From Bernie Sanders - "Revenue Must Match Cuts to Lower Deficit"

Sanders Says Revenue Must Match Cuts to Lower Deficit

March 6, 2011

Calls for Surtax on Millionaires, Ending Breaks for Big Oil        

BURLINGON, Vt., March 6 – As the U.S. Senate heads for votes this week on competing spending plans for the rest of the year, Sen. Bernie Sanders said Congress also must raise additional revenue to reduce deficits.  He proposed a surtax on millionaires and eliminating tax breaks for Big Oil.

While there is widespread agreement on the need to reduce the $14 national debt and $1.6 trillion deficit, Sanders (I-Vt.) said “this must include not only budget cuts, but raising revenue in a fair and economically just way.”

Sanders, a member of the Senate Budget Committee, also said, “It would be morally wrong for the United States to balance the budget on the backs of the most vulnerable people in our society while asking nothing from the wealthiest.”

Sanders suggested an emergency surtax on millionaires. A 5.4 percent surtax on adjusted gross incomes over $1 million would raise as much as $50 billion a year. An NBC News/Wall Street Journal poll published last week showed overwhelming support for that concept. 

Sanders also would end tax breaks for big oil and gas companies.  Over the past decade, the five largest oil companies in the U.S. earned nearly $1 trillion in profits.  Meanwhile, in recent years, some of the largest oil companies in this country paid nothing in federal income taxes.  Ending those tax breaks could raise at least $3.5 billion a year.

Senate leadership already agreed to cut spending by $41 billion.  The president last week signed into law a short-term continuing resolution that cut an additional $4 billion. Senate negotiators have offered additional $6.5 billion in cuts.  That's more than half of the $100 billion House Republicans have called for in terms of deficit reduction. “Unfortunately, until now, virtually the entire debate in Washington has focused only on cutting federal programs,” Sanders said. “Many of the cuts being proposed will have a devastating impact on some of the most vulnerable people in our nation - including seniors, children, the sick and the poor.” 

Republicans and the national debt. (Or, do as I say, not as I do.)

Republicans and the national debt. (Or, do as I say, not as I do.)
by Patrick English (my Facebook friend) on Sunday, April 17, 2011. 

As I care very much about the national debt, and in an effort to be fair to the Republicans who profess such deep and apparently sincere concern about the national debt while genuflecting before the Tea Baggers, I decided to look into just how many members of the GOP voted for then-President Clinton's deficit reduction plan. You know, the one that resulted in a budget surplus, had us on the path to paying off the national debt, led to years of economic expansion, a reduction in unemployment, falling poverty and other good things. And I was shocked, shocked, to discover that not a single Republican had voted for that budget. Not one. And yet it was sound fiscal policy that led directly to years of economic growth.

Realizing that I couldn't use that as the only measure of the GOP's sincerity on the national debt, I thought I owed it to them to check whether or not they'd supported the George W. Bush tax cuts for the wealthy. You know, the ones that led to an immediate increase in the national debt, a huge increase in US borrowing from foreign countries like China and which thus weakened us seriously and immediately. And believe it or not, they did! How odd, to think that these paragons of fiscal responsibility had not only voted against a plan that was fiscally responsible, they voted FOR one that was the height of fiscal irresponsibility! Who'd have thought it?

But in an effort to be certain I hadn't accidentally picked the only two examples of Republicans saying one thing and doing another, I thought I'd check and see if they'd voted to increase the national debt under George W. Bush. Surely they hadn't done so, not when they were handed a sound budget, a shrinking deficit and a chance to get the country out of debt. Incredibly, it turned out they had indeed voted to increase the debt ceiling under Bush. And not just once, as might be expected when cutting taxes during a time of war for the first time IN HISTORY, either. No, they voted to increase the debt ceiling under Bush 19 times. Let me spell that out in case you missed it the first time. NINETEEN times. That would be ten times, and nine more times after that. Or nine and then ten, if you prefer.

Now I realize that this is all going to come as quite a shock if you watch Fox News, since they will never, ever tell you any of these things, but it doesn't make them any less true. And you might want to think about them as November approaches and you head to the voting booth, debating just how much country you want to leave for your kids, your grandkids and the future of our country. Because unless you only want to leave them lip service, you should think twice about the Republicans who are very good at telling you one thing while doing the exact opposite. Those tough deficit hawks that they are.

We Have a REVENUE Problem

Today, the median wage of a Single Worker in America is $26,000 and pays 23.4% of their income in total taxes. 

The top 400 richest people had a median wage of $344,590,000, but only pay 16.9% of their income in total taxes.

This means that the bottom 99.9% of Americans pay a 38.5% higher tax burden than the super rich. In 2000, Clinton's last year, corporations paid at an average real tax rate of 15.2%, $249.9 billion. But in 2008, Bush's last year (the last year figures are available), they paid at an average real tax rate of 12.6%, $230.1 billion. - from Thom Hartman: Secrets the Rich don't Want You to Know

We don't have a BUDGET problem, we clearly have a REVENUE problem. 

Unseriously unfair - REALLY?

In 2008, the top 1% paid 38% of all federal income taxes, and the top 5% paid 58%.

Unseriously unfair

www.economist.com

 

One of Barack Obama's clearest themes in his speech today laying out his latest deficit-reduction plan was that rich people ought to pay more in taxes.

 

There are many fallacies in the Economist argument. 

First, most wealthy people make a lot of their money through capital gains, and thus only pay a 15% marginal tax on the largest share of their income, because we tax capital gains and dividends differently. And the Social Security and Medicare taxes are not applied to so-called unearned income. So the guy flipping burgers at McDonald's pays his 19.9% in Social Security and Medicare taxes, while the wealthy pay “0”, that’s right ZERO, on their "unearned income." (Yes, I know some will argue that McDonald's pays half of that tax, but I would argue that it is benefit in lieu of taxes, so if McDonald's wasn't paying that 9.95% of payroll, they could and would pay their employees more, but we can have that argument, later.)  

So, higher incomes start out with an almost 20% lower tax rate.  So, in 2010, the average working family pays a marginal tax rate of 44%, 25% in income tax and 19% in Social Security and Medicare taxes.  But families making over $373,000 only pay a marginal tax rate of 39.9%, 37% in income tax, and 2.9% in Medicare taxes, as they are no Social Security taxes on income over $108,000. 

That’s not fair!  Even by the Economist's standards. 

I think we should eliminate the distinction between earned (worked for) income, and unearned (clipping coupons) income.  Maybe we should try completely scrapping the distinction, and tax all capital gains and dividends at the income tax marginal rate, adding a 10% penalty for short term capital gains, if one believe that it is necessary, and I do, to discourage efforts to manipulate stocks and the market that result short term gains but long term pain to the vast majority of us.  Think September 2008. 

And one has to remember. The first $50,000 anyone earns, we all pay the same tax rate on it. Higher incomes pay a higher marginal rate on their additional income, only.  Thus, someone who makes $108,000 and someone who makes $250,000, they both pay the same taxes on that first $108,000.

That's fair.

But, since the marginal tax rates don't start to kick in to $373,000, that next $265,000 is taxed very low overall, as there are no Social Security taxes on it. 

That's not fair!  Even by the Economist's standards. 

And the top 5% of income represents 60% of all income, so at that rate if they are currently only paying 58% of the taxes, they aren't paying enough. 

That's not fair! 

And if you really want to fix social security, you apply the 17% Social Security tax to all income, earned and unearned, and you have a solvent system for at least the next century, and probably forever. 

Right now over 50% of the income in the US doesn’t pay any Social Security taxes. 

That’s not fair.  Even by the Economist's standards. 

Let's go back to the income tax rates and deductions from 1950, and index them all for value of those dollars versus the value of today's dollars.  Most working families of four, under those circumstances, would pay zero in federal taxes. 

Remember the 1950s? The times for a booming economy, were the American dream was alive and well for all, and our deficits were minimal.  Yes, those 1950s, the ones that Reagan used to "dream" about, the days of Ozzie and Harriet and Fat her Knows Best.  Those are the days that many of the Republinuts say they want America to return to:  The days of 90% marginal tax rates on the upper income of people.  Back to the days when corporations like GE and others, gladly paid their fair share of corporate taxes, and didn't have an army of lobbyists to see that the tax code was written in their favor.  Back to the days when corporate taxes were 60-70% of the total taxes paid and individuals only paid 30-40% of the total tax bill. 

Oh yes, I say, let's make life and taxes fair for more, and return to the good old days, and tax all income, making no distinction of if you are flipping burgers or cutting coupons.  And make all taxes apply to all income, with Social Security and medicate taxes being applied to income, making no distinction between worked for and coupon clipping.    

Jobs and Competitiveness - It's a revenue problem not a budget problem

Don Graves, ED of the President's Council on Jobs and Competitiveness. "The global economy means we need to out educate, out innovate and out build other countries." 

In order to be competitive in the global economy, we are going to have to stop fighting wars all over the world, and return taxes to the equitable and fair taxes of the Clinton years. We don't have a budget problem in the US, we have a revenue problem. Cutting and... cutting taxes over the last 30 years have left the revenue stream too low. Taxes are now at their lowest level since 1950. And we don't live in a 1950s world. 1950 was even before the Eisenhower Interstate System was funded, and when we only had about half the Americans we do today, and we weren't fighting in wars around the world.

We the People Rally

Here is a link to the rally on 04-13-11 in Michigan.  This is what we need in Georgia.  Thousands, not a couple of hundred, on the lawns around the State Capitol, in the hallways of the building, in the offices of the Republican Legislative leaders, in the office of the Governor.  Let them know that we won't stand for tax cuts for LearJet owners, and Delta Airlines, while the HOPE program is cut, while K-12 education is cut, while the many programs to help working people are cut, and the tax breaks for the rich grow.  It is time Georgia, it is way past time, for the people to rise up and speak out.  We the People need to make our voices heard.  We the People Rally - The Crowd, The Signs, The Solidarity - http://www.youtube.com/watch?v=Q2F7O4CQnJw. 

Welcome to Blue Democrat, my blog

We'll have some fun here.  My commentary will be primarily about politics and social justice issues, with occasional news items thrown in, and some comments about The University of Michigan college sports scene. 

I enjoy a good lively debate, even from people I totally disagree with.  My view is that we all care about our people and our country, and we are trying to do the best as we see it, though that is sometimes severely corrupted.  I don't see people l disagree with as evil, just misguided. 

Follow on, and I hope it is a fun run for all of us.