Category Archives: Democracy

GE Doesn’t Pay Taxes — Taxpayers Pay GE

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In 1983 NY hotel-chain-owning billionaire Leona Helmsley said, “We don’t pay taxes. Only the little people pay taxes…” As our country migrates from democracy to plutocracy, this more and more appears to be official policy. Again and again we see tax cuts for the wealthy few, tax breaks and subsidies for the big corporations that operate as fronts for those wealthy few, and budget cuts for the things We, the People (government) do to empower and protect each other. Just a few weeks ago we watched as an extension of the Bush tax cuts and a huge cut in the estate tax rate was pushed through. Now we watch as the discussion turns to cuts in Social Security and the rest of the so-called “safety net.”

Another indicator of plutocracy (government of, by and for the wealthy) is impunity for those at the top. Leona Helmsley actually went to jail for tax evasion. Even as recently as the early-90s Savings and Loan Crisis our government investigated, prosecuted and jailed more than a thousand bad actors for fraud and other crimes. This time, well, … not so much. Well … actually not at all. Times have changed. Don’t look back. Deal with it. Suck it up. Let’s all get on the same team and keep this ball moving forward down the field at the end of the day. Whatever. Hey, look over there!

Today’s Plutocracy Indicator

From the NY Times, G.E.’s Strategies Let It Avoid Taxes Altogether

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

So not only did GE, the highly-profitable recipient of federal contracts and bailout money, not pay taxes, we paid them $3.2 billion!

Revolving Door Writes The Loopholes

How does GE accomplish this? By taking advantage of the “revolving door” where people move back-and-forth from government agencies to the corporations those agencies are supposed to oversee. From the NY Times story,

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While Congressional staffers they write the loopholes into the laws. Then they go to their reward at corporate headquarters for very high pay. Then they go work in the agencies to make sure the rulings go their way. They then go collect again. It is a lucrative game. They’re the winners — they call themselves “producers.” We’re the losers — they call us … “losers.”

Who Really Benefits?

The use of the general term “corporations” to describe the beneficiaries of these policies is really a smokescreen that masks the fact that really a very few people are benefiting. Yesterday’s post, Lobbyists Admit Corporate Tax “Holiday” Didn’t Work, But Demand It Again, pointed out that it is a very few actual people that we are really talking about here,

Corporate wealth is really just personal wealth, held at arms length from the person to mask what is going on. The wealthiest 1% own 50.9% of all stocks, bonds, and mutual fund assets. The wealthiest 10 percent own more than 90 percent. The bulk of us own less than 1 percent. When you hear about “corporate” holdings, think about this chart from the Working Group on Extreme Inequality:

At The Expense Of The Rest Of Us

These benefits accrue to the wealthy few at the expense of the rest of us. What many people don’t understand is that it is also at the expense of other companies. Our infrastructure and public structures – roads, education, courts, customers – are the soil in which good companies can grow. When tax dodgers are able to avoid contributing to our communities and country, the overall environment for the rest of our businesses deteriorates and our worldwide competitiveness declines. We see it all around us every day.

Ungrateful Bastards

For all the benefits huge multinational companies like GE get from We, the People — subsidies, contracts, bailouts, tax breaks and customers, they aren’t very rateful and certainly are not about to give anything back. Barry Ritholtz at The Big Picture writes,

Yet another reason why you don’t bailout companies whose inability to manage risk allowed themselves to become destroyed: They not only do not deserve to continue with the same management/shareholders/creditors who all created the insolvency in the first place, but they are ungrateful bastards as well.

Even Reagan

Even tax-cutter Ronald Reagan balked when he learned that GE (for which he had been spokesman) didn’t pay its taxes. From the NY Times story,

In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. — a company for which he had once worked as a commercial pitchman — was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

“I didn’t realize things had gotten that far out of line,” Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.

Isaiah Poole, in Rewriting Eric Cantor’s Cant On Jobs,

“So let’s stop the demagoguery about overtaxed corporations and have a dialogue instead about a tax code that taxes all people fairly. A tax system in which a billionaire like Warren Buffett pays taxes at a lower rate than his secretary is not fair, and an unfair tax code, one that’s riddled with loopholes, perverse incentives and ways to game the system, keeps us limping and unproductive.”

Terrance Heath has been writing a series on The Truth About Tax & Spend Conservatism,

… the truth about “Tax & Spend Conservatism” is that it isn’t about raising or cutting taxes, but about whose taxes are raised and whose taxes are cut. It’s about, as Robert Borsage put it, who gets hit with the tab for the great recession.

Resources

Public Campaign fact sheet titled, GE’s Corporate Tax Dodging that begins,

General Electric spent $235.2 million in political money since 2000–paid no federal income taxes in 2008, 2009, and 2010.

and points out:

G.E. cut American jobs and exported them overseas.

The New York Times reports “[since] 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment.”

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

Will Republicans Allow Public To Vote?

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Sacramento is still stuck.  George Skelton lays it out in the LA Times, in, California lawmakers need to get moving,

   

Republicans can’t get out of their fix without angering the anti-tax crowd they cower to. Either they compromise and allow a tax extension measure to be placed on a special election ballot or they’re seen as obstructionists or, worse, irrelevant, doing nothing in Sacramento except drawing their public pay and perks.
. . . Democrats seem to be moving at a brisk pace on spending cuts, but Republicans still are crawling on tax negotiations.
. . . The Legislature needs to pass a compromise package within the next three or four weeks in order for Brown to call a special election in June. If that deadline is missed, the earliest balloting would be in late September, because voters tend to ignore political pitches during the summer vacation season.

Republicans hold just over 1/3 of the votes in Sacramento. That is just enough to block everything, including allowing the public to express their wishes. And that is what they are doing. A shutdown seems to be their goal.
Update — Dick Morris lays out the Republican strategy nationally, and it clearly is the same as in California: Create a budget deadlock on purpose, never mind the effect on citizens, use it to increase your own political power:
A Budget Deadlock Will Defeat Obama, But a Compromise Might Save Him,

A budget deadlock, played out over months, will doom President Obama and assure his defeat. But an easily won compromise will help him get re-elected.
. . . If the Republicans hold firm in demanding huge spending cuts and Obama does not give in, the question of whether or not to cut spending will dominate the nation’s political discourse for months on end and will spill over into the 2012 election.
To assure that it will, the Republicans should hold firm to their budget spending cuts without surrender or compromise. If necessary, it is OK to vote a few very short term continuing resolutions to keep the government open for a few weeks at a time, always keeping on the pressure.
. . . If Obama offers a half a loaf, the GOP should spurn it for weeks and months.

Does this or does it not sound exactly like the Republican plan in California, too?

Democracy Vs Plutocracy: Public Transportation

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Here is a letter in a recent “Mr. Roadshow” column in the San Jose Mercury News. The letter illustrates the problems in plutocratic/libertarian thinking vs democracy. (Note: Caltrain is the commuter-rail line serving towns between San Francisco and San Jose.)

Your recent article on Caltrain’s $30 million deficit is once again showing your socialist leanings. Saying Larry Ellison of Oracle or Sergey Brin and Larry Page of Google or Steve Jobs of Apple should rescue Caltrain is one of your famous inane ideas. If Caltrain cannot operate without taxpayer funding, it should go out of business. Just how much taxpayer money is used to fund the likes of Southwest Airlines, Greyhound Bus or any taxi services? As a taxpayer, I have never received a billing statement from any of these companies for not using their business! If you want the rich to pay for Caltrain, I suggest you tax rich athletes, actors, entertainers, the major news network anchors and, of course, rich politicians such as Dianne Feinstein, Barbara Boxer, Nancy Pelosi and John Kerry, to name a few. Private business is the heart of America! Not government! Maybe you should quit the Mercury News and go to work for Gov. Jerry “Moonbeam” Brown and become director of Caltrans.

Let’s look at the assumptions in this letter:

  • If XXXX cannot operate without taxpayer funding, it should go out of business. (Insert Caltrain, Public Radio, schools, libraries, health clinic for the poor, etc., as needed.)
  • Private business is the heart of America! Not government!
  • No taxpayer money goes to help airlines, bus companies, etc. operate.

    • Never mind the idea of public infrastructure, courts, etc. that provide the underpinnings of all business. An airline can’t operate without an airport, air traffic control, weather forecasting, etc. A bus or taxi company cannot operate without roads, police, and the rest of the system. No business would exist without courts and the financial system…
    I want to explore a deeper question. What are we, as citizens in a democracy, entitled to? Yes, that word, “entitled.” There are things we are entitled to because we are human beings and citizens. We are supposedly still a one-person-one-vote system and not a one-dollar-one-vote system, and we are supposedly entitled to equal opportunity, equal access and an equal voice.
    But for-profit systems only respect those with lots of money. In a democracy is it right to require people to have a lot of money have access to transportation? To health care? To information?
    What are your thoughts?
    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Jerry Brown’s State of the State Speech

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    Today’s State of the State speech lasted about 15 minutes. This was actually a speech that regular people would enjoy listening to:

    The interesting thing about this speech is that it was clearly not “crafted” by speechwriters. It was Jerry being Jerry, straightforward, open, and to the point.
    Summary: he said we need to get the budget straightened out, that we have a great opportunity to really go places as a state if we do this, that he has presented a plan to do this and wants to take the plan to the voters, and if anyone has a better idea please tell us what it is.
    One notable thing about the speech was it was entirely about trying to get the Republicans to cooperate with anything at all. Republicans are trying to prevent taking Brown’s plan to the voters, prevent passing anything with any taxes, prevent any budget that allows the government to operate as a government, and prevent … everything.
    So Brown spent most of the speech outlining why it is wrong to prevent the public from being allowed to vote. Following are a few notes paraphrasing what he said:

    Under our form of government it would be unconscionable to tell the voters they can’t decide.
    The state’s Constitution says all political power is inherent in the people.
    “When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can’t say now is the time to block a vote of the people,”
    The only way forward is to go back to the people and seek their guidance.
    If you want to block the people’s right to vote, stand up to say block that vote. (No one stood up.)
    My plan to rebuild California requires a vote of the people, and frankly, I believe it would be irresponsible to exclude the people from this process. They have a right to vote on this plan. This state belongs to all of us, not just those in this chamber. Given the unique nature of the crisis and the serious impact our decisions will have on millions of Californians, whether it’s more cuts, extend taxes, the voters deserve to be heard.
    It’s the best budget I can devise, if any of you have any suggestions on how it can be better please share them with me. No one has offered even one alternative solution.
    If we can get our budget in order we are in a good position to take advantage of our assets.

    Democracy, Plutocracy Chart

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    DEMOCRACY

    PLUTOCRACY

    We, the People

    Wealthy Few

    One Person One Vote

    One Dollar One Vote

    Government

    Limited Government

    Majority

    Supermajority

    Information

    Propaganda

    Taxes on the Wealthy

    Tax Cuts for the Wealthy

    Budgets

    Budget Cuts

    Jobs programs

    Bank Bailouts

    Welfare

    Warfare

    Express Lanes for 2 or More People

    Express Lanes for 2 or More Dollars

    Security Lines at Airports

    Special First-Class Security Lanes at Airports

    Public Schools

    Private Schools

    Public Investment

    Private Investment

    Update:

    Public Transportation Private Jets
    Accountability Impunity
    Rule Of Law Above The Law
    Transparency Secrecy
    Sustainable growth Polluter Growth
    Medicare-For-All Healthcare For Profit
    Clean Elections Rigged Elections
    Savings Accounts Offshore Accounts
    Credit Card Debt Credit Default Swaps
    Union members Serfs

    Feel free to add additional contrasts in the comments.

    George Will’s Problem With Government By We, The People

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    In a column today, Hubris heading for a fall, George Will lays out his problem with America’s system of decision-making by We, the People.

    The idea that America’s problem of governance is one of inadequate resources misses this lesson of the last half-century: No amount of resources can prevent [decision-making by We, the People] from performing poorly when it tries to perform too many tasks, or particular tasks for which it is inherently unsuited.*

    Will continues, saying that the problem with democracy is “the bell-shaped curve.” He says we should be ruled by the class of people who “achieve eminence” by superior performance, like surgeons, and not the regular people currently allowed to vote.

    Actually, decision-making by We, the People is not sufficiently demoralized. The hubris that is the occupational hazard and defining trait of the political class continues to cause decision-making by We, the People to overpromise and underperform. This class blithely considers itself exempt from the tyranny of the bell-shaped curve – the fact that in most occupations a few people are excellent, a few are awful, and most are average.
    In fact, the bell curve is particularly pertinent to government. Surgeons achieve eminence by what they do “in office” – in operating rooms, performing surgery. Politicians achieve eminence simply by securing office – by winning elections, a skill often related loosely, if at all, to their performance in office.

    Will goes on to complain about the “pathologies” of expanded decision-making by We, the People, saying that public-sector jobs like teaching, nursing, the performing arts are inferior because they are labor-intensive and inherently do not increase their productivity, and are thus “stagnant” with rising relative costs. He says We, the People should not provide these services to people.
    I vote for democracy. But, if Will has his way I won’t be able to vote.
    * I substituted “decision-making by We, the People” for Will’s use of the word “government.”
    This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    We Must Stop the Right-wing Rhetoric that Incites Violence

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    As Americans and people of common decency, we are deeply saddened and offended by the most recent violence perpetrated upon Gabrielle Giffords, a warm and compassionate young Congresswoman from Tucson, Arizona and the other innocent people standing nearby who were wounded and killed. We have no choice but to be outraged. Democracy and freedom are under attack whenever people are threatened with violence or become the victims of actual violence because of their political opinions or beliefs.
    This political assassination attempt could have happened in California or anywhere in the U.S.A. It happens often in Pakistan, Mexico, Iraq and other third-world countries. Sadly, we in the United States are not immune. Perhaps it is should be less surprising given the frequent right-wing references to revolution, violence and Sara Palin’s “target” list that includes a map with enemies identified in a rifle’s cross-hairs. No joke. When violent rhetoric is ramped up as it has been over the past few years, it cannot be surprising that hate groups and crazed individuals will rise up and respond. In fact, according to the Southern Poverty Law Center there are over 60 active hate groups identified in California alone; 66 in Texas and 18 in Arizona. And that list has grown over 250 % in the past few years!
    With six innocent and decent people killed and several others wounded by a deranged young man-with-gun and bizarre political extremist views, it is time to speak up and demand consequences for violent and hate-filled speech by right-wing extremists, led by the Glen Becks and Sarah Palins of the world, and not give them a pass on their rhetoric. Whether intended to or not, hateful and violent speech incites unstable and violence-prone people to lash out and hurt and kill children, doctors, highly-respected judges and senior citizens as well.
    We know the right-wing spin machine is fast at work. They’ll end up trying to persuade us that it’s all Obama and “the lefties” fault because of their policies, and that the leftties’ rhetoric is just as violent and inciteful. As we know, the propaganda machines of the right have never been concerned with the truth, so I’ve included a link below (which you can cut and paste) that demonstrates how this type of hateful rhetoric has been amped up by the right-wing for years. With that being said–and it should be reiterated over-and-over so the toxic and violent references of the right stop, there should be no similar violent images from the left—or anywhere in our political system. We have a way to speak: it is through the ballot not bullets (a shocking suggestion of bullets where ballots don’t achieve the “desired” result– attributed to Sharon Angle in her campaign against Harry Reid where she continuously talked about “Second Amendment remedies.”)
    But the facts are clear: it is these very people who, by virtue of their constant references to guns and violence, MUST be held accountable. We must demand a stop to the gun metaphors of bullseyes, targets and firing machine guns as a political campaign activity (actually conducted by Ms. Gifford’s opponent, Jesse Kelly, during the campaign prior to the November election). When you hear people using the “right-wing’s” talking points about how the left is just as hostile, you’ll be able to refute their claims. They are factually false.
    The hate-mongering must end. Glen Beck and his cohorts must be made to understand that free speech has consequences and responsibilities that go with it—especially when inciting and hate-mongering are conducted through the air-waves. No more wistful mutterings about killing Michael Moore, or calling for insurrection and overthrow of the government with “2nd amendment rights.” It is the Glen Becking that provides the encouragement to those who are deep into hate or madness and who believe that they are entitled to impose their views through violence and destruction.
    Even assuming no ill motives to the politically heated rhetoric of the “right” espoused by Beck, Bill O’Reilly, Rush Limbaugh, Michael Savage and Ann Coulter and others, are certainly not stupid people. They know that their rhetoric plays to those with a propensity for violence. The goal is that it stop; that the violence stop and that we find a way to respectfully disagree without forcing our opinions on one another through the barrel of a gun or other acts of intolerance and destructive conduct.
    Enough already. Let’s take over the debate and demand that the facts speak for themselves. And in the meantime, let us all share the weight of six innocent people whose lives were taken by a madman for their simple act of participating in an act of liberty–meeting their congresswoman to express their concerns or appreciation. This is America, after all—where we pride ourselves on liberty and the ability to disagree in freedom and in safety.
    See the Insurrectionism Timeline at http://www.csgv.org/issues-and-campaigns/guns-democracy-and-freedom/insurrection-timeline

    The Anti-Tax Pledge vs Democracy

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    Every Republican in the California legislature except two have taken a “Pledge” not to vote for any tax, ever, regardless of need or consequence. Now the anti-government group behind this Pledge is extending it to say that politicians are violating it even if they allow the public to vote on increasing any tax.
    From the Sacramento Bee’s Capital Alert blog, Grover Norquist group: Putting taxes on ballot violates no-tax pledge,

    The national anti-tax group Americans for Tax Reform will e-mail and fax letters tomorrow to California legislators who signed its no-tax pledge, warning them the group will consider any vote to put tax extension measures on the ballot a violation of that pledge…
    Gleason said asking voters whether they wanted to extend tax increases qualified as an effort to increase taxes.

    So, what do you think? I guess it makes sense for an anti-government group to oppose allowing the public to make decisions. After all, that is what government is: the public making decisions for themselves.

    The Elusive “Swing” Vote

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    Have you heard of the “Moveable Middle?” This is the idea that there are voters on the left who will always vote on the left, and voters on the right, who will always vote on the right, and then there are voters between them who switch back and forth. They are called “swing voters.”

    So the idea in politics is that in order to win elections you have to take positions that appeal to these voters, and they will “switch” and vote for you instead of for the other side. This is a fundamental mistake.

    Here is what is very important to understand about the “swing” vote: No voters “switch.” That is the wrong lesson. There are not voters who “swing” there are left voters and right voters in this middle segment who either show up and vote or do not show up and vote, and this causes this “swing” segment to swing.

    The lesson to learn: You have to deliver for YOUR part of that swing segment or they don’t show up and vote for you. That is what makes the segment “swing.”

    Any Democrat politician who thinks that any conservative will vote for any Democrat, no matter how far right they move, is learning the wrong lesson. All that does is cause your voters in that swing segment to turn away from you, and stay away from the polls.

    This is the lesson that Karl Rove brought to politics. He understood that you can get the right-voting part of the “middle” roused up to come to the polls by moving the Republicans to the right. Instead of “moving to the center” he got Bush and the Republicans to stand up for conservative principles and refuse to compromise, and the result was that the right-leaning part of the swing segment started to show up at the polls.

    The polling supports this conclusion. Greg Sargent, in Progressives and centrists battle over meaning of indy vote,

    Independents are not a monolith, and what really happened is that indys who backed Obama in 2008 stayed home, because they were unsatisfied with Obama’s half-baked reform agenda, while McCain-supporting indys turned out in big numbers.

    . . . The key finding: PPP asked independents who did vote in 2010 who they had supported in 2008. The results: Fifty one percent of independents who voted this time supported McCain last time, versus only 42 percent who backed Obama last time. In 2008, Obama won indies by eight percent.

    That means the complexion of indies who turned out this time is far different from last time around, argues Adam Green of the Progressive Change Campaign Committee. His case: Dem-leaning indys stayed home this time while GOP-leaning ones came out — proof, he insists, that the Dems’ primary problem is they failed to inspire indys who are inclined to support them.

    “The dumbest thing Democrats could do right now is listen to those like Third Way who urge Democrats to repeat their mistake by caving to Republicans and corporations instead of fighting boldly for popular progressive reforms and reminding Americans why they were inspired in 2008,” Green says.

    The Democrats have taken the entirely wrong lessons, and election results show this. Instead of standing up for progressive values, they give in and “move to the right’ on every issue, thinking that there are voters “in the middle” who will then switch sides and support them, when what they are actually doing is convincing those in the middle who might have shown up at the polls to stay home and not bother.

    Jerry Brown

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    In April, 2009, I wrote a post about Jerry Brown that I would like to repost today in honor of his election as Governor:

    On Jerry Brown’s Campaign For California Governor

    He was called “Moonbeam” and mocked, but he was right, and we were right, and the country needs to come to terms with this this so we can move on and finally DO right.

    Jerry Brown was Governor of California from 1975 to 1983. He was a symbol of “the 60’s” even though it was the 70’s, because he came from the times, cared about the issues of the times, spoke the language of the times and governed for the people, from the times. He opposed the Vietnam war. He talked about protecting the environment and conserving energy and providing education and “Buddhist economics.” He fought corporate power and sued large corporations, particularly in the area of campaign finance. He was right.

    For taking these positions Jerry was called “Moonbeam” and mocked for advocating things that we now all understand were correct and necessary. It is 30 years later and the country needs to get past that mocking of the people who were right. But the mocking and obstruction by entrenched interests are still in the way of letting us move on and do the things we need to do for the economy, the country, and the planet.

    Now Jerry is again running for Governor of California and I think this is important to our current national conversation at a time when we must come to terms with the reasons that we have waited 30 years to start doing something about major problems. Jerry’s campaign will force a conversation that will clarify for the country that the “dirty hippies” were right, that we need to learn to ignore the mocking that is a primary weapon of the corporate right, that we need to take care of the planet, that we need to take care of each other, that we need to be in charge of the corporations, not the other way around.

    In his speech to the California Democratic Convention he talked about how 30 years ago he changed California’s energy policies, and how the result has been that California has barely increased its energy use since while the rest of the country has. He talk about a number of things like this, but what most resonated with me was when he talked about how we educate kids. The current emphasis on testing is stifling the creativity of kids. He says we need to bring back education that stimulates creativity. Wow — how long since I have heard “60’s” talk that’s so right?! Talk that recognizes our humanity and says that we are not just cogs in a corporate machine. Who talks about these things today?

    A few years ago, when Jerry was running for Attorney General, I wrote, 

    I’ve loved Jerry Brown since his 1992 campaign for President. During that campaign he proposed boosting the economy and helping the energy/pollution/Middle East problem with a national program to hire unemployed people to retrofit buildings to be energy efficient. Imagine if we had done that! So now 13 years later we have the Apollo Alliance but Jerry doesn’t seem to get much credit for being so far ahead on this.

    A few years before that I wrote,

    In the 1992 campaign Jerry Brown made a suggestion that I haven’t forgotten. He suggested putting the unemployed to work retrofitting buildings and homes to be energy efficient. It requires an up-front investment but it returns a more efficient economy (everyone paying less for energy) and national energy
    independence as a foreign policy bonus. Meanwhile all those unemployed people are getting and spending paychecks, boosting the economy. It helps everyone but the oil companies. Oh. I guess not, then.

    I don’t know right now if Brown can or should win and this is not an endorsement. But I think this is a conversation that we all need to have and learn from.

    He did win, and the state and country will be better off for it.