Tuesday, April 12, 2011

A Misguided Path


...the Republicans, quite smartly, recognize that there is great political hay to be made in the appearance of deficit reduction, and that white middle class voters will respond with overwhelming enthusiasm to any call for reductions in the “welfare state,” a term which said voters will instantly associate with black welfare moms and Mexicans sneaking over the border to visit American emergency rooms.
Matt Taibbi

It’s no use pretending that what has obviously happened has not in fact happened.
Joseph Stiglitz

Sometimes life becomes so absurd that even Stephen Colbert is unable to deliver his lines without falling all over himself laughing. That's about how I feel right now (only with plenty of crying thrown in for good measure) so I'd like to just pass along a few recommendations to read and ponder over a beverage in the coming days.

First of all, take a look at Joseph Stiglitz's piece in Vanity Fair on how wealth and income have flooded into bank accounts of the top 1% of all earners in the United States. Stiglitz is a pundit Nobel Prize winning economist who simply and methodically points out that this inequality gap has expanded in recent decades because many of those at the top are more productive and contribute more to society have monopoly power and preferential tax treatment in addition to the increase in labor-saving technology, globalization and the steady decline of unions. The top 1% is a club of corporate executives, congressional leaders and executive branch policy makers who manufacture tax legislation and subsidies that favor themselves. Those in power have succeeded in narrating the rest of us into the American virtues of fair play, equality of opportunity, and a sense of community the "free market," the profit motive and unbridled competition.

Second, click on Robert Reich's blog post detailing the catastrophe of language coming from both the right (Paul Ryan's budget proposal) and left (Obama's counterproposal) that seeks to cut the national debt by chopping Medicare. Reich is a pundit Berkeley economics professor who was the Secretary of Labor for Clinton back in the 1990s. The 4'10" Reich is big on Medicare because it has lower administrative costs and should be allowed to haggle with drug companies, hospitals and doctors for better prices (what economists call "economies of scale"). But don't just trust Reich that Ryan's plan would increase health care costs for middle class seniors. Trust the experts at the Congressional Budget Office. If you are looking for a harder-hitting, more therapeutic read, try Matt Taibbi's recent Rolling Stone blog post on for size. Unfortunately, when it comes to squeezing the most out of the budget the GOP has chronically cut back on defense, upper-class tax cuts, bailouts, corporate subsidies, and big handouts to Pharma and the insurance industries infrastructure projects, health care for the poor and elderly, education, infrastructure projects and environmental protection.

Third, peruse Joshua Holland's article about the increasing advantages that corporations have over the rest of us in the realm of taxation and representation. Corporations and their pundits on CNBC whine over their 35% tax rate, but in reality, pay far less than this due to deductions, credits and other loopholes. Corporations can now pay as much as they want to air political ads on TV to strong-arm politicians into privileged policies while hoodwinking the American public into a simplistic narrative about less government and the job-creating benefits of corporations like GE which profited $14 billion and paid $0 in US taxes in 2010 while raking in $3 billion in "tax benefits" (they spent $20 million to lobby Congress for this special treatment). Now, truly, that's Imagination At Work.

7 comments:

  1. Tom, would you please cite your source that GE "paid zero in taxes in 2010"? Also I'd like to know where you get the "$3 billion in subsidies" number.

    Thanks!

    ReplyDelete
  2. Timmy, I added the source (NY Times article) in the post for GE's tax liability in 2010 and corrected my jargon from "subsidies" to "tax benefits." No matter how you say it, GE is gettting a huge advantage through aggressive lobbying and creative accounting.

    ReplyDelete
  3. This comment has been removed by the author.

    ReplyDelete
  4. I would be interested to know if you think it is morally wrong for a person to attempt to minimize their tax bill while still complying with the law?

    ReplyDelete
  5. Timmy T, I do not believe it is morally wrong to minimize one's tax bill while still complying with the law. What I am advocating for, plain and simple, is changing the law because, as it stands, I believe it is immoral. There is no such thing as "a free market." One of the government's most important roles is to set the rules for the market and in the case of GE and many corporations, I believe that the government should change the rules (ie, closing loopholes and banning tax havens) so that we can reduce income inequality in the United States so that we can increase tax revenue to invest in education, health care, jobs, sustainable energy and deficit reduction.

    ReplyDelete
  6. My understanding of GE's claim to a "tax benefit" comes, in large part -- though certainly not completely -- from "sustainable energy" credits because they produce many green energy products like wind energy turbines.

    Do you not find it a little ironic that you would simultaneously advocate closing such "loopholes" while advocating for the very same investments?

    ReplyDelete
  7. Tom,

    It seems like you believe that the current tax law is immoral because your understanding of Scripture says it is immoral.

    If this is so, shouldn't anyone who has that same understanding follow God's law first?

    In other words, shouldn't those that are benefiting from the current immoral tax law pay more than what the law says, and those that are paying more than they should pay less? This would be both an act of obedience to God's law and an act of civil disobedience.


    The Obamas, for example, just saved over $100,000 because of Bush's tax laws. Doesn't it seem like they should pay what they want the law to be were they to get their way?

    ReplyDelete