Category Archives: Economics

The Truth About Taxes

Mark Fernald

Now that Congress has punted most of the tough fiscal questions down
the road for a couple months, we can be sure in the weeks ahead there
will be a lot of discussion about who pays how much in taxes, and what
is fair.

Below is an excellent analysis of the distribution of the tax burden,
state, local and federal. It’s from September, but I just stumbled
across it. To Ezra Klein’s analysis I would add two points. First, the
federal income tax should be progressive because state and local taxes
are regressive. A significant part of federal revenue is distributed
to the states, where those revenues help offset the regressive state
and local taxes.

Second, low income people should pay taxes at a lower overall rate
because the first $10,000 or so of a person’s income is subsistence,
the bare minimum cost to provide that person with food, clothing and
shelter. Assessing income tax on that income could mean that the
government would gain a few hundred dollars in revenue, but the
low-income taxpayer would be forced into starvation or homelessness.
(This a good argument for increasing the personal exemptions from
income tax.)

Food for thought in the coming months.

Mark Fernald

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/19/heres-why-the-47-percent-argument-is-an-abuse-of-tax-data/

*The one tax graph you really need to know*

Posted by Ezra Klein
<http://www.washingtonpost.com/2011/02/24/ABifXwI_page.html>
on September 19, 2012

At the heart of the debate over “the 47 percent” is an awful abuse
of tax data.
This entire conversation is the result of a (largely successful)
effort to redefine the debate over taxes from “how much in taxes do
you pay” to “how much in federal income taxes do you pay?” This
is good framing if you want to cut taxes on the rich. It’s bad
framing if you want to have even a basic understanding of who pays how
much in taxes.
There’s a reason some would prefer that more limited conversation.
For most Americans, payroll and state and local taxes make up the
majority of their tax bill. The federal income tax, by contrast, is
our most progressive tax — it’s the tax we’ve designed to place
the heaviest burden on the rich while bypassing the poor. And we’ve
done that, again, because the working class is already paying a fairly
high tax bill through payroll and state and local taxes.
But most people don’t know very much about the tax code. And the
federal income tax is still our most famous tax. So when they hear
that half of Americans aren’t paying federal income taxes, they’re
outraged — even if they’re among the folks who have a net negative
tax burden! After all, they know they’re paying taxes, and there’s
no reason for normal human beings to assume that the taxes getting
taken out of their paycheck every week and some of the taxes they pay
at the end of the year aren’t classified as “federal income
taxes.”
Confining the discussion to the federal income tax plays another role,
too: It makes the tax code look much more progressive than it actually
is.
Take someone who makes $4 million dollars a year and someone who makes
$40,000 a year. The person making $4 million dollars, assuming he’s
not doing some Romney-esque planning, is paying a 35 percent tax on
most of that money. The person making $40,000 is probably paying no
income tax at all. So that makes the system look really unfair to the
rich guy.
That’s the basic analysis of the 47 percent line. And it’s a basic
analysis that serves a purpose: It makes further tax cuts for the rich
sound more reasonable.
But what if we did the same thing for the payroll tax? Remember, the
payroll tax only applies to first $110,100 or so, our rich friends is
only paying payroll taxes on 2.7 percent of his income. The guy making
$40,000? He’s paying payroll taxes on every dollar of his income.
Now who’s not getting a fair shake?
Which is why, if you want to understand who’s paying what in taxes,
you don’t want to just look at federal income taxes, or federal
payroll taxes, or state sales taxes — you want to look at total
taxes. And, luckily, the tax analysis group Citizens for Tax Justice
<http://ctj.org/images/taxday2012table.jpg>
keeps those numbers. So here is total taxes — which includes
corporate taxes, income taxes, payroll taxes, state sales taxes, and
more — paid by different income groups and broken into federal and
state and local burdens:
<http://www.washingtonpost.com/blogs/ezra-klein/files/2012/09/state-local-federal-taxes-income.jpg>

As you can see, the poorer you are, the more state and local taxes
bite into your income. As you get richer, those taxes recede, and
you’re mainly getting hit be federal taxes. So that’s another
lesson: When you omit state and local taxes from your analysis,
you’re omitting the taxes that hit lower-income taxpayers hardest.
But here is really the only tax graph you need: It’s total tax
burden by income group. And as you’ll see, every income group is
paying something, and the rich aren’t paying much more, as a
percentage of their incomes, then the middle class.
<http://www.washingtonpost.com/blogs/ezra-klein/files/2012/09/total-tax-bill-income.jpg>

That’s really what the American tax system looks like: Not 47
percent paying nothing, but everybody paying something, and most
Americans paying between 25 percent and 30 percent of their income —
which is, by the way, a lot more the 13.9 percent Mitt Romney paid in
2011*.
When politicians try to convince you that half of Americans aren’t
really paying taxes, it’s usually because the real data undermines
their preferred policies. For instance, you wouldn’t look at these
numbers and think tax cuts for the rich need to be a huge priority.
And that’s one reason people who want more tax cuts for the rich
don’t like to show you these numbers.
* Romney’s 13.9 percent rate only counts his federal taxes. He
hasn’t released his state and local returns for 2011, so we can’t
say how that would change his total tax rate. But given the state and
local averages for someone in his income group, it’s likely to
remain well below the 25-30 percent that is typical.

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Our Phantom Debt Menace

Is the game rigged?

Nick Vazzana

No matter where we look these days, we find an obsession with debt and the deficit. We hear on a daily basis that the deficit will ruin our economy, turn us into Greece and drown our grandchildren in crushing debt. How true is this understanding?

I am not an economist but I was founder and C.E.O. of a successful corporation for over 25 years. From a business point of view, debt is merely an obligation or liability to pay or render something to someone else. A problem emerges when investors lose faith in the debtor’s ability to repay the obligation. A company, similar to a country, sells bonds to provide working capital. Contrary to popular belief, it is not a bad thing for Chinese or European investors to buy U.S Treasury bonds. It demonstrates confidence in our nation’s economy.

Furthermore, the country’s wealthiest 2% tell us that any day now investors will lose faith in America’s ability to pay its bills. They warn of a run on Treasury bonds similar to what happened in Greece and see inflation skyrocketing. These scare tactics fail to recognize that the United States is not Greece and we have many safeguards in place since the Depression of the 1930’s. In addition, we overcame the Great Recession of 2008-9 thanks to a strong Federal Reserve, a competent President and a Congress that actually did its job.

Unlike Greece, we have our own currency and all of our debt, both public and private, is denominated in dollars. These dollars are not backed by gold but the full faith and credit of the Federal Government. Theoretically, our government can never run out of money because currency is physically manufactured on an hourly basis. Most citizens are unaware that currency printing began in 1861 to fund the Civil War and has always kept our economy solvent. This fact of life often leads to the following question: “If the government prints money to pay its bills won’t that lessen the value of the dollar and lead to runaway inflation?”

Economists tell us that when the government prints more money, investors may start to expect higher inflation down the road and this may push down the value of the dollar.
However, if these results do take place that would actually help rather than hurt the U.S. economy, right now. The fear of higher inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make exports more competitive.

Generally speaking, our deficit is the result of higher spending and reduced tax revenue, caused primarily by a drop in personal income and the cost of two wars and necessary social programs. It is ironic that the scare-mongers of the debt menace are the very people who have benefited the most from our existing economic system.

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Workers in Chicago Arrested at Protest for Minimum Wage Raise

chicago protesters

In this article from the Chicagoist, workers and protesters demanded that the minimum wage be raise to a living wage level of $15/hour.  As reported below, 21 people were arrested but sympathy among even the arresting cops existed as quoted in the story.

We need more of this action, more everywhere across the country as people are pressed to work for less than what is required to survive.  Contrary to popular opinion and even apparently the opinion of some unions, “protecting the middle class” is not what unions are all about; they also must be about raising living standards for everyone.

The people who serve the middle class — the people who work on weekends, holidays and nights, who turn their hotel sheets, who smile and say “Thank you come again” because if they don’t they’ll get fired all serve many who already make a living wage, who enjoy the protections that unions brought them.

It is in the interest of all Americans to raise the living standard for everyone so that everyone can live a decent life and participate in the economy in a productive and meaningful way.

Read the full story here: 21 Protesters Arrested at Mag Mile Demonstration for Raising the Minimum Wage

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Yes, Right to Work Will Kill the Middle Class — But Why Empower Classism?

Center for American Progress has an excellent in depth article, that we recommend everyone read, on how the Right to Get Union Benefits Without Paying for Them hurts the “middle class”.  Now one would ask, if we’re against classism, why do we find this article so good?

Well, because the article analyzes the economic truths about our current capitalist system.  Its hard for most anyone to deny that the numbers that keep coming up everywhere don’t show that the capitalists and their resulting plutocrat class benefit by squeezing workers to their breaking point — workers are nothing more than a commodity nor different than oil shale, natural gas or water; get as much as you can out of it, as cheaply as possible and then let someone else worry about the resulting damage.

The problem of course with the Americans for Progress analysis is that it supports a frame of “middle class” because some geniuses somewhere get the willies thinking about rubbing ideological elbows with the lumpen proletariat.

Well, here’s a clue; we’re all proletariats, so if you work for a wage or as I’ve mentioned elsewhere, are doing your own thing as a “self employed” (meaning non-covered, under the table employee) “independent contractor” then you are a worker, you trade your labor and time for money.  You don’t have extra cash in the bank to speculate on stocks, business ventures, investments or what have you; your money goes to supporting you and that’s all you got.

Read the article, spread it around, but never forget that we’re all in this together and the ultimate goal to achieving real justice for all and democracy is the destruction of the hierarchy of oppression that capitalism requires to exist; destruction of classism and oppression altogether and the creation of a just, egalitarian socio-economic system.  Its possible.

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Tell it Brother! Michgian Rep Slams Fellow Legislators Hard!

Workers at capital building in Lansing day of vote.

Workers at capital building in Lansing day of vote.

Finally, unfortunately a little too late as Michigan, in a heavily controlled and blocked manner managed to pass the “Right To Work” bill in one of the traditionally strongest union states in the country.  A Democratic Rep from Grand Rapids, Brandon Dillon had finally had enough and called bullshit on the entire lot.  Standing before his fellow legislators he hammers them hard on their slimy tactics in keeping the people from voicing their opinion on this bill before being voted on or allowing amendments, or even allowing the public in to view the voting.

Representative Dillon deserves a pat on the back for his courage in being a truth-teller in front of the fools and stooges who have answered to the ALEC agenda of destroying American labor and breaking the backs of working people across the country.

Click here to get to his website, send him a note, give his office a call.  We need to encourage those who speak truth to power.  This man has principles and we need more of that, what’s most telling is that he points out that his district is not a strong union district; but he demonstrated the ability to see the big picture and not just the interests of the people in his district only.

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Workers Burn While Unions Find Their Ass

Make sure you find your local and stick yourself there.

Of course by now nearly everyone from your wingnut uncle Walter who lives in a trailer in the middle Ozarks to the brain-dead hipster in Greenwich Village knows that the Hostess company has filed for bankruptcy and basically screwed workers out of nearly everything.  Of course anyone with half a brain who’s been around long enough to know the lyrics to a famous Nazareth song about being pissed off and ready to fuck some shit up pretty quick, knows this old story about corporate meltdowns and workers getting the boot with nothing more than their last paycheck.  Its old hat these days.

So why the whining and hand-wringing going on among so many in the leftward blogosphere about “What Really Happened to Hostess”.  I mean really, Black Commentator had a piece a bit back, written by someone on the front lines in St. Louis, telling sordid tales of long active racism within the company’s management, about the company’s anti-union tactics and other misdeeds also so typical of the American worker story today.  We noticed other stories, well written that popped out right away telling the whole story for what it was.

So now again, why now all the Johnny Come Latelies?

Possibly we’d say because the unions have had to wake up from their trance and figure out that they just lost their ass again.   Oh wait, I forget myself; that’s right, the unions that the workers at Hostess were a member of weren’t part of the other fight [name one in your community or Local] because you know, the other unions have their own battles and hey, tough luck there kid.

Or something like that.  I know, how naive of me to imagine that possibly unions might be able to climb over their proverbial, imaginary fences that divide them and reach out and work with each other on a meaningful basis.  Of course that might also mean that the AFL-CIO drop their absolutely offensive “Save the Middle Class” campaign and stop trying to convince their rank and file that they are some kind of bourgeois Third Estate that the worker/proletariat must serve and that they must not soil themselves with fighting their battles.

I mean, have you seen teachers, fire fighters, police officers, janitors, hotel workers, meat packers, millwrights or the candle stick maker, the butcher and the baker for that matter all stand together in solidarity when one of them gets threatened by the plutocracy?  No, neither have I.

It seems high time they did.

Classism is a construct and tool of the elites, whether of tyranny by capitalism or whatever other means.  One will not find a donut in a shit pile and you won’t find democracy or justice within the oppression of classism, racism or any other construct made to divide one group against another, which only benefits those outside the struggle for crumbs.

Despite all the hand-wringing and analysis and the “OMG!” going on about the unholy greediness of the plutocrat class, the fact is you’d have to not only live under a rock, but possibly be living under a rock under Uncle Walter’s trailer and be deaf and dumb as a stump to not know that this has been going on with plutocrats for a pretty long time.  It seems at some point we can conclude that the capitalist class really sucks at creativity no?  They keep playing that old song of rape and pillage and many of us hold our hands to our ears and say, “I can’t believe it! I didn’t know they knew that tune!”

But with a regularity you can set your watch by, the liberals and left end of the spectrum here in the Land of the Not-So-Free acts with shocked and stunned surprise when they find out that a capitalist is greedy and selfish.  This happens so often that one might begin to think that a large portion of our society really wants to believe that capitalism really works.  Like the wife of the cheating husband who promises to be good next time, a large sector of Americans continue to sit at home alone, tears streaming down their faces not believing he did it again!  What happened, they think and then they ruminate on husbands misdeeds.  Well sweetheart, that works for the first time around.  Remember the old saying, “Fool me once…don’t get fooled again.” Oh wait that was the Bush II version, anyway, you know what I’m talking about; stop being a damned sucker.

Without solidarity — you know unity, without workers coming together from all sectors and standing up when any sector is threatened — as a unified act of power — nothing will change.  The plutocracy will not stop until every single worker in this country is reduced to the newly cherished and celebrated “entrepreneur” who struggles for whatever he/she can pinch out of the economy, with little hope of a pension or even basic protections such as worker’s comp or the added luxury of health insurance.  Don’t believe this? Look around at skilled jobs in the “private sector” among the working classes, besides the low hanging fruit of the Wal-Marts of the world.

You will see auto mechanics, trades people, sales professionals, temp workers, computer techs, service workers, maintenance workers, those in the building trades — all often working under the ubiquitous “independent contractor”, temp worker status or as the much maligned and marginalized non-voting/non-citizen resident worker.  A part of the new worker frame, found more and more tolerable as the standard among the young, the world many happily escape with a union retirement just one jump before the ax.

All the while though, the major business unions seem to be doing what?  Wisconsin was ready for a major general strike that would have shut down the whole state and showed workers where their power was, but the major unions bargained that power away with the Democrats who wanted a chance to grab power — and couldn’t do that competently.  For whatever the incompetence or compliance the Democrats demonstrated, the fact is that workers lost and large labor unions cemented their traditional bond with the Democratic party — you pay us to organize our people (not all workers mind you, just the select middle class) and we’ll deliver when you need them or hold them back when you ask.

Now again, a major company falls off the edge and throws its workers off the cliff and although the struggles of the workers at Hostess and the poor management of the company was no secret, the larger unions couldn’t find a way to get there and help the workers out.   Maybe run a picket, a campaign.  What did they do, clear their throats before their party overlords and ask permission that was denied?  Or did they more accurately, realize that they probably couldn’t even get their rank and file anywhere since they can’t even get them most of them to come to a meeting.

Now Michigan is about to turn, as one Facebook commenter aptly stated, “Right to Freeload”.  Unbelievable, historically the last bastion of the rust belt.  First Wisconsin last year, now St. Louis and Michigan in a matter of months.  In some ways its no surprise as the unions sat on their hands for thirty years, have ignored the job of educating their rank and file about the labor struggle and had the audacity to even (under the leadership of Lane Kirkland most notably) let Reagan and Carter before that negotiate rust-belt jobs away in the name of “competition” and some other capitalist tripe about impending globalism sold to the workers as meaningful economic theory for worker prosperity.

St. Louis needs another factory to leave that area like capitalism needs another ethical black  hole.  But hey, who cares? Anyone who had lived in the Mid-West knows damn well that workers there cannot afford to lose a job; the city like most of the rust belt was hollowed out long ago.  But let’s go ahead and talk theory; how and who was screwed over and especially how the Republicans are big bad meanies.  There are people going hungry on the streets, losing their homes — not just houses they bought, but apartments they rent.  There are people whose last paycheck was last week, last month, last year and they know all too well what it is to “struggle” in the “free market”.  Oh and by the way, let’s ask Warren Buckets-O-Money what he thinks.

Nothing like being one of those workers and having a member or a lackey of the plutocrat class tell you about how “liberals” need to stop “programs” because you know, what poor folks don’t have is ambition.  Because finding the ambition to make it to the next week is just small stuff; no worries.  Homelessness is a myth of course; it only happens to the drunks down by the river, in a tent, on your street corner with a cardboard sign.  Because we all know what their problem is and they stand as examples of what a “poor work ethic” will do to you too — until of course your company closes and you are thrown out in the street with the paper recycling; a commodity used up, disposed of and gone.

As I write this, a worker tells me tonight that he has worked for a week and a half, after being unemployed for months, his hands rough and nicked from the metal roofing he works with open in frustration before me, “I work for two days, get out for one day to heal myself and then go back to do it all again to make him [owner of the company] more money!” he then goes on, “Then what do I have? Two days of work, a prescription I can’t pay for a hospital bill that I’ll never be able to pay and if I don’t show up, I’m out with nothing.  I work to make him money and wear myself to the ground.”

He said that he told the hospital staff, “Insurance?! I have no insurance, I don’t even have workman’s comp! I’ll have to pay all my taxes myself, I can’t even get unemployment!”  The woman behind the counter quietly says, “Its too bad you don’t have a friend who has a prescription with Wal-Mart where you can get your prescriptions for a few dollars.”

Well I know that fact to be untrue.  I have a Wal-Mart card and I know that only a few commonly used drugs that are cheaply produced on the generic level are offered to Wal-Mart customers at ridiculously low prices and it wouldn’t surprise me if they receive a grant from the government or from the manufacturers to distribute some drugs cheaply through Wal-Mart.

Whoops, now we’re off on the healthcare system, but frankly, its all related.  As wages among workers stagnate with the least organized going first, all workers will face the multitudinous ways in which the capitalist system screws them over.  If they get paid, its so little that they can barely meet their most basic needs, but, a lifeline is woven inside the thicket of human commodification that helps to keep the workers on the thread and also appearing just saved enough for the masses to ignore.

Ignore at their peril as all worker’s wages are inextricably tied together and one lead weight over the side of the ship pulls the whole vessel further to collapse.  So long has this gone on and so gradual has the shift been (although it is disputable as to how gradual it is now, but that’s another discussion) that most of the workers in this country believe the shift to be minimal, to be an isolated event. “Keep calm and carry on” as they traditionally say in Britain with a stiff upper lip supposedly, carry that burden and shut up, keep up the faith, the one speaks first loses so the game goes.

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After Hurricane Sandy: Public Welfare or Private Profit Opportunity?

Occupy Wall Street has taken on the concept of indebtedness among working folks in America. Seemingly wound so tightly around the fist of corporate bankers, it appears that now every portion of the fabric of the regular working person’s life encompasses some form of debt management.  We are told repeatedly that we must take on debt as the “responsible” action to move upward on the path to “success” — which of course means piling on more debt.

The concept of moving up often can take on many forms, from the most trivial such as clothes or other accoutrements that symbolize middle class upward mobility, or more major investments such as an education or purchasing a house.

But what if people had to take on debt just to meet their basic needs? Already middle class Americans have already started to use credit cards to stay afloat; keep the mortgage paid, fuel in the car and even to pay for emergencies — those necessities that financial advisors always tell people to save for. But how can you save when you have nothing?

In addition, how can one even conceive of taking out a loan to fix their neighborhood or rebuild their house if it is destroyed by a natural disaster?  Should a community or individuals residents of a community take on entirely, by themselves the cost of rebuilding that community? Should they take on the burden of becoming borrowers on behalf of the public good?

And more importantly, how does this effect the balance of power in our society? Already, international banks hold entire countries hostage to the credit they extend them.  If bankers wield power over the collective, can the collective join together to decide how to go about rebuilding? Will long-term growth and sustainability be taken over by the banker’s interest of payment as immediately as possible, with interest?

Bankers have now seized on the opportunity to use Hurricane Sandy victims as another “market opportunity”.   This should draw immediate concern and alarm, but instead the federal government and the capitalist fed pundits for the elite, have nothing to say about the developing stranglehold that the banking/finance system has on American communities.  States and local governments, strapped and desperate and essentially abandoned by the feds and served only haphazardly by either under powered non-profits on the ground and ignored by huge non-profits that usurp the public’s good will for their own needs, have little choices left but to consider privately funded loans to rebuild their communities.

In the interoccupy post attached to this Occupy Wall Street report, many activists are concerned and speaking out.  Read more here, Shouldering the Costs: Who Pays in the Aftermath of Disaster?

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Wal-Mart Actions Around New Hampshire

Protesters in Manchester on South Willow Street on Black Friday.

Actions against the employment practices of Wal-Mart happened in three locations in the state this past Friday after Thanksgiving — known as “Black Friday”.

Activists from Occupy NH, Occupy Seacoast, the I.W.W. union and Occupy North Country set up protests, handed out flyers and in one instance, reportedly clashed with local police.

In Manchester participant Mark Provost said, “People were generally positive, honking their horns, waving their fists in solidarity, the jig is up, people know what is going on.”

In Somersworth, NH

In Somersworth Occupy the Seacoast held a protest outside the store in the morning, according to David Holt, “9 put of 10 people that reacted to us when we were outside were positive, gave us the thumbs up or honked and waved in support.”  David said that the group also went inside Wal-Mart with their signs, “We walked thru the Walmart with our signs and the management tried to herd us out, they called the police but we were gone before they showed up.”

When they were outside David said, “One cop pulled over in a cruiser and rolled down the window and we weren’t sure what he would say but he said he was behind us 100%.” Of the numbers of people in Occupy David said, “We had a wide range of people that had never come to an occupy event before, one of the people event printed up pamphlets and handed them out about what Walmart does.”

Some reported that an individual had a clash with the police in Littleton, but that person has asked not to speak to the press, so no further information is available at this time.

More about the action in Somersworth from the Foster’s Daily Democrat: Demonstrators in Somersworth Call for Changes at Wal-Mart

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DSA Statement: Reject the Fiscal Cliff

Reject the Fiscal Cliff, Tax the Rich,

Invest in Infrastructure and Services

A statement of the National Political Committee of the Democratic Socialists of America

November 20, 2012

DSA rejects the “fiscal cliff” hysteria of the corporate establishment and the pressure for a “Grand Bargain” that would cut Social Security, Medicare and Medicaid. While unemployment remains high and economic growth slow, the government should not impose austerity measures that reduce essential programs that benefit the middle and working classes and that further shred the safety net for the most vulnerable. Rather, government policy should prioritize investments in job creation, public education and healthcare reform, while raising essential revenues by taxing the large corporations and wealthiest citizens who can afford to pay.

Immediately after the election, Wall Street-backed foundations such as Third Way and the Concord Coalition organized a “Campaign to Fix the Debt” to spin the election results as a mandate for a “bi-partisan” focus on reducing the deficit as the highest national priority. For decades the billionaire Pete Peterson has funded groups that claim that the universal entitlement programs Social Security and Medicare are bankrupting the nation and that their future growth must thus be drastically trimmed.  These neoliberals scored an initial success in 2011 when the Simpson-Bowles Congressional Commission put to a vote a long-term “budget compromise” that would have instituted three times as much in budget cuts than in tax increases. But despite President Obama’s evident willingness to reach such a one-sided compromise, Tea Party insistence on no tax increases, even on the wealthiest, scuttled the deal. The “resolution” of this manufactured, alleged “budget crisis” was to postpone a decision on further deficit reduction until the end of 2012, hence the contrived “fiscal cliff.”

What is the fiscal cliff? If Congress makes no changes to the Budget Control Act of 2011, the Bush tax cuts will expire on January 1, 2013. In addition, automatic cuts of $55 billion each in annual defense and “discretionary domestic” spending will begin. These tax increases and spending cuts, combined with the expiration of the FICA payroll tax cut and the end of extended unemployment benefits, will create a significant fiscal drag on the economy. The annual budget deficit will fall from over $1 trillion in 2012 to $500 billion dollars in 2013; and the resulting drop in aggregate demand from this combination of spending cuts and increases in taxes would almost definitely cause a double-dip recession.

Like other progressive groups, DSA rejects the notion that some “unified” fiscal cliff must be addressed in the lame-duck session of Congress. It is in fact a “fiscal obstacle course” that Congress should address without panic early in 2013, while heeding the election results. A progressive solution would include restoring all automatic domestic cuts, while making more strategic and deeper cuts in defense procurement spending. The revenue for expanding domestic social welfare spending can be raised by ending the Bush tax cuts for the top 2% and corporate tax-giveaways, while instituting a modest financial transaction tax on stock and bond transactions. In addition, Congress should restore the tradition of not requiring a separate authorization vote every time the current debt ceiling is crossed. Requiring such a vote provides the right with endless opportunities to blackmail the Congress into counter-productive budget slashing.

Specifically, DSA advocates that Congress pass legislation to:

1. Restore all the automatic cuts to the domestic discretionary budget. These cuts would deny WIC nutrition to 750,000 mothers and children, eliminate Title I funding for 1.8 million low-income school children and would deny 734,000 households home heating assistance. In addition, it would cut financing of all federal regulatory agencies by 10%.

2. Reauthorize federal funding of extended unemployment insurance. Otherwise, on January 1, 1.5 million unemployed workers and their dependents will lose their unemployment benefits.

3. Restore the improvements to the Earned Income Tax Credit and the Child Care Credit that have reduced the tax burden on the middle and working classes. To preserve the purchasing power that would be lost by an end to the 2% FICA payroll tax cut, reintroduce the 2009 Recovery Act refundable tax credit of $500 for individuals and $1,000 for families earning under $110,000.

4. Abolish the Bush tax cuts on the top 2% and tax capital gains and stock dividends at the same rate as earned income. Increase effective corporate taxation through the elimination of corporate tax loopholes and corporate “tax expenditures.”  These reforms would yield $275 billion in additional annual revenue. In addition, instituting a “Robin Hood Tax” could net another $300 billion in annual revenues. (This financial transaction tax is a small sales tax, for example 0.25%, charged on all trading in stocks, currencies and debt instruments such as bonds, derivatives, futures and options.)

5. Make major cuts in our bloated defense budget, while creating a public jobs program that trains the unemployed to rebuild infrastructure, creates an alternative energy grid and expands mass transit.

6. Extend and strengthen Social Security for future generations, funding enhancements by progressively lifting the cap on earned income subject to the FICA tax and extending it to income derived from capital.

7. Progressively extend and strengthen Medicare/Medicaid, until it covers U.S. residents of all ages, while installing effective cost controls.

DSA welcomes and will work with broad national and local coalitions that are forming to fight cuts in Social Security, Medicare and Medicaid; to preserve programs that benefit the working poor and most vulnerable; to promote greater investment in public education and healthcare and to raise revenues by taxing the rich and corporations.  We also support Tavis Smiley’s and DSA National Honorary Chair Cornel West’s call for President Obama to convene a White House conference on poverty.

DSA will bring to these coalitions the educational perspective of our GET UP (Grassroots Economics Training for Understanding and Power) and The Other America is Our America (TOA) projects. GET UP analyzes the neoliberal capitalist roots of the Great Recession and advances social market economic alternatives. TOA demystifies the history of anti-poverty policy and argues for a new, true war on poverty. We can only stop the corporate drive for austerity if we educate, agitate and organize. DSA will join those in the streets resisting the bi-partisan effort to thwart the needs of the very constituencies that just re-elected our president.

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The Hand That Feeds You

If you live in America and shop for your food, services and other goods in the mainstream market, then you have probably been served or helped by a low-wage worker.  If you don’t work in the low-wage world, then more than likely you have the convenience of not having to consider the sacrifice that these people make to serve your needs.

From the retail worker checking out your goods on a weekend or late in an evening, checking out your last minute the holiday eve, the person who is there to punch in the amount of your fuel at the last minute before rushing to your relative’s house for a day of relaxation and celebration. The person who hands you your sliced deli meats after you get out of work, the one who hands you a cappuccino.  Get the point?

While you, middle class person that you are, have put in your time in a regular schedule, the same shift every week, the same pay that allows you to purchase a house, a new car, finance for the kids college, yes that gives you some semblance of a future to hope for a sanity for today based on some measure of predictability, there exists an entire economy of people toiling and struggling to make ends meet, who end up on the bottom of the social ladder to serve your interests, who have no ability to negotiate anything; if they want the job they will be on the job when appointed to do so — mostly in service to your desires.

Its awfully convenient to be able to run into the toy-store two hours before official Christmas Eve to get that last toy, to rush into the convenience or grocery store to pick up a bottle of wine or something you forgot for the dinner celebration.  Its awfully convenient that someone will serve you fried eggs at 3 o’clock in the morning on a Saturday after a long night of partying with your friends, or who will be there in the brisk am on Christmas day to make sure the gas pumps are on so you can drive out of town.

Its all awfully convenient.  But at what price? Most people assume that with the degree of labor or sacrifice given, the employee has room to negotiate and bargain for better wages and working conditions; that the employee who works on a holiday, a late-night or on weekends has chosen to do so, thus we can believe in our minds that there really was no sacrifice at all.

But the fact is that more and more unskilled work is unregulated by an agency of the worker.  Bereft of union representation and the power of organization amongst themselves, most low-wage workers toil in silent rage that soon stifles down to surrender and a sense of complete powerlessness.

Nothing reminds a low-wage worker more of their position in our current economic system than the snotty, hurried middle class shopper who will complain and threaten one’s job over an imagined slight or trivial inconvenience.  Nothing reminds a low-wage worker more of their economic position than the sneer of their peers and others when one mentions working at a retail establishment or the old “You want fries with that?”.  Because of course, no one wants to be a servant and no one wants to be on the end of the social ladder.

It never really is a surprise to anyone either that jobs open to women who don’t have a college education are predominantly in the retail and service industries that pay pitifully low wages.  While non-college educated men can still regularly count on trade work which often has some level of social respect (construction) and/or union representation, most female dominant jobs do not offer union representation, good wages, benefits or even a modicum of social respect.  Instead, women and all too often, people of color of both sexes, ex-felons (even if their felony was non-violent or minor) or those with disabilities are relegated to work that often does not take into account their full potential, nor give them a chance to realize their full potential to contribute to society.  Next time you assume your convenience store clerk has maximized all their opportunities and has reached their apex, think again.

Which is why workers on all levels must stand up to support the fair representation of low-wage workers, so that hopefully the term ‘low-wage’ is one reserved for the history books and not as a relegation to poverty for millions of Americans in this country.  Which is why all middle class people, who have good jobs, who have the ability to make change in their lives and to assist change in others’ lives must step up to do so.

The following demands should be made and the middle class must be willing to step up and make clear that they can and will make the sacrifice necessary to see to it that workers are treated fairly — and more importantly, will help to demand that the plutocracy that has arisen out of the hierarchy of work in our society be gone forever!

People should demand the following as the very basic of worker’s justice:

1.  That workers be allowed the day off on major and religious holidays to spend time with their families and in their communities.

2.  That all workers be granted health insurance and life insurance benefits.

3.  That workers with families be given a regular weekly schedule that is predictable and allows them to adjust their family lives around their work.

4.  That workers be given affordable childcare — paid either by meaningful state/federal subsidies and/or with a tax on the employer.

5.  That doling out jobs and positions by gender or race identification cease immediately.

6.  That wages be pegged to a basic needs tested standard of living measure.

As a worker, especially if you do better than a low-wage worker who serves your needs:

1. Be aware of the sacrifice made economically for your low prices — that it all too often comes from the worker, not the company owners.

2. Chose to consume less and to shop during reasonable times of the day – be the proof that worker’s don’t need to occupy a store at times when most people are at home with their families.

3.  Break down human commodification by treating all workers as your equal.  No one has more value as a person than you.  Recognize your privilege.

4.  Speak out about worker justice that you understand; make an effort to learn more.

5. Support worker actions for justice.

6.  Learn to shop before holidays; spend time at home with your family and share this value with your family and friends.  Stay home on large marketed shopping days such as “Black Friday” or the day after New Year’s, do not shop stores that make their employees work on holidays or long nights or weekends.

For more reading on this topic:

Improving the Situation for Low-Wage Workers…

One in Four Workers Will be in Low-Wage Jobs…

Low Paying Jobs are Here to Stay

Down and Out

Sustainable Scheduling

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