Mike Lillis writes in The Hill about the challenge President Obama faces as he attempts to play to the center while appeasing ever-rowdier and more extremist Republicans. As he gets ready to unveil his deficit reduction proposal, he risks alienating his base, who if uninspired, may not contribute to his re-election campaign and even stay home in November 2012.
While early reports indicate that Obama may include some good things in his proposal, such as ending some of the tax breaks for the wealthy and reducing military spending as part of his deficit reduction plan, other questions still remain. How strong will those proposals be? And will he include deep Medicare and Medicaid cuts?
...As Obama prepares Wednesday to outline his deficit reduction strategy, liberals worry he’ll embrace Medicare and Medicaid cuts as an olive branch to Republicans in advance of larger fights over the nation’s debt...
..Liberal lawmakers already were irked with Obama’s decision to support upper-income tax cuts he campaigned against and to launch military operations in the Middle East without congressional approval.
Rep. Peter DeFazio (D-Ore.) this week said Obama should start acting like a Democrat, while two left-wing grassroots groups warned their members could withhold funds from the president’s reelection campaign... The criticisms highlight the problem facing Obama, who is trying to lead from the center without alienating his political base. The White House strategy could help the president with independents, but risks leaving liberals at home in the fall of 2012.
In addition to harsh criticisms coming from the Congressional Black Caucus (CBC), the Congressional Progressive Caucus (CPC) released it's own budget, "The People's Budget," to place a flag in the ground to the Left of Obama's centrist position.
The People's Budget includes smart tax proposals: enacting a progressive estate tax, closing corporate tax loopholes, enacting a new set of income tax rates for incomes over a million dollars, and taxing capital gains the same as ordinary income. The plan also includes rolling back military spending and focusing limited federal dollars on job creation programs here at home and upgrading our nation's aging infrastructure.
In addition to the new and stronger push-back coming from progressive in Congress, including the CBC and the CPC, outside organizing is underway to hold Obama accountable to his political base before it's too late.
But the real question is, how hard will progressives push Obama from the Left? Are we willing to push as hard from the Left on Obama as the Tea Party and freshman Republicans are pushing on Rep. Boehner from the Right? In the end, as FDR said after his election and President Obama himself paraphrased, we must "make [him] do it."
When it comes to taxes, not all income is created—or taxed—equal. Despite the time-honored value of rewarding hard work, our tax code gives preferential treatment to income derived from pre-existing wealth instead of income earned from work.
Here are other things you can do:
- Learn more about the special tax breaks for investment income.
- Use the interactive tax calculator, watch videos, and take the Tax Fairness Pledge.
- Read about proposals to end the tax break for capital gains and dividends.
- Read press release announcing Tax Wealth Like Work campaign.
- Follow coverage of our 2011 Tax Wealth Like Work campaign.
- See coverage from last year's Tax Fairness Pledge.
In the US, the gap is widening fast between fewer and fewer rich people and everyone else. Do Americans care?
Columbia professor and Responsible Wealth member Eric Schoenberg joined Warren Olney, host of KCRW Los Angeles' "To the Point," for a conversation about why wealthy and upper-income members of Responsible Wealth support raising taxes on themselves.
Other guests include:
- Mark Bittman: New York Times
- Michael Norton: Harvard Business School
- Jason Rink: Foundation for a Free Society
- Tom Donlan: Barron's National Business and Financial Weekly
Download the interview (forward to 18:44 to hear from RW member Eric Schoenberg)
Our current tax system rewards wealth over work by taxing capital gains and dividend income at a much lower rate than salaries and wages. UFE is calling for the restoration of the tax rates on capital gains and dividends to the same rate applied to income earned from work. Various proposals have been put forth to move in that direction.
1. President Obama's proposal to roll back
the Bush income tax cuts for the wealthiest households. His proposal would restore the top income tax rates and the capital gains rate to their pre-Bush levels for those earning over $250,000. If the Obama plan were law, the top rate on regular income would be returned to 39.6 percent, while the top rates for dividends and capital gains would be 20 percent. This is a step in the right direction, but it only partially restores capital gains and dividends to the same tax rate as wages. First, capital gains and dividend income below the $250,000 threshold would still be taxed at a rate much lower than income earned from work. For income over that threshold, capital gains and dividends would still be taxed at nearly half the rate on income from work (20 percent vs. 39.6 percent).
2. Rep. Jan Schakowsky's Fairness in Taxation Act (H.R. 1124). This bill would create a new set of income tax brackets of 45% through 49 percent for income in excess of $1 million. The top rate of 49 percent would apply only to the very exclusive group of Americans with income over $1 billion a year. Capital gains and dividend income under the $1 million threshold would still benefit from the preferential rate, but similar income over that threshold would be taxed at full parity with wage and salary income. The Fairness in Taxation Act, including both the income tax rates and the capital gains and dividend rates, would raise $78 billion.
3. The Congressional Progressive Caucus' “People’s Budget.” This plan includes, among other provisions, taxing capital gains and dividends as ordinary income. The bipartisan Deficit Commission included the exact same measure in its December 2010 recommendations.
What is a loophole? Can you hold one? And if you remove them from state budgets, what could we we actually pay for? Here's a radically moderate perspective on loopholes via video, courtesy of the Washington Bus, an organization that empowers young people through hands-on democracy.
Originally published by OtherWords.
So many governors are hammering their budgets with a “we’re broke” message these days that it’s amazing our country hasn’t shattered into a thousand separate islands. More and more, however, rational voices are correctly asserting that we’re not broke.
The problem isn’t that the United States is out of money. It’s that a tiny sliver of households are under-taxed. The richest 10 percent of Americans own almost three-fourths of the country’s total wealth. Astoundingly, the most affluent 1 percent of Americans own more than one-third of our total wealth.
Many Republican lawmakers, along with governors like Wisconsin's Scott Walker and Ohio's John Kasich, bizarrely think that they can erase deficits with tens of billions of dollars in budget cuts and tax breaks for corporations and wealthy people who don’t need them. They’re ignoring the greatest economic returns available, which are provided by public investments, federal aid to states, and even unemployment benefits. Instead of helping save the middle class, they're propelling us toward a busted, plutocratic disaster.
The GOP's deficit obsession isn't just misguided. It turns a blind eye on the struggles of low- and middle-income Americans. In contrast, Rep. Jan Schakowsky’s sensible Fairness in Taxation Act would raise taxes on millionaires and billionaires, which better serves the American majority.
Currently, families earning $374,000 pay the exact same federal income tax rates as families with multi-million-dollar incomes, or even the handful who earn a billion bucks every year, such as the heirs of Walmart's founder. The lifestyles of the ultra-wealthy wouldn’t change in the least if they had to pay moderately higher income taxes. And it would boost our national economy.
The Fairness in Taxation Act calls for establishing five new tax brackets for incomes between $1 million and $1 billion, with rates ranging from 45 percent to 49 percent.
The Illinois Democrat's bill would also address an absurd aspect of our tax system, which wrongly favors wealth over work. Today, money earned through working nine-to-five or the graveyard shift is taxed at a higher rate than money obtained through windfalls. Capital gains, dividends, and other investment income derived from pre-existing wealth shouldn't be taxed at rates lower than income earned through work.
Three-quarters of all stocks and mutual funds owned by U.S. taxpayers belong to the richest 10 percent of American households. Therefore, some of the most affluent Americans actually pay lower effective tax rates than many middle-class Americans.
Take, for example, a weasel like Lloyd Blankfein, CEO of Goldman Sachs. He raked in just over $13 million in 2010 (excluding his bonus of some $12 million worth of shares in his company). Of that $13 million, only his base salary of $600,000 will be taxed according to the federal income tax rates. The remaining $12.4 million will be taxed at a top rate of 15 percent. Unfortunately, Blankfein is just one example of the kind of gross inequity that exists in the current tax system.
A century ago, tax policies adopted during President Teddy Roosevelt's administration were guided by sound principles that stand in direct contrast to those of today’s Republicans.
“No man should receive a dollar unless that dollar has been fairly earned,” explained Roosevelt in a 1910 speech. “Every dollar received should represent a dollar's worth of service rendered--not gambling in stocks…I believe in a graduated income tax on big fortunes."
The Fairness in Taxation Act takes aim at the same inequities Teddy Roosevelt--a Republican--identified long ago. If it were enacted this year, it would generate $78 billion that could fund jobs and social programs that Americans need now more than ever.
Repeat after me: we're not broke. It’s time to mandate that the wealthiest members of our communities share in the sacrifice of the economic recovery and pay their fair share. The Fairness in Taxation Act offers a clear path in that direction.
When corporations acquire too much power and influence, it threatens the air we breathe, the water we drink, and the health of our democracy. Amid the rising power and political muscle of major corporations in recent decades, the need to counter greedy and harmful corporate practices has grown exponentially.
The Rise of CEO Pay
Executives of corporations receive financial compensation often as a mixture of salary, bonuses, shares of the company stock, etc. Over the past 60 years, executive pay has increased astronomically. In fact, CEO pay in 2009 had more than doubled the CEO pay average for the decade of the 1990s, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century. (link: Institute for Policy Studies)
The contrast between executive pay and average worker pay is stunning. In 2009, CEOs of major US companies averaged 263 times the pay of typical American workers. Back in the 1970s, CEOs made 30 times average worker pay. To make matters even more galling, taxpayers subsidize these outlandish executive salaries to the tune of more than $20 billion a year through tax and accounting loopholes.
In 2010, Congress passed major health care and financial reform bills, both of which contained small executive compensation related policies. The health care reform bill capped the tax deductibility of health insurance executive pay, and the financial reform bill required that all firms report CEO-worker pay ratios. Much more needs to be done and there’s no shortage of good ideas to reign in outsized executive compensation.
One of the key tools for speaking out against rising CEO pay and harmful corporate practices is shareholder activism. In addition to legislation, it is one of the most powerful tools for advancing corporate reforms.
Corporations are owned by shareholders, who can be individuals or institutions (such as mutual funds). If certain legal and regulatory requirements are met, shareholders are permitted to offer resolutions that get voted on at a corporation’s annual meeting. Shareholder resolution issues can be financial – e.g., executive compensation, predatory lending practices – or non-financial – e.g., board diversity, divestment from particular countries.
Shareholder resolutions are only advisory, meaning that even if a resolution passes, it is not required to be implemented by the corporation. However, resolutions often put unwanted public attention and pressure on corporate leaders and, thus, are used as leverage to win shareholder demands. Read more about shareholder activism here.
Rep. Jan Schakowsky (D-IL) has introduced a bill that would ensure millionaires and billionaires contribute their fair share toward rebuilding and stabilizing our economy. Now, we need your support to move the bill forward. Please call your Representative and urge him/her to support the Fairness in Taxation Act! (Click here to find your Rep's contact info.)
Income inequality in the U.S. has reached levels not seen since the Great Depression. The policies that made that possible have also created unprecedented disparities of wealth. Today, the top 10 percent of households owns three-fourths of the country's total wealth, and the top one percent alone owns 34 percent!
The Fairness in Taxation Act would generate significant revenue to fund vital public services and infrastructure, while also reducing economic inequality.
Currently, the top tax bracket begins with incomes of $373,000 or more. In essence, households with incomes of several hundred thousand dollars are paying the same rates as those with multi-million or multi-billion dollar incomes.
The Fairness in Taxation Act would add new tax brackets for income starting at $1 million and ends with a $1 billion bracket. The new brackets would be:
- $1 - $10 million: 45%
- $10 - $20 million: 46%
- $20 - $100 million: 47%
- $100 million - $1 billion: 48%
- $1 billion and over: 49%
The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion.
This bill makes perfect sense. It's a fair and sensible solution to our budget hardships, as it affects only those who can contribute more toward the greater good of our country without sacrificing their livelihoods. That's precisely why it has garnered the support of many wealthy taxpayers, including members of UFE's Responsible Wealth project.
Here's what some high-wealth supporters of the bill had to say:
This bill has been introduced at a time when conservative officials across the country are calling for drastic cuts to education, health care and myriad other programs that will further affect our social and economic integrity.
American workers have suffered enough. We need the wealthiest members of our communities to share in the sacrifice of the economic recovery. The Fairness in Taxation Act offers a superior alternative to more painful budget cuts.
It's imperative that we speak out, together and as loudly as possible, in support of this bill and other progressive tax initiatives. With your support and the support of others like you, tax justice will always stand a fighting chance.
Unions do far more than negotiate benefits for its own workers. Unions have fought to strengthen public policies that benefit all Americans, both unionized and non-unionized. And as corporate power and influence has skyrocketed in recent years, unions have provided a powerful mechanism for voter turnout that keeps our democracy strong.
Historically, unions have fought to strengthen public policies that benefit all Americans, both unionized and non-unionized. Unions have fought to strengthen minimum wage laws, worker safety protections, and public safety nets. We have unions to thank for the two-day weekend and the 40-hour workweek. More recently, unions have fought to strengthen minimum wage laws, worker safety protections, and public safety nets.
Decline of Union Power
Since the 1980s, the presence and power of organized labor in the U.S. has sharply declined. Today, union members account for roughly 12 percent of the workforce, down from 20 percent in 1983. In the public sector, the unionization rate is significantly higher at 36 percent. Over half of all unionized workers today are public sector employees.
Unions Keep Democracy Strong
As the number of unionized workers in the U.S. decreased, the number of corporate lobbyists has skyrocketed. Beginning in the 1970s, well-heeled corporations began to organize and work to undo these earlier labor victories. In 1968, only 100 corporations had public affairs offices in Washington. By 1982, the number of registered lobbyists in D.C. reached 2,500. That’s a whopping 2,400 percent increase in just under 30 years.
This decline in union power over the past 30 years has hurt all Americans. Historically, unions have helped to provide a powerful mechanism for voter turnout that keeps our democracy strong. Unions represent one of the few organized forces that provide a counterbalance to the influence of corporate money and power in our democracy.