Monthly Archives: April 2010

14 Ways A 90 Percent Top Tax Rate Fixes Our Economy And Our Country

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

A return to Eisenhower-era 90% top tax rates helps fix our economy in several ways:

1) It makes it take longer to end up with a fortune. In fact it makes peoplebuild and earn a fortune, instead of shooting for quick windfalls. This forces long-term thinking and planning instead of short-term scheming and scamming. If grabbing everything in sight and running doesn’t pay off anymore, you have to change your strategy.

2) It gets rid of the quick-buck-scheme business model. Making people take a longer-term approach to building rather than grabbing a fortune will help reattach businesses to communities by reinforcing interdependence between businesses and their surrounding communities. When it takes owners and executives years to build up a fortune they need solid companies that are around for a long time. This requires the surrounding public infrastructure of roads, schools, police, fire, courts, etc., to be in good shape to provide long-term support for the enterprise. You also want your company to build a solid reputation for serving its customers rather than cheapening the product, pursuing quick-buck scams, cutting customer service, etc. The current Wall Street/private equity business model oflooting companies, leaving behind an empty shell, unemployed workers anda surrounding community in devastation will no longer be a viable business strategy.

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Tranquillon Ridge and Logic

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I’m reading Robert Cruickshank’s post at Calitics, titled, What the Louisiana Oil Spill Tells Us About Tranquillon Ridge.  Summarizing, another oil-spill tragedy is unfolding in the Gulf because of offshore drilling and “offshore oil drilling presents an inherent and ongoing risk to the environment and the economy.”  He concludes,

Approving the Tranquillon Ridge project means we are again running a significant risk of a major and devastating oil spill striking what is one of the most unspoiled parts of the California coastline (the remote west-facing beaches of Santa Barbara County).

If a paragon of new offshore drilling technology can fail this catastrophically, it should cause Californians to seriously reconsider whether allowing new drilling off our coast is worth the considerable risk. As our oceans are already facing the stress of pollution, overfishing, and global warming, offshore drilling seems like the last thing we would want to do to our oceans, our beaches, our wildlife, and our economy.

I think this is an emotional reaction, not a logical reaction.  My understanding is that the Tranquillon Ridge deal is not “allowing drilling off our coast.”  Drilling is already occurring off the coast, and we all hate it.   

But this deal does not set up any new platforms, drilling rigs, etc.  It allows PXP to drill at an angle from existing platforms, but in exchange it sets up a date when they stop drilling, dismantle the platforms, and go away.  

Without the deal they can stay.

There is a concern that they won’t honor the deal.  Fair enough.  So let’s say that, seeing as how they are in the oil business, there is perhaps a 99% chance that they will try to wiggle out of the deal.  That still leaves a 1% chance that they will honor the deal, stop drilling, dismantle the platforms, and go away.

Even a 1% chance that they will honor the deal leaves us all better off than we are today.  Take the deal.

Disclaimer – Hannah-Beth Jackson, who founded Speak Out California, is working with EDC on the Tranquillon Ridge project.  I am currently a volunteer with Speak Out California and the associated Institute for the Renewal of the California Dream. While I’m not paid my association with HBJ might influence my views.

Prop 16 – A Monopoly Wants To Stay That Way

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Proposition 16 is being sold — and sold, and sold, and sold — as a “right to vote.”  The Prop 16 website makes it sound so reasonable,

“It requires voter approval before local governments can spend public money or incur public debt to get into the electricity business.”
So reasonable!  But that isn’t really what Prop 16 does.  Proposition 16 is entirely financed with million of dollars from one company – PG&E – and it is intended to perpetuate their monopoly.  
Here is the background: Currently municipalities can choose to form Community Choice Aggregation Projects that let communities buy power for their citizens, instead of using PGE as an intermediary.  The result is that people can buy power at a lower cost, and can choose to buy a mix with more renewable energy.  PGE, of course, doesn’t like that.
Prop 16 takes away a community’s right to choose to buy their own power and imposes a 2/3 vote requirement.  A community can usually gather a majority to make such decisions but a 2/3 requirement means that PG&E can swoop in and spend some money to get a minority to oppose such a decision, and kill it.  
California already has a 2/3 requirement to pass a budget, and we know how that is working.  Democracy is suppressed and budgets can’t pass.
We know monopolies don’t work in our society.  While we’re trying to create competition to encourage the development of clean, renewable energy sources, PG&E is taking your rate-payer dollars to try to squelch that effort.  PG&E wants to stay a monopoly, continue to use dirty fuels which cause climate change and keep the competition out.  That’s not very democratic now, is it?
We need to say no to big corporations that use their money (rate/taxpayer in this case, actually) to bully us with phony claims that really serve to perpetuate fat payouts to executives while undermining consumer choice.
 
Let’s not be deceived. Spread the word that Prop 16 is about protecting corporate fat-cats, not you and me, not democracy, not fair competition.

What Conservatives Mean By “Freedom” and “Big Government”

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Many of us have wondered what conservatives mean by terms like “big government” and “freedom.” Today the vice chairman of the California Republican Party gives us a hint. In Constitution guarantees freedom, not a cushy life, published in the Rev. Moon’s Washington Times (do Christians know he’s writing there?), Thomas G. Del Beccaro writes,

   

Today, politicians literally speak of the “rights” of people as they attempt to guarantee a certain standard of living for their constituent-subjects. Of course, most recently, the federal government took on the role of guaranteeing that Americans had a minimum standard of health care because, to the government, it was a right – however unenumerated. 

Now, it would be one thing if a government could actually guarantee such standards of living, but it cannot. After all, before the Great Society was enacted to take on the War on Poverty, the government-measured poverty rate was 14 percent.The pre-Great Society federal budget was less than $130 billion.Since then, we have spent tens of trillions of dollars in good intentions and have a nearly $4 trillion budget, yet the poverty rate remains virtually the same 14 percent. 

 In the process, of course, we have diminished freedoms immeasurably – whether by forcing people to pay for those trillions or by being forced to be subject to government rules….

So “big government” means more rights for Americans, like the right to health care. And by “freedom” he means not being “forced” to help out other Americans. (Of course, the poverty rate was much lower before conservatives took over the government a few years back…) 

Conservatives opposed civil rights for women, minorities, and now gay people. They opposed and fought to the last against Social Security, Medicare, unions, public schools, libraries, parks, worker safety rules, food safety riles, consumer safety rules, bank regulation, even public health programs. These are the “cushy life” big-government programs he complains about. And by “freedom” he means not pitching in to pay for things like roads, bridges, education. 
Government is We, the People watching out for, empowering and protecting each other. It means WE make the decisions and “big government” means WE make decisions that help US. Think of the alternative to We, the People making the decisions and you will realize what opponents of government are pushing for. 
 Apparently conservatives want us all to be disposable economic units with no value beyond what we are able to consume and how much money we make for the wealthy few.

Tax Tricks

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

How many ways can people be tricked about taxes? Here are a few tricks I have come across.

* The rich already pay most of the taxes. You hear variations of this, most recently the news that 47% of Americans don’t owe any federal income tax. But the fact is that the rich take in most of the income and literallyown almost everything. You probably heard about 25 hedge fund managers getting $25 billion income last year? They get a special deal and don’t pay income tax rates on that money. But regular people still pay Social Security, state and local and sales taxes on their income. In fact working people pay a higher overall tax rate than the super-rich, even if federal income taxes are not part of that.

One more thing – really, don’t get me started – most income at the top comes from “capital gains” from things like stocks and property, but capital gains are taxed at a much lower rate than income that comes from from actually working.

* The new Tea Party Contract From America has as item 4: “enact fundamental tax reform; Adopt a simple and fair single-rate tax system by scrapping the internal revenue code and replacing it with one that is no longer than 4,543 words — the length of the original Constitution. (64.90 percent).”

Think about this. Since the rich pay most of the taxes, guess what happens to their taxes – and yours – if we move to a single tax rate for everyone. Clue: their taxes go way down and everyone else’s go way up.

* Raising taxes on rich unlikely to cut deficit. You often hear stories like this — that there just isn’t enough money at the top to pay off the debt, so why bother? First, even if it doesn’t completely close the budget gap, it sure would make a dent. Next, think about those 25 hedge fund managers who brought in $25 billion last year but don’t even pay income taxes. That’s a please to start right there, and it’s just 25 people. Then think about the$140 billion Wall Street bonus pool that was paid out last year – a recession and bailout year. That all went to just a few more people. There’s lots of money at the top.

* Taxes “take money out of the economy,” or otherwise hurt economic growth. Where do they think the money goes? Taxing the rich might take money out of the economy of the Cayman Islands, but when used to fund investment in our economic future (roads, schools, R&D, etc.), it actually grows the economy.

Please let us know about some tax tricks you have heard, in the comments.

And finally — Take a look at CAF’s Taxes: Myths And Realities

Once Again Voters Overwhelmingly Approve Tax Increases

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You hear a lot about “anti-tax sentiment” but when voters are given the choice of raising taxes or cutting services, they usually want the taxes.  

St. Louis voters overwhelmingly — 63% to 37% — voted to increase taxes to support mass transit programs.  Voters also approved a number of property tax increases to help schools.

In other local elections yesterday, Kennett Missouri voters passed a tax increase 66% to 34% and Provincetown, Mass voters approved new taxes.
In January Oregon voters approved income tax increases on the wealthy and corporations “to prevent further erosion of public schools and other state services.”
If the honest case is made and the public is allowed to see that we have a revenue problem in California, not a spending problem, the public will be more willing to open its pocketbooks to fund the services they want and expect.
California should just let the tax question go to the voters without such restrictions on democracy as a 2/3 requirement.  As these election results show, for most people obviously “taxes” isn’t a dirty word.  If conservatives want to say it is why won’t they just allow an “up or down” vote?

Prop 17 – The “Mercury Insurance” Initiative

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The other day I wrote that Proposition 17 — on the ballot in June — is known as the “Mercury Insurance Initiative” and that I’ll explain that later.  

Well, it’s later.
The Mercury Insurance company has single-handedly spent millions of dollars to put Proposition 17 on the ballot.  Now they are about to spend millions more advertising it.  The proposition allows insurers to penalize consumers for missing one payment or having a lapse in car insurance coverage.  So if you stopped driving – couldn’t afford it, left the state, etc. – or miss a payment, your car insurance rates skyrocket.
Mercury Insurance is going to spend millions of dollars to advertise an initiative that will cost people a ton of money by claiming it saves people money?  Right – that’s why they’re spending millions on it, to save you money rather than to make themselves a bundle.  (My bet – in this current economy they will also claim that it “creates jobs.  Just a hunch.)
The Campaign for Consumer Rights has a Stop Prop 17 website, with a great video, “Mercury Insurance Wants You To Pay More For Your Car”.  Here is is for your viewing pleasure: