What Else Could Tax Cut For The Richest 1% Buy? A 50-State Perspective

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By Jill Richardson of Other Words – Inequality in America has been growing for decades, stymying our national potential and contributing to the growing political rift in the country. According to estimates by the Institute on Taxation and Economic Policy, the Tax Cuts and Jobs Act introduced in the House of Representatives would disproportionately benefit the richest 1 percent of Americans. The ITEP estimates reveal that nationwide, the richest 1 percent of earners would receive a 31 percent share of the tax cuts in 2018 – and by 2027, the richest 1 percent would receive a 48 percent share, leaving the remaining 99 percent to share roughly half the tax benefits. What the ITEP estimates cannot reveal is the lost potential in federal investment represented by this reallocation of resources to the 1 percent. The House bill is designed to increase the deficit by no more than $1.5 trillion over ten years – the equivalent of about a year of federal discretionary spending. The loss of revenue will trigger other choices, as decision makers in Congress either accede to a higher than customary level of national debt, or face political pressures to drastically reduce spending on federal programs and services. Pressure to cut spending could result in losses to popular federal programs ranging from education to health care and infrastructure, and more.

Prosperity Through Keystrokes: Understanding Federal Spending

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By Steve Grumbine. It has long been known that our electoral system and methods of voting are corrupt, untrustworthy, and easily manipulated by less than savvy politicians, state actors, and hackers alike. The answers to many of these issues is the same answer that we would need to push for any progressive reforms to take place in the United States: namely, we need enlightened, fiery, peaceful, and committed activists to propel a movement and ensure that the people rise, face their oppressors, and unify to demand that their needs be met. What is not as well-known, however, is how a movement, the government, and taxes work together to bring about massive changes in programs, new spending, and the always scary “National Debt” .

CBO: House GOP Tax Plan Triggers $25 Billion In Medicare Cuts

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By Ethan Wolff-Mann for Yahoo Finance – If the House GOP tax plan passes, it is projected to cut revenue significantly, likely increasing the deficit by $1.456 trillion from 2018 to 2027, according to the Joint Committee on Taxation and Congressional Budget Office (CBO). With a number that large, Congress’s “pay as you go” rules that prevent unchecked spending would fall into place, a move that could cut Medicare’s budget by as much as $25 billion for 2018. In a letter to House minority whip Steny Hoyer (D-MD), the CBO explained that without any more money to offset the fall in revenue, the Office of Management and Budget (OMB) would be required to issue a “sequestration order” to reduce spending in 2018 by $136 billion. The effects of this sequestration order would trigger automatic cuts to various programs, including Medicare. According to the CBO, this could be as much as 4% for Medicare, which amounts to $25 billion in 2018. Furthermore, all non-exempt programs would be eliminated, which include some farming subsidies, border security, and student loan help. Others, like Social Security, would remain untouched. At the same time, the tax plan’s changes to the estate and gift taxes would cut revenue $151 billion from 2018 to 2027, according to the JCT.

Experts Explain How Wall Street Loots The Economy

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By Pam Martens and Russ Martens for Wall Street on Parade. If you feel lost in the cacophony of contrasting claims that Wall Street was adequately reformed under the Dodd-Frank legislation of 2010 or that it remains an insidious wealth transfer system for the 1 percent, then you need to invest one-hour of your time to listen carefully to some of the smartest experts in America address the topic. A free one-hour video is now available (see above) which should settle the debate once and for all that the Dodd-Frank legislation of 2010 has failed to deliver the needed reforms to Wall Street’s corrupt culture and fraudulent business models and that nothing short of restoring the Glass-Steagall Act is going to make the U.S. financial system safe again. Don’t let the grainy quality of the video turn you off (it was made from a live webinar): the integrity of the voices will quickly reassure you that you are watching something powerful and critical to the future of the U.S.

This Year’s Real Halloween Horror

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By Bob Lord for Inequality – The family that has made billions off trick-or-treat candy has gone generations without paying any appreciable tax on its enormous fortune. And the Trump tax plan, if adopted, would ax a huge chunk of the tax on the family’s income! The Mars family has made billions selling us M&Ms, Snickers, and countless other Halloween treats for a century now. But when it comes to paying tax, the Mars family seems to be all tricks and no treats. In fact, the family’s latest tax trick may have cost the U.S. Treasury a whopping $10 billion. What could $10 billion do? That’s the cost of delivering prenatal care to hundreds of thousands of expectant moms under Medicaid, an essential program that President Trump and the GOP Congress plan to cut by up to $1 trillion. According to the current U.S. tax code, any American worth $25 billion can expect 40 percent of that, or $10 billion, to go to Uncle Sam in estate tax, the federal levy on the personal fortunes of deep pockets who kick the bucket. Forrest Mars Jr. had a $25-billion fortune when he died in July 2016. But the Mars family has apparently been able to avoid estate tax on that entire $25 billion. How do we know? Researchers at Forbes and Bloomberg, the two business publications that track America’s billionaire wealth, have some fascinating numbers for us.

Big Tax Cuts Will Lead To Big Cuts To The Federal Budget

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By Sharon Parrott for CBPP – Many Republican policymakers are already talking about using the same fast-track process (“budget reconciliation”) next year to push large cuts in entitlement programs as they plan to use this year to push the tax cuts. Reconciliation bills can’t be filibustered, and they require only a simple majority to pass the Senate, unlike most legislation that requires 60 Senate votes. Roll Call reports that it “interviewed half a dozen House Budget Committee members, as well as a few other fiscal hawks in the GOP conference, and they all said that they anticipate mandatory spending cuts [i.e., cuts in entitlement programs] being a priority for the fiscal 2019 budget reconciliation process.” Indeed, some Republican lawmakers weren’t shy about their two-step strategy. “We dream those big dreams here,” Budget Committee member Rob Woodall said. “I’ll take half of that dream in tax reform, and then I’ll come back next spring for the other half.” Budget Committee Chair Diane Black similarly promised “some real attention on [deficit reduction] next year,” based on “the acknowledgement of our leadership,” Roll Call reports. Congressional Republicans could have chosen to write a single bill with both tax cuts and the program cuts (or tax increases) to pay for them.

Cutting Corporate Taxes Will Not Boost American Wages

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By Josh Bivens for EPI – Bivens and Blair (2017) explain in detail how the theory for corporate tax cuts as a wage-boosting tool breaks down in the face of real-world data. This report provides a quick overview of this theory and then highlights how its predictions compare with real-world data. The theory is the following: First, corporate income tax cuts boost post-tax profits, which then boost the returns to owning stocks or bonds. These higher returns induce households to spend less and save more, and this increased supply of savings pushes down the cost of borrowing, or interest rates. Lower interest rates then induce firms to borrow more to finance new plants and equipment, and this raises productivity by giving workers more and better tools to work with. Second, competitive labor markets force employers to reward workers for their productivity increases buy paying them higher wages. This theory provides a number of empirical propositions regarding the effect of corporate tax changes on wage growth that can be tested with real-world data. The data show that many of the key predictions will almost surely fail. Before looking at the specific weak links in the causal chain, we review evidence relating to the overall claim that lower tax rates will boost productivity growth and wage growth.

Current Taxes And Tax Reform Undermine Social Security & Medicare

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By Sam Pizzigati for Other Words – You probably pay about four times more of your income to Social Security than millionaires, who want to cut their taxes and your benefits. How much did your paychecks total last year? You know the answer, of course. So does the Social Security Administration. The totals for every American’s paycheck income are sitting in Social Security’s computers. Once every year, Social Security does a serious data dump out of those computers to let us know just how much working Americans are actually making. The latest totals — covering 2016 — have just appeared. Most of us, the new numbers show, are simply not making all that much. In fact, nearly half of our nation’s employed — 49.3 percent — earned less than $30,000 in 2016. A good many of these Americans lived in poverty. In 2016, families of four that earned less than $24,339 ranked as officially poor. We don’t have an “official” figure for middle class status. But the Economic Policy Institute has calculated the costs of maintaining a no-frills middle class existence in various parts of the United States. In Houston, one of our nation’s cheaper major cities, a family of four needed $62,544 in 2016 to live a bare-bones middle class lifestyle.

GAO: Climate Change Already Costing US Billions In Losses

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By Staff of Associated Press – A non-partisan federal watchdog says climate change is already costing U.S. taxpayers billions of dollars each year, with those costs expected to rise as devastating storms, floods, wildfires and droughts become more frequent in the coming decades. A Government Accountability Office report released Monday said the federal government has spent more than $350 billion over the last decade on disaster assistance programs and losses from flood and crop insurance. That tally does not include the massive toll from this year’s three major hurricanes and wildfires, expected to be among the most costly in the nation’s history. The report predicts these costs will only grow in the future, potentially reaching a budget busting $35 billion a year by 2050. The report says the federal government doesn’t effectively plan for these recurring costs, classifying the financial exposure from climate-related costs as “high risk.”

An Independent Thinker’s Guide To The Tax Debate

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By Chuck Collins for Other Words – For 40 years, tax cutters in Congress have told us, “we have a tax cut for you.” And each time, they count on us to suspend all judgment. In exchange, we’ve gotten staggering inequality, collapsing public infrastructure, a fraying safety net, and exploding deficits. Meanwhile, a small segment of the richest one tenth of 1 percent have become fabulously wealthy at the expense of everyone else. Ready for more? Now, Trump and congressional Republicans have rolled out a tax plan that the independent Tax Policy Center estimates will give 80 percent of the benefits to the richest 1 percent of taxpayers. The good news is the majority aren’t falling for it this time around. Recent polls indicate that over 62 percent of the public oppose additional tax cuts for the wealthy and 65 percent are against additional tax cuts to large corporations. Here’s the independent thinker’s guide to the tax debate for people who aspire to be guided by facts, not magical thinking. When you hear congressional leaders utter these claims, take a closer look. “Corporate tax cuts create jobs.” You’ll hear that the U.S. has the “highest corporate taxes in the world.” While the legal rate is 35 percent, the effective rate — the percentage of income actually paid — is closer to 15 percent, thanks to loopholes and other deductions.

Hundreds Of Billions In Taxes Avoided Off-Shore By Corporations

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By Staff of U.S. PIRG – U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to paying taxes. Corporate lobbyists and their congressional allies have riddled the U.S. tax code with loopholes and exceptions that enable tax attorneys and corporate accountants to book U.S.-earned profits in subsidiaries located in offshore tax haven countries with minimal or no taxes. Often a company’s operational presence in a tax haven may be nothing more than a mailbox. Overall, multinational corporations use tax havens to avoid an estimated $100 billion in federal income taxes each year. Every dollar in taxes that corporations avoid must be balanced by higher taxes on individuals, less public investments and services and more federal debt. But corporate tax avoidance is not inevitable. Congress could act tomorrow to shut down tax haven abuse by revoking laws that enable and encourage the practice of shifting money into offshore tax havens. This should be the cornerstone of any congressional tax reform effort. Instead, many in Congress are considering proposals that would make offshore tax avoidance worse. By failing to act, our elected officials are tacitly approving a status quo in which corporations don’t pay what they owe and ordinary Americans inevitably must make up the difference.

Taxpayer-Subsidized DC Wharf Creates Low Wage Jobs

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By Staff of DC Fiscal Policy Institute – The District of Columbia’s economic development efforts – including the enormous Wharf project – too often support creation of low-wage jobs with minimal benefits, because they do not link large public subsidies with requirements to create high-quality jobs, according to a new analysis by the DC Fiscal Policy Institute. This means that DC is failing to use its substantial economic development investments to reduce the city’s large income gaps or to ensure that benefits of DC’s growing prosperity are shared widely. The redevelopment of the Southwest Waterfront is one of the largest real estate development projects in the history of the District. It is transforming an historic area of the city’s waterfront, while creating new retail, dining, entertainment and housing options within walking distance of the Mall. Yet the project faces growing questions about the type of jobs it is actually creating, and who truly benefits from large taxpayer subsidies for such developments. The District approved $300 million in public subsidies for the Wharf project, including public land and cash subsidies through DC’s Tax Increment Financing (TIF) and PILOT economic development subsidy programs.

How Alabama's 'New Poll Tax' Bars Thousands Of People From Voting

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By Connor Sheets for AL – Randi Lynn Williams assumes she will never be able to afford to vote again. The 38-year-old Dothan resident lost her right to vote in 2008, when she was convicted of fraudulent use of a credit card. She was on probation for over two years, then served a few months behind bars ending in early 2011, at which point she would have been eligible to vote in most states. In Maine and Vermont, she would have never lost that right in the first place. But in Alabama and eight other states from Nevada to Tennessee, anyone who has lost the franchise cannot regain it until they pay off any outstanding court fines, legal fees and victim restitution. In Alabama, that requirement has fostered an underclass of thousands of people who are unable to vote because they do not have enough money. For folks like Williams, who said she regularly voted prior to her conviction in 2008, poverty is the only remaining obstacle to participation in the electoral process. “When all this started, the county told me I lost my right to vote and I don’t get my vote back until I pay all my fines and costs and get off probation and all that,” she said. Alabama’s felon disenfranchisement policies are likely unconstitutional, and they have disparate impacts on felons who are poor, black, or both, according to experts.

The Scandal Of Pentagon Spending

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By William D. Hartung for Toms Dispatch – Hawks on Capitol Hill and in the U.S. military routinely justify increases in the Defense Department’s already munificent budget by arguing that yet more money is needed to “support the troops.” If you’re already nodding in agreement, let me explain just where a huge chunk of the Pentagon budget — hundreds of billions of dollars — really goes. Keep in mind that it’s your money we’re talking about. The answer couldn’t be more straightforward: it goes directly to private corporations and much of it is then wasted on useless overhead, fat executive salaries, and startling (yet commonplace) cost overruns on weapons systems and other military hardware that, in the end, won’t even perform as promised. Too often the result isweapons that aren’t needed at prices we can’t afford. If anyone truly wanted to help the troops, loosening the corporate grip on the Pentagon budget would be an excellent place to start. The numbers are staggering. In fiscal year 2016, the Pentagon issued $304 billionin contract awards to corporations — nearly half of the department’s $600 billion-plus budget for that year. And keep in mind that not all contractors are created equal.

Divest From War, Invest In People 2017

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By Sam Koplinka-Loehr for National War Tax Resisters. At the national war tax resistance gathering in Florida in November 2016, a group of folks sat down to think through this initiative. A number of us brought it back to our communities as our redirection effort for the coming year. We decided that it makes most sense for war tax resisters to coordinate this effort on the local level based on our relationships with other organizations, and NWTRCC will help publicize the effort and gather information on the total amount that was redirected. Tax resisters have been engaged with struggles for racial justice in our communities for a long time. This is an opportunity to redirect resources to those fights and more directly support Black and Brown leaders in our areas.