoals, to show why their ideas are best. Americans frustrated with Congress and disappointed by the president are primed for someone to pick up the bullhorn and say, "We hear you."

It’s too bad "compassionate conservatism" has become tarnished because compassion is what is needed in today’s GOP playbook: Compassion for the hungry whose food stamps House Republicans excised from the farm bill; compassion for 11 million immigrants who are prisoners in illegal limbo; compassion for gays, lesbians and others seeking protection against workplace discrimination.

These are not such difficult choices in the scheme of things. How to guarantee that Iran can’t weaponize its nuclear capability? That’s tough. Not so tough: Helping the poor feed their families, finding a path for citizenship along with other immigration reforms, extending equal protections to individuals whose sexual orientation should not be a firing offense.

The Senate also has passed a comprehensive immigration bill with the help of 14 Republicans that contains a relatively strenuous path to citizenship that includes paying back taxes and fines, and getting in line behind others seeking citizenship. Hardly a giveaway. Even so, some Republicans aren’t on board with the path to citizenship. Although Boehner told me he hopes to get an immigration bill to the House floor next year, others say 2014’s midterm elections make this unlikely.

Phooey.

What’s really not likely to happen is a Republican White House — ever — without Latino voters. There’s only so much Republicans can accomplish when they control only half of one-third of government. Consider that the biggest states with the largest concentrations of Hispanics — Florida, California, Texas and New York — also convey 151 of the 270 electoral votes needed to be elected president.

Appealing to Latinos doesn’t mean Republicans have to pander or bow to President Obama’s wishes. It means doing the right thing. Even though a slim majority of Americans (53 percent) think most immigrants here illegally should be deported, according to a Reuters/Ipsos online survey last February, a more recent NBC/Wall Street Journal poll found that 65 percent favor a path to citizenship if it requires essentially what the Senate bill proposes.

The draconian option of deportation would be an unlovely sight. Not only would families be torn asunder, but America’s crops would wither on the vine, as they did in Alabama after that state’s crackdown prompted a sudden, mass exodus. Yet again, unyielding principle prevailed over common sense and survival.

Time is of the essence if Republicans hope to refresh their image in the public square. Picking battles wisely, acting compassionately, creating rather than negating is the only way forward. Jar the hardwoods, campers, there’s daylight in the swamp.

Kathleen Parker’s email address is kathleenparker@washpost.com.

O’SNAP! Republicans Caught Taking Food Stamps

O’SNAP! Republicans Caught Taking Food Stamps (List)

Lipstick Liberal


Legislation passed by the GOP-controlled House would cut Supplemental Nutrition Assistance Program (SNAP) by an additional $5 billion annually and tighten eligibility requirements. A program that for every $5 of food stamps generates up to $9 in economic activity.
1. Rep. Stephen Fincher (R-Tenn.) collected nearly $3.5 million in taxpayer-financed farm subsidies from 1999 to 2012, including roughly $70,000 just last year in the form of direct payments from Washington, paid for by you and me.
2. Doug LaMalfa (R-Calif.) received more than $5 million in commodity subsidies since 1995, according to the group’s analysis of data from the U.S. Agriculture Department.
3. Rep. Michele Bachmann (R.Minn) received $250,000 in Federal Farm Subsidies.
4 – 29.  Thirty-Three other Members of Congress received $15 Million Dollars from farm subsidies yet voted to cut food stamps  
30. Wal-Mart Supercenter employing 300 workers cost taxpayers at least $904,000 annually, with profits over $446 billion dollars annually.
*BONUS* Rep. Paul Ryan (R-Wisc.), fights to keep moochers from not paying their fair share, while allowing the super-rich to hide between $21 and $32 trillion in offshore jurisdictions around the world .

http://winkprogress.com/lipstickliberal/4446/winkend-update-republican-home-cooking/

How the Super-Rich Are Abandoning America

 How the Super-Rich Are Abandoning America

How the Super-Rich Are Abandoning America

The wealthiest Americans who hate "takers" enjoy $2 trillion in special tax carve outs, more than double the entire annual budget of Social Security.

Paul Buchheit for The Contributor

November 4, 2013 - 8:35am

 

Paul Buchheit
The Contributor

Paul Buchheit
The Contributor

Bernard Marcus, co-founder of Home Depot, thinks Americans who object to greed are "imbeciles."
As they accumulate more and more wealth, the very rich have less need for society. At the same time, they've convinced themselves that they made it on their own, and that contributing to societal needs is unfair to them. There is ample evidence that this small group of takers is giving up on the country that made it possible for them to build huge fortunes.

They've Taken $25 Trillion of New Wealth While Paying Less Taxes

The 2013 Global Wealth Databook shows that U.S. wealth has increased from $47 trillion in 2008 to $72 trillion in mid-2013. But according to U.S. Government Revenue figures, federal income taxes have gone DOWN from 2008 to 2012. Even worse, corporations cut their tax rate in half.

American society has gained nothing from its massive wealth expansion. There's no wealth tax, no financial transaction tax, no way to ensure that infrastructure and public education are supported.

Just how much have the super-rich taken over the past five years? Each of the elite 5 percent -- the richest 12 million Americans -- gained, on average, nearly a million dollars in financial wealth between 2008 and 2013.

2. For the First Time in History, They Believe They Don't Need the Rest of Us

The rich have always needed the middle class to work in their factories and buy their products. With globalization this is no longer true. Their factories can be in China, producing goods for people in India or Europe or anywhere else in the world.

They don't need our infrastructure for their yachts and helicopters and submarines. They pay for private schools for their kids, private security for their homes. They have private emergency rooms to avoid the health care hassle. All they need is an assortment of servants, who might be guest workers coming to America on H2B visas, willing to work for less than a middle-class American can afford.

The sentiment is spreading from the super-rich to the merely rich. In 2005 Sandy Springs, a wealthy suburb of Atlanta, stopped paying for most public services, deciding instead to avoid subsidizing poorer residents of Fulton County by hiring a "city outsourcer" called CH2M to manage everything except the police and fire departments. That includes paving the roads, running the courts, issuing tickets, handling waste, and various other public services. Several other towns followed suit.

Results have been mixed, with some of CH2M's clients backing out or renegotiating. But privatization keeps coming at us. Selective decisions about public services threaten to worsen already destitute conditions for many communities. Detroit, of course, is at the forefront. According to an Urban Land Institute report, "more municipalities may follow Detroit's example and abandon services in certain districts."

3. They Soaked the Middle Class, and Now Demand Cuts in the Middle-Class Retirement Fund

The richest Americans take the greatest share of over $2 trillion in Tax Expenditures, Tax Underpayments, Tax Haven holdings, and unpaid Corporate Taxes.

The Social Security budget is less than half of that. Yet much of Congress and many other wealthy Americans think it should be cut. These are the same people who deprive the American public of $300 billion a year by not paying their full share of the payroll tax.

4. They Continue to Insist that They "Made It on Their Own"

They didn't. Their fortunes derived in varying degrees - usually big degrees - from public funding, which provided almost half of basic research funds into the 1980s, and even today supports about 60 percent of the research performed at universities.

Businesses rely on roads and seaports and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, communications towers and satellites to conduct online business, the Department of Commerce to promote and safeguard global markets, the U.S. Navy to monitor shipping lanes, and FEMA to clean up after them.

Apple, the tax haven specialist, still does most of its product and research development in the United States, with US-educated engineers and computer scientists. Google's business is based on the Internet, which started as ARPANET, the Defense Department's Advanced Research Projects Agency computer network from the 1960s. The National Science Foundation funded the Digital Library Initiative research at Stanford University that was adopted as the Google model. Microsoft was started by our richest American, Bill Gates, whose success derived at least in part by taking the work of competitors and adapting it as his own. Same with Steve Jobs, who admitted: "We have always been shameless about stealing great ideas."

Companies like Pfizer and Merck have relied on basic research performed at the National Institute of Health. A Congressional Budget Office study reminds us that The primary rationale for the government to play a role in basic research is that private companies perform too little such research themselves (relative to what is best for society).

5. As a Final Insult, Many of Them Desert the Country that Made Them Rich

Many of the beneficiaries of American research and technology have abandoned their country because of taxes. Like multinational companies that rationalize the move by claiming to be citizens of the world, almost 2,000 Americans, and perhaps up to 8,000, have left their responsibilities behind for more favorable tax climates.

The most egregious example is Eduardo Saverin, who found safe refuge in the U.S. after his family was threatened in Brazil, landed Mark Zuckerberg as a roommate at Harvard, benefited from American technology to make billions from his 4 percent share in Facebook, and then skipped out on his tax bill.

An Apt Summary?

Bernard Marcus, co-founder of Home Depot and member of the Forbes 400, had this to say about any American who might object to all the greed: "Who gives a crap about some imbecile?"

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

How America Is Killing the Poor

Lack of access to education, medical care, good wages and healthy food isn't just leaving the worst-off Americans behind. It's killing them. 

 The Guardian / By Gary Younge

November 4, 2013  |  

 

During a discussion at the University of Michigan in 2010, the billionaire vice-chairman of Warren Buffett's Berkshire Hathaway firm, Charles Munger, was asked whether the government should have bailed out homeowners rather than banks. "You've got it exactly wrong," he said."There's danger in just shovelling out money to people who say, 'My life is a little harder than it used to be.' At a certain place you've got to say to the people, 'Suck it in and cope, buddy. Suck it in and cope.'"
But banks, he insisted, need our help. It turns out that moral hazard – the notion that those who know the costs of their failure will be borne by others will become increasingly reckless – only really applies to the working poor.
"You should thank God" for bank bailouts, Munger told his audience. "Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies."
In the five years since the financial crisis took hold, people have been sucking it in by the lungful and discovering how pitiful a coping strategy that is. In Michigan, the state where Munger spoke, black male life expectancy is lower than male life expectancy in Uzbekistan; in Detroit, the closest big city, black infant mortality is on a par with Syria (before the war).
As such, the crisis accelerated an already heinous trend of growing inequalities. Over a period of 18 years, America's white working class – particularly women – have started dying younger. "Absent a war, genocide, pandemic, or massive governmental collapse, drops in life expectancy are rare," wrote Monica Potts in the American Prospect last month. But this was a war on the poor. "Lack of access to education, medical care, good wages and healthy food isn't just leaving the worst-off Americans behind. It's killing them."
This particular crisis, however, has also accentuated the contradictions between the claims long made for neoliberalism and the system's ability to deliver on them. The "culture" of capitalism, to which Munger referred, did not die but thrived precisely because it was not forced to adapt, while working people – who kept it afloat through their taxes and now through cuts in public spending – struggle to survive. Given the broad framing of economic struggles in the west exacerbated by the crisis, this reality is neither new nor specific to the US. "Over the past 30 years the workers' take from the pie has shrunk across the globe," explains an editorial in the latest Economist. "The scale and breadth of this squeeze are striking … When growth is sluggish … workers are getting a smaller morsel of a smaller slice of a slow-growing pie."
A few days before the bailout was passed, I quoted Lenin in these pages. He once argued: "The capitalists can always buy themselves out of any crises, as long as they make the workers pay." What has been striking, particularly recently, has been the brazen and callous nature in which these payments have been extorted.

Last Friday, 47 million Americans had their food stamp benefits cut. These provide assistance to those who lack sufficient money to feed themselves and their families. Individuals lose $11 (£7) a month while a family of four will lose $36. That will save the public purse precious little – bombing Syria would have been far more costly – but will mean a great deal to those affected. "Before the cut, it was kind of an assumption you were going to the food bank anyway," Lance Worth, of Washington state, told the Bellingham Herald. "I guess I'm just going to go $20 hungrier – aren't I?"

The cut marks the lapse in stimulus package ushered in four years ago. But while the recession is officially over, the poverty it engendered remains. Government figures show one in seven Americans is food insecure. According to Gallup, in August, one in five said they have, at times during the last year, lacked money to buy food that they or their families needed. Both figures are roughly the same as when Obama was elected. This negligence will now be compounded by mendacity.Republicans propose further swingeing cuts to the food-stamp programme; Democrats suggest smaller cuts. The question is not whether the vulnerable will be hammered, but by how much.
The impetus behind these cuts are not fiscal but ideological. Republicans, in particular, claim the poor have it too easy. "We don't want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency and complacency," claimed former Republican vice-presidential candidate Paul Ryan. "That drains them of their will and their incentive to make the most of their lives."
The notion that food "drains the will" while hunger motivates the ambitious would have more currency – not much, but more – if the right wasn't simultaneously doing its utmost to drive down wages to a level where work provides no guarantee against hunger. In last week's paper for the Economic Policy Institute, Gordon Lafer, an associate professor at the University of Oregon, revealed the degree to which conservatives have been driving down wages, benefits and protections at a local level after their victory at the 2010 midterms.
He writes: "Four states passed laws restricting the minimum wage, four lifted restrictions on child labour, and 16 imposed new limits on benefits for the unemployed. With the support of the corporate lobbies, states also passed laws stripping workers of overtime rights, repealing or restricting rights to sick leave, and making it harder to sue one's employer for race or sex discrimination."
That's why 40% of households on food stamps have at least one person working. And the states most aggressive in pursuing these policies, Lafer points out, had some of the smallest budget deficits in the country.
Immediately after Obama's election in 2008, his chief of staff to be, Rahm Emmanuel, said: "You never let a serious crisis go to waste. And what I mean by that is it's an opportunity to do things you think you could not do before." The crisis didn't go to waste. But it is the right that has seized the opportunity. Not content with balancing the budget on the bellies of the hungry, it is also fattening the coffers of the wealthy on the backs of the poor.

 

The Real Reason So Many Americans Are Poor

By Mandi Woodruff | Business Insider – 17 hours ago

Quinn Dombrowski via flickr 

Thumb through any personal finance book written over the last five years and chances are you'll come across at least a handful of chapters on how cutting daily luxuries like coffee and cable are the key to financial discipline.
It's that kind of finger-wagging criticism that's rubbed so many hardworking people wrong — the idea that they wouldn't be in this position if only they'd watched less TV, traded in their cars, or tried cooking more meals at home.
In case you're in need of a reminder of the bigger picture, personal finance expert Helaine Olen nails the issue right on its ugly head in her book "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry." She writes:
"The problem was fixed costs, the things that are difficult to 'cut back' on. Housing, health care, and education cost the average family 75% of their discretionary income in the 2000s. The comparable figure in 1973: 50%.
And even as the cost of buying a house plunged in many areas of the country in the latter half of the 2000s (causing, needless to say, its own set of problems) the price of other necessary expenditures kept rising. The cost of medical services continued to increase at numbers far exceeding the rate of inflation with the price of health insurance doubling in the period between 2001 and 2011, even as that insurance required steeper co-pays and deductibles from families."
Couple that with the 40% surge in the cost of raising a child over the last decade and soaring college tuition costs, and you've got a recipe for financial disaster any average consumer would have trouble thwarting.
Now, for the final blow:
"At the same time, household income was falling. According to the Federal Reserve's Survey of Consumer Finances, the median income for families in the 35 to 44 age bracket fell by 14% between 2001 and 2010, from $63,000 to $53,900. This was not a problem of relative youth. Median income for Americans ages 45 to 54 fell from $66,800 to $61,000 in 2010."

Why do 'red states' have more poverty?

Tampa : FL : USA | Feb 24, 2013 at 10:56 AM PST

By itobin53

Why do Red States have more poor people? Image: Upworthy.com

Americans do not have to guess what the country would be like if the small-government, conservative economic agenda were implemented on a national scale.
Many Republican-controlled, predominantly Southern “red states” already have. The result is not an abundance of prosperity from under taxed “job creators,” as often touted in sound bites and on the conservative candidate campaign trail. Instead, according to the numbers, it’s quite the opposite.
Smaller government austerity policies in red states have created macroeconomic societies with high poverty and low education rates. Low-paying jobs and lack of health care also dominate states that have implemented the smaller government theories of conservative ideology.
In Texas, for example, decades of Republican control, from the governor’s office down to state and local legislatures, has kept the Tea Party ideological model in place. And it has the highest poverty rate of “any large industrial state,” according to Texas Politics data.
The data showed similar high poverty rate numbers for other red states, including Mississippi, Louisiana, Kentucky, North Carolina, and Tennessee.
Lack of health care is also a bigger problem in states following the conservative Republican ideological view of less funding for government assistance programs.
Florida Gov. Rick Scott recently acknowledged the serious economic problems associated with having more than 21 percent of the population without health insurance. The costs for hospitals treating the uninsured is so high, Scott surrendered to pressure from Florida health care providers and accepted the Medicaid expansion of the Affordable Care Act, also called Obamacare.
Hunger is also a bigger problem among states where Republicans have had their way with local budgets. And while southern red states do not have a lock on growing US poverty rates, they still lead with the worse numbers. More than 24 percent of the people in Mississippi suffer from food deficiencies, with Alabama coming in second at nearly 23 percent.
Red States also top the charts for populations with lower education levels. The top 10 include Oklahoma, Tennessee, Indiana, Nevada, Alabama, Louisiana, Kentucky, Arkansas, Mississippi and West Virginia, according to Fox Business.
There is a disturbing correlation between Republicans and high poverty rates. CNN reports that the 10 poorest states in America tend to elect Republicans. Is this because they haven’t made the connection between conservative government policy and the need for the social safety net? Or have they simply been convinced by right-wing political rhetoric to vote against their own best interests?
In addition to the disconnect between conservative policies and economic security, it has been demonstrated in states completely controlled by Republicans that consolidated power can lead to loss of personal freedom and the most fundamental elements of democracy.
In the 2012 elections, the people of Michigan voted by a 53 to 47 percent margin to repeal the state’s power to replace their local elected representatives with appointed emergency managers, in areas with struggling budget issues. “The law was intended to help municipalities avoid bankruptcy or default, but it has been criticized for infringing on the rights of local governments,” according to the New York Times.
Rather than listening to the voice of voters who repealed the law at the ballot box, Michigan legislators have ignored court orders to remove “emergency managers” and reinstated the legislation, this time adding a clause that blocks any further attempts by the public to make it a ballot initiative in the future.
Republican-controlled legislatures have also used their power to strip unions workers of their rights to collective bargaining, as Gov. Scott Walker did in Wisconsin.
So not only are Republican’s changing the fundamental economic structure of America, they are using scare tactics and misleading campaign ads to try to gain monopoly-control of as many branches of government as they can.
Salon.com put it this way:
This is the formula for a reactionary politics that does not serve the collective good….
Elites who have long been disconnected from the masses manipulate this anxiety into a politics that serves to gut the social safety net and chase down the chosen bugaboos of the Right--the "evil" unions, "liberals," "intellectuals," teachers, Muslims, immigrants, racial minorities, gays and lesbians, "overpaid" public employees, and/or anyone who is not a "real American."
In the end game, the authoritarianism infused White reactionary Tea Party AstroTurf politics of the New Right are the road to inverted totalitarianism--an order that rises out of a failure of democratic politics, a collapsed and exhausted economy, a triumphant corporatism, and the false promises of popular Conservatism.
In the 2012 elections, voters did indeed reject the policies of right-wing Republicans by giving Democratic House candidates over a million more votes. However, Republican gerrymandering after the 2010 census prevented those votes from counting toward democratic control of Congress.
Today, the only thing preventing the United States from becoming the poverty-ridden, low education, no health care, totalitarian-style government that has taken over red states is the Democratic majority in the Senate and Barack Obama in the White House.
Will voters in 2014 make the connection between their own economic interests and adversarial conservative policies and reject GOP monopoly rule? Or will they continue to vote for candidates who have demonstrated that their best abilities lie only in creating less opportunity, and more hardship and poverty than their blue state counterparts?
If you like to write about US politics, enter Allvoices’ "The American Pundit" political writing contest. Allvoices is awarding four $250 prizes each month between now and Nov. 30. These monthly winners earn eligibility for the $5,000 grand prize, to be awarded in December. If you do not already have a free account, sign up here.
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Recommended:
Republicans admit spending cuts will damage economy
Wayne LaPierre: Guns are for Armageddon and 'fun'
Is Apple’s edge gone without Steve Jobs?
Sources and more info in addition to the links above:
Child poverty in the South getting worse
'The Hunger Games' Are Here. And They Are Very, Very Real.

itobin53 is based in Tampa, Florida, United States of America, and is an Anchor for Allvoices.

9 Things The Rich Don't Want You To Know About Taxes

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman’s ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Obama has agreed to continue for two years.

You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values. 

Tax policy is something the framers left to politics. And in politics, the facts often matter less than who has the biggest bullhorn.

The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show. 

As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation-adjusted.)

Credits: WW CHART — SOURCE: AUTHOR 
ANALYSIS OF SAEZ & PIKETTY TABLE A6;
 2008 DOLLARS

1. Poor Americans do pay taxes.

Gretchen Carlson, the Fox News host, said last year “47 percent of Americans don’t pay any taxes.” John McCain and Sarah Palin both said similar things during the 2008 campaign about the bottom half of Americans.

Ari Fleischer, the former Bush White House spokesman, once said “50 percent of the country gets benefits without paying for them.”

Actually, they pay lots of taxes—just not lots of federal income taxes.

Data from the Tax Foundation show that in 2008, the average income for the bottom half of taxpayers was $15,300.

This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes.

But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax-free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.

Credits: WW CHART — SOURCE: MEDICARE TAX DATABASE; CENSUS

2. The wealthiest Americans don’t carry the burden.

This is one of those oft-used canards. Sen. Rand Paul, the tea party favorite from Kentucky, told David Letterman recently that “the wealthy do pay most of the taxes in this country.”

The Internet is awash with statements that the top 1 percent pays, depending on the year, 38 percent or more than 40 percent of taxes.

It’s true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available). But people forget that the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.

Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners.  That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.

Credits: WW CHART — SOURCE:
SOCIAL SECURITY MEDICARE
TAX DATABASE

3. In fact, the wealthy are paying less taxes.

The Internal Revenue Service issues an annual report on the 400 highest income-tax payers. In 1961, there were 398 taxpayers who made $1 million or more, so I compared their income tax burdens from that year to 2007.

Despite skyrocketing incomes, the federal tax burden on the richest 400 has been slashed, thanks to a variety of loopholes, allowable deductions and other tools. The actual share of their income paid in taxes, according to the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.

Compare that to the vast majority of Americans, whose share of their income going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent in 2007.

(By the way, during seven of the eight George W. Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama administration overturned almost instantly after his inauguration.)

Credits: WW CHART — SOURCE:
AUTHOR CALCULATIONS FROM IRS

4. Many of the very richest pay no current income taxes at all.

John Paulson, the most successful hedge-fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero.

Congress lets hedge-fund managers earn all they can now and pay their taxes years from now.

In 2007, Congress debated whether hedge-fund managers should pay the top tax rate that applies to wages, bonuses and other compensation for their labors, which is 35 percent. That tax rate starts at about $300,000 of taxable income—not even pocket change to Paulson, but almost 12 years of gross pay to the median-wage worker.

The Republicans and a key Democrat, Sen. Charles Schumer of New York, fought to keep the tax rate on hedge-fund managers at 15 percent, arguing that the profits from hedge funds should be considered capital gains, not ordinary income, which got a lot of attention in the news.

What the news media missed is that hedge-fund managers don’t even pay 15 percent. At least, not currently. So long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They only pay taxes when they cash out, which could be decades from now for younger managers. How do these hedge-fund managers get money in the meantime? By borrowing against the carried interest, often at absurdly low rates—currently about 2 percent.

Lots of other people live tax-free, too. I have Donald Trump’s tax records for four years early in his career. He paid no taxes for two of those years. Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.

Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers. 

In Wisconsin, Terrence Wall, who unsuccessfully sought the Republican nomination for U.S. Senate in 2010, paid no income taxes on as much as $14 million of recent income, his disclosure forms showed. Asked about his living tax-free while working people pay taxes, he had a simple response: Everyone should pay less.

Credits: WW CHART — SOURCE: AUTHOR CALCULATIONS FROM IRS

5. And (surprise!) since Reagan, only the wealthy have gained significant income.

The Heritage Foundation, the Cato Institute and similar conservative marketing organizations tell us relentlessly that lower tax rates will make us all better off.

“When tax rates are reduced, the economy’s growth rate improves and living standards increase,” according to Daniel J. Mitchell, an economist at Heritage until he joined Cato. He says that supply-side economics is “the simple notion that lower tax rates will boost work, saving, investment and entrepreneurship.”

When Reagan was elected president, the top marginal tax rate (the tax rate paid on the last dollar of income earned) was 70 percent. He cut it to 50 percent and then 28 percent starting in 1987. It was raised by George H.W. Bush and Clinton, and then cut by George W. Bush. The top rate is now 35 percent. 

Since 1980, when Reagan won the presidency promising prosperity through tax cuts, the average income of the vast majority—the bottom 90 percent of Americans—has increased a meager $303, or 1 percent. Put another way, for each dollar people in the vast majority made in 1980, in 2008 their income was up to $1.01.

Those at the top did better. The top 1 percent’s average income more than doubled to $1.1 million, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. The really rich, the top one-tenth of 1 percent, each enjoyed almost $4 in 2008 for each dollar in 1980.  

The top 300,000 Americans now enjoy almost as much income as the bottom 150 million, the data show.

Credits: WW CHART — SOURCE:
MARTIN SULLIVAN, TAX ANALYSTS
 ECONOMIST, FROM DATA AT BEA.GOV

6. When it comes to corporations, the story is much the same—less taxes.

Corporate profits in 2008, the latest year for which data are available, were $1,830 billion, up almost 12 percent from $1,638.7 billion in 2000. Yet, even though corporate tax rates have not been cut, corporate income-tax revenues fell to $230 billion from $249 billion—an 8 percent decline, thanks to a number of loopholes. The official 2010 profit numbers are not added up and released by the government, but the amount paid in corporate taxes is: In 2010 they fell further, to $191 billion—a decline of more than 23 percent compared with 2000.

Credits: WW CHART — SOURCE: IRS

7. Some corporate tax breaks destroy jobs.

Despite all the noise that America has the world’s second-highest corporate tax rate, the actual taxes paid by corporations are falling because of the growing number of loopholes and companies shifting profits to tax havens like the Cayman Islands.

And right now America’s corporations are sitting on close to $2 trillion in cash that is not being used to build factories, create jobs or anything else, but acts as an insurance policy for managers unwilling to take the risk of actually building the businesses they are paid so well to run. That cash hoard, by the way, works out to nearly $13,000 per taxpaying household.

A corporate tax rate that is too low actually destroys jobs. That’s because a higher tax rate encourages businesses (who don’t want to pay taxes) to keep the profits in the business and reinvest, rather than pull them out as profits and have to pay high taxes.

The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than 800 companies to bring profits that were untaxed but overseas back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

The companies said bringing the money home—“repatriating” it, they called it—would mean lots of jobs. Sen. John Ensign, the Nevada Republican, put the figure at 660,000 new jobs. 

Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately it started firing people. Since the law took effect, Pfizer has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed.

Now Congressional Republicans and some Democrats are gearing up again to pass another tax holiday, promoting a new Jobs Creation Act. It would affect 10 times as much money as the 2004 law. 

Credits: WW CHART — SOURCE:
IRS TABLE 1.4 IN 2008 DOLLARS

8. Republicans like taxes too.

President Reagan signed into law 11 tax increases, targeted at people down the income ladder. His administration and the Washington press corps called the increases “revenue enhancers.”  Reagan raised Social Security taxes so high that by the end of 2008, the government had collected more than $2 trillion in surplus tax.

George W. Bush signed a tax increase, too, in 2006, despite his written ironclad pledge never to raise taxes on anyone. It raised taxes on teenagers by requiring kids up to age 17, who earned money, to pay taxes at their parents’ tax rate, which would almost always be higher than the rate they would otherwise pay. It was a story that ran buried inside The New York Times one Sunday, but nowhere else.

In fact, thanks to Republicans, one in three Americans will pay higher taxes this year than they did last year.

First, some history. In 2009, President Obama pushed his own tax cut—for the working class. He persuaded Congress to enact the Making Work Pay Tax Credit. Over the two years 2009 and 2010, it saved single workers up to $800 and married heterosexual couples up to $1,600, even if only one spouse worked. The top 5 percent or so of taxpayers were denied this tax break.

The Obama administration called it “the biggest middle-class tax cut” ever. Yet last December the Republicans, poised to regain control of the House of Representatives, killed Obama’s Making Work Pay Credit while extending the Bush tax cuts for two more years—a policy Obama agreed to. 

By doing so, Congressional Republican leaders increased taxes on a third of Americans, virtually all of them the working poor, this year.

As a result, of the 155 million households in the tax system, 51 million will pay an average of $129 more this year. That is $6.6 billion in higher taxes for the working poor, the nonpartisan Tax Policy Center estimated. 

In addition, the Republicans changed the rate of workers’ FICA contributions, which finances half of Social Security. The result:

If you are single and make less than $20,000, or married and less than $40,000, you lose under this plan. But the top 5 percent, people who make more than $106,800, will save $2,136 ($4,272 for two-career couples).

Credits: WW CHART — SOURCE:
MEDICARE TAX DATABASE;
 CENSUS.GOV

9. Other countries do it better. 

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service. 

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year.

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, unmarried Germans on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organization for Economic Cooperation and Development. 

At first blush the German tax burden seems horrendous. But in Germany (as well as in Britain, France, Scandinavia, Canada, Australia and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money. 

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition and fees for services, and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany. 

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries—almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens. 

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

Here is a question to ask yourself: We started down this road with Reagan’s election in 1980 and upped the ante in this century with George W. Bush. 

How long does it take to conclude that a policy has failed to fulfill its promises? And as you think of that, keep in mind George Washington. When he fell ill his doctors followed the common wisdom of the era. They cut him and bled him to remove bad blood. As Washington’s condition grew worse, they bled him more. And like the mantra of tax cuts for the rich, they kept applying the same treatment until they killed him.

Luckily we don’t bleed the sick anymore, but we are bleeding our government to death.

Credits: WW CHART — SOURCES:
OMB; CENSUS.GOV; BEA.GOV;
CALCULATIONS BY AUTHOR

---

David Cay Johnston is a columnist for tax.com and teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management. He has also been called the “de facto chief tax enforcement officer of the United States” because his reporting in The New York Times shut down many tax dodges and schemes, just two of them valued by Congress at $260 billion. Johnston received a 2001 Pulitzer Prize for exposing tax loopholes and inequities. He wrote two bestsellers on taxes, Perfectly Legal and Free Lunch. Later this year, Johnston will be out with a new book, The Fine Print, revealing how big business, with help from politicians, abuses plain English to rob you blind