The GOP Tax Plan Is Igniting a Movement for a Moral Economy

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If you’re expecting a gift card from your boss as an end-of-year bonus, enjoy it this year because you probably won’t get one in 2018.

The Senate tax bill would ban such rewards. Why? Because Republican lawmakers are determined to prevent ordinary workers from pocketing a $ 25 or $ 50 gift card without reporting it as taxable income.

Meanwhile, these same politicians are planning to dole out billions of dollars in tax breaks to the very wealthiest Americans.

For example, they’re planning to gut or entirely eliminate the estate tax, a curb on extreme wealth concentration that currently applies only to fortunes worth more than $ 11 million per couple.

Republican Senator Chuck Grassley explained the reasoning: “Not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Republicans are using this prejudice against working people to justify a massive giveaway to wealthy political donors. While giving the rich and big corporations huge tax breaks, the Republican tax plan would raise taxes on 87 million middle-class families, throw 13 million people off health insurance, and cut Medicare by $ 400 billion.

This moral abomination is already igniting a firestorm across the country. Over the past two weeks, protests have erupted at 50 universities and in least 100 cities, while nearly 50 people have been arrested on Capitol Hill.

And whether or not President Trump achieves his goal of signing this tax deal into law by the end of the year, this fight is just beginning.

On December 4, prominent faith leaders announced plans for one of the largest waves of civil disobedience in U.S. history. Dubbed the “Poor People’s Campaign: A National Call for Moral Revival,” this effort will mark the 50th anniversary of a similar initiative in 1968 that was undercut by the assassination of Dr. Martin Luther King.

The campaign co-chairs, the Rev. Liz Theoharis and the Rev. Dr. William J. Barber II, are determined to pick up the baton from King and other 1960s leaders. They’ve called the Republican tax plan “an act of gross violence against America’s poor.” But this is just one of the motivations.

“We are witnessing an emboldened attack on the poor and an exacerbation of systemic racism, ecological devastation, and the war economy that demands a response,” Rev. Barber said.

new Institute for Policy Studies report I edited reveals that conditions in each of these areas have worsened since 1968 by many measures.

It documents the increased number of Americans below the poverty line, the acceleration of economic inequality, and the emergence of new forms of voter suppression and mass incarceration that further entrench systemic racism.

It also highlights the growing imbalance in government spending on the military relative to social programs, and the intensification of racial and income disparities in access to clean air and water.

Starting next spring, the Poor People’s Campaign aims to bring tens of thousands of poor and disenfranchised people, clergy, and other moral leaders to rallies at statehouses in at least 25 states, leading up to a major demonstration at the U.S. Capitol on June 21.

While Republicans may succeed in scoring a short-term win for the political donor class, their tax plan is sparking a new moral movement that will lift up the millions of Americans living in poverty and build power for transformational change.

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How to Stop a Tax Plan Rigged for the Rich


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The Earth doesn’t quite shake when lawmakers in Washington, D.C. take one of their periodic votes on tax “reform.” But sometimes history does turn, and this coming week’s expected vote on the Senate version of the GOP tax plan could be one of those rare times that history actually turns for the better.

Indeed, this year’s situation bears a remarkable resemblance to the epic tax battle of 1932, a largely forgotten struggle that set the stage for an entire generation of increasing equality. Could this history repeat? It certainly is already echoing.

Back in 1932, just as today, conservatives had a lockgrip on the White House and both houses of Congress. Then as now, America’s wealthy lusted for fundamental tax changes that would significantly reduce their already reduced tax burden. Then as now, those wealthy — and the pols they subsidized — framed tax breaks for the rich as our only road to prosperity.

That prosperity seemed incredibly distant in early 1932. The nation had sunk into the Great Depression, and the federal government was collecting far too little revenue from a Depression-ravaged economy to function. The government, nearly everyone understood, simply had to raise more revenue. But the new revenue the government so desperately needed, top Republicans and Democrats in Washington agreed, must not come from the rich.

In November 1931, Democratic Senate floor leader Joseph Robinson from Arkansas had driven that consensus home with comments the Washington Post called “so conservative as to sound like a statement from Secretary of the Treasury Andrew Mellon,” the mega-millionaire who spent the 1920s orchestrating tax cuts that sheared the top tax rate on America’s highest incomes from 77 to 25 percent. Robinson warned the American people against any move that might subject the nation’s wealthy to significant new taxation. Serious people all agreed, the Senate’s top Democrat would explain, that the government could only tax the rich so high “without discouraging investment and production.”

Democrat John Nance Garner from Texas, the House speaker, would pound home the same theme the next month. He delivered what the Los Angeles Times Washington correspondent would dub a “mild spanking” to his Democratic Party colleagues who had had the nerve to suggest boosting tax rates on high incomes back near World War I levels.

A few weeks later, another leading Democrat, acting House Ways and Means Committee chairman Charles Crisp of Georgia, would continue the spanking. The nation could never meet its fiscal emergency by “soaking the rich,” Crisp informed his colleagues. Average Americans will have to “gird” themselves for “tremendous sacrifices.” A national sales tax, or some other tax that demanded “stamina” and “backbone” from all Americans, was going to have to be levied.

The Herbert Hoover White House agreed, in part. Administration officials would ask Congress to enact higher federal excise taxes on many everyday purchases, everything from tobacco to telephone calls. But the Republican Hoover administration would not go along with a national sales tax. Undersecretary of the Treasury Ogden Mills, soon to become treasury secretary after Andrew Mellon resigned to become America’s ambassador to Great Britain, asked Congress instead to up the nation’s top income bracket tax rate from 25 to 40 percent.

What explains this White House willingness to contemplate slightly higher tax levies on America’s comfortable? Hoover may have considered a little political discretion here the better part of valor. Better a modest tax increase on the wealthy than risk the unpredictable popular wrath a national sales tax might unleash.

Republican and Democratic leaders in Congress had no such fears. The heat they felt came from newspaper publisher William Randolph Hearst, the powerful media magnate who had emerged as the national sales tax notion’s most fervent advocate.

Hearst had no particular philosophical affection for taxing sales. Neither did any of his fellow wealthy Americans. They simply wanted Congress to put in place an alternative to taxing income. Their income. Americans, Hearst wrote in a nationally circulated March 1932 editorial, must “carry on a sustained crusade Morning, Evening, and Sunday against the present Bolshevist system of income taxation.”

The Democratic Party majority on the House Ways and Means Committee would obediently oblige. Lawmakers on the panel repudiated the Hoover administration and nixed any income tax hike. They passed instead an almost all-encompassing national sales tax, a 2.25 percent manufacturer’s excise levy on everything but food.

What happened next would floor top Democrats and their calculated bid to position the party as a reliable partner for America’s rich and powerful. Powerful Democrats — like the Wall Street financier Jacob Raskob — had simply gone too far. Americans would push back. They would mount the first national political surge against plutocracy since the Great Depression began.

The surge broke out almost as a matter of spontaneous political combustion. From across the nation, average Americans began bombarding congressional offices with angry complaints about the pending new national sales tax. In the face of this surprise bombardment, rank-and-file Democrats in Congress would suddenly rediscover their inner displeasure at America’s staggering concentration of income and wealth. They would join with Representative Fiorello LaGuardia from New York and other progressive House Republicans to kill the national sales tax by a stunning 223-153 margin.

Amid shouts of “soak the rich!” on the House floor, this unexpected majority would go on to raise the top tax rate from 25 percent on income over $ 100,000 to 63 percent on income over $ 1 million. The new higher tax rates, notes tax historian Elliot Brownlee, would double the effective tax burden on America’s richest 1 percent.

House Democratic majority leader Henry Rainey would not be happy about any of this.

“We have made a longer step in the direction of communism,” he told his House colleagues, “than any country in the world ever made except Russia.”

But Rainey remained above all else a savvy politician. He saw clearly that Americans overwhelmingly supported higher taxes on the nation’s wealthy, and now he would make the best of a bad situation. The evening after the crushing defeat of the sales tax proposition, he would go live on national radio and position the new taxes on the rich as a fiscally prudent step toward balancing the federal budget. He would also do his best to convince Americans that the rich had now sacrificed quite enough.

Lawmakers in the House, Rainey told the nation, have raised income taxes on the wealthy “to the very breaking point.” Even “the most violent advocate of ‘soaking the rich’ ought to be satisfied,” the Democratic majority leader would pronounce.

“We have ‘soaked the rich,’ I assure you,” Rainey would repeat for emphasis at the close of his radio address.

In fact, the soaking had been more a quick rinse. Taxes on the nation’s wealthy would remain, even after the increases, substantially lower than top rates in effect during World War I. The bulk of the tax dollars the new revenue legislation would raise would come from new and increased excise taxes, some on luxury items like furs but most on everyday items like chewing gum and lubricating oil.

Even so, the 1932 tax fight did mark a turning point. The rich and their political enablers had reached for the brass ring, a national sales tax. The American people had slapped them down.

In Albany, the state capital of New York, an ambitious governor took notice. Just two weeks after the tax brouhaha in Washington, Franklin D. Roosevelt, a leading candidate for the 1932 Democratic Party nomination, would begin a remarkable series of addresses that aligned his candidacy four-square with America’s grassroots push against plutocracy.

The first of these addresses, broadcast April 7 in NBC’s Lucky Strike Hour, would champion the “forgotten man at the bottom of the economic pyramid” and blast away at political leaders who “can think in terms only of the top of the social and economic structure.”

The next month, at a commencement address at Georgia’s Oglethorpe University, Roosevelt would deliver a stirring call for “bold, persistent experimentation” to aid the “millions who are in want.”

“Do what we may have to do to inject life into our ailing economic order,” the Presidential hopeful would explain, “we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”

The New Deal had begun.

Could a defeat of the GOP tax plans of 2017 signal a similar new egalitarian upsurge? Maybe. But first we have to deliver that defeat.

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The GOP’s Great Depression Tax Plan


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Critics of this fall’s tax reform spectacle on Capitol Hill never seem to miss an opportunity to contrast the GOP’s rush to judgment today with what they hail as the measured, bipartisan approach to tax reform back in 1986.

Back then, the line goes, legislative statesmen from both sides of the aisle joined and vanquished tax policy’s most ornery sacred cows. They slashed individual tax rates while closing loopholes favored by corporations—without party line votes or deceitful math.

But if we want a historical analogy that illuminates our present political moment, we would do well to ditch 1986 and look back to 1932, a year when America’s political elites made an amazingly brazen tax move to comfort America’s already comfortable. Sound familiar?

At that time, we were in trouble. The Great Depression had left government barely able to function. New revenues, almost everyone agreed, simply had to be raised.

Where to get these revenues? According to the political elites, top Democrats and Republicans alike, only tax breaks for the rich could start the nation down the road to prosperity.

Read the full article on Fortune.

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If The Trump-GOP Tax Plan Passes, Kiss Your Home’s Equity Goodbye!


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Make no mistake: The Trump-GOP tax plan is a declaration of war on homeowners, homebuilders, realtors, and the mortgage industry. With seven different provisions that will put pressure on home values, it’s hard to imagine that the plan will not cause a crash in the housing market.

Wait, seven separate provisions unfavorable to homeowners? But Trump’s blueprint for tax reform recognized the societal value of home ownership, right?

Well, that blueprint was less than candid. Surprised?

Here are those seven provisions:

One: The plan raises the threshold for deducting home mortgage interest. By nearly doubling the standard deduction, the plan reduces the amount by which mortgage interest and property taxes, when combined with other itemized deductions, will translate into a reduction in taxable income.

Two: The plan eliminates other itemized deductions, most notably state and local income taxes. That reduces the amount by which mortgage interest, property taxes, and the other few remaining itemized deductions exceed the standard deduction. The net effect is a further reduction in the tax benefit associated with home mortgage interest and property taxes.

Three: The plan cuts in half the maximum mortgage loan on which interest is deductible at all. The impact of this at the higher end of the housing market will be immediate and potentially devastating, as it could increase the annual after-tax cost of home ownership by 50%. The middle and lower end of the market will feel the effect as well, as the market softening at the top cascades down to the lower levels.

Four: The plan eliminates entirely the deduction for mortgage interest on a second residence. The markets in vacation and snowbird communities could see immediate softness because of this.

Five:  The plan moves the goalpost for avoiding tax on the gain from selling a personal residence. Under current law, homeowners who sell after two-years of occupancy avoid tax on up to $ 500,000 of gain for a married couple. Under the Trump-GOP plan, anyone who sells before living in a house for five years will not qualify for the gain exclusion. According to the National Association of Home Builders, 26% of homebuyers, and 28% of first-time homebuyers, move out before the end of five years.

Six: The plan will phase out the benefit of the exclusion from income for gain on the sale of a personal residence for those with higher incomes.

Seven: President Trump’s plan includes a special low maximum tax rate of 25% for certain types of income, including income from housing rentals. Because it’s the after-tax return that matters to an investor, owners of rental housing will be able to offer lower rates to renters, which will mean the cost of renting will decrease relative to the cost of owning. While this change also could mean investors will be willing to pay more for housing units, it’s not likely to help homeowners, because there is limited overlap between the markets for rental housing (think apartments) and owner-occupied housing.

So, if the Trump-GOP tax plan passes, how soon will we see it reflected in home prices? Hard to say for sure, but it brings to mind what the monkey said when he got his tail caught in the lawn mower:

“It won’t be long now.”

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Republicans Admit Their Tax Plan Is All About Rich Donors


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Sometimes I have to remind myself that people in “real America” with “real jobs” don’t while away their mortal hours reading about politics. But God help me, if you’ve suffered through any coverage of the Republican tax plan, you’ve probably heard three things.

First, it’ll dramatically slash taxes on corporations and billionaires, raise them for nearly a third of us in the middle class, and blow a $ 1.5 trillion hole in the deficit.

Second, it’s unpopular. Less than a third of Americans support it, Reuters reports. That’s worse than Trump’s own approval rating, which remains mired in the 30s.

And third, the Republicans who control Congress believe it simply must pass.

In fact, this third point sets the tenor for the entire debate. “Republicans are desperate to rack up a legislative win after a series of embarrassing failures,” TIME observes. “If tax reform doesn’t pass, many in the party fear an all-out revolt in 2018.”

“All of us realize that if we fail on taxes, that’s the end of the Republican Party’s governing majority in 2018,” South Carolina Republican Lindsey Graham told Fox News recently. In fact, “that’s probably the end of the Republican Party as we know it.”

If the tax giveaway doesn’t pass, adds Utah Republican Mike Lee, “We might as well pack up our tent and go home.”

The thing is, that doesn’t make any sense. Gallup polls have shown over and over that most Americans think rich people and corporations should pay more, not less. Even a majority of Republican voters worry about what this wealth grab will do to the deficit.

If they were looking for a win, then, Republicans would be running against their own plan. So what gives?

Well, New York Republican Chris Collins recently offered a clue: “My donors are basically saying, ‘Get it done or don’t ever call me again.’” Ah!

Many voters in Collins’ high-tax district will likely pay more, since the GOP wants to end federal deductions for state and local taxes. But it doesn’t have a lick to do with voters. It has everything to do with the affluent donors who bankroll GOP campaigns.

A similar dynamic played out in the health care debate. GOP leaders trotted out plan after plan that would eliminate coverage for anywhere from 20 to 24 million Americans — plans that never topped the low 20s in public support.

But those plans would have reduced taxes on the wealthy. So they had to pass.

“Senator Charles E. Grassley of Iowa, who has been deeply involved in health policy for years, told reporters back home that he could count 10 reasons the new health proposal should not reach the floor,” the New York Times reported back in September, “but that Republicans needed to press ahead regardless.”

When those bills met their righteous demise, elite GOP fundraising took a huge dive. Senate Republicans lost $ 2 million in planned contributions alone, The Hill noted this summer. Fundraising in those months fell some $ 5 million below where it had been in the spring.

So there it is, team: Follow the money. It’s no wonder Princeton researchers found a few years ago that rich people matter to Congress, but ordinary folks generally don’t. That’s probably why many of us prefer to tune it out entirely.

It’s also exactly why we do have to pay attention. Especially in those rare moments when members admit exactly what’s going on.

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Trump’s Tax Plan Taunts the Dignity of Labor

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Most of us work for a living. We wait tables or write software. We teach kids or drive buses. We treat patients or lay block. Our income, just about all of it, comes from our work.

But some people — wealthy people — don’t depend on work for their living. They rely on their wealth. The stock they hold pays dividends. The bonds they own pay interest. The assets they sell bring capital gains.

Two different classes of Americans, two different sorts of income. Now which class should pay tax at a higher rate, those who work for a living or those who let their wealth do their work?

Read the full article at the Dallas Morning News.

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Don’t Be Fooled By the Throw-Clayton-Kershaw-Under-the-Bus Tax Plan

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A Tax Plan Only a One Percenter Could Love


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After the failed effort to repeal the Affordable Care Act (aka Obamacare), the Trump administration has set its sights on its next big project: so-called “tax reform.”

And the “reform” they seek appears guaranteed to elicit disdain from all sides — with the notable exception of the ultra-wealthy.

Let’s first acknowledge that tax reform is hard. The system is held in place by entrenched interests who don’t want to see their favorite loopholes taken away. That’s a big reason why it’s been over 30 years since the last major tax overhaul, championed by Ronald Reagan in 1986.

Adding to the complexity of tax reform is the fact that all of the White House people working on it are resplendently wealthy.

Treasury Secretary Steven Mnuchin and Trump economic adviser Gary D. Cohn are each worth hundreds of millions. In fact, Trump’s cabinet is the wealthiest in history. That might have something to do with Trump, himself a billionaire, being the wealthiest president in history.

Put simply, the folks making the rules around taxes may not have working families’ interests in the forefront of their minds. Crowding them out are the wishes of the ultra-rich friends they see regularly in their glitzy country clubs and gated communities.

A seminal study by Professors Benjamin Page, Larry Bartels, and Jason Seawright in 2013 showed that the policy preferences of the wealthiest 1 percent are “much more conservative than the American public as a whole” when it comes to “taxation, economic regulation, and especially social welfare programs.”

The top 0.1 percent, those with assets over $ 40 million, have even more conservative views, the paper points out.

Perhaps unsurprisingly, the study shows, the wishes of the wealthiest citizens are much more likely to make it into public policy than those of the less affluent. One person, one vote be damned.

Every year Gallup puts out the same poll asking people about taxes. Every year they get the same response: Over 60 percent want to see the wealthy pay more in taxes. More than half believe “government should redistribute wealth by taxing the rich.”

Earlier this year, Treasury Secretary Mnuchin seemed to agree. He promised in no uncertain terms that this administration wouldn’t seek to cut taxes for the “upper class.”

Unfortunately, that was a bald-faced, pants-on-fire, inexplicable lie.

Trump’s plan does redistribute wealth, it turns out — but it’s towards greater inequality, not less. It takes serious mental gymnastics to argue that what Trump’s team has proposed on taxes would benefit the average working Joe or Jane.

The plan eliminates the federal estate tax, a levy that only impacts the wealthiest 0.2 percent of heirs and heiresses. It was put in place a hundred years ago with the express goal of reducing inequality and preventing aristocracy.

The plan also cuts the effective tax rates on the wealthiest individuals and most profitable corporations, those doing phenomenally well right now.

Meanwhile, the administration has proposed massive budget cuts eliminating whole programs for working people.

This draconian effort would intentionally and literally push working families into the cold, by zeroing out the Low Income Home Energy Assistance Program. If that weren’t savage enough, the administration also wants to cut the Women Infant and Children (WIC) food program that provides nutrition assistance to about half the babies born in this country.

The poor in this country often don’t see themselves as poor, the late author John Steinbeck noted, but as “temporarily embarrassed millionaires.” Maybe that’s why some working class people support this administration.

But what’s really embarrassing is what they’ll get in return.


The GOP Health Plan Would Make the Opioid Crisis Even Worse


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“We will give people struggling with addiction access to the help they need,” Donald Trump promised on the campaign trail in 2016.

We’re in the midst of the worst opioid epidemic our country has seen. More people died last year from opioid overdoses than ever before — 33,000. Opioid abuse now kills more people nationwide than car accidents or gun deaths.

The problem runs most rampant in America’s heartland — in states like Ohio, Kentucky, and West Virginia. Ohio alone, which gave key electoral votes to Trump, has three of the top 10 cities with the worst overdose rates in the country, with Dayton coming in at number one.

So why is Trump supporting a health care bill that experts have said will only make our opioid problem worse?

Specifically, the GOP’s Obamacare replacement would eliminate the law’s requirement that Medicaid cover basic mental health and addiction services. This expansion currently covers half the cost of Ohio’s medication-assisted addiction treatment. All in all, 1.3 million Americans get treatment under it.

Studies have shown that a major cause of the opioid problem is patients becoming addicted to the painkillers their doctors prescribe. Even Trump seems to understand this.

“We prescribe opioids like Oxycontin freely,” Trump said in October 2016. “But when patients become addicted to those drugs, we stop doctors from giving patients the treatments they medically need.”

And yet, that’s exactly the problem the new GOP health care bill perpetuates.

The bill would allow insurance companies to turn away drug users, causing patients to lose affordable access to lifesaving treatments like Suboxone, Emily Kaltenbach of the Drug Policy Alliance told Vice.

The new health care plan would also make doctors more likely to prescribe opioids for chronic pain, Northeastern University law and health professor Leo Beletsky says, because their patients won’t be insured for alternative treatment options like physical therapy.

Republican senators from Ohio, West Virginia, Arkansas, and Colorado recently released a statement saying they wouldn’t support any “poorly implemented or poorly timed” change in “access to life-saving health care services.” But Trump is pushing for it anyway.

On the campaign trail, Trump also promised his rural and Appalachian supporters that he would fight for harsher sentencing for drug dealers. But piles of evidence prove that harsher punishment doesn’t stop the flow of drugs into these vulnerable communities. In fact, it only makes the drug trade more lucrative.

When all’s said and done, the health care policy that Trump supports could increase the opioid treatment gap — those who can’t get substance abuse treatment because they can’t afford it or the care just isn’t available — by 50 percent, according to a Harvard Medical School and NYU report.

That would bring the number of people who remain untreated for addiction up to 640,000.

Trump promised his voters that he would end the opioid epidemic and “make America safe again.” But it’s those same communities in Ohio, Kentucky, and West Virginia that trusted the president to make good on those promises who stand to lose the most.

Domenica Ghanem is the media manager at the Institute for Policy Studies.


Nixon’s Basic Income Plan – Jacobin magazine

Nixon's Basic Income Plan
Jacobin magazine
… proposed basic income: the nineteenth-century English Speenhamland plan. According to Polanyi, Speenhamland incited the poor to idleness, damping their productivity and wages, and threatening the very foundations of capitalism by “prevent[ing] the