TFOC on the Radio

The following radio news stories about a recent TFOC report, entitled Solutions that Work for Main Street: Progressive Guidelines for Closing Recessionary State Budget Gaps, explain that budget cuts are not the only answer to widespread state budget deficits.

These stories, originally aired in Virginia, Tennessee, Florida, and New York, were syndicated for broadcast on radio stations across the country, reaching well over 4 million listeners! See below for transcript exerpts and click through to listen to the stories on Public News Service.

New York

April 1, 2010

"Ron Deutsch, executive director of New Yorkers for Fiscal Fairness, points out that Wall Street is one sector of New York's economy that has bounced back from the recession and into record profits. To head off painful state budget cuts, which also will send a negative ripple effect through the state's economy, he urges decisionmakers to consider taxing Wall Street's bonuses and excess profits, instead.

'We've spent trillions to shore up the financial sector, and Main Street basically bailed out Wall Street. So, what we're saying is there are a number of different ways Wall Street could help contribute to helping solve our state's budget gap right now.

The report, issued by the United for a Fair Economy Tax Fairness Organizing Collaborative, also suggests tapping into rainy day funds, scrutinizing existing tax breaks and encouraging more federal revenue sharing.

[...] Karen Kraut, director of the Tax Fairness Organizing Collaborative, says [...] "We're also looking at things like closing corporate loopholes and ending tax breaks for businesses that don't produce the jobs that they say they're going to produce."

Listen to our 4/1/10 New York radio story on Public News Service.

Florida

April 1, 2010

"Daniella Levine, president and CEO of the Human Services Coalition, Miami, says legislators need to put politics aside because cutting state spending hurts economic recovery. Instead, she suggests they focus on fine-tuning the tax code so it reflects a progressive structure - meaning those who make the least pay the smallest share and those who make the most pay a larger share to fund critical services.

"We are looking at cutting some of the most basic services - health care and education and senior programs - and what is so worrisome is we are still continuing to reduce taxes for those who are able to pay."

Listen to our 4/1/10 Florida radio story on Public News Service.

Tennessee

March 31, 2010

"While many would argue against raising taxes in tough economic times, Elizabeth Wright, executive director of Tennesseans for Fair Taxation, says the discussion is more complex and needs to focus on getting rid of unsound and unfair taxes.

"Our state economy is based far too heavily on the sales tax. Most states have a more even balance: a sales tax, a property tax and a tax on personal income."

Listen to our 3/31/10 Tennessee radio story on Public News Service.

Virginia

March 31, 2010

"David Shreve, report co-author and an economist with the Virginia Organizing Project, says legislators need to put politics aside, because cutting state spending hurts the economy. Instead, he suggests states focus on fine-tuning their tax code so it reflects a progressive structure -- meaning those who make the least pay the smallest share and those who make the most pay a larger share.

"This is not only much, much easier to do than anyone would imagine, it's very economically sound to approach it this way. If you're looking for the optimum way to move Virginia more quickly out of the recession, this is it."

Listen to our 3/31/10 Virginia radio story on Public News Service.

"Imagine this: your state has the option of reducing its residents’ combined federal tax bills by hundreds of millions of dollars a year and, at the same time, substantially reducing state taxes for almost 80 percent of its residents ... but then chooses not to do so.

Remarkably, that’s exactly what Wyoming and six other states are doing. Wyoming, Florida, Nevada, South Dakota, Tennessee, Texas, and Washington are opting out of a state tax reform that would make those significant benefits to taxpayers possible.

Like the other six states, Wyoming raises revenue by relying heavily on sales taxes instead of levying a personal state income tax. Those two revenue approaches combined create a lose-lose situation for most Wyomingites.

Low- and middle-income residents lose because they end up paying significantly more of their income in total state taxes than do high-income taxpayers. And residents who itemize their federal tax returns lose the "bang for the buck" on the deduction for state tax payments (the "federal offset"), thereby missing an opportunity to export a more substantial part of their state tax load to the federal government. [...]"

Read the full column by Karen Kraut in the Casper Star-Tribune

Listen to Bill Creighton on The Rick Smith Show.

Highlights from the interview:

Creighton: "We're the folks that the Bush Tax Cuts were designed to help...my tax burden has progressively gone down, since, well actually, since Reagan."

Smith: "So let's say we jump back up to just the Reagan tax cut, which was the top marginal rate at about 50%, would your lifestyle completely change, or would you not even notice it?

Creighton: "It wouldn't affect me a bit.  If I were paying what I should have been paying, I would still have enough.

What's ludicrous is that I can go out and swing a sledge hammer and pay 33, 34, 35% for swinging a sledge hammer, or I can sit on my duff and watch my [invested] money grow and pay what actually works out to less than 15%.  It's crazy... [Our country] rewards sitting back and doing nothing if you have enough...We penalize work by comparison for what we do for not working.

A bunch of us have signed a pledge which says that we are giving back the tax cuts we've received from Bush.  There is a tax calculator on ResponsibleWealth.org where individuals can go...and the calculator will show you what your Bush 'tax gift' was...we have pledged to give that money back to fix this tax code."

This is sad. Despite everything, it’s still hard to believe that anyone would oppose a tax cut on basic food items because for fear that it will lead to "increasing taxes on some taxpayers making more than $200,000 a year."

Back in April, the Alabama House of Representatives voted not to debate House Bill 1, a bill that would have repealed the 4% sales tax on groceries and saved residents upwards of $300 million per year. Why? Because some didn't like that it made up for that revenue with modest tax increases on those making more than $200,000 per year.

Our Alabama TFOC partner waged a noble campaign. There will be victories to come, but, for now, this stings.

"[...] Cambridge was a popular target of Tea Party warm-up acts (the Boston Globe was too, with one speaker bellowing you’ll only read the real scoop “in the Herald.”)

But some from Cambridge didn’t take the liberal ribbing sitting down.

'We share some of the anger,' said Steve Schnapp, 64, of Cambridge. Schnapp works for United for a Fair Economy, a nonpartisan group. 'We feel the target of (the Tea Party) anger is misdirected. The problem isn’t big government, it is the fact that wealthy individuals and institutions have too much power.”

Read the full article from the Boston Herald

Visit UFE's Flickr page for more photos from this event

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"Nevada's lack of an income tax means state taxpayers are paying more than they should in federal income taxes, according to a study released Monday.

Seven states that rely on sales taxes instead of an income tax could cut sales taxes while implementing an income tax to generate equal amounts of money for state coffers. [...]

Generally, taxpayers can deduct portions of state property, sales and income taxes from their federal returns. The problem with states that rely on sales taxes instead of income taxes is that the people paying a lot of the sales taxes have lower incomes, said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, which co-authored the study."

Read the full article by Alan Choate in the Las Vegas Review Journal.

States that rely heavily on sales taxes instead of levying a personal income tax are imposing billions of dollars in extra federal income taxes annually on their residents, according to a new report from the Institute on Taxation and Economic Policy and United for a Fair Economy’s Tax Fairness Organizing Collaborative.

The new report, “Leaving Money on the Table,” explains the reason behind the larger tax bills and estimates the aggregate federal tax savings for state taxpayers in seven states – Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming – that would result from a revenue-neutral “swap” from sales taxes to income taxes. 

The report also shows that such a tax swap would substantially reduce state taxes on low- and middle-income families, resulting in significant improvements in the tax fairness climate of each state.

DOWNLOAD THE REPORT (PDF 306KB)

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"Here's the thing: taxes are not charity. It would be a bad idea for wealthy people who feel they should be paying more taxes to instead contribute large amounts of money voluntarily to reduce the national debt. The first, less important reason for this is that any individual's contributions would be meaninglessly small; they can make far more difference by using the same amount of money to advocate for higher taxes, as these millionaires are doing. But the second, more important reason is that even if a million millionaires got together and voluntarily donated money in such quantities that it made a measurable dent in the deficit, it would be even worse, because they would be giving license to other people to continue pay less than their fair share of taxes. It's an invitation to free-riding, with the public-minded rich subsidising the irresponsible and selfish.

If America did not have a severe and potentially catastrophic national debt problem, one could have a legitimate argument in which some people argued for higher taxes and more defense, health care, transportation, etc, while others argued for lower taxes and less defense, health care, transportation, etc. That is not the situation in which America finds itself. For 30 years, we have systematically collected much less in taxes than our government spends; the structural deficit used to be around 3% of GDP, but over the past two years it's leapt up due to the recession. Over the long term, we need to make painful choices to bring expenses and revenues back into line. There are two legitimate arguments one can make here. One is 'I think we should raise taxes in the following ways.' The other is 'I think we should make the following massive cuts in defense, health care, transportation etc.' It is not legitimate to say: 'Hey, if you feel like paying more to reduce the debts we all incurred together, go ahead; as for me, I'll pass...' "

Read the full article from The Economist.

Visit msnbc.com for breaking news, world news, and news about the economy

Starting in 2001, the Bush Administration enacted a series of tax cuts that have, to date, cost roughly $2.5 trillion. Nearly half of that went to the top 5% of wealth holders and income earners in the US and, as Responsible Wealth Project Director Mike Lapham explains, the way we see it, that's just "not good policy."

Lapham: "We don't think that it was the right choice [in 2001], and we think it's inexcusable that [the Bush] tax cuts are continuing now. They were set to expire in 2010 and we're trying to make sure through [our] Tax Fairness Pledge that they do actually expire."

Dylan Ratigan: "There's a huge difference between the tax rate for those who are wealthy and invest money and those who are poor and have to work for their money. We tax workers at vastly higher rates than we tax the wealthy in this country on the belief that lower taxes on the wealthy will incentivize them to invest in our future, when we know all we've done is create a giant gambling parlor in New York [...]. How do you deal with that?"

Lapham: "To the extent that tax cuts help create jobs at all, which is debatable, certainly tax cuts for lower-income people are much more effective [...] because they don't put [their money] into savings accounts or send it off shore or whatever else. The other thing is, government spending is much more effective at creating jobs [than tax cuts to the wealthy]. There's a very good study out by Peter Orszag and Joseph Stiglitz, recently, that covers all of that."