Why I am opposed to H.R. 4853 (the Tax bill) in its current form.

[jtuck004]

First, I should tell you that I understand the need for help by those on unemployment. We moved my wife's 89 year old mother in with us - (it was a lot easier on the parked cars she was hitting). Within a few months I lost my full-time job, found a part-time job (required because of her care) but lost that in a slowdown. There is no unemployment from part-time jobs, so we are just a little short of making it each month. Lots of resumes get no response, much less an interview. I have an MEd and 20 years with computers and networks, so perhaps there are other reasons. Eastern Washington isn't a hotbed for jobs right now. I took a tax prep class, and I will probably work for one of the tax prep places, try to get through the Spring. They charge too much (don't pay much either) so I am also volunteering for the VITA program. Maybe it will offset the Karma. <G>.

One more quick thing. I don't blame Obama, and I don't blame GWB. It's just bad policy, doesn't matter who sits in the chair. It trades short-term gain for long-term debt, and makes the rich richer. Bad trade, just as it was in 2001.

To tell you why I detest this tax abomination I have to go back in time a little, and borrow some data and other's writing. During the three decades after World War II incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic. (1)

In 1983 Ronald Reagan began to remove protections and break unions, and gave us the gift of the S&L crisis. While making his sneaky move on taxes (he increased them in a back door move on social security) he pointed to something called the laughter Laffer Curve, proved that the tax cuts would spur growth, and that wealth would then "trickle-down" on all us little people. We got some growth, but the people who profited the most were the 1/2 of 1 % of all families that saw their combined wealth increase by $1.45 trillion. The wealth of the bottom 40 percent of families saw their wealth go down by $256 billion. Lo and behold, we added $1.49 trillion to the national debt. By not paying their fair share, the people with the most money saw their wealth rise, leaving behind a larger debt for everyone else. And the working person's income flat lined. (2)


The chart shows average inflation-adjusted incomes of the poorest 20%, middle 60%, and top 1% of households since the 1970s. The incomes include government transfers and subtract taxes. For the bulk of American households, incomes have increased moderately or minimally. For those at the top, by contrast, they have soared.
Chart found here...

But there was more to come. During the administration of Bill Clinton we had the greatest number of jobs created by any administration. But that administration took dead aim on the last of the regulations that had protected this country against the worst excesses of capitalism, rules created during the New Deal. Robert Rubin, at the urging of Citibank, worked to remove Glass-Steagall and move derivatives into the shadows, where the lack of sunlight could set up a rot that still stinks today (then left for a $15 million/yr job with Citibank). They set the stage for what would become a rout in the next administration, where a small number of people profit at the expense of everyone else (3). Clinton says he regrets following that advice. I bet.

George Bush tried to deliver the kill shot. Not satisfied with where things were in 2001, pushed for and got the Economic Growth and Tax Relief Reconciliation Act of 2000, because he believed the people that told him the" Laughter Curve" (sorry, can't help it) worked so well during Reagan's term. Again, no "tickle-down", but a lot of people got dumped on. That "Economic Growth Bill" worked so well that 3.6 million jobs were lost in the last year of his presidency. We were left with an additional $2.8 trillion of debt for the nation to pay. And, of course, income followed that well-worn trail...


here...

In $ terms:


here

What's the effect of that tax loophole on working folk?


here...

So here we are today with Democrats (DEMOCRATS for dogs sake!) arguing over whether we should continue this policy. Because this policy is driving those income gains and losses, leaving 80% of the people behind, while 20% don't pay their fair share and make themselves richer in the process.

You may have seen this government chart in http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=556710&mesg_id=556710">here...:



Who is trying to fool whom? That left side is a little inflated.

Renewable Energy Grants? When is the last time you were going to put in a several megawatt wind farm? That money goes to people who already have millions of investor dollars, and will help them attract more. I think it's a necessary thing - but please don't try to pass it off as going to people who are "needy". that's $18 billion going to a medium-sized business with assets.

The equipment expensing? Let's say there are a few hundred small businesses that are going to buy a delivery truck, or revamp some machines, etc. (Won't work for buildings, that's long term), that might - might - use up a billion dollars. Most of that is going to large and very large businesses. But business hires people because of demand, and this isn't going to increase demand. It is just a loophole which will increase the profit, most of which will go to the people at the top. $21 billion.
That's $153 billion going to the very, very rich, or 2% of the population. This bill will spend $195 billion for the other 98% of us. You can do the math, but you don't need a calculator to see who is going to make out like a bandit on this.
But we are not done yet. Our nation is still spending more than we are taking in on taxes, so nearly every penny of that money that we are "getting" is going to add to the debt that only a portion of us will pay back. And if we are paying that bill we can't keep teachers employed, firefighters and police on the job, take care of our roads and bridges. 46 states are in serious financial trouble, because there just isn't enough income to support what is there. We need to help, but that means everyone needs to pay their fair share, not just 80% of us.

I'm actually not disturbed by the debt. We are deep, very deep, in a hole, with perhaps 15-20 years of anemic, low-wage job growth to look forward to. When we should have been saving we blew it by allowing the rich to increase their wealth at everyone's expense. We are going to have to use that debt now to rebuild.

The payroll tax "holiday"? It will make available $112 billion which is pitifully small given the size of what needs to be done. It might be spent, or it might go to pay off bills, 'cause there are plenty of those in most homes. Regardless, it will wind up as a liability on our books, more debt only a few of us will be on the hook for, because the money that would otherwise go to SSI will be pulled from the general fund. In other words, it will just add to the money that, by now, you know that not everyone is obligated to pay. And if it is spent, the profit may well end up in China, funding another polysilicone factory, or another $800/mo engineer doing alternative energy research. Leaving us with no jobs to earn the money we will need to keep our nation strong.

Having a "holiday" (makes it sound like something out of "It's a Wonderful Life) takes the discussion away from the larger issues, and away from why we cap this at $106,00 of income or so. Why don't people who make $4 billion in a year, who only pay 15% on that income, pay their fair share? If they did that perhaps Social Security would be assured for your children when they retire? And since the number of Americans who retire on ONLY SSI is nearing 40%, that might be more important than a $112 billion bill, which may very well be used as a spear to run through the heart of a program that has served us as Americans for over 70 years.

While I am sympathetic to the unemployed, I know that the trade off for giving them the money with H.R.4853 the Middle Class Tax Relief Act of 2010 may not be the best way to get it done. They get their $300 a week for an additional several months. But their kids have to go to a school with larger classes. There may not be money for food stamps because of state budget cuts. A hospital emergency room may not be staffed. The rich have shown us that they use their wealth to make sure the job that might have been there after a year will be offshored to a place where someone will work for less than a mom or dad gets paid in unemployment. I know how hard it is, believe me. But it won't be any better because a couple million people get a small check for a year if we trade away the services their family needs.

If you read the Stock Market Watch on the front page here at DU in the mornings (thank you for your work Ozy, and everyone else. Btw, they had nothing to do with this - it is all my responsibility. So throw the bricks at me), you will note that we have bailed out the investment banks with loans of perhaps as much as $23 trillion dollars. A portion of that was the TARP program, which is nearly all paid back. But there is $2 trillion outstanding, perhaps another trillion beyond that, for which there is no bill. It was just paid to the investment banks, some of whom pay their people over $600,000 a year to do no useful work, to build nothing. Just to find ways to profit from us. We know that part of the reason they were bailed out was because they held thousands of life insurance policies, annuities, and retirement funds hostage, threatening to "Enron" them in which case thousands of our retirees would have gotten pennies. So we bailed out the greedy, corrupt, reckless , two-faced criminals on Wall Street instead of making sure there were jobs for single parents, and we wonder why we have trouble garnering support.

But the American people aren't holding anyone hostage, not threatening anyone. They just want a job, opportunity. Why don't we treat ourselves as well as the reptiles at the investment banks? Let this abomination of a tax hack die, close the loopholes for the wealthy, and use the revenue to put $3 trillion on the table. Start a jobs program which would pay 20,000,000 unemployed people $30,000 a year (that's twice what they would make on unemployment, btw). Have them start work on the bridges, on high-speed rail that would connect the 50 largest cities in the continental U.S., build 20 alternative energy research centers. Fund the tuition and offer free classes at junior colleges for adults that need retraining in select areas. Start something that increases demand.

Now I know someone will say "But, but, but, the Republicans are in the house". Uh huh. So? We have overcome harder obstacles as Americans. Remember when the Nazi's were in the way? That didn't stop us either, and they had guns. (well, so do some of these folks, but the first policeman that shoots back will scatter them like bunnies, and they will run over the "witless bullies" that act as their leaders on the way out). We have a world class speaker in Barack Obama, and thousands of community organizers. I bet Senator Bernie Sanders would help . Let's put those pictures that Alan Grayson showed the House of the things that the rich are buying with the 87% of private wealth they hold, and ask the American people if they they think that is fair, if they think that it is right for those people to evade their duty to this country. Make it absolutely clear that the reason they don't have jobs is because we haven't led them in a march on D.C. to demand that the factories be updated. Make it clear that the reason they haven't got medical care is because we haven't led them to deluge the Capital switchboards with millions upon millions of calls and letters demanding a change in health care, not just a mandate that moves money into the claw-like grasp of the insurance companies. And then we need to pursue actions which may well not be in the best interests of insurance companies, or the second biggest contributor to President Obama's campaign, Goldman Sachs. (3)

I'm not fooling myself. I know it won't be easy. Taxes will go up, but they will go down on the people who make the least. At least the money will go to work for the people, and not mostly into the pockets of the very, very wealthy. Some of our $174,000 a year politicians may lose their seat and have to go back to the community and face the people they are insulated from today. But they won't be alone. It's not easy for the woman that wrote Bernie Sanders that they have to put plastic over their windows because they have no heat or can't afford gas for the car to go to the doctor. It's not easy for a parent to get 99 weeks of unemployment and realize they have no options, no hope. It's damn sure not easy to watch a child go hungry over the weekend, knowing they won't eat until they get to the school lunch program Monday morning. And it may not be easy for you. But it won't get any better if the bill passes.

Btw, adding the unemployment extension to H.R. 4853 was done after the bill to extend unemployment failed. If that can't pass on its own, maybe we could post pictures of all the people that voted against it, with ALL their phone numbers and email addys, and suggest the unemployed call with their opinions until it does.

Perhaps the reason life is so hard for so many is because we haven't fought the battles we need to fight. There were 3.8 million jobs lost the year before President Obama took office, 4.7 million the year he took the oath, and we were in the process of shoveling trillions of dollars into a Ponzi scheme called investment banking. People were, and still are, hurting badly from that. Maybe we need to announce the need for a $3 trillion jobs program because this country will not survive without jobs. One can make all the excuses they want, but excuses don't send the kids to college, they don't pay the mortgage, and mandates don't make it possible for people to buy medical care. And when people jump up to oppose it, let's invite them up on the stage, where they can stand in front of big pictures that show their income and assets, and how comfortable they can be whether you get a job or not. Or maybe we can find a way to demonstrate that there are 6 people in this country looking for every job that's available, as well as 20 more people looking for it overseas?

I know, I know, the kowtowing to Wall Street reversed a long-decline in fundraising. But that's like making a deal with a snake - they can't help but bite the friendly hand. It's just in their nature. But money is not everything - have you looked at Lisa Murkowski's campaign? The Republican Party turned it's back on her when Miller won the primary. She proceeded to kick his ass with the first write-in campaign for the Senate since 1954, with less money and without the support of her party. That's a lesson anyone should learn from.

One thing I find particularly offensive - the bill increases taxes on single people who make less than $20,000 a year, and on married couples who make less than $40,000 a year. Those were people G. Bush didn't think would vote for him, so they weren't important. But they are our supporters. A lot of good paying jobs have been lost in this depression, and many people who used to make $40K a year have now dropped into that lower category. If we show them our backs, where will they turn?

Part of the fallout from this bill will be ammo for those that tell us that SSI and Medicare have to be trimmed. That's utter and complete nonsense. This country has the capacity to grow itself out of debt like no other. Cutting expenses is like giving in to the worst of the enemies this country has ever seen, and will have the same result that England found when they tried to make a deal with Hitler. We have some of the smartest, hardest-working people on the planet, and they deserve more than to be told the money they worked for all their lives has been stolen and the Democratic Party is going to take the side of the thieves. They deserve to know that we can re-create the life we want, if we work together and teach each other how.

Like Senator Bernie Sanders said, that bill needs to die. And we need to fight for the people again.

(1) http://www.nytimes.com/2010/10/17/business/17view.html?_r=2&th=&emc=th&pagewanted=print
(2) The Looting of America - Les Leopold
(3) The Great American Stick-Up - Robert Scheer

[gateley]

1. You obviously haven't given this much thought, so why don't you

do a little research and come back and give us your opinion then?

:sarcasm:

Man, I'm printing this out and showing it to my friends - VERY well done. Thanks! :hi:

[DJ13]

2. K&R, that was a lot of work, great post

[Hello_Kitty]

3. Great job! eom

[pa28]

4. A DU'er posted a chart comparing Gini coefficient by country not long ago.

Looks like we'll shortly have an even more stark division of wealth than Mexico. With a few more years and a few more regressive pieces of legislation we'll be giving Brazil a run for their money.

[sasha031]

5. excellent work, thank you