Bricks and Mortars

Poliquin sold you out — will Collins?

By Lawrence Reichard | Nov 24, 2017

It's hard to overstate the importance of the tax bill. The federal government is 21 percent of the economy, and this bill fundamentally restructures that sizeable chunk of the economy. The financial fate of the poor and the middle class depends on how that portion of the economy is structured.

The bill is being rammed through with essentially no input from the party that won the popular vote for president by 2.8 million votes and won a clear majority of votes for the House and Senate, only to lose the House because of Republican-concocted gerrymandering. And Democrats would have won even more votes but for Republican-engineered voter suppression.

In other words, the true majority party is being almost completely shut out. No debate, no hearings.

This is new. In the past, both parties have generally been involved in the drafting of bills with such widespread effect. The downward spiral of democracy continues.

But it's worse than that. The very need for the bill, as put forward by its proponents, is a basic, fundamental lie. And that lie is facing little if any challenge from Democrats. Thus half the battle is lost before the first shot is even fired.

Lie No. 1: Almost everyone in both parties says we have the highest corporate tax rate in the world and that we must lower that rate to be competitive. The debate is about how to do it, not whether it's even needed in the first place. Yes, the official rate of 35 percent is high by current world standards. But with loopholes, the effective rate is less than 9 percent, and that is low, or very low, for an industrial country. Lowering our already low rate wouldn't make us more competitive and wouldn't create jobs — it would simply fatten corporate profits.

Lie No. 2: Corporations need this. That's a lie. Corporate profits and the stock market are at all-time highs.

Lie No. 3 is one of omission. What is rarely discussed is that the push to lower corporate taxes is part of a global race to the bottom in which revenue shortfalls caused by lower corporate taxes are filled by individuals — or by cuts to government programs that benefit individuals. To fully understand the tax bill and the motivation behind it, it has to be seen in this context. It's simple: The global race to the bottom, as exemplified by this tax bill, either continues or is stopped, and who better to stop it than the world's biggest economy?

Lie No. 4: Another lie of omission. The tax burden has already been steadily shifting away from corporations and to individuals for decades, with no jobs benefit. In 1945, corporations accounted for 35 percent of federal revenues. That is now 9 percent. The burden borne by individuals has risen from 40 percent to 47 percent. And the portion paid by payroll taxes has skyrocketed from 8 percent to 34 percent. True, corporations pay a large share of payroll taxes, but according to the Center for Budget and Policy Priorities, corporations often do this by paying lower wages — thus individuals are effectively paying most payroll taxes.

Lie No. 5: The bill will create jobs. In 2003-2004, corporations repatriated offshore profits at reduced rates. This bonanza for the rich was supposed to create jobs — it didn't. The trillion-dollar bank bailout of 2009 was supposed to save mortgages and infuse money into the economy — it didn't. Banks fattened executive bonuses and bought back stock, to no general economic benefit.

Lie No. 6: It's a middle-class tax cut. The corporate tax cut is permanent, while the mixed-bag middle-class tax cuts are temporary. The middle class gets sandbagged down the line. Bruce Poliquin voted for this. His corporate love is eternal — his middle-class love is a one-night stand.

Lie No. 7: Trump says the bill would hurt him personally. But the bill has a special tax cut for golf courses. Seriously. And Trump's heirs could get a $1 billion tax break — while teachers would lose their deduction for school supplies they buy for needy students. Seriously.

We are already seeing the flip side of lowering corporate taxes. The proposed elimination of deductions for state and local taxes, mortgage interest and student loan interest, the gutting of Obamacare that will result in higher premiums for all, and the absolute hammering of students and graduate-school assistants who receive free tuition — a real body blow to an economy already facing a severe shortage of high-skill labor. President Trump decries the importation of high-skill labor, but this bill will make that even more necessary, as our homegrown students are forced to drop out. Instead of working to reduce outrageous college costs, the GOP is raising them.

Even this copious shifting of tax burden fails to pay for the bill's corporate largesse, so $25 billion to $48 billion would be cut from Medicare — from health care for 55 million elderly.

And now the GOP is openly saying it must have something, anything, any kind of legislative victory to show for itself heading into next year's elections. It doesn't matter what is passed — what's important is to pass something, anything. Republicans say this openly, right in front of television cameras.

Clearly this is not about what's best for the country. Twenty-one percent of the economy would be widely restructured with only 24 percent public support, so that one party — the minority party — will have some sort of ragged, tattered "accomplishment" to run on.

Last week Bruce Poliquin did right by his corporate buddies and voted for this train wreck. Now the ball is in the Senate's court, and Susan Collins is a crucial swing vote. Her Washington phone number is: 202-224-2523. One hundred phone calls to Collins could defeat this deceitful, undemocratic, regressive bill that will harm most people and produce no jobs. Be one of those calls.

Lawrence Reichard is a first-place Maine Press Association winner, freelance writer and activist living in Belfast.


Comments (10)
Posted by: Ronald Horvath | Dec 04, 2017 14:35

Actually, Ken, I prefer the progressive tax system we had in the fifties and sixties when the obscenely rich paid their fair share of taxes before Reagan began to shift the burden onto the backs of the middle and working classes.  During those years we had the wherewithal in this country to finance the renewal of a Europe in ruins, to build a new school every week, construct the interstate highway system, create a national defense unrivaled in history, a space program which allowed a man to walk on the moon, and provide science and industry with the resources for research and discovery.  Does anyone now realize how much wealth was generated by those investments in our own country and society?  Would today's world be possible without the technological advancements paid for by a  government willing to redistribute wealth away from the privileged few and toward a broader idea of the "common good?"

Redistribution of wealth?  A nasty leftist idea?  Oh no.

“The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and poor.  There is one mode of using great fortunes, the true antidote to the temporary unequal distribution of wealth.  Under its sway the surplus wealth of the few will become, in the best sense, the property of the many, because administered for the common good.”  -Andrew Carnegie

"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in proportion." -Adam Smith

Since those times, and thanks to Reagan, jobs and wealth have been bled out of this country as the rich have used their economic power to warp and pervert the politics of a once great nation in a scheme to revert back to the times of the real, and robber, barons when wealth in the hands of a few ruled everything, usually for it's own benefit and to keep the wealthy wealthy by keeping the rest of us poor and struggling.

"It is also in the interests of the tyrant to make his subjects poor...  the people are so occupied with their daily tasks that they have no time for plotting."  -Aristotle

“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”  
-Adam Smith

But my first thoughts when reading your posts, Ken, are exactly what do you think "work" is.  The poor work harder than anyone in this country just to stay alive.  Most people on food stamps are working either full time jobs or several part-time jobs.  I've been there myself in my working life and believe me, it's no picnic.  The poor actually contribute a great deal to this country sacrificing the leisure and healthy life style that many take for granted just to keep mobile and upright, and working.  As Barbara Ehrenreich writes:

"The 'working poor,' as they are approvingly termed, are in fact the major philanthropists of our society. They neglect their own children so that the children of others will be cared for; they live in substandard housing so that other homes will be shiny and perfect; they endure privation so that inflation will be low and stock prices high. To be a member of the working poor is to be an anonymous donor, a nameless benefactor, to everyone else." Nickel and Dimed: On (Not) Getting By in America

No, Ken, I don't believe that government is "the problem."  But any libertarian fantasy of allowing the corporate state to take over every aspect of our society that can be squeezed for a profit is certainly not the answer.  We made do with a -excuse the term- socialist safety net for years before the "Reagan Revolution" started our slide back into a repeat of the Gilded age and in my opinion that's what we need more of. Did you know that Christmas bonuses are becoming out of fashion?  Smacks too much of "coddling" the workers, does it?  It more than belies the false claim that giving more to the rich benefits us all.  

“Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.” -Adam Smith

"There are some men, who, living with the one object of enriching themselves, no matter by what means, and being perfectly conscious of the baseness and rascality of the means which they will use every day towards this end, affect nevertheless -- even to themselves -- a high tone of moral rectitude, and shake their heads and sigh over the depravity of the world."  Charles Dickens



Posted by: Kenneth W Hall | Dec 03, 2017 09:44

I am curious as to what tax plan would satisfy you Ron.  I am asking with no malice and trying to be civil when doing so.

 

The internet will produce study after study, BUT the results depend of who is financing the "study".  It is seeming the more and more, that the options the politicians are putting forward are better then other options.

 

Personally, As much as allowing the poor to be tax free, it puts them in a mental state of defeat.  Stripping them from donating towards the success of the country.

 

Run some numbers then answer the question......"The financial position of the United States includes assets of at least $269.6 trillion(1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP)" ... Wikipedia

Net worth of top 1% is 38% of the US wealth!!  123.8 trillion X 38%=47.044trillion dollars the top 1% own.  Stay with me as the numbers for the top 1% get complicated.....

SubmittedFebruary 9, 2016
Submitted to 114th Congress
Total expenditures $4.147 trillion (requested) 21.5% of GDP
Deficit $503 billion (requested) 2.6% of GDP
Debt $19.95 trillion (requested)

That is 24.097 trillion the government wants to spend plus has already spent!

 

So let's talk about the 800lb gorilla in the room.....the top 1% and lets take the ENTIRE top 1%'s wealth.  That's every penny the top 1% own.

 

We have a problem......we do not have enough money to run the country for the next two complete years.  The 1% will have NO money in less then two years and now the bottom 100% can be left to wonder..................How do we fund year three??????

Who funds the 24 trillion in year three, four, five and beyond?

 

This would eliminate the 1% argument completely, and force EVERYONE to learn to live with-in their means.  Including the former top 1%.  I suppose then the top 1% would suffer the least because their wealth was grown at one point in time by living within their means.  Let's shame the top 1% for doing that too.

Warren Buffet saved and believed in the power of compound interest and became a 1%er.  He lived within his means and the government could live off of his entire wealth for a few months.  Then he would start over like any and every American and those whom live with in their means and do not spend more then they make and save every week would end up again in the top 1% again.  Warren Buffet had a choice to retire or not and he goes to work every single day now that he is well into his 80's.  What do we say to those that have worked for 20 years and want to retire now and live off the government programs?  It is a choice but choosing to drop out of the work force has consequences. What consequences should the 99% make when they have consumed the entire top 1% wealth so that everyone is equal.  Will the retired 75 year old be willing to go back to work every day like the 80+ year old Warren Buffet?

 

The government is not the answer it is the problem.  Now it demonstrates how to spend more then you take in.  The government will never be the top 1% and anyone that believes spending more then they take in is a fool.



Posted by: Ronald Horvath | Dec 03, 2017 07:12

"Opponents of a national sales tax remind us that sales tax is by nature a regressive tax, hitting people with lower incomes the hardest. In addition, a national sales tax would likely spur sales tax evasion. When a national sales tax was proposed in 1998, the Brookings Institute said, “When examined closely, the simplicity breaks down, payments would be close to impossible to collect, and the tax’s fairness would be, at best, questionable.”

There are also a number of potential compliance challenges for states. They would need to adjust existing or create new mechanisms to administer a federal sales tax. They would also need to decide what to do with their personal and corporate income taxes. Sen. Moran’s legislation presumes that a 23% tax rate will generate enough tax to replace the federal income taxes. What isn’t said is how high state rates would have to be to replace their personal and corporate income taxes. These state taxes are relatively easy for states to administer because of the reporting requirements found in the corresponding federal taxes. Without those federal reporting requirements, it would likely be difficult for states to administer state corporate and individual income taxes."
https://www.avalara.com/blog/2017/01/11/national-sales-tax-wacky-tax-wednesday/



Posted by: Kenneth W Hall | Dec 02, 2017 22:00

Flat tax would be equal but a national sales tax would be a better way to go.  Buy a little pay a little. Buy a lot pay a lot.  The poor would be subsidized on government programs if they choose to be homeless or can't work is subsidized.  Then there would be NO FILING at all!!!  No tax cuts.  No write offs for the rich.  No IRS.



Posted by: Ronald Horvath | Dec 02, 2017 16:51


THE BOROWITZ REPORT:

"PYONGYANG (The Borowitz Report)—Kim Jong Un is concerned that his long-standing plan to destroy the United States has been made totally irrelevant by the Republican tax bill moving through the Senate, a source close to the North Korean dictator said on Friday.

The source, who spoke on the condition of anonymity, said that Kim fears that his scheme to turn the United States into an uninhabitable hellhole has been to a large extent upstaged by a similar proposal from congressional Republicans.

“You have to understand, destroying America is something that Kim and his family have been plotting for decades,” the source said. “To see the Republicans swoop in at the last second and basically steal that idea—it’s got to hurt.”

According to the source, Kim has been watching C-SPAN non-stop, praying that the Republicans’ plan to end life as Americans know it might come undone at the last moment, but he is “not getting his hopes up.”

“After having such a wonderful missile test, he should be on top of the world this week,” the source said. “Instead, he’s afraid that all his hard work has been for nothing. He now understands why so many Americans despise the Republicans.”
https://www.newyorker.com/humor/borowitz-report/kim-jong-un-fears-that-gop-tax-bill-makes-his-plan-to-destroy-us-redundant



Posted by: Ronald Horvath | Dec 02, 2017 15:23

"Flat-tax proponents promise...  a single levy on every dollar earned. That change, many contend, would allow taxpayers to file their returns on postcards. And surveys suggest positive voter responses to several of the most recent proposals...  Yet none will be adopted, for at least two reasons. One is that a flat tax would do nothing to make filing tax returns any simpler. But, more important, it would greatly exacerbate longstanding growth in income inequality."

"The contention that a flat tax would be simpler because it involves only a single rate is flatly wrong. The complexity of the current system has nothing to do with its multiple income brackets...  The hard step in figuring your tax bill is to compute your taxable income — roughly, the amount you earn, less the myriad exemptions, deductions and various other offsets described in the 3.4-million-word code of the Internal Revenue Service. You’d also have to calculate your adjusted gross income under a flat tax. But once you’ve completed that step under either system, you consult the tax tables to see how much you owe. In the current system, the entries have multiple brackets and rates already built into them, so this step is no harder than it would be under the tables for a flat tax.

The much more serious concern is that a flat tax would reinforce the trends toward greater income inequality that have been seen over the last several decades. As documented by a recent Congressional Budget Office study, the top 1 percent of income recipients in the United States earned 275 percent more in 2007 than they did in 1979, adjusted for inflation, a period when the earnings of middle-income households grew by less than 40 percent. A flat tax would increase inequality by substantially reducing rates on the most prosperous households, while increasing them on low- and middle-income households."

According to an analysis by the nonpartisan Tax Policy Center, (the flat tax) would increase the annual tax bill of a typical family of four earning $50,000 a year by more than $4,000, but would reduce the taxes owed by a similar family earning between $500,000 and $1 million by almost $60,000. The center also estimated that families in the top one-tenth of 1 percent of households would enjoy an average annual tax reduction of nearly $1.4 million under the Cain plan. Similar distributional effects are common under all flat-tax plans... "

Rising inequality exacts a toll not just on those with lower incomes, but also on those much higher up the income scale. In their 2009 book, “The Spirit Level: Why Greater Equality Makes Societies Stronger,” the British public health researchers Richard Wilkinson and Kate Pickett document a range of social ills that are reliably associated with increased income inequality, both over time within nations and at any particular moment across a broad range of countries. Countries and times with lower inequality fare better on virtually every published index of health, well-being and quality of life.

Those with the highest levels of inequality, like the United States, invariably score poorly on these indexes. And those same countries consistently experience higher rates of violent crime."


-Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.
http://www.nytimes.com/2011/11/06/business/flat-tax-doesnt-solve-inequality-problem.html



Posted by: Kenneth W Hall | Dec 02, 2017 11:49

Interesting read.  I wish politicians would make a bill to dissolve Republican and Democrat.  Wouldn't it be refreshing to have them vote what is good for their State?  Granted it wouldn't remove the money that sways their decisions, but would be a start in the right direction.

I still say it should be just one simple percentage.



Posted by: Ronald Horvath | Dec 02, 2017 07:53

"PBS pointed out a study from the "strictly non-partisan National Bureau for Economic Research" that shows "under Democratic presidents, per capita GDP has been higher; job creation has been stronger; decreases in unemployment have been greater; the S&P 500 stock index has been higher; corporate profits have been bigger; and real wages and labor productivity have increased."

As Brad Plumer also noted in the Washington Post, "Since World War II, there's been a strikingly consistent pattern in American politics: The economy does much better when a Democrat is in the White House... the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans." If one drops the Eisenhower years, it is far worse for the GOP.
http://www.huffingtonpost.com/barbra-streisand/have-you-heard-the-good-n_b_6972394.html



Posted by: Kenneth W Hall | Dec 01, 2017 23:46

Last I saw the tax cut bill was 2700 pages long!!!!

 

How is that simplified?



Posted by: Scott O'Brien | Dec 01, 2017 02:16

Most people are unaware of the cuts to Medicare, and the destruction of CHIP (the program of healthcare for poor and working class children.) There is also a provision which basically eliminates reproductive health coverage for women. This is a disaster for the middle class and working poor.

 



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