Tag: taxes

As we move closer to the debt ceiling limit and defaulting on the debt, two proposals have been put forward by opposing sides. The Republicans have put a bill together that will come up for a vote on Wednesday that calls for a two-step plan that would allow the debt limit to be raised by $1 trillion and create “a “Super Congress,” composed of members of both chambers and both parties, isn’t mentioned anywhere in the Constitution, but would be granted extraordinary new powers.”

From the Democrats, House Majority Leader Harry Reid has proposed $2.7 trillion in spending cuts and raising the debt ceiling through 2012 with no revenue increases but would not touch any of the big three social safety nets. It does include the proposed “super congress”:

“made up of 12 members, to present options for future deficit reduction. The committee’s recommendations will be guaranteed an up-or-down Senate vote, without amendments, by the end of 2011.”

There are a few problems though. The first problem is the neither bill will pass both houses. The other obstacle two-fold. Reid’s bill will need 60 votes for cloture. It is unlikely that Reid can convince four Republicans to vote for it. He may get able to convince Sen, Olympia Snowe (R-VT) and Sen. Collins (R-ME) but he also must get the blue dogs to fall in-line. The only way I can see Reid getting this bill to the floor for a vote is to use the “Cheney nuclear option” and call bull shit on the filibuster. They don’t have the guts for that.

House Speaker John Boehner has similar problems. He needs 217 votes to pass. With 89 tea party Republicans who signed a letter refusing to raise the debt ceiling no matter what the deal, Boehner would need to convince 63 Democrats. That won’t happen either. Some of the tea party crew may break tier “oath” since they are taking heat from their constituents at home. The House bill stands a better chance of suvival.

If both bills by some miracle pass, then it goes to reconciliation and both bills have to be voted on again. This isn’t going to happen in less than a week. If only the House bill makes it, the Senate probably reject it. That is the most probable scenario.

That leaves one option and it falls back to the White House to use the 14th Amendment, Article 4. Obama has already rejected this option but as it gets closer to August 2 and default, given the choice of a constitutional crisis versus a global economic melt down, let hope Obama put his “big boy pants on” and starts acting like a responsible adult who has to make a decision not everyone is going to like.

President Obama’s Chief of Staff Bill Daley, former bankster and Third Way board member, thinks that it is “the deficit is a serious drag on the economy.” You would think that the Tea Party Republicans had taken over the White House. Oh, wait, they have.

Mr. Daley appeared on Meet the Press with corporate shill, David Gregory

As Scarecrow at FDL points out

Apparently, the man closest to the President of the United States, and on whom the President relies for political and economy advice, does not know that the only reason the terrible unemployment numbers that may end his President’s re-election hopes are at 9.2 percent and not 11 or 12 percent or higher is because of the increased federal deficit spending of the last two years.

And the only thing that can keep unemployment from reaching higher levels in 2012 is continued federal spending, which they will cover via more deficits. If Mr. Daley’s diagnosis were translated into policy – and that seems to be what’s happening – he and his President will need new jobs in 2013.

Mr. Daley and the completely useless David Gregory totally ignore the real causes for current economic disaster:

On the debt reduction negotiations, David Gregory asked Mr. Daley what he must have thought was a gotcha now question. He showed Mr. Daley a graphic showing the increase in the total debt since Obama took office, with the debt going from $10 trillion to $14 trillion or so, and projected to rise another $2 trillion.

Then Gregory smuggly concluded, “can’t you [Mr. Daley] see the logic of those who argue that given this huge increase in the debt, it makes sense that we reduce that only with spending cuts and not tax increases?”

The correct response to a question that jaw-droppingly stupid would have been to award Gregory the Douglas Feith Award and terminate his contract with NBC. Daley may not get the allusion and couldn’t say that in any event.

But in responding, Daley couldn’t even remember to remind viewers that the bulk of that debt increase was entirely the result of the recession: fallen tax revenues and increased safety-net spending, plus the stimulus, all responding to the recession Mr. Obama inherited. Instead, he left us with the lecture on how the debt or deficit was a serious drag on the economy, so our President was really focused on that.

Scarecrow is so right that “there are no more adults in this conversation.”

 

A corporate tax holiday? Does Sen. Chuck Schumer (D-NY) seriously think that by cutting the tax rate on overseas profits for US Multinationals from 35% to 5,25% it will encourage these companies to create jobs here? That is what Schumer, our elected Wall St. lobbyist, is pushing despite the fact that the last time this was done in 2005, most of the money went to shareholders and executives (pdf) in the form of dividends and stock buy backs. We all know how many jobs were created, zero. Indeed, the companies that profited the most actually laid off more workers and cut back production in the US. We all know how many jobs were created, zero. Indeed, the companies that profited the most actually laid off more workers and cut back production in the US. As to increased revenue, short term it might bring $50 billion into the Treasury but over a ten year period there would be an $80 billion loss.

In his Rolling Stone blog, Matt Taibbi explains how this is just another “con” by corporation lobbyists:

Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it.

Think of it as a gigantic global IRA. Companies that put their profits in the offshore IRA can leave them there indefinitely with no tax consequence. Then, when they cash out, they pay the tax.

Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.

Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs..

According to Forbes, Chuck Schumer has garnered the blessings of some “left” Democrats by pairing it with a job creating infrastructure program. Former SEIU president Andy Stern and Sen. Kay Hagen (D-NC), who voiced her support at a Third Way breakfast, have endorsed the idea and the multi-nationals have already sent out their dogs to push it:

While the repatriation holiday alone is a non-starter for most Democrats, pairing it with an infrastructure program could marshal labor support. It’s an approach backed by former Service Employees International Union president Andy Stern, who’s emerged as the most vocal proponent of the tax holiday on the left.

snip

The team of corporate heavyweights behind the lobbying push for the holiday — including Apple (AAPL), Cisco (CSCO), Duke Energy (DUK), Google (GOOG), Kodak (EK), Microsoft (MSFT), Pfizer (PFE), and Oracle (ORCL) – has shown some success softening up Democratic opposition recently. Last week, the centrist Democratic think tank Third Way hosted a breakfast on the topic that featured Sen. Kay Hagan (D-N.C.). “A repatriation holiday can encourage economic activity at a fraction of the cost of recent fiscal policy,” Hagan said in her prepared remarks.

My head hurts.

I think the GOP is smelling success in their goal of making President Obama a one term president. Even bloggers like the Rude Pundit doubt Obama:

At some point, Obama has to squash McConnell and Boehner like bugs (although he probably won’t)

Now that Boehner has once again walked away from the negotiating table, Senate Minority Leader Mitch McConnell made it clear on Fox News Sunday that his top priority is stopping Obama’s re-election:

Even with the country on the brink of default, the Senate’s highest ranking Republican says his “single most important” goal is to make Barack Obama a one-term president.

“The single most important thing we want to achieve is for President Obama to be a one-term president,” Senate Majority Leader Mitch McConnell told National Journal’s Major Garrett in October.

Fox News’ Bret Baier asked McConnell Sunday if that was still his major objective.

“Well, that is true,” McConnell replied. “That’s my single most important political goal, along with every active Republican in the country.”

“But that is in 2012,” he added. “Our biggest goal for this year is get this country straightened out and we can’t get this country straightened out if we don’t do something about spending, about deficit, about debt and get the economy moving again. So our goal is to have a robust vibrant economy to benefit all Americans.”

McConnell told Baier that a “Grand Bargain,” where Republicans agree to tax hikes in exchange for cutting Social Security and Medicare benefits, was likely off the table.

“I think it is. Everything they told me and the Speaker is to get a big package would require big tax increases in the middle of the economic situation that is extraordinarily difficult with 9.2% unemployment. We think it’s a terrible idea. It’s a job-killer.”

Priorities aside, what all these politicians don’t seem to understand is that austerity is the “job killer”, especially with the the job market and wages sinking like a rock. President Obama’s grand plan of $4 trillion in deficit reductions with cuts to vital social safety nets as the carrot and minuscule revenue increases, is even worse. This is all about maintaining the status quo for the wealthiest who have proven since the Bush tax cuts that they will just keep the money and screw the masses.

John Aravosis sums up this debacle quite succinctly:

Someone’s being played.  First the Republicans walked out of the Biden talks.  Now Boehner is refusing the President’s more than generous offer to cut Social Security and Medicare as part of a larger deal absurdly skewed towards GOP goals.  It’s those pesky tax increases, you see.  It’s just not enough that the President caved on a clean debt ceiling, caved on having an additional stimulus instead of spending cuts, caved on postponing spending cuts until the economy is well again, caved on at least making spending cuts equal to tax increases, and caved on keeping cuts to Social Security and Medicare out of this.

Mind you, it’s not entirely clear what the Republicans have even agreed to here in terms of any tax increases.

So the GOP walks, and Obama will just have to sweeten the deal to “save the hostages.”  Did anyone else see this coming?

Someone is being played alright, the American people.

I have no hope for any rational solution that is going to improve the economy and the job situation for Americans. It makes no difference who is in the White House at this point, or in 2012.  Obama will never stand up to McConnell and Boehner simply because he agrees with them. They are playing Russian Roulette with a loaded gun at the American people’s head.

Up Date below the fold

Call a Wahmbulance for House Majority Leader Eric Cantor as he quits the debt ceiling talks with Vice President Joe Biden:

House Majority Leader Eric Cantor, Republican of Virginia, said Thursday that he was quitting  the debt ceiling negotiations being led by Vice President Joseph R. Biden Jr. because of an impasse over the role of taxes in any final deal.

“I believe that we have identified trillions in spending cuts, and to date, we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order,” Mr. Cantor said in a prepared statement.

“That said, each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases. There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation. Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.”

David Kurtz at Talking Point Memo says this may not be such a big deal:

The read we’re getting is that this could be merely an indication that the emissaries to the talks have gotten as far as they can get and that the remaining heavy lifting is going to have be done by the principals: President Obama and Speaker Boehner.

Meanwhile, Speaker John Boehner doesn’t sound to pleased that he will now have to defend the Republican stand that tax increases are off the table:

“I understand his frustration, I understand why he did what he did, but I think those talks could continue if they’re willing to take the tax hikes off the table,” he said.

One possible interpretation of Cantor’s pullout was that he needed Boehner’s authority to negotiate revenue increases necessary to complete a far-reaching deal with Democrats, but Boehner made repeatedly clear on Thursday that he had not budged at all on the issue.

“Tax hikes are off the table,” he said. “First of all, raising taxes is going to destroy jobs….second, a tax hike cannot pass the US House of Representatives — it’s not just a bad idea, it doesn’t have the votes and it can’t happen. And third, the American people don’t want us to raise taxes. They know we have a spending problem.”

(emphasis mine)

Boehner may be correct on point two but he is so wrong on one and three that is totally laughable and flat out lies that the press refuses to counter. Americans know we have a revenue problem because of the Bush/Obama tax cuts and loop hole in the tax code. Americans overwhelmingly support tax increases on millionaires. I don’t think Boehner is stupid, I think he is a tool of his corporate masters.

My only question now is where the hell is the Democratic leadership to counter this? Why aren’t the Democrats out in front of the cameras pointing out how wrong the Republicans are? The Democrats need to listen to the people, too and take Social Security, Medicare and Medicaid off the table as well.  

While CEO’s are rolling in more money than any average workers could imagine in a lifetime, raising their taxes and closing the tax loop holes that allow then to pay even less or, in some instances, nothing at all. According to a USA Today analysis, CEO’s pay went up 27% in 2010 while workers’ pay rose only 2%.

Paychecks as Big as Tajikistan

By Gretchen Morgenson

WHEN does big become excessive? If the question involves executive pay, the answer is “often.”

snip

Answers to that question come fast and furious in a recent, immensely detailed report in The Analyst’s Accounting Observer, a publication of R. G. Associates, an independent research firm in Baltimore. Jack Ciesielski, the firm’s president, and his colleague Melissa Herboldsheimer have examined proxy statements and financial filings for the companies in the Standard & Poor’s 500-stock index. In a report titled “S.& P. 500 Executive Pay: Bigger Than …Whatever You Think It Is,” they compare senior executives’ pay with other corporate costs and measures.

It’s an enlightening, if enraging, exercise. And it provides the perspective that shareholders desperately need, particularly now that they are being asked to vote on corporate pay practices.

Let’s begin with the view from 30,000 feet. Total executive pay increased by 13.9 percent in 2010 among the 483 companies where data was available for the analysis. The total pay for those companies’ 2,591 named executives, before taxes, was $14.3 billion.

That’s some pile of pay, right? But Mr. Ciesielski puts it into perspective by noting that the total is almost equal to the gross domestic product of Tajikistan, which has a population of more than 7 million.

Warming to his subject, Mr. Ciesielski also determined that 158 companies paid more in cash compensation to their top guys and gals last year than they paid in audit fees to their accounting firms. Thirty-two companies paid their top executives more in 2010 than they paid in cash income taxes.

The report also blows a hole in the argument that stock grants to executives align the interests of managers with those of shareholders. The report calculated that at 179 companies in the study, the average value of stockholders’ stakes fell between 2008 and 2010 while the top executives at those companies received raises. The report really gets meaty when it compares executive pay with items like research and development costs, and earnings per share.

Using Disney CEO, Robert Iger and workers at Disney World in Florida as an example, Time looks at the ever widening income gap:

Disney’s Robert Iger got a 45% bigger bonus in 2010

The corporate PR teams are defending these bonuses by saying that the executives deserve the pay because stock prices and earnings are up. A Walt Disney spokesperson says that shareholder return at the company was up nearly 24%, substantially more than the Standard & Poors 500. But haven’t we already learned, through bubble after bubble, that stock prices are a poor indication of anything. They are irrational, give us false positives, and crash.

But here’s what is the real problem. Yes, if higher profits and a higher stock price warrant better pay for CEOs, why doesn’t the same ring true for the average employee. Workers at Disney’s Florida amusement park Walt Disney World fought for months last year and early this year for higher wages. What they finally ended up getting, in a new contract settled earlier this month, was an annual raise of 3% to 4% over the next three years. The workers will get a bonus, too, of $650, a mere 20,769 times less than Iger’s bonus. As long as it remains that only a small segment of our population will be rewarded for better performance, while the rest of us do more and more work for the same pay, the wealth gap in America is certain to get worse.

It is very evident that the White House, Congress and many state governors and legislatures have not learned that tax cuts for the wealthy will not improve the economy or create jobs. They have done nothing to reverse the trend of the widening income gap. They have dug themselves and us into a hole so deep that they cannot hear rational ideas for even stopping the spiral into a economic morass.

Continuing economic policies  the have failed is flat out stupid. Proposing to not only continue with those policies but to reinforce them by making them worse is economic and political suicide. It is the path that the Obama administration and Congress have taken us down by renewing the Bush Tax Cuts until December 2012. Some of the GOP candidates would like to cut taxes even further, so much so that it would cripple the government and widen the socio-economic gap of the haves and have-nots.

June 7th was the tenth anniversary of the Bush tax cuts that were enacted on the promise as a  necessary economic stimulus that would boost job creation and a stalled economy by the Bush regime who said the “deficits didn’t matter”. Bush promised that result would be that the Federal debt would be paid in 10 years that was in 2001. At the end of 2008, the national to over $10 trillion dollars, 69% of the GDP and the highest it had been since 1955.

Think Progress compiled a concise video with graphics and music that demonstrates how the Bush tax cuts drove up the deficit and will continue to make matters worse over the next 18 months.

Yet, we still have the right wing pundits and GOP candidates for president repeating the with most of the talking heads nodding in acquiescence. Lawrence O’Donnell was the exception last night comparing the ignorance of Sarah Palin to the out right lies about tax cuts by GOP presidential hopeful, ex-Gov Tim Pawlenty. If elected, Pawlenty would propose cutting the business tax rate and wipe out the capital gains tax, interest income tax, dividend tax and the estate tax.

It’s estimated that Pawlenty’s proposals would triple the size of the Bush tax cut costing another $7.8 trillion over the $2.5 trillion the current extension is costing. Meanwhile, the other GOP contender, ex-Gov. Mitt Romney, follows the Bush/Cheney economic theory that deficits don’t matter with his endorsing a “federal spending at 20 percent or less of the GDP and finally, finally balance the budget” without mentioning the other side of the equation, revenue.

With Obama caving on just about everything, his word that he will not extend the Bush tax cuts again doesn’t hold much water. His economic policies and thus his re-election is in the inept hands of a Wall St. shill, Treasury Secretary Timothy Geithner and his Chief of Staff, former Morgan Stanley bank executive, Bill Daley. If Ben Bernanke expressed less than a rosy economic outlook, it understandable that the markets worldwide are taking a tumble.

Americans are struggling to make ends meet, can’t find jobs and are making less money than they did in 1997. What is the House GOP solution? Tax cuts and subsidies for drilling to oil companies that are the most profitable.

Today, the Republicans in the House of Representatives celebrated this massive redistribution of wealth from American families to oil executives. With the support of 7 oil-patch Democrats, 234 Republicans voted to block a bill to eliminate a $1.8 billion annual subsidy that treats oil drilling as “domestic manufacturing”:

   House Republicans rejected an effort by Democrats Thursday to use a procedural maneuver to force a vote on a bill to repeal a key oil industry tax break.

As they did in March, House Republicans voted unanimously to defend these wasteful, unaffordable and unfair oil subsidies, even though several members told their constituents they want to end them.

The GOP really hates women so much that they have been barely able to focus on little else at times. They managed to stop the District of Columbia from using its own money to assist poor women in obtaining the procedure by attaching a rider to the continuing resolution to fund the government throwing Democrats the bone of removing the rider that would have defunded Planned Parenthood.

Tonight Think Progress reports the House passed H.R. 3 which proposes some of the most radical and draconian restrictions on women’s rights:

– Redefinition Of Rape:

The bill sponsor Rep. Chris Smith (R-NJ) faced serious backlash after he tried to narrow the definition rape to “forcible rape.” By narrowing the rape and incest exception in the Hyde Amendment, Smith sought to prevent the following situations from consideration: Women who say no but do not physically fight off the perpetrator, women who are drugged or verbally threatened and raped, and minors impregnated by adults.

Smith promised to remove the language and while it is not technically in the bill, Mother Jones reports that House Republicans used “a sly legislative maneuver” to insert a “backdoor reintroduction” of redefinition language. Essentially, if the bill is challenged in court, judges will look at the congressional committee report to determine intent. The committee report for H.R. 3 says the bill will “not allow the Federal Government to subsidize abortions in cases of statutory rape” – thus excluding statutory rape-related abortions from Medicaid coverage.

– Tax Increase On Women And Small Businesses:

H.R. 3 prevents women from using “itemized medical deductions, certain tax-advantaged health care accounts or tax credits included in last year’s health care law to pay for abortions or for health insurance plans that cover abortion.” In doing so, the bill forces women and small businesses that provide health insurance that covers abortion to pay more in taxes than they would otherwise.

– Rape Audits:

Because H.R. 3 bans using tax credits or deductions to pay for abortions or insurance, a woman who used such a benefit would have to prove, if audited, that her abortion “fell under the rape/incest/life-of-the-mother exception, or that the health insurance she had purchased did not cover abortions.” Essentially, the bill turns Internal Revenue Service agents into “abortion cops” who would force women to give “contemporaneous written documentation” that it was “incest, or rape, or [her] life was in danger” that compelled an abortion.

Former House Speaker Nancy Pelosi has called this bill the “most comprehensive and radical assault on women’s health in our lifetime” and the president has already said that he would veto this bill if it made it to his desk which is doubtful since the Senate would never pass it. That doesn’t mean they won’t try to attach it to the Debt Limit Compromise. As David Dayen reports Rep. Trent Franks R-AZ) has already proposed just that with the blessing of House Speaker John Boehner:

   The decision to put the measure on the floor is giving new hope to some social conservatives who want their issues swept up into the debt limit debate.

   Rep. Trent Franks, an anti-abortion advocate, said that House Republicans “have some leverage” to get the Democratically controlled Senate to take up the legislation, similar to the way House Republicans forced an amendment onto the continuing resolution that would defund federal funding for Planned Parenthood. As part of a larger agreement on the final CR, Senate leaders agreed to hold a separate vote on the Planned Parenthood amendment […]

   While Franks, a two-term lawmaker from Arizona, acknowledged that a balanced budget amendment may be better suited to be part of a compromise debt limit vote, he still has hope for a Senate vote on an anti-abortion bill.

   Franks isn’t alone in hoping that H.R. 3 is part of the discussion on the debt ceiling extension.

   “What we use the debt limit to leverage is really up to the leaders, [but] I would think this would be one of the bills that we could be asking for,” said Rep. Joe Pitts (R-Pa.), an ardent anti-abortion supporter.

I really despise these people.

Jon Stewart asked where is the outrage over Paul Ryan’s (R-WI) budget plan that includes not only ending Medicare with a voucher system but also raising the eligibility age for Medicare. Yes, Medicare, not just Social Security as has been proposed by both Republicans and Democrats, including the White House, as if the one where not enough.

Under current law, you become eligible for Medicare on the day you turn 65. If the Republicans get their way, you wouldn’t become eligible for the new Medicare voucher until the day you turn 67.

The change would happen gradually, with the eligibility age rising two months every year, starting in 2022. And, in the grand scheme of things, it’s not like that many people are between the ages of 65 and 67 anyway. But think for a second about who those people are–and the insurance options they’d have available to them without Medicare.

Remember, the House Republican budget would also repeal the Affordable Care Act. That would leave insurance companies free to charge higher premiums, restrict benefits, or deny coverage altogether to individual applicants who have pre-existing conditions. Given the relatively high incidence of conditions like hypertension, arthritis, and vision problems among older Americans, it’s safe to assume many seniors would have trouble finding affordable coverage–if, indeed, they could find coverage at all.

Economist Paul Krugman in his Conscience of a Liberal blog this morning points out that “in our increasingly polarized society, life expectancy is more and more a class-related issue.”

As the Social Security Administration has shown, the gap between life expectancy in the top and bottom halves of the wage distribution has risen sharply:

Since most of the corporate media is controlled by the right wing oligarchs, it’s a little difficult to get the real message out to the people or at least an unbiased reporting of what the Republicans have been plotting. The Murdochs and Redstones have controlled the message but because of shows like Jon’s, Stephen’s, Rachel’s and Keith’s, the real agenda is finally getting out there. Evidence the events in Wisconsin, Michigan and Ohio where the voters are enraged, we now need to take this to a national level. Witness also the latest DCCC message that call the Republicans out on their lies to constituents about Medicare in this MSNBC’s segment with Cenk Uygur:

Finally, we are starting these corporate puppets being held to account for their lies and hypocrisy. Now, throw all the bums out from top to bottom.