Pay No Attention to the Politicians Behind the Curtain!

When it comes to telling the story of our dire economy, it seems Republican politicians have lifted their strategy from the Wizard of Oz rather than a political playbook. But rather than accept the line that poor people are to blame for our mounting federal deficit, we should pull back the curtain on the real culprits.

It's an iconic scene: when Dorothy discovers the true identity of the Wonderful Wizard, he frantically exclaims, 'Pay no attention to the little man behind the curtain!' The banter around the federal budget and reducing the deficit is no different. Republicans are the man behind the curtain, blowing smoke and posing as the all-knowing wizards of economic policy. Meanwhile, they have created a mess out of our economy through massive Bush-era tax breaks for corporations and wealthy people; tax breaks that have been a primary cause for the deficit. But rather than acknowledging the role of tax breaks for the wealthy in our economic nosedive, these politicians distract us with smoke and mirror-lies about the strains low-income people have caused on our economy.

There's no denying the irony. Conservatives scream and shout about reducing the deficit, demand cuts in programs that fund services for the poor, and refuse to consider any tax increases for wealthy people and corporations. Yet, these politicians point to low-income folks as the culprits behind our economic mess, even though they’re not the ones cutting jobs across the US, shipping jobs oversees, and evading taxes while making record profits.

Our economic challenges have nothing to do with how the government helps poor people survive ("survive" being a key word; as opposed to a cool word like "thrive," but that’s a discussion for another day). The deficit did not reach this point because of over-spending on programs for poor people. Our budget is in shambles because of ill-informed, selfish decision-making by wealthy people who influence policy. Unlike millionaires and billionaires, normal working folks can't afford hefty election donations, never mind hire high-paid lobbyists dedicated specifically to guard their bank accounts.

All of this financial influence has given wealthy people more access to legislatures. When George Bush Jr. took office he began with a budget surplus. Since 2001, tax breaks have consistently favored the wealthy, allowing them not to have to pay their fair share of taxes- which helps explain why our deficit has ballooned. Today, Republicans continue to fight tooth and nail for tax breaks for their funders, breaks that are meant to somehow “create jobs.” In actuality, these loopholes have done quite the opposite. And now that Republicans have created a mess, all they can do is propose program cuts that will negatively impact poor people; many of whom didn't have have a strong seat at the decision-making table to begin with.

Another example of the 'man behind the curtain' at work? The estate tax. Since passing the Bush tax cuts in 2001, conservatives have waged a war on state and federal estate tax, going to drastic measures to reduce and even eliminate the estate tax completely. Yet, the estate tax only affects the wealthiest 0.27 percent of people, and has the potential to bring in billions in tax revenues. In other words, a tax that would impact very few people and bring in billions seems like a scarecrow (i.e. no-brainer).

Instead, wealthy conservatives are acting all 'cowardly lion'; cutting services for low-income people, fighting to reduce taxes on themselves, and shifting the responsibility for paying taxes to middle and lower income people who can’t afford it.

It's time we pull back the curtain on our elected officials and demand better. We must stop penalizing low-income families who are not the culprits of the demise of our economy. How much longer will we allow Republicans to keep villain-izing poor people while telling America to ignore the true masterminds. Until that happens, they will continue to stand behind the curtain, sneakily licking the federal revenue plate clean.

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How the Debt Ceiling Debate Impacts the Estate Tax

The estate tax is quietly under siege in the debt ceiling debate. Since the debt ceiling is the total amount of money that the government is allowed to borrow, you might wonder, what does that have to do with the estate tax?

Put simply, it's a matter of cash flow. If we fail to raise the debt ceiling, the government will default on its obligations for the first time in U.S. history. As of August 2, 2011, we will no longer be able to borrow money to finance existing commitments, such as military salaries and Medicare benefits. Historically, Congress has always raised the debt ceiling when needed without batting an eye. But today, the issue is stuck in a quagmire of political bargaining and conservative catch-phrasing, such as “tax breaks” and “spending cuts.” These so-called “tax breaks” are directed at the wealthy, of course, and often in the form of eliminating the estate tax.

Indeed, Republican politicians are making tough demands in debt ceiling negotiations (perhaps it’s a last-ditch effort to strengthen future candidacies). Many are refusing to pass an increase in the debt ceiling unless there is an agreement to slash federal spending. They claim that the solution to current budget woes comes from spending cuts alone. But how can we expect to improve our financial situation without increased revenue flows? One key source of revenue is a stronger estate tax, which has garnered fierce conservative opposition.

Although we don’t know exactly what the Republican debt-ceiling proposals entail, recent Republican legislation gives us a pretty clear picture of their intentions. One budget plan (that was later rejected) proposed a complete elimination of the estate tax and corporate income tax. Another amendment (to a bill ending ethanol tax credits, no less) would have completely removed the estate tax. In a time of debt, we cannot afford to lose valuable tax revenue from the nation’s wealthiest. 

Last week, House majority leader Eric Cantor (R-VA) walked out of bipartisan budget talks led by Vice President Joe Biden because of the stalemate on tax increases and spending cuts between Democrats and Republicans. But how much of a threat do the Republicans actually pose to increasing the debt ceiling?

Vocal support for an increase comes from the International Monetary Fund, which has urged Congress to raise the U.S. debt ceiling to avoid a financial meltdown with international implications, as well as from Chairman of the Federal Reserve Ben Bernanke.

And don’t forget one of the most powerful lobby groups on the Hill: Wall Street. Failure to increase the debt ceiling would greatly harm the U.S. financial system and perhaps lead to the demise of major U.S. banks. Wall Street executives have no intention of letting Republican politicians endanger the international power of the U.S. financial system (or their hefty bonuses).

So, even if the estate tax isn’t in the headlines, it is important to remember that the estate tax is under attack today. Call your congressman and urge him or her to vote for an increase in the debt ceiling without giving into unreasonable Republican demands. We simply cannot afford to eliminate the estate tax.

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Why is Income Inequality Bad?

When you think of the America, what comes to mind? Opportunity? Wealth? Equality? If it’s equality that comes to mind, then you should know that America may not be as equal as you think, according to the CIA and United Nations.

American cities with the most income inequality include some of our largest, such as Atlanta, New Orleans, Washington D.C., and Miami. New York City is the ninth most unequal city on the planet. International cities with similar levels of income inequality include Abidjan, Ivory Coast, Buenos Aires, Argentina, Nairobi, Kenya, and Santiago, Chile.

But those are just cities, right? Let's see how we, as a country, compare internationally.

The U.S. is ranked 39 out of 136 (with Sweden ranked 136 and the most equal). Some of the countries ranked most closely to the U.S. in terms of family income distribution include Rwanda (35), the Phillippines (36), Uganda (37), Jamaica (38) and Iran (42).

More than 70% of the countries measured have more equitable distribution of family income than the U.S. That includes Cambodia (48), Russia (51), China (52), Vietnam (77), India (79), Egypt (90), France (98), Pakistan (109), and over 85 other countries.

Moreover, in 2007, the United States had the fourth highest rate of income inequality of all OECD countries. What’s even worse? We also had the fourth highest rate of relative poverty; over 6% worse than the average country.

Okay, so we’ve got income inequality. But, why is that so bad? Well, let’s take a look at what inequality has led to:

It seems extreme income inequality is a pretty precarious position, and it has already made for some devastating results. It’s time to take a stand before it gets even worse.

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Student Immigrants Fight Hateful Legislation in Massachusetts

The Massachusetts Student Immigrant Movement (SIM) have launched MassHope 2011, a round-the-clock vigil on the steps of the Massachusetts State House to prevent the passage of anti-immigrant amendments in the state's budget.

Last year, SIM staged a 19-day vigil to prevent similar measures from passing, and they succeeded. They recognized that the victory was only made possible by a highly engaged community of human rights supporters, which included documented and undocumented immigrants, citizens and a coalition of organizations working to build a better world.

Despite popular support in the Bay State for SIM's cause, a relentlessly dismissive Republican contingent is hell-bent on advancing this inherently hateful legislation.

The national immigrant justice movement suffered a disappointing setback at the close of 2010 with the failure of the U.S. Congress to pass the DREAM Act. That served as a reminder to SIM and other statewide coalition members of the hard work that lies ahead.

This movement will move forward with ever-growing tenacity, refusing to rest on past successes. But they'll need more and more individuals and organizations in Massachusetts to stand with them. Sign SIM's petition here, and visit their website to learn how to join the movement.

A few photos from the MassHope 2011 press conference:

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Interview with a Popular Educator: Ty dePass (1 of 2)

Ty, what's your story, and how did you get involved in popular education for social change?

Whew! That’s a packed question.

Well, I’m a black man, eldest of seven and raised in Harlem and the South Bronx. I came of age during the social ferment of the 1960s – a time that shaped my understanding of the world as it was, and quickened my hunger to play a part in shaping the world as it might be.

The fight for social justice found me at a young age. I was six-years-old in 1955, when I discovered those photos from Emmett Till’s autopsy and funeral in a magazine in my parents' livingroom. Till had been brutally beaten and murdered by a group of white men because he was young and foolish, and had broken one of their most sacred cultural taboos: he forgot his “place” in White America.

Those horrifying images brought my childhood to an abrupt end, and I became the black kid who refused to comply. The old folks called it being “hard-headed.” But, to me, I wasn’t supposed to be the only dark face in those “accelerated” academic programs in elemetary school. I asked myself if I should, as instructed, submissively “know my place” and stay in it. Now, at 62, perhaps I should’ve burned out or sold out years ago, retreating from the struggle filled with cynicism and despair. To make a long story short, I was, I wouldn’t, and I haven’t and won’t, because I’m in this fight for the duration – mine, at least.

ladder of citizen participationBy the mid-70s, I’d already invested nearly a decade in the struggle against Dr. King’s “Triple Evils” – racism, militarism and poverty. Throughout high school, I tutored young children failed by the public schools in the project’s neighborhood center. Then, just a month into my first semester of college, the movement called and I left to do anti-draft outreach in the ‘hood.

At the time, grassroots efforts against poverty were ostensibly driven by the notion that the poor were entitled to “maximum feasible participation” in programs meant to benefit them.

I was a confirmed believer, but that lofty ideal was rarely realized. Over time, I grew increasingly frustrated as “participation” devolved into empty tokenism (superficial placation or perfunctory consultation) and Lyndon Johnson’s rhetorical war on poverty morphed into the GOP’s protracted war on the poor and working class.

I was first exposed to theories of social and experiential learning and organizational development while working for the Virginia State Economic Opportunity Office, the state-level liaison for anti-poverty initiatives in Virginia. I had the opportunity to apply and test these new learnings in a range of community venues to address issues of power, agency and voice.

I focused on two areas: 1) team-building and strategic planning to establish a multidisciplinary task force on child care and development, and 2) troubleshooting political tensions between local elected officials (the all-white old guard) and a community action agency (mostly-black led grassroots challengers). I learned that much of what I was doing with community-based organizations was being called “popular education.” I brought those learnings to subsequent work as an organizer for various grassroots initiatives, progressive campaigns, and progressive coalition efforts.

Currently, my focus is in the arena of public education, where issues of voice, agency and alliances pit well-connected insiders (politicians, bureaucrats, corporate interests, university or think tank wonks, venture philanthropists, education entrepreneurs, and corporate media) against those with the most at stake in the ed-reform process (students, parents, teachers, and communities).

Check out the first post on my blog, Cimarrón, for more. It pretty much sums up who I am, where I came from and how I roll.

Why is popular education important for movement building? What sets it apart from more conventional educational models?

Barry Checkoway's literature on social change distinguishes six distinct categories of community change strategies: 1) issue-focused mass mobilizations; 2) confrontational social action; 3) government-sponsored citizen participation; 4) expert advocacy; 5) local development (self-help); and 6) popular education.

The first five approaches emphasize securing either a “seat at the table” or a “piece of the action.” They focus on the immediate need, rather than sustainability, and primarily seek to alter the existing distribution of resources and benefits on behalf of the traditionally locked out or marginalized, rather than transforming the longstanding arrangements of wealth, status and influence, which create those conditions in the first place.

Instead of building the capacity of community members to solve their own problems, these strategies focus narrowly on enlisting outside forces and resources to “fix” the community. They fail to acknowledge that a "seat at the table" doesn't always guaruntee the ability to influence, or even know, what's happening under the table. Likewise, the size of one's piece of the pie is ultimately determined by those serving the pie.

In contrast, popular education promotes a kind of ‘transformative populism’ by which socially- and politically-marginalized peoples are encouraged and enabled to pursue the power to influence the decisions affecting their lives and livelihoods.

As a strategic response, pop-ed is informed by a critique of actual social, political and economic relationships. Additionally, the popular education strategy can support other change strategies by providing an analytical platform enabling community members to choose the most appropriate strategies for particular situations.

Click here to continue to part 2 of the interview with popular educator, Ty dePass.

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Interview with a Popular Educator: Ty dePass (2 of 2)

Ty, would you share with us a specific instance in which you witnessed the effectiveness of popular education?

The D7 RoundTable was a community-based organization focused on the struggles against racism, violence, and poverty in Greater Roxbury – Boston’s poorest, brownest, most culturally-diverse, and politically-marginalized neighborhood. For eight years, from 2000 to 2008, D7 convened a monthly grassroots public policy forum, bringing residents of Roxbury and Boston's other progressive communities together to examine, debate, and exchange opinions on a host of critical issues and public institutions.

In the spring of 2001, Boston’s public schools were being criticized for an evident “achievement gap,” as reflected in the scores of mandatory standardized tests. D7 dedicated one of its regular monthly forums to exploring the issue – specifically, the factors contributing to the “gap” in student test performance.

The nearly one hundred community members who attended the forum were seated at tables of with 8 to 9 of their neighbors. On each table was an information packet providing a detailed profile of a selected area school district or local high school.

The popular education exercise was divided into three rounds. In round one, participants were tasked with becoming “experts” on their data packets and answer three questions: 1) What do you see in the data? 2) What, if anything, stands out to you? and 3) How might this explain the “achievement gap”?

In round two, the tables were reconfigured to mix the research teams. This is called the “jigsaw method." The new teams were then tasked to compare and contrast their findings on the districts or schools examined, based on a new set of questions: 1) What similarities and differences stand out to you? 2) Which items appear most relevant to student achievement? and 3) What is the problem and where should Boston’s reform efforts begin?

The final round was devoted to a full-group discussion focused on describing the problem (test score disparities), its contributing factors (student body by race, income, language proficiency, student suspension days, curriculum access), and specific recommendations for change. participants displayed an impressive grasp of the data and its implications, often making surprising connections and inferences. Many participants shared with us how much they enjoyed the exercise, some even expressing their surprise over the how much they now understood doing policy research.

The only downside was that the exercise wasn't connected to an actual organizing initiative for school reform. Nevertheless, after ten years, a number of individuals who participated in the event and are now involved in local reform efforts tell me they remember the exercise clearly and use similar models in their own work.

One of the principles of popular education is that education must be a reciprocal process between facilitators and participants. It is an acknowledgement that no individual has all the answers, and that our unique lived experiences allow each of us to act as both sudents and teachers. What's one of the most important things you have learned in your work with other groups?

I start from the general assumption that most of what we think we know, just ain’t so. By this, I mean that we must be alert to testing our assumptions and risking exposure to new ideas. This is not the same as blindly accepting “expert knowledge," because we need to test that as well. But it does appreciate that the most useful knowledge is grounded in real world experience. Knowledge is best constructed as a collective effort – it is never fixed and it must be subject to challenge once it fails to explain new experiences.

How can others around the country get involved in popular education for social & economic justice?

To say, “get involved,” in popular education is an accurate formulation. Pop-ed is a medium for constructing people’s knowledge, a strategy for raising consciousness and informing appropriate action. It’s more a means to an end than an end in itself.

There are already a number of national organizations and networks that folks can get involved with that have a history of using pop-ed techniques as a medium for progressive organizing.

Among them are the Right to the City coalition, the Applied Research Center, the Highlander Research and Education Center, the People’s Institute for Survival & Beyond,  Project South and various local expressions of people’s theater, a.k.a., “Theater of the Oppressed."

What are your short- and long-term hopes for the progressive movement both within the U.S. and in the global community?

In the short-term, I’m hoping to see the emergence of the broad, multi-racial and united front against war, racism and poverty envisioned by Dr. King more than 40 years ago. This is a major piece of unfinished business for progressives. In the long-term, I’m just hoping to be around long enough to finally enjoy the fruits of that movement.

Click here to go back to part 1 of the interview with popular educator, Ty dePass.

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Crossing the Corporate Moat – RW Fights Unfair Foreclosures

By Responsible Wealth Intern, Adriana Hernandez

Since last fall, Responsible Wealth (RW) members and our allies have been working on a shareholder resolution and strategies to shed light on how banks and mortgage servicing institutions are handling foreclosures.

Through this work, RW developed partnerships with, among others, New York’s Neighborhood Economic Development Advocacy Project (NEDAP) and the PICO National Network. Together, we drafted resolutions on foreclosure mitigation practices, and consolidated our resolutions into one that targeted the use of robo-signing throughout the foreclosure process.

Thanks to the support of RW members, this resolution was filed at Bank of America, JP Morgan Chase and Wells Fargo in November. Unfortunately, our resolution was beat out by less than 48 hours by similar resolutions filed by the AFL-CIO and the Comptroller of the City of New York. As a result, our resolutions were not on the ballots (as those that preceded were substantially similar), but that didn’t mean our fight was over.

When the annual meetings rolled around, RW members were enlisted to provide access to twenty-six people for the meetings at JP Morgan Chase and Wells Fargo.

Despite fortress-like security at the JP Morgan Chase meeting, our allies were able to traverse the castle moat (literally!) to join the meeting. The proxies provided by RW members allowed advocates a platform to directly address CEO Jamie Dimon, asking him if he would stop foreclosures. They also demanded to know what Dimon planned to do to help those whose homes had been wrongly foreclosed—including families with a parent serving in the military overseas.

Ultimately, though not to our surprise, the resolution with JP Morgan Chase did not pass. Although, Dimon's response, "Maybe," was quoted in several news accounts of the meeting.

At the Wells Fargo shareholder meeting, our allies brought with them a group of protesters so large that their chants from the ground floor were delivered loud and clear to the enclosed meeting room on the 15th floor!

In the meeting, our members and allies called on Wells Fargo CEO John Stumpf to impose a moratorium on foreclosures until more comprehensive and ethical foreclosure policies could be developed to provide families the opportunity to save their homes.

For several minutes, our allies' voices dominated the meeting. As expected, Stumpf would not relent, and, as our allies persisted, Wells Fargo resorted to having some arrested.

While neither resolution made it through the corporate gauntlet, they were effective in raising both shareholders' and the media's awareness of the questionable foreclosure practices of these financial giants. And it is on that enhanced awareness that we can build stronger cross-class relationships and a louder collective voice for corporate accountability.

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11 Things the Richest U.S. Households Can Buy That You Can’t

The 400 wealthiest families in the U.S. aren't just filthy rich, they are downright dirty. Collectively, these households own $1.37 trillion dollars; a number so high that it's nearly impossible to comprehend. Here are 11 shocking things $1.37 trillion can buy that you can't.

In the U.S., accumulating this kind of wealth is the "American Dream." Getting rich is the result of hard work; padding your bank account is applauded and encouraged. But at what cost? Have we created economic policies that cater to the wealthy, in hopes that we will someday be among them?

Perhaps in today's economy, we have allowed the wealthy to get too far ahead financially.

Case in point: today, the wealthiest families in the U.S. are sickeningly, obscenely rich, to the tune of $1.37 trillion dollars. And unlike the rest of us, they don’t have outstanding medical bills or student loans, trouble paying credit card debt, or live paycheck to paycheck.

So how much is $1.37 trillion dollars? To demonstrate just how much money this is, here are 11 things that the richest 400 households in the U.S. can buy with their "hard-earned" cash:

  • The richest 400 households can pay off every student loan for every single student in the entire United States. No more paying for an education, so that you can get a good job so that you can... well, pay off your education.
  • The richest 400 can pay off all credit card debt for every single person in the entire United States. Imagine that! No more credit card debt looming over your shoulders!
  • The richest 400 households can afford to triple the number of teachers in the United States, then give every single one a $30,000 raise. Teachers are being laid off everywhere, their salaries are being cut, and they are suffering. Teacher-to-student ratios in schools are abysmal. But what can we do about it when so much wealth is in the pockets of so few families?
  • The richest 400 families alone could replace 70% of all money lost in the Great Recession, for everyone! How much money did you, your parents, or grandparents lose in the Great Recession of 2008? 30%, 50% of your portfolio? Not only do the rich still have enough money to fund their wildest dreams, but they can also fund your retirements.

As you can see, the wealthiest families in the U.S. are doing just fine. And with this money has come a great deal of political influence, often in the form of tax breaks and tax loopholes. Their influence on policy has made it easy for the rich to stay rich [and get richer].

And until this winner-take-all economy changes, it will remain nearly impossible for us regular folks to get ahead, no matter how hard we work.

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The Bush Tax Cuts Ten Year Hangover

Ten years ago, the great con known as the Bush tax cuts was signed into law.

We were told that the budget surplus left by the Clinton administration would be better off in the hands of the taxpayers. Those tax breaks were to stimulate the economy, create jobs and lead us all to the American Dream.

Of course, the story of the past decade has been much different:

The lion's share of the tax breaks were stuffed into the pockets of a small percentage of taxpayers. The top 10 percent of earners received 55 percent of the tax benefits; the top 1 percent alone grabbed 38 percent. And, at the tip top of the income scale, the top .01 percent of households snatched an average cut of $520,000, or 450 times the average break for a middle-income family.

The current unemployment rate of 9.1 percent is more than double the rate in the same month a decade ago. In more human terms, 13.7 million people are currently looking for work but can't find a job. And those figures are upwards of 76 percent higher if we include the under-employed and folks discouraged by a still-thin job market.

As for the American dream of white picket fences and a home to call your own, overall home foreclosures were two-and-a-half times above the 2001 rate by the end of 2010. Today, roughly 3.7 million homes are in danger of foreclosure.

Foreclosures started, 1987-2010

Chart h/t U.S. Department of Housing and Urban Development, Historical Data

Policy-makers should be addressing the dire unemployment and foreclosure epidemics that plague our economy instead of focusing on the long run deficit. But it is worth mentioning that, for all the hubbub about the size of government and federal spending, the Bush tax cuts increased the deficit by $1.7 trillion between 2001 and 2008. And they remain the policy change responsible for the biggest share of our projected deficits for the next ten years.

It couldn't be more obvious; if you care about the deficit, end the Bush tax cuts. If you care about the economy, end the Bush tax cuts. If you care about suffering families who can't find a job getting forced out of their homes, end the Bush tax cuts. It's past time to begin getting our economy back on track. Ending a policy that lines the pockets of millionaires is the right place to start.

The results are in. The Bush tax cuts are a massive failure. Ten years is ten years too long. End the Bush tax cuts now.

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Take Action - Bush Tax Cuts Anniversary

Do you think it’s time to raise taxes on millionaires and corporate tax dodgers?

June 7, 2011 marks the tenth anniversary of the disastrous 2001 Bush tax cuts. Those irresponsible tax cuts added $2.6 trillion to our national debt and went primarily to the wealthiest households in the country.


But a nationwide tax justice revolution is gaining steam. All over the country, people are demanding to know: If we can pay our taxes, why can't America's wealthy individuals and richest corporations pay their fair share?


Join United for a Fair Economy, Responsible Wealth, and our partners during the week of June 7 to demand that millionaires and billionaires pay their fair share. Here's how you can get involved.




Make three (3) calls to 888-907-1485, and ask to be connected with your representative and two senators. 

  • Tell them: It’s time to end the Bush tax cuts for the wealthy and increase tax rates for millionaires. No more budget cuts until millionaires and corporate tax dodgers pay their fair share.

JOIN A NEARBY EVENT OR CREATE YOUR OWN with the True Majority events database. You can also download an activist tool-kit that includes signs, talking points, Town Hall questions, and sample press releases and op-eds.



  • Contact Sarah VonEsch at and include your organization's name, contact person and his/her email.



  • Use email and social media to encourage your friends, family and colleagues to get involved.
  • Blog about the need to end the Bush tax cuts for the wealthy as a way to raise revenue to stop budget cuts at the federal, state and local levels.

Our economy is still in tatters and the middle class is disappearing. But that's not stopping conservatives in Congress from fighting for more of what led to the economic meltdown in the first place. In fact, they want to give even larger tax cuts to the super-rich—all while slashing essential public services, environmental protections and attacking public employees.


We need to shut down these damaging proposals. Your support and participation are crucial to the advancement of economic justice.


Thank you for taking action!


Lee Farris

Federal Tax Policy Coordinator

United for a Fair Economy

617.423.2148 x133


P.S. For more information on the 10-year anniversary of the Bush tax cuts, see the following analyses:

Endorsing organizations of the June 7th Days of Action include:


Business for Shared Prosperity | Every Child Matters | Friends of the Earth

Institute for Policy Studies | | USAction

Wealth for the Common Good



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New Report: Flip It to Fix It

States are facing their largest decline in revenue on record. The response from elected officials has been downright harmful, shortsighted, and economically unsound. Cutting to get out of a deficit is like digging to get out of a ditch. It puts everything we value at risk. And as we state in our new report—Flip It to Fix It: it doesn’t have to be this way.

By design, our state tax structures are designed to fail. Why? Because every state in the U.S. has a regressive tax structure, meaning it takes a greater share of income from low- and middle-income families than from the wealthy. In tough economic times, trying to raise adequate revenue through a regressive tax structure is like trying to squeeze water from a stone.

A new study, released today by the Tax Fairness Organizing Collaborative at United for a Fair Economy, asks the question: What if there was a solution to state deficits that would raise significant revenue, encourage investment, and create jobs—without cutting vital public services? And what if the revenue required by such a solution could be generated solely by making tax systems as fair as most Americans think they ought to be?

As this study demonstrates, this can be achieved by inverting each state’s tax structure. In other words, taking each state’s current distribution of state and local taxes and flipping it, with a pivot point at dead center (the 50th percentile). In this inverted state and local tax model, the wealthiest 20 percent pay the share of state and local taxes currently imposed on the least wealthy 20 percent, and vice-versa, with the fourth quintile also trading places with the second.

Every single state would benefit tremendously by inverting their existing tax structure.  All combined, states would generate an additional $490 billion in revenue—immediately eliminating their deficits with cash to spare for investing in job creation and other stimulants to the economy. The flipped structure would be progressive, which is not only more economically sound, but also consistent with the majority of Americans’ perception of “fair.”

Read the full report in our resources section.



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Three Books About the Causes & Consequences of Inequality

If you’re looking for a great book to deepen your thinking about the causes and consequences of inequality, here are three of my favorite reads of the last few months.

Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class, by Paul Pierson & Jacob Hacker

Many progressives point to the election of Ronald Reagan as the great turning point in our economy, ushering in a new age of inequality, but that misses a much bigger story. In this eye-opening and insightful book, Pierson and Hacker document the dramatic shifts in the political landscape that took place in the decade prior to Reagan’s election. As unions were in decline, corporate America was organizing like never before, hiring armies of lobbyists and filling the coffers of political campaigns. By the late 70s, they were able to stop President Carter’s agenda dead it its tracks, effectively crippling his presidency. Pierson and Hacker’s book goes further by documenting the continuation of this trend through the 80s, 90s, and today. Taken in context, the recent Citizens United ruling and the assault on public sector unions in Wisconsin and elsewhere are the continuation of a long-term pattern that must be turned around. The core take-away from this book is that organizations matter… a lot.  If we are to turn the tide back in our favor, we must organize a real movement from the ground up, because being right just isn’t enough.

The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson & Kate Pickett

The negative social consequences of inequality is fairly intuitive, but Wilkinson and Pickett take it to an entirely new level with hard data and great analysis. The book examines the way in which inequality, and the increased social stratification that goes with that, reaches deep down into the human biology, triggering primal fight-or-flight instincts, reducing trust levels, and increasing stress. Using statistical data comparing developed nations around the world and states within the US, they document clear correlations between a wide array of social indicators – including physical and mental health, obesity, crime, bankruptcy, and more – with higher levels of inequality. One clear message from The Spirit Level is that inequality is bad for everyone, including those at the top of the economic ladder.

Aftershock: The Next Economy and America's Future, by Robert Reich

Reich takes on inequality from a different perspective. Instead of arguing the morality or social implications of inequality, he focuses on the economic basics. Without a strong middle class, the economy stalls. Over the past few decades, middle class Americans have used various coping mechanisms to stay ahead despite stagnant wages for the bottom 90%, including shifting to two-income households and taking on debt, but these families have since hit a wall. He proposes numerous policy solutions to reverse the growing inequalities and revive the middle class, including a “reverse income tax” that actually pays out to anyone earning under $50,000, coupled with graduated rates for higher-income households topping out at 55%; taxing capital gains and dividends the same as wage income; and expanding public investments in mass transit, Medicare for all, and more. If you’re looking for a good book that explores the economic trends and growing divide of the last few decades, this may be the book you’re looking for.

Happy reading!


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