Tax Fairness Action News (TFAN)
The annual publication of the Tax Fairness Organizing Collaborative (TFOC), showcases the critical organizing experiences and victories of TFOC's members.
By Ed Cutlip
United for a Fair Economy has released a new report analyzing President Barack Obama's tax proposals. In the report, the progressive organization argues that Obama's tax proposals fall short of what is needed to implement a progressive tax structure and to reduce incentives for the kind of financial risk-taking that led to the current economic crisis.
The report compares Obama's tax proposals--unveiled in his 2010 budget--with recommendedations from the Institute for Policy Studies (IPS). The report finds that the IPS proposals would generate significantly more revenue and curtail many of the practices that led to the financial crisis. Their proposals would increase the tax rates on the richest Americans to bring them closer to what the average taxpayer pays.
Read the full post on Media Mouse.
On Febuary 25th, the Boston Chapter of the Progressive Communicators Network convened a panel discussion called “Talking About Racial & Economic Justice in Obama’s America.”�
Amaad Rivera [LISTEN] is the director of the Racial Wealth Divide program at United for a Fair Economy, and lead author of their "2009 State of the Dream Report: The Silent Depression." He discusses Racism without Racists, patterns of school segregation in Boston, and building racial justice frameworks.
Tarso Luís Ramos [LISTEN] is the director of research at the right-wing watchdog group Political Research Associates. He discusses the work of Ian F. Haney Lopez’s on “colorblind white dominance,”� Eduardo Bonilla-Silva’s work on White Supremacy and Racism in the Post-Civil Rights Era, and the “Color Blind Ideology.”�
Doyle Canning [LISTEN] of smart/MEME, discusses some of the stories in the popular culture on racism and “post racism,”� and how story-based strategies can work to challenge some of the underlying assumptions of white supremacy in the dominant culture.
Read the full blog post on smart/MEME.
President Obama's fiscal year 2010 budget proposes an ambitious and exciting agenda that invests in our nation's future. His budget substantially invests in the long-deferred and vital areas of health care reform, clean energy, and education. The President partially pays for these investments though a mixture of progressive tax changes and other revenue measures.
United for a Fair Economy applauds the new direction President Obama appears to be taking our nation and supports a number of his proposals. Overall, the Obama budget takes steps that reduce economic inequality, but does little to reduce the racial wealth divide. We also believe there are some critical improvements needed in the budget in the areas of military spending, racial justice and federal tax policy. UFE is working to improve the budget with organizational allies who share our values.
While the general proposals were accepted by both Houses of Congress, much is left to be defined in the details stil be to hashed out. Please let your US Representative and both Senators know your opinions. Find your legislators here.
While President Obama's budget makes significant strides in social spending, the budget also makes a disappointing choice to increase, not decrease, both Department of Defense and Homeland Security spending. (See chart: US Military Spending vs. The World, 2008.)
Obama is proposing that the Defense Department receive $533.7 billion as a baseline budget for fiscal year 2010, with another $130 billion in supplemental funding to bring the total to almost $664 billion, a 1.4 percent ($9 billion) increase over FY 09. These figures do not include roughly $7 billion in personnel, health care and military construction spending recently appropriated under the economic stimulus law.
The President's budget seeks $42.7 billion for the Department of Homeland Security in fiscal 2010, up 1.2 % from $40.1 billion in FY 09. That's in addition to $2.8 billion for homeland security included in the stimulus bill.
We applaud the long awaited investment to improve the medical treatment of wounded service members and veterans and the President's commitment to pursue a reform of the acquisition process to make sure that funds are not being wasted on expensive and outdated weapon systems. Yet, we believe the President's decision to expand the Army and Marines neither supports desperately needed economic recovery nor responds to the desires of a majority of Americans to reduce our reliance on the military as a means of achieving security, stability, and peace among nations.
If the Obama administration is serious about a shift in how we relate to other nations and how the US engages in global affairs, then we must move away from policies and budget decisions that serve to maintain global US military hegemony. From experience, the world sees the Marine Corps as the invasion and intervention military outfit of choice, and the US army as its occupying counter part.
A large portion of the homeland security budget goes to border security and immigration. It includes $1.4 billion to Immigration and Customs Enforcement (ICE) to ensure that illegal aliens who commit crimes "are expeditiously identified and removed" from the United States. This investment is problematic as we have seen time and time again how ICE, under the guise of rounding up and deporting "illegal aliens who commit crimes", has indiscriminately rounded up and deported thousands of non-criminal undocumented workers and separated families. If the Obama administration is serious about controlling the influx of undocumented workers into our country, then it should consider redesigning US foreign and trade policies instead of implementing para-military persecution and building walls. (See UFE's policy recommendations on Latin America.)
President Obama's budget proposal forecasts a roughly $50 billion yearly savings in war costs over time. But this doesn't really address the concern about spending billions of dollars to maintain and expand a neo-colonialist war machine instead of investing in the creation of a more just and sustainable national and international economic structure grounded in solidarity and social economy principles.
The price we pay for being a military superpower with an interventionist agenda is unsustainable, both economically and politically. That needs to change. We want even greater increases in spending on public education, affordable housing and job creation, community-led economic development and fair global trade policies, rather than improved weapons systems and a bigger military force to keep the world in fear of us. We want a major step up in healthcare and renewable energy, rather than the build-up of fences on our borders.
As this country experiences an economic recession, people of color are experiencing an economic depression, with unemployment, stagnant wages and asset poverty that would be considered an epidemic if the country as a whole were experiencing similar dismal economic realities.
While some aspects of the President's budget attempt to address areas of concentrated poverty, isolated geographic areas, civil rights, and historically disfranchised populations, the attempts are sporadic. Virtually absent in the budget is the subject of race and its implications. If history is the litmus test of success, past federal policies that failed to systemically address the underlying racial disparities at best maintained these inequities and at worst exacerbated them nearly beyond repair. President Obama's budget inadequately addresses the issues of structural racial inequity.
This structural racism practiced during the recent economic bubble and bust - including discriminatory policies of the financial industry - led to the largest loss of wealth in modern history for people of color. The President's budget does not address the resulting economic crisis.
Further, Obama promotes "race-neutral" policies such as the increase in green technology to the tune of $34 billion, which, while important, lack a clear directive to concentrate such resources and jobs where they're needed most: struggling communities that are disproportionally the communities of color.
Understanding that Latinos are the least likely to have medical insurance, that Blacks are the most likely to live in areas of concentrated poverty, that Native Americans have some of the highest drop-out rates compared to the rest of the population and that APIA (Asian Pacific Islander Americans) are not even counted in a wide variety of disparity data, allows us to understand that not all people in this country are entering this 21st century economy equally.
This budget has the potential to both symbolize progress and address some of the persistent structural racial inequalities through adequate funding for the enforcement of anti-discriminatory policies, new initiatives on inequality and improved data collection. As of yet, President Obama has not demonstrated a clear commitment to addressing the vast and growing racial inequalities in our nation. Some have said, "if you are not using the race card, you are not playing with a full deck." As we enter a new chapter of American history, let us create a 21st economy that works for everyone. This is only possible by dealing with race, not ignoring it.
Federal Tax Policy
President Obama's budget proposes many changes in tax policy. Together, these changes make tax law somewhat more progressive, but they fail to raise greatly needed revenue. We would prefer tax changes that result in a steeply progressive tax system, and raise enough revenue to accomplish national goals.
We support the President's efforts to:
- repeal the Bush tax cuts on those earning above $250,000
- limit deductions for people in the top 5% of income
- return the tax on investment income back to 20%
- tax the compensation of hedge fund and private equity managers at the same rate as earned income
- increase international corporate taxes
- eliminate numerous oil company tax breaks, and
- establish a "cap and trade" system to limit carbon emissions and reduce pollution.
We disagree with Obama's proposal to permanently reduce the Alternative Minimum Tax, which mostly benefits the wealthiest 10%. And we believe that, given our nation's massive deficit, this is not the time to hemorrhage revenue by cutting taxes for families earning less than $250,000 and extending business tax cuts, as Obama's budget does.
A particularly big disappointment is the President's handling of the estate tax. He proposes to make permanent President Bush's reduction in the estate tax with an exemption of $3.5 million per spouse and a tax rate of 45% on the amount above the exemption, which will cost $166 billion over 10 years. This benefits only people in the top 1% of income. Instead, United for a Fair Economy proposes an estate tax with a $2 million exemption per spouse and up to 55% rate over the exemption, which would bring in billions more over 10 years.
Obama missed his chance to introduce other new taxes that primarily affect wealthy people and corporations, and which would have made the tax system more fair, raised significant revenue, and created disincentives for some of the financial speculation that contributed to the economic meltdown. We support the Institute for Policy Studies' excellent package of tax proposals, which could raise up to $422 billion per year more than Obama's proposals. In addition to a strong estate tax, the proposals include an income surtax on people earning over $5 million/year; a tax on speculative financial transactions; taxing investment income at the same rate as earned income; closing overseas tax havens; and ending subsidies for excessive executive compensation.
Here are some charts that show:
Where federal revenue comes from:
and what it is spent on:
Without strategic tax changes and policies that reduce military spending and explicitly advance racial justice, our nation's economic inequality will not be reversed, and Obama's investments in health care reform, clean energy, and education will falter.
Again, please let your US Representative and both Senators know your opinions. Find your legislators here.
If you have questions or comments about UFE's critique of President Obama's budget proposal, please contact:
Military Spending: Adrian Boutureira, [email protected]
Racial Justice: Amaad Rivera, [email protected]
Federal Tax Policy: Lee Farris, [email protected]
Necessary economic policy changes towards Latin America
By Adrián Boutureira, United for a Fair Economy
United for Fair Economy believes the Obama administration faces great challenges as well as great opportunities inour future relationship with Latin America.
During his election campaign, candidate Obama courageously stated he would not support the Colombia Trade Agreement due to the impunity in which human rights violations and violence against labor organizers occur in that country. While we applaud Mr. Obama for bringing these sobering facts to the attention of the American people, weinvite him to go further. President Obama must not only condemn the Colombian government's complicity in the gross violation of human rights of labor and community leaders, but he must also confront and address our own nation's economic and military complicity in those violations.
Furthermore, the new administration must not only examine and rectify these inherent inconsistencies in the proposed US-Colombia trade agreement, but also those of other existing bilateral and multilateral 'free' trade agreements in the hemisphere, such as NAFTA, CAFTA, and the US-Peru Trade Agreement.
A truly new phase in US-Latin America relations calls for a rejection of many past and present US trade policies that have played a key role in the creation of social instability, lack of economic opportunity, and gross economic inequality that has led to the displacement and forced emigration of millions of human beings.
Any real change in direction inimmigration and US policy towards Latin America calls for President Obama toalso quickly distance himself from past foreign policies that have mainly supported the interests of multinational corporations and entrenched local oligarchies. He should instead develop a new comprehensive strategy that willgenerate a foreign policy that will support Latin American social movements and governments that aim to advance the rights of workers, women, the indigenous,small farmers, and other historically oppressed majority populations as they struggle for social, economic, cultural, and environmental justice.
To this end, UFE respectfully suggests the following changes in USpolicies towards Latin America and its citizens:
1. Initiate and institute changes in US foreign policy that:
- Respect the economic, political and territorial sovereignty of all Latin American nations.
- End all covert and overt military and intelligence intervention in the internal affairs of all Latin American nations.
- End the present political belligerence toward popularly elected governments throughout the region, such as Bolivia, Ecuador and Venezuela, among others.
- Provide political, technological and financial support for those Latin American governments that pursue sustainable, locally determined, economically, socially and environmentally just development strategies, regardless of their alignment to US corporate interests.
- Close the Western Hemisphere Institute for Security Cooperation.
- Close the International Law Enforcement Academy in San Salvador.
- Stop the funding of Plan Colombia and cut off all military aid to that country.
- Stop the funding of the Merida Initiative and the militarization of the US/Mexico border.
- Close the National Endowment for Democracy and return USAID to its original foreign aid mission.
- Help return President Aristide to Haiti's presidency and support the end of the UN occupation.
- End the embargo against Cuba and normalize relations with that nation.
2. Establish tradeagreements with Latin America that:
- Include comprehensive agreement-drafting mechanisms that allow for full transparency in all aspects of the negotiations and that are drafted by democratically elected government representatives and other major non-governmental stakeholders. (For example, civil society organizations that represent autonomous indigenous communities affected by the proposed policies);
- Ensure that corporations cannot challenge international treaties and agreements; local, state and federal public interest policies; and/or international labor, human rights, health, environmental, and safety laws and regulations;
- Promote and enforce the implementation of a common, best practices standard for the rights of workers, Indigenous Peoples, small farmers, consumers and women;
- Support the autonomy and integrity of the public sector and the full protection of the environment;
- Establish practices that focus on local economies, support fair trade and sustainable growth principles, and aim at serving the interests of working people in the US and the working people of our Latin American trading partner/s equally;
- Include alternative indicators for measurements of wealth and progress other than the GNP and GDP, such as the Genuine Progress Indicator (GPI), that reflect the importance of accurately measuring the adverse effects of certain economic activity on human welfare and environmental sustainability;
- Shift measuring the impact of natural resource exploitation and the introducing of potentially hazardous substances into the environment away from Risk Assessment methodology and towards the use of methods that employ the Precautionary Principle.
3. Initiate the creation of a just immigration reform that:
- Prevent the passage of anti-immigrant legislation and the criminalization of undocumented immigrant workers and their families;
- Halt the militarization of the border and the continued building of the wall separating historically culturally and economically interconnected cross-border communities;
- Cease all deportation proceedings of undocumented workers with children living and or born in the US;
- Reject the guest worker program as a viable alternative for normalizing the status of undocumented immigrant workers;
- Reject undocumented worker employer sanctions and "no match" letters;
- Develop a comprehensive path to citizenship for undocumented immigrant workers;
- Facilitate speedy family reunification;
- Protect and advance the civil rights of all immigrants and their families;
- Protect labor rights and promote a living wage for all immigrant workers.
Background on the estate tax:With your help over the past decade, we've succeeded in preventing repeal of the estate tax. Now the imminent battle is over reform. There is a real threat that a weak version of the estate tax that results in little revenue and worsening economic inequality will prevail. Our objective in 2009 is to defeat reckless estate tax proposals and to pass legislation to maintain a robust federal estate tax that generates significant revenue.
Press for Progressive Estate Tax Reform. President Obama advocates freezing the estate tax at its current 2009 exemption ($3.5 million for an individual and $7 million for a couple) and indexing it for inflation. Conservatives are still pressing for reckless proposals that would gut the law. Progressive alternatives, such as our "Sensible Estate Tax" proposal, would maintain a lower wealth exemption ($2 million per spouse) and introduce a progressive rate structure, with higher rates on larger estates.
A progressive estate tax will preserve most of $1 trillion in revenue over the next decade, provide a powerful incentive for charitable giving, and reduce inequalities of wealth. Eliminating or irresponsibly reforming the tax will shift tax obligations onto lower income taxpayers or future generations. Building Congressional support for a more progressive estate tax will help defeat conservative efforts to gut the law.
As Bill Gates Sr. has written, "the estate tax is a means by which wealthy people pay back the society and the commonwealth that has made their wealth possible."
Evaluating Elected Officials on Taxes
Both at the state and federal level, elected officials are crafting proposals and taking positions on tax policy.
While tax policy can be used for a wide range of purposes, in our view one of its most important functions is addressing economic inequality.
Some elected officials, but not all, share this value. But often it's difficult to see through the rhetoric and evaluate an official's position – especially on topics as complex as taxes.
That's why we created Action Tools for evaluating elected officials on taxes. They contain short descriptions and definitions of key progressive principles and sample questions that you can ask as you research elected officials' proposals and positions.