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Letting the portion of the Bush tax cuts that benefit the top tax brackets expire was a key part of candidate Obama's platform in the 2008 Presidential election. It was one of the key differences between his proposals and the proposals of John McCain.

President Obama has been in office for more than a year and a half, and the time has come for Congress to act on his signature tax proposal. But now, a powerful lobbying campaign is underway to sway the debate and hand out new tax breaks to top earners.

The same leaders that pushed through the Bush tax cuts - with their lopsided benefits for the rich - in the first place are mobilizing the same people to make the same arguments now to keep them in place. They were wrong ten years ago when the first of the Bush tax cuts was passed. Our disastrous economy proves that. And they are wrong now.

They have a powerful lobby and plenty of funding, but we're here organizing to make sure that candidate Obama's pledge is upheld. The Bush tax cuts for the wealthy have been draining our economy for ten years too long already. It's time to end them now.

As year-end approaches, the debate over the expiring Bush tax cuts is getting messy and harder to tolerate. Part of the reason is that there are more than just the usual suspects trying to advance clearly terrible proposals.

Sarabeth Guthberg at 1115.org had me squinting at her blistering critique of claims made by political advisor/economist Mark Zandi. (He had it coming.) As a key advisor to House Speaker Pelosi, Zandi is trying to rally support for permanent extension of the Bush tax cuts benefiting the "middle class," and a one-year-but-not-really extension of the tax breaks for those earning more than $250,000 per year (roughly the top 2%). He says it's necessary because the recovery is still too fragile, and that even the richest Americans "may be sensitive." (And, we wouldn't wanna make anyone cry, right?)

Experts from different sides of the board, including Paul Krugman and Alan Greenspan, have sounded off, saying the Republican proposal to permanently extend all of the Bush tax cuts is a bad idea. The tab for such a move would run up to around $3.7 trillion over 10 years. Read more >>

Photo h/t wsws.org

This August, President Obama signed into law a bill that would save more than 300,000 jobs in teaching and public service. Amidst this Great Recession, that seems like a no-brainer, but it turned out to be one of the more controversial bills of the summer. Republican demands that the bill be deficit-neutral led to the shifting of $26 billion (half the House's intended allocation) away from food stamp and green jobs programs to fund the initiative.

This resulted in an outpouring of negative media coverage: public employees called “fat cats” and federal aid to states labeled “another sloth-encouraging bailout." One headline even likened this effort to preserve teaching jobs to theft: “Robbing Renewable Energy to Pay Teachers.”

All this haggling was over $26 billion. $26 BILLION! That's, by any standard, a sizable amount. But, compared to the nearly $137 billion Congress has allocated to the largely unpopular Iraq and Afghan wars in this fiscal year, or the $680 billion it could cost to extend the Bush tax cuts for the top 2% of households over the next decade, it's peanuts. Read more >>

Working as an intern at United for a Fair Economy (UFE) has helped me realize that taxes, economic policy and government play vital roles in improving our communities. UFE warns against and strives to dilute concentrated wealth and power. They work on a national scale to promote progressive economic policies that can enable all levels of government to invest in the common good, and support a grassroots economic justice movement that can bring those policies to fruition.

When we zoom in to see what's happening at the local level, in too many areas we're finding that community development remains stagnant, including in our own, Boston. Here, local decision-makers continue to place the interests of monied special interests above the needs of most residents – especially those in underdeveloped neighborhoods. Here's a snapshot of what we've been dealing with...  Read more >>

Well, we can say that there is at least one good egg in the Senate. Bernie Sanders called out the hypocrisy of the born again deficit hawks who – just nine years ago – were telling us that “deficits don’t matter." Two wars, two huge sets of tax cuts and a spate of record setting debt accumulation later, we are now in a hole that only leaders as outspoken and honest as Sanders can get us out of.

His recently proposed Responsible Estate Tax Act would be a great way to raise much needed revenue in a way that would only affect multi-millionaires and billionaires. The so-called deficit hawks seem to have a problem with it.

Federal estate tax policy has been a contentious issue since the establishment of Bush’s tax policy in 2001. While its most adamant opponents deem it the “death tax,” supporters of the estate tax maintain that – besides being a sizeable revenue source –  it represents the fundamental American ideal of meritocracy. The estate tax helps to ensure that one achieves success by her own hard work, rather than by the fortune of his or her parents.

As I listened to United for a Fair Economy’s teleconference on the estate tax, I was amazed by Abigail Disney’s simple, yet powerful argument. She dispelled the myth that the estate tax impedes economic success. Disney – who paid a sizeable estate tax herself – pointed to her own family’s financial triumphs, noting that they were possible “not in spite of, but because of the American system of taxation." She reminded us that were it not for federal investment in highways, Disneyland would never have succeeded, or that if we did not have a strong court system Mickey Mouse’s trademark protection would not have endured.

The experiences of the Disney family serve as a poignant reminder of the ways that meaningful public investment can enable the culture, innovation, and values that define us as Americans. More importantly they show us that individual success and adequate government funding need not be described in opposition, but rather that they are woven together as the fabric of a nation’s prosperity.

The estate tax seems like a fitting way for the very wealthy to enable others to share in and expand this prosperity that America represents. It presents a symbolic bridge between individual success and our coveted democratic ideals. The adoption of strong estate tax legislation will not force us to choose between the individual and the nation, or the short term and the long run. Rather, it will serve all of the above.

Four months ago, 300 plus workers from the Shaw’s distribution center in Methuen, MA went on strike. This month, they're celebrating a victory.

The strike was born when workers voted in opposition to a contract that would cut their healthcare benefits. Shaw’s refusal to absorb the cost of an increase in premiums would cause workers a loss of $28 per week, which accumulates to $1,456 annually. Shaw's management stubbornly moved forward by hiring replacement workers and terminating healthcare for the striking workers.

In late May, the workers’ union, United Food and Commercial Workers Union, Local 791, organized a 60-mile, 5-day “March for Justice” beginning in Methuen and ending in Boston. Public officials, including Sen. John Kerry and Rep. Michael Capuano, urged Shaw's/Supervalu president and CEO Craig Herkert to reach a settlement.

The workers approved a new four-year contract–including wage increases and more affordable healthcare–on July 8th, ending the bitter strike. The temporary workers will be phased out gradually, allowing for the union workers to resume their positions.

A joint press release by UFCW and Shaw's stated, “The four-year contract continues Shaw’s long-standing history of providing good wages, comprehensive and affordable health care and a generous retirement plan,” although the original contract didn't exactly live up to this commitment. Many continue to feel that the ratified contract isn't enough–especially considering the months of lost pay–but the victory is about more than the final terms.

This resolution demonstrates the perseverance of the workers and the commitment of the union and communities to stand behind them. Shaw's was greedy and determined to break the union with intimidation, but the workers were unbending and rallied an enormous amount of support, ultimately forcing the company to renegotiate the contract.

The victory was made possible, in part, by the Commonwealth of Massachusetts, which granted unemployment benefits that were vital to the workers’ ability to sustain the strike. Additionally, a strike fund, for which over $180,000 was raised, played a key role in giving the Shaw's workers the financial wherewithal and morale to continue the strike.

Anthony Zuba, leader of the Interfaith Committee for Worker Justice, said healthcare should never be used as an “economic weapon,” and this 4-month battle is a lesson in why. The workers, union, advocacy groups and communities stood bravely and found their own weapon in a collective voice for workers' rights.

Conservatives' bluster about the Bush Tax Cuts for the wealthy reminds Kevin Drum of conservative bluster about the estate tax. He harkens back to the heat of the estate tax debate under President Bush.

Back in the day, one of the key Republican arguments against the estate tax was that it forced hardworking, salt-of-the-earth children of small farmers to sell the family plot in order to pay their taxes after dad died. It was a sad story, but with one problem: no one could find even a single small farmer who had been forced to liquidate in order to satisfy Uncle Sam's voracious maw. Even the American Farm Bureau Federation was eventually forced to admit that it couldn't come up with a single example, and a few years later the Congressional Budget Office estimated that under the now-current exemption level, only a tiny handful of small farms were likely to owe any estate tax to begin with — and of those, only about a dozen lacked the assets to pay their taxes. And even those dozen had 14 years to pay the bill as long as the kids kept running the farm. In other words, the story was a fraud from beginning to end.

The same argument is still being made by the anti-tax lobby to smear the estate tax, and it is still nonsense. That's why we're still putting out the facts about family farms and the estate tax. The new variation to the nonsense is the claim that small business owners will bear the brunt of ending the Bush income tax cuts on the top tax bracket. Prompted by Senator Chuck Grassley's (R-IA) public dare, Drum takes that argument apart in four quick steps.

Step 1: The Brookings Tax Policy Center estimates that only 1.9% of small businesses are in the two top brackets that would be affected. That's a little better than the dozen small farms affected by the estate tax, but not by much.

Step 2: About half of that 1.9% aren't really small business owners at all. They're high-income investors who get part of their income from investments in small businesses. So we're down to about 1% of small businesses that would be affected.

Step 3: The top brackets are just that: brackets. When the top rate goes up, it doesn't affect your entire income, just the portion in the top bracket. So if the top rate goes back up from 35% to 39.6%, it only affects the portion of income above approximately $400,000. A small business owner making $500,000 would see an increase of about $5,000. This is a fairly modest amount for someone making a half million dollars, and anything higher than that is hardly a "small" business to begin with. And the marginal effect is even smaller for the second highest bracket.

Step 4: The Office of Management and Budget estimates that the 10-year cost of these upper-income tax cuts is $678 billion, the vast majority of which hits wealthy individuals, not small businesses no matter how you define them. That's a fair chunk of change for anyone concerned about the deficit.

So that's the case. Letting Bush's tax cuts for the rich expire affects only a tiny number of small businesses; it doesn't affect them very much; and it generates revenues of $678 billion. If the only thing you care about is keeping taxes low for rich people, you won't be convinced. For the rest of us, it's a no-brainer. [emphasis added]

The $678 billion dollar figure does not include additional tens of billions of dollars that will either be generated in revenue or added to the deficit based on what we decide to do with the estate tax this year. Remember, the estate tax was gutted by the same Bush tax cuts, and like the rest of the Bush tax cuts, the estate tax cuts are set to expire at the end of this year too.

There's some real big choices to make this year. Should we hand out billions of dollars in tax breaks to the richest of the rich, or should we generate some much needed revenue? Should we keep a few dollars in the pockets of millionaires and billionaires, or should we generate start to turn around the trend of growing economic inequality?

The Financial Reform bill has been passed by both houses of Congress and now awaits President Obama's signature. When the President signs his name, the new law will be the biggest improvement to regulation of the financial industry in generations. It's a big change with a lot to it, but reigning in Wall Street and the excesses of finance will not be accomplished with one new law alone. But for now, it's time to celebrate what truly is an historic victory.

Of the many good things in the final package, the new consumer protections may be the sweetest. The new Consumer Financial Protection Bureau made it through in a reasonably strong form, and has a chance to truly protect consumers from many of the abuses that plumped up bank profits and bonuses at the expense of the public. Members of UFE and our Responsible Wealth project deserve to be particularly proud for standing up for the consumer financial protection in this bill.

Chris Sturr at Dollars and Sense (a magazine you should subscribe to if you don't already) runs down some more details. He links to an excellent explanation of what's in the bill, what got cut out, and what never even had a chance.

Some more reactions:

• Shahien Nasiripour (who has also become a must read) teams with Ryan Grim at the Huffington Post for a wrap up on passage of financial reform.

• Ezra Klein highlights some of the positives.

• Simon Johnson is hard to please, but he sees some encouraging similarities to past regulatory efforts.

• And Kevin Drum made a good the case for the bill when it's passage was still, at least somewhat, in doubt.

Representative Linda Sanchez (D-CA) introduced a new estate tax proposal in the House of Representatives. The specifics are very similar to the Responsible Estate Tax Act (S.3533) introduced in the Senate in late June.

It is a good bill. Representative Jim McDermott's Sensible Estate Tax Act (HR 2023) is still the best proposal in the House. It stays closest to the AFET guidelines for good estate tax reform. However, the release of matching proposals in the House and Senate from Sanchez and Sanders, looks like a sign that progressive lawmakers are serious about fighting for a strong estate tax.

Congress needs to get serious about taxes. With the Bush tax cuts expiring and conservatives returning to their nonsensical rhetoric, the fight for progressive taxation is on.

The good news is that the American public strongly favors higher taxes on the rich, poll after poll after poll (pdf, page 16) backs up that fact. The estate tax, of course, is paid exclusively by millionaires, which is exactly the kind of tax the public wants. And, we're rallying more support for our nation's most progressive tax. 

Stay tuned for more news coming out of our press conference on July 21st.