Weekly Audit: The Shocking Truth About Taxes

 

By Lindsay Beyerstein, Media Consortium blogger

The super rich are different from you and me. For one thing, their tax rates are lower.

According to IRS statistics, the nation’s top 400 taxpayers increased their average income by 392% and slashed their average tax rate by 37% between 1992 and 2007, Dave Gilson reports inMother Jones. Furthermore, when you factor in payroll taxes, the tax rate for Americans earning $370,000 is nearly equal to the rate for those making between $43,000 and $69,000 a year.

Meanwhile, at TAPPED, Jamelle Bouie notes that, in 2007, more than 10,000 Americans reported incomes of $200,000 or higher and paid no income tax at all. These lucky ducks are known to the IRS as HINTs, which stands for High Income, No Taxes.

Pseudo-farms of the rich and tax-dodging

The ultra-rich are using deluxe hobby farms to dodge millions of dollars in taxes, Yasha Levine reports for The Nation:

Take Michael Dell, founder of Dell Computers and the second-richest Texan, who qualified for an agricultural property tax break on his sprawling 1,757-acre residential ranch in suburban Austin and saved over $1 million simply because his family and friends sometimes use the land as a private hunting preserve to shoot deer. Or take billionaire publisher Steve Forbes, who got more than a 90 percent property tax reduction on hundreds of acres of his multimillion-dollar estate in upscale Bedminister, New Jersey, just by putting a couple of cows out to pasture.

Agricultural tax breaks were originally designed to help farmers stay on their land as suburban sprawl grew up around them. As neighborhoods shifted from rural to residential in the 1950s and ’60s, farmers struggled to keep up with rising local taxes.

So, who’s a farmer for tax purposes? Levine reports that the standards are ridiculously low in many states, like New Jersey, where a yard full of weeds can qualify as a farm.

Worst of all, tax breaks for faux farms are depriving public schools of billions of dollars of desperately needed revenue. In Texas–which loses over a billion dollars a year in property taxes from pseudo-ranches of the rich and famous–hundreds of public school students are taking to the streets to protest massive proposed layoffs of teachers and support staffers, Abby Rapoport reports in the Texas Observer.

Tax me, I’m rich

A group of self-proclaimed “trust fund babies” is demanding higher taxes, Pete Redington reports for Working In These Times:

Resource Generation recently teamed up with another nonprofit that organizes affluent activists, Wealth for the Common Good, to form a Progressive Tax Campaign. They will be organizing and advocating a change in the policy, laws and perceptions of our tax system. Specifically, the campaign aims to draw attention to the social services that taxing the wealthy could fund, and advocates higher tax bracket rates for top income earners, as well as higher taxes on investment income.

Major debt

Student loan debt is likely to reach $1 trillion this year, outpacing credit card debt for the second year in a row, Julie Margetta Morgan reports for Campus Progress. Student loans can be a smart investment if they lead to a lifetime of higher earnings. However, Margetta Morgan notes, the average bachelor’s degree holder will shell out $250 a month for a decade to pay back the loan.

Many Americans won’t pay off their debt until their own children are in college. President Obama was still making payments into his late 40s.

As college tuition continues to rise, we can expect students to borrow even more for their education in years to come. Much of this debt is guaranteed by the taxpayer. Margetta Morgan argues that colleges should be doing more to educate students about smart borrowing.

The economics of happiness

Kristy Leissle reviews the new documentary, The Economics of Happiness, for YES! Magazine. The film argues that community is the foundation of happiness and that globalization is the enemy of community. The movie also examines what ordinary citizens can do to nurture their own communities.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Weekly Audit: Republicans' Budget Declares War on Medicare

By Lindsay Beyerstein, Media Consortium blogger

The Republicans are poised to unveil a model budget on Tuesday that would effectively end Medicare by privatizing it, Steve Benen reports in the Washington Monthly. House Budget Committee Chair Paul Ryan (R-WI) is touting the budget as a strategy to reduce the national debt.

Ryan’s plan would turn Medicare from a single-payer system to a “premium support” system. “Premium support” is a euphemism for the government giving up to $15,000 per person, per year, to insurance companies to defray the cost of a health insurance policy.

As Benen points out, privatizing Medicare does nothing to contain health care costs. On the contrary, as insurance customers weary of double-digit premium increases can attest, private insurers have a miserable track record of containing costs. They excel at denying care and coverage, but that’s not the same thing.

The only way the government would save money under Ryan’s proposal is by paying a flat rate in vouchers. Medicare covers the full cost of medical treatments, but private insurers are typically much less generous. So, after paying into Medicare all their working lives, Americans currently 55 and younger would get vouchers for part of their health insurance and still have to pay out-of-pocket to approach the level of benefits that Medicare currently provides.

Taking aim at Medicaid

The poor are easy targets for Republican budget-slashing, Jamelle Bouie writes on TAPPED. Ryan’s proposal would also cut $1 trillion over the next 10 years from Medicaid, the joint federal-state health insurance program for the poor, by eliminating federal matching and providing all state funding through block grants. Most of this money would come from repealing the Affordable Care Act’s Medicaid expansion, which is slated to add 15 million people to Medicaid.

Block grants are cuts in disguise. Currently, Medicaid is an entitlement program, which means that states have to enroll everyone who is eligible, regardless of the state’s ability to pay. In return, the states get federal matching funds for each person in the program. Ryan and the Republicans want to change Medicaid into a block grant program where the federal government simply gives each state a lump sum to spend on Medicaid. The states want to use this new found “flexibility” to cut benefits, narrow eligibility criteria, and generally gut the program.

This is incredibly short-sighted. The current structure of Medicaid ensures extra federal funding for every new patient. So when unemployment rises and large numbers of new patients become eligible for Medicaid, the states get extra federal money for each of them. But with a block grant, the states would just have to stretch the existing block grants or find money from somewhere else in their budgets. Medicaid rolls surge during bad economic times, so a block grant system could make state budget crises even worse.

Ryan’s proposal has no chance of becoming law as long as Democrats control the Senate. The main purpose of the document is to lay out a platform for the 2012 elections.

Fake debt crisis

In The Nation, sociologist and activist Frances Fox Piven argues that the Republicans are hyping the debt threat to justify cuts to social programs:

Corporate America’s unprovoked assault on working people has been carried out by manufacturing a need for fiscal austerity. We are told that there is no more money for essential human services, for the care of children, or better public schools, or to help lower the cost of a college education. The fact is that big banks and large corporations are hoarding trillions in cash and using tax loopholes to bankrupt our communities.

She notes that Republican-backed tax cuts for the wealthy are a major contributor to the debt.

Jesus was a non-union carpenter?

Josh Harkinson of Mother Jones reports on the religious right’s crusade against unions. He notes that James Dobson of the socially conservative Family Research Council tweeted: “Pro-family voters should celebrate WI victory b/c public & private sector union bosses have marched lock-step w/liberal social agenda.”

Harkinson reports that the Family Research Council is backing the Republican incumbent, David Prosser, in today’s Wisconsin Supreme Court election–a battle that has become a proxy fight over Gov. Scott Walker’s anti-collective bargaining bill:

The FRC’s new political action committee, the Faith, Family, Freedom Fund, is airing ads on 34 Wisconsin radio stations in an effort to influence the April 5 judicial election that could ultimately decide the fate of the law. The ads target Wisconsin Assistant Attorney General JoAnne Kloppenburg, who’s running against a conservative incumbent, David Prosser, for a seat on the state Supreme Court. If elected, Kloppenburg wouldalter the balance on the court in favor of Democrats, giving them the ability to invalidate the recently enacted ban on public-employee collective bargaining. “Liberals see her as their best hope to advance their political agenda and strike down laws passed by a legislature and governor elected by the people,” say the ads. “A vote for Prosser is a vote to keep politics out of the Supreme Court.”

Roger Bybee of Working In These Times argues that recalling Republican state senators in Wisconsin is not enough to defend workers’ rights from Gov. Scott Walker’s anti-union onslaught.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Weekly Diaspora: 100 Years After Triangle Fire, Immigrant Workers Still Fighting for Labor Rights

by Catherine A. Traywick, Media Consortium blogger

Last week marked the centennial of the infamous Triangle Shirtwaist Factory Fire, in which 146 mostly immigrant workers died. The tragedy prompted widespread labor reforms in the United States, but its commemoration underscores the plight of immigrant workers similarly exploited today.

As Richard Greenwald notes at Working in These Times, the disaster marked “the moment that a strong collective working class demanded its citizenship rights,” while today, “we are living in a time where organized labor is weak, fractured and leaderless.” He concludes that a rebirth of labor must come, as it did in 1911, from today’s new immigrant communities, which continue to bear the brunt of exploitative labor practices.

Immigrant workers rally for labor rights

Immigrant workers and union organizers articulated the same sentiment when they commemorated the fire last week. According to Catalina Jaramillo at Feet in Two Worlds, labor groups rallied Friday to call for safer working conditions and unionization—especially for the thousands of immigrants who face abuse and exploitation because of their immigration status. One union member articulated the similarities between today’s migrant workers and those who perished in the Triangle Fire:

“I see that a hundred years since this terrible accident that killed so many people, things have really not changed at all,” said Walfre Merida, a member of Local 79, from the stage.

Merida, 25, said before joining the union he worked at a construction company where he was not paid overtime, had no benefits and was paid in cash.

“Safety conditions, none. Grab your tool and go to work, no more. And do not stop,” he told El Diario/La Prensa. ”When we worked in high places, on roofs, we never used harnesses, one became accustomed to the dangers and thanked God we weren’t afraid of heights. One would risk his life out of necessity.”

Kari Lydersen at Working In These Times adds that, while workplaces in general have gotten safer, immigrant workers tend to be employed in the most dangerous professions and are disproportionately affected by workplace health and safety problems. In particular, foreign-born Latinos tend to suffer injury and illness at a much higher rate than U.S.-born Latinos. Lydersen writes:

Work-related injury and illness can be especially devastating for undocumented workers since they are often fired because of their injury and they often don’t collect workers compensation or other benefits due them. […] A 2009 Government Accountability Office report says non-fatal workplace injuries could be under-reported by 80 percent.

Crackdown on immigrant workers bad for the economy

Other labor rights advocates are drawing attention to the federal government’s ongoing crackdown on immigrant workers. Worksite audits which require employers to check the immigration status of their workers have resulted in thousands of layoffs in recent months. This sweeping trend hurts families as well as local economies, according to a new report from the Center for American Progress and the Immigration Policy Center.

The report specifically looks at the economic impact of immigrant workers in Arizona, but its findings present much wider implications. Marcos Restrepo at The Colorado Independent sums up the key points:

  • The analysis estimates that immigrants on the whole paid $6 billion in taxes in 2008, while undocumented immigrants paid approximately $2.8 billion.
  • Increase tax revenues by $1.68 billion.

The report adds that the effects of deportation in Arizona would:

  • Decrease total employment by 17.2 percent.
  • Eliminate 581,000 jobs for immigrant and native-born workers alike.
  • Shrink the state economy by $48.8 billion.
  • Reduce state tax revenues by 10.1 percent.

Meanwhile, the effects of legalization in Arizona would:

  • Add 261,000 jobs for immigrant and native-born workers alike.
  • Increase labor income by $5.6 billion.

Restrepo adds that, in part because of such mounting evidence, immigrants rights advocates are exhorting authorities to recognize immigrants as workers, first and foremost.

Immigrant farm owners contend with exploitation

Of course, even when immigrants are owners, rather than employees, they still disproportionately contend with exploitative industry practices. At The American Prospect, Monica Potts reports on the unique experiences of Hmong immigrants operating chicken farms in the Ozarks. Specifically, Potts examines how behemoth agri-businesses like Tyson exploit the inexperience or limited English abilities of immigrants to sell chicken farms and secure contracts that often put the farmers deep into debt:

Many Hmong were signing contracts they couldn’t read and getting into deals they didn’t fully understand. At least 12 Hmong declared bankruptcy in 2006. […] The concerns are similar for other immigrant farmers, especially Hispanics, who moved into the area to work at chicken-processing plants but were also recruited to buy operations. Hispanic farmers sometimes pooled their money and bought farms without a contract, only to realize later they wouldn’t be able to sell their chickens on the open market. … Many just walked away rather than trying to save their farms.

This post features links to the best independent, progressive reporting about immigration by members of The Media Consortium. It is free to reprint. Visit the Diaspora for a complete list of articles on immigration issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, and health care issues, check out The Audit, The Mulch, and The Pulse. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Weekly Audit: Massive Protest In Wisconsin Shows Walker’s Overreach

 

By Lindsay Beyerstein, Media Consortium blogger

About 100,000 people gathered in Madison, Wisconsin to protest Gov. Scott Walker’s new anti-collective bargaining law. The state Senate hurriedly past the bill without a quorum last Wednesday. Roger Bybee of Working In These Times reports:

The rally featured 50 farmers on tractors roaring around the Capitol to show their support for public workers and union representatives from across the nation, stressing the importance of the Wisconsin struggle. Protesters were addressed by a lineup of fiery speakers including fillmaker Michael Moore, the Texas populist radio broadcaster Jim Hightower, TV host Laura Flanders, the Rev. Jesse Jackson, U.S. Rep. Dennis Kucinich, U.S. Rep. Tammy Baldwin, and The Progressive editor Matt Rothschild, among others.

The bill is law, but the fight is far from over. The Wisconsin Democratic Party says it already has 45% of the signatures it needs to recall 8 Republican state senators. So far, canvassers have collected 56,000 signatures, up from 14,000 last weekend. The surge in signature gathering is another sign that the Walker government’s abrupt push to pass the bill has energized the opposition.

Polling bolsters the impression that Walker overreached by forcing the bill through with a dubious procedural trick. Simeon Talley of Campus Progress notes that, according to a recent New York Times/CBS News poll, Americans oppose efforts to limit the collective bargaining rights of public employees.

Jamelle Bouie of TAPPED notes that the enthusiasm gap that helped elect Scott Walker last year has disappeared. In June 2o10, 58% of Democrats said they were certain to vote compared to 67% of Republicans. In March 2011, 86% of Democrats and 85% of Republicans surveyed said they would certainly vote.

Firefighters shut down bank

Wisconsin firefighters found a way to get back at one of Scott Walker’s most generous donors, Madison’s M&I Bank, Julianne Escobedo Shepherd reports in AlterNet. Firefighters Local 311 President Joe Conway put a call out to his members who banked with M&I to “Move Your Money.” Firefighters withdrew hundreds of thousands of dollars of savings in cashiers checks. The beleaguered bank closed its doors at 3pm on March 10.

John Nichols of the Nation reports that other unions got in on the act. He quotes a pamphlet distributed by Sheet Metal Workers International Association Local 565:

“M&I execs gave more money than even the Koch Brothers to Governor Walker and the Wisconsin GOP,” the message goes. “M&I got a $1.7 billion bailout while its CEO gets an $18 million golden parachute. Tell M&I Bank: Back Politicians Who Take Away Our Rights (and) We Take Away Your Business.”

Nichols explains that the next big step in the fight to overturn the bill will be the Wisconsin Supreme Court election, set for April 5. Assistant Attorney General JoAnne Kloppenburg is challenging conservative state Supreme Court Justice David Prosser. Legal analysts have raised serious questions about the bill and the process by which it was passed. A court challenge to Walker’s law might stand a better chance if a liberal justice replaces the conservative pro-corporate Prosser.

Guess what? We’re not broke

Steve Benen of the Washington Monthly takes on a GOP talking point, the myth that the United States is broke. It’s a convenient claim for those who wish to make massive cuts to popular programs without having to justify taking them away. If we don’t have the money, we don’t have the money. If it’s a choice between cuts and bankruptcy, cuts suddenly seem not only acceptable, but inevitable.

But the United States has a $15 trillion economy, immense natural resources, a highly educated workforce, and countless other economic advantages. The problem isn’t a lack of resources, it’s extreme inequality of distribution. Over the last 20 years, 56% of income growth has been funneled to the top 1% of the population, with fully one third of that money going to the richest one-tenth of one percent.

Benen notes that the Republicans didn’t think we were broke when they were advocating for a $538 billion tax-cut package, which wasn’t offset by a dime of cuts.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Weekly Pulse: 911 Is a Joke (Because It’s Broke)

By Lindsay Beyerstein, Media Consortium blogger

As the Great Blizzard of 2010 blanketed New York City, most residents were blissfully unaware that their city’s 911 system was on the brink of collapse. The system fielded 50,000 calls in a single day, and at one point the backlog swelled to 1,300 calls. The mayor was called to account for the slow service and promised that it wouldn’t happen again.

But David Rosen and Bruce Kushnick report in AlterNet that New York’s close call is an example of a much broader and deeper problem. Cash-strapped state and local governments are raiding funds set aside for 911 service, and the system is hurting badly:

Hundreds of millions of dollars are collected annually by states and localities to support 911 services and much of it is diverted to plug state budget holes and meet a host of other demands. Most disturbing, 911 services are technologically bankrupt, held together by duct-tape and workarounds.

States siphoned nearly $400 million earmarked for 911 between 2001 and 2004. The law demands that the money, raised by a tax on every phone line, has to be set aside for 911-related services. Some states fudge the definition of “911-related” to fund things that had nothing to do with emergency services, like raises for courthouse staffers. Others just brazenly redirected the money into their general funds. New York collected $82.1 million in 911 taxes on phone lines in 2007, but only 19 cents out of the $1.20 monthly fee was spent on 911.

At least New York can account for its misdirected funds. South Dakota simply has no idea where its 911 money went, Rosen and Kushnick report.

Walker: Hurry up and die

Seemingly determined to cast himself as a Dickensian villain, Wisconsin Governor Scott Walker presented a budget last week that would slash millions in funding for health care for the poor and the elderly. However, as I reported in Working in These Times, Walker recommended an increase in funding for a program that buries Wisconsinites who die destitute.

Medicaid roulette

Some governors are clamoring for more control over Medicaid, the joint state/federal health insurance program for the poor, Suzy Khimm reports for Mother Jones. Currently, Medicaid funding is allocated primarily by a matching system, with the federal government kicking in a certain number of dollars for every dollar the state spends. The states must abide by federal rules in order to qualify. Now, some Republican governors want to see Medicaid funding doled out in block grants. The states would get a fixed amount of money, which they could spend as they saw fit.

Rep. Cathy McMorris Rodgers (R-Wash.), the fourth highest-ranking Republican in the House, is a leading proponent of this new scheme. She claims it would increase “flexibility” for states. In this case, flexibility is a euphemism for “massive cuts.” Washington’s Democratic governor, Christine Gregoire, has already convinced the Obama administration to exempt her state from certain Medicaid rules. McMorris Rodgers applauds the move.

Crisis Propaganda Centers

New York City City passed a landmark “truth in advertising” bill last Wednesday that would force so-called crisis pregnancy centers (CPCs) to disclose that they are not health care facilities. CPCs are anti-choice ministries posing as reproductive health clinics. Among other things, the law will require city CPCs to inform potential clients that they do not refer for abortions or emergency contraception, Noelle Williams reports for the Ms. Magazine blog.

The logic of our sex laws

The cover story of this month’s Washington Monthly is a provocative analysis of Dan Savage, America’s most influential sex advice columnist, as an ethicist of contemporary sexual mores. The author, Benjamin J. Dueholm, is a Lutheran pastor and a longtime fan of Savage’s syndicated column “Savage Love.” Dueholm does a good job of summarizing some of the core principles of Savage’s ethos: disclosure, autonomy, mutual pleasure, and personal commitment to achieving sexual competence. His central critique is that Savage’s attitude is too consumerist and businesslike.

I would argue that there’s nothing inherently capitalist about Savage’s ethics. Yes, Savage’s ideal sexual world is based on consensual, mutually beneficial exchanges, like an idealized free market–but that doesn’t mean that realizing one’s sexual identity, or finding true love, is on par with picking a brand of laundry detergent. In consumerism, the customer is always right. Savage is constantly urging his readers to be active participants in a mutually satisfying sex life, not passive consumers who expect their partners to cater to them without giving anything in return.

USDA hearts Michael Pollan

Every five years, the U.S. Department of Agriculture issues guidelines for healthy eating. Parke Wilde of Grist explains why this year’s edition is, in many ways, a radical and surprising document:

The new edition has a fascinating chapter on eating patterns, focusing on real foods and not just nutrients. This chapter on eating patterns provides a nice counterpoint to the reductionism — what Michael Pollan calls “nutritionism” — of scientific discussion of diet and health. The guidelines’ healthy eating patterns may or may not include meat. For example, the USDA Food Patterns and the DASH diet each include moderate amounts of meat and plenty of low-fat dairy. At the same time, the guidelines explain clearly that meat is not essential, and near-vegetarian and vegetarian diets are adequate and even “have been associated with improved health outcomes.”

This is a big departure for an agency that has historically been criticized for acting as a propaganda outlet for the livestock and dairy industries. But Wilde notes that, despite its enlightened discussion of the perils of “nutritionism,” the USDA hasn’t broken the habit of referring to nutrients rather than foods. The guidelines still recommend that Americans eat less saturated fat, without dwelling at length on which foods actually contribute most of the saturated fat to the American diet.

As nutritionist Marion Nestle explains in her seminal book, Food Politics, this mealy-mouthed advice is measured to avoid offending any lobby group that might take offense at the suggestion that Americans eat less of their product. There is no saturated fat lobby, but there are plenty of lobby groups representing the interests of industries tied to the major sources of saturated fat in the American diet, which include cheese, pizza, bakery products, ice cream, chicken, and burgers.

This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

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