FOX Business, Nightly Scoreboard with David Asman – June 16, 2011
Watch the video of CampusWorks Chairman and Wealth for Common Good member Eric Schoenberg on why we should increase top tax rates.
by Bernie Becker
Originally posted on The Hill, June 14, 2011
A business group that has taken some positions popular among liberals has come out against a corporate tax holiday for offshore profits, saying U.S. multinationals already have too much incentive to ship jobs abroad.
Business for Shared Prosperity and a coalition of other groups, some of them representing small businesses, also called a previous holiday — which allowed corporations to bring profits into the U.S. at a drastically reduced tax rate — a failure.
“When powerful large U.S. corporations avoid their fair share of taxes, they undermine U.S. competitiveness, contribute to the national debt and shift more of the tax burden to domestic businesses, especially small businesses that create most of the new jobs,” the groups said in a letter, dated Tuesday, to lawmakers.
Business for Shared Prosperity has also come out in recent weeks against continuing the Bush tax cuts for wealthy earners and has said that a reform of the tax code should create revenue to reduce deficits.
Bob Keener, a spokesman for the group, told The Hill over e-mail that Business for Shared Prosperity did not have a formal membership, but that over 800 businessmen and women from around the country had signed its petitionagainst tax havens.
A bipartisan group of lawmakers — including Reps. Kevin Brady (R-Texas), a senior House Ways and Means member, and Jim Matheson (D-Utah) — is pushing legislation that would create a holiday similar to the one enacted in 2004, which allowed corporations to repatriate profits at a 5.25 percent rate. The current top corporate rate is 35 percent.
Advocates for a new holiday — which also include the Win America Campaign, a coalition that includes Apple, Google and other top multinationals — say it could help stimulate the economy by bringing more of the roughly $1 trillion American companies have abroad into the U.S.
In a statement, the Win America Campaign said the groups’ letter had missed the boat. “Make no mistake, our outdated policies hurt workers and businesses alike and that’s why this effort to bring the money home has drawn together supporters of every political stripe,” the coalition said.
The advocates, who also include Rep. Eric Cantor (R-Va.), the House majority leader, have essentially also said a repatriation holiday could be a sort of bridge to comprehensive tax reform, a process many Washington officials say is both important and time-consuming.
Third Way, the centrist Democratic think tank, is set to have a Wednesday event on the idea as well, featuring Sen. Kay Hagan (D-N.C.), Rep. Jared Polis (D-Colo.), Rep. Loretta Sanchez (D-Calif.) and Andy Stern, the former President of the Service Employees International Union.
Opponents of a new holiday are skeptical the previous one helped create jobs and say it could encourage companies to keep more money overseas by conditioning them to expect more holidays.
Rep. Lloyd Doggett (D-Texas), also a Ways and Means member, also requested a Joint Committee on Taxation examinationof two generic tax holidays, one of which the nonpartisan committee said would cost $79 billion over a decade.
For its part, the Obama administration has also said it will only look at repatriation in the broader tax reform discussion, a stance that Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, has hinted he shares.
In their letter, the groups cited recent Businessweek reporting that showed how corporations like Forest Laboratories and Google lower their tax bills by routing profits to low- or no-tax countries like Bermuda.
“We need to stop this irresponsible tax avoidance, which undermines the U.S. economy, and assure that all businesses play by the same tax rules,” the group writes.
The coalition also said it is against the U.S. switching to a so-called territorial tax system, in which corporations would essentially only be taxed on profits made within American borders. As it stands, U.S. corporations can basically defer paying American taxes until they try to repatriate them to the U.S.
Republicans are pushing for a move toward a territorial system, which is used in many other industrialized countries. But opponents say it would encourage corporations to employ more tax avoidance strategies.
As someone who has personally received these tax cuts during the past 10 years, I feel it is my responsibility to speak out.
Supporters of tax cuts for high income households, such as House majority leader John Boehner, argue that wealthy people are the “job creators” and that tax cuts will encourage them to create jobs and that these new jobs will, in turn, increase employment opportunities and improve the wages of the remainder of the population. Did any of these benefits occur after the Bush tax cuts? The quick and accurate answer is, no, they did not. Adjusted for inflation, the median weekly earnings of working Americans actually fell by 2.3% from the end of the 2000 – 01 recession to the onset of the Great Recession. This is unique in the post WWII period. Further, the recovery from the 2000 – 01 recession was the slowest of any post WWII recession to date, requiring 39 months before the number of employed Americans reached the pre-recession level. Where is even a scintilla of evidence that tax cuts such as those passed in 2001 and 2003 generate income and employment growth for the vast majority of the population?
A significant part of the failure of the Bush tax cuts to generate jobs and income growth flows from the top-heavy distribution of the benefits conveyed by these measures. The vast bulk of the reduced taxes were reaped by a very small number of families. In 2011, the average tax reduction to families receiving an income of $1 million or more (about 321,000 families) will be $139,199. For this less than 0.5% of all families this is a reduction in taxes of $860 million/week. Compare these tax benefits to the yearly savings proposed by cutting the WIC program: $833 million. An obvious question is, why can’t this very small group of extremely high income families give up just one week of their tax cut to provide nutrition for the tens of thousands of women and children that benefit from the WIC program? More significantly, in light of the deficit hysteria gripping Washington D.C., the combined impact of the 2001 and 2003 Bush tax cuts has been the addition of more than $2.6 trillion to the federal debt. This included more than $400 billion in interest payments on the debt necessary to pay for the cuts.
Of course, one might forgive these policy failures if the promise of economic growth had been fulfilled. On this measure, however, the record is even worse. The 2000 – 01 recession ended in the fourth quarter of 2001, just in time for the first Bush tax cut to take effect. From the end of the recession until the onset of the Great Recession, the economy grew at a slower rate than in any other post recession period since WWII. Thus, despite promises from the advocates of the tax cuts, the reality was slower growth rather than faster growth. The additional tax cut in 2003 did nothing to increase the pace of economic growth.
In sum, the Bush tax cuts were a bad idea at the time and are an even worse idea today. Ending these cuts for incomes over $250,000 would generate over $100 billion/year in additional revenue. If we also created additional tax rates for very high-income families (e.g. at $500,000, $1,000,000, $5,000,000 and $10,000,000) we could increase federal revenue by more than double that amount and put us on the road to reducing deficits and debts.
Barclay worked for 22 years in financial service before retiring in 2004. He is an adjunct professor at the University of Illinois at Chicago in the Liautaud Graduate School of Business and is a member of Wealth for the Common Good.
Listen to the Patriotic Millionaires on National Public Radio, June 8, 2011.
Tell Me More host Michel Martin speaks with Dennis Mehiel, chairman of U.S. Corrugated and Andy Shallal, owner of Washington, DC restaurant Busboys & Poets.
The Patriotic Millionaires include almost 200 people with incomes over $1 million and are advocating to increase their own tax rates. Read the sign-on letter here.
A video message to Speaker John Boehner and members of Congress:
Watch press clips:
Patriotic Millionaires on why they would pay higher tax rates:
On June 6, 2011 the Patriotic Millionaires held a press conference to mark the 10-year anniversary of the Bush tax cuts and encourage Congress to put millionaire tax rates on the table in the budget debates.
“I pay a lesser percentage of my income now than I have paid at any time in the past. If our country is really broke, we can’t afford to give tax cuts to people like me.” - Paul Egerman, Founder of Escription and Patriotic Millionaire
“It is self-defeating to pursue these tax policies, and it is inconsistent with our values as Americans. We need to throw out the Bush tax cuts in a hurry and begin the process of restoring some fiscal sanity to the country’s budget.” - Dennis Mehiel, Chairman of U.S. Corrugated and Patriotic Millionaire
“I am in favor of higher tax rates for those of us who can afford that. I am also in favor of lower tax rates for the middle class. I think this whole idea of supply side trickle down economics has clearly failed… My business needs a strong middle class. My business is dependent upon employment increasing and on the housing market.” - Frank Patitucci, CEO and Chairman, NuCompass Mobility Services Inc. and Patriotic Millionaire
“It really irks me, as an American, that people who make money by trading in markets pay significantly less taxes than those people who actually go out and work for it. I want to give back to this country and give everybody else the same opportunities I had.” - Dal Lamagna, Co-Managing Partner IceStone and Patriotic Millionaire
“There are some in Congress who believe that the best way to deal with the struggling economy right now is to extend the tax cuts and see if they work the second time around. They didn’t work the first time, and they aren’t going to work the second time. If they are extended, they will cost Americans $5.5 trillion dollars, a huge blow to the economy. We need to do something different or we are going to end up where Paul Ryan wants to take us; with a country that doesn’t have a Medicare system, that has a shadow of a Medicaid system and where even wealthy people won’t be doing as well as they were during the good ‘ol days of Bill Clinton.” -Robert McIntyre, Director of Citizens for Tax Justice, author of “The Bush Tax Cuts After Ten Years”
Contact Alison Goldberg at alison@wealthforcommongood.org for a recording of the entire press conference.
by Arthur Delaney, Originally posted on Huffington Post
June 8, 2011
WASHINGTON — The self-described Patriotic Millionaires who want the government to close its budget gaps with higher taxes on the rich think it’s ridiculous to expect wealthy people to just “tax themselves” and donate their extra money to the government.
“The idea that people are just going to send in $1 million or $500,000 or $5 million or something to reduce the national debt is just preposterous on its face,” Dennis Mehiel, the founder and chairman of cardboard box manufacturer U.S. Corrugated, said on a conference call with other millionaires this week.
A reporter had asked the millionaires why, if they want the government to take more of their money, don’t they just hand it over voluntarily?
“We have a system of compulsory taxation and everybody gets treated the same under the law,” Mehiel said. “We disagree with what the law is right now. We think its outcomes are unfair.”
Paul Egerman, founder of a medical transcription company called eScription, also scoffed at the suggestion millionaires who advocate for higher taxes should take it upon themselves to send money to the government.
“Running any government is a shared responsibility of its citizens,” Egerman said. “Government is not a charity, and you can’t imagine a situation where the Department of Defense runs a bake sale to build an aircraft carrier.”
But one Florida man said he didn’t mind sending some free cash to Uncle Sam. He thought it was such a good idea that he himself donated $5,000 to the U.S. Treasury this week, according to an email receipt the man shared with HuffPost. The man, who said he does not earn anything near a million dollars a year but is financially quite comfortable, spoke to HuffPost on condition of anonymity for fear of alienating coworkers who might earn less than he does.
“After a year watching the gap between the richest and the poorest get greater and greater I finally got really cynical about it,” the man said. “We’re moving back to the way it was when there was a landed gentry and some small percentage of people own everything and everyone else is dirt poor.”
To make his donation, the man went to www.Pay.gov and then found the “Gifts to Reduce the Public Debt” page. Making the donation took a couple minutes.
According to the Treasury Department, the government has received $1.7 million worth of donations to relieve the public debt so far this year. In 2009, it received $3 million worth of donations, the most ever.
But even if each of the nearly 200 millionaires who signed a letter demanding congressional Republicans consider tax increases donated $1 million to the government, they wouldn’t put a dent in the government’s debt, which currently stands at $14.3 trillion. According to CTJ, if the tax cuts are extended beyond their current expiration date of January 2013, they’ll add another $5.5 trillion to the debt.
The cuts disproportionately benefit the richest 1 percent of Americans, according to an analysis by the Tax Policy Center, a project of the Brookings Institution and the Urban Institute.
Originally printed in The Chicago Tribune
June 7, 2011
Rep. Jan Schakowsky, D-Ill., represents the 9th Congressional District and served on the National Commission on Fiscal Responsibility and Reform. Mary Liebman founded Rich American Patriots United for a Tax Increase.
Today is the 10th anniversary of the Bush tax cuts passed in 2001. In observance of this day, we should raise taxes on millionaires and billionaires.
A decade of these cuts cost our nation more than $2.5 trillion in lost revenue. Almost 40 percent of the benefits, or about $1 trillion, went to households with incomes above $380,000.
One of us is a member of Congress and lead sponsor of legislation to institute new tax brackets for income of $1 million a year and above. The other is an affluent taxpayer who has advocated for increased millionaire tax rates and believes those who have gained the most from our nation’s economic system should contribute more to make the system stronger. Both of us think raising taxes on millionaires is the patriotic and prudent thing to do for America.
A decade ago, federal budget forecasters projected a 10-year surplus of $5.6 trillion over the ensuing decade. That surplus evaporated thanks to massive tax cuts in 2001 and 2003, plus two wars paid for by borrowed money, and a major recession caused by the recklessness of some big Wall Street banks.
At the same time, extreme inequalities of income and wealth are at their greatest level since the Great Depression. The wealthiest 1 percent of households own more than 35.6 percent of all private wealth, more than the bottom 90 percent of the U.S. population combined. And at the very top, wealth is even more concentrated. In 2007, the combined net worth of the Forbes 400 wealthiest Americans was almost as much as the combined net worth of 150 million Americans — 50 percent of Americans.
Unfortunately, after a generation of tax cuts for high-income earners, millionaires are paying the lowest effective tax rates since before the 1920s.
Republican leaders and many governors around the country are saying “we’re broke” and advocating a new austerity of budget cuts. But their proposed cuts hit at the vitality of our communities, targeting college loans, food safety, children’s health care and converting Medicare into a voucher program.
“Our country is not really broke,” said Cynthia Carranza, who directs a food pantry in Niles. Carranza has watched the increase in hungry people at her food pantry door even as government support for her program is slashed. “We’re an incredibly rich and prosperous nation. But our wealth is skewed to a very few fortunate at the top. We’re not broken, just twisted.”
Middle-class and low-income families didn’t create these budget deficits or reap economic rewards over the last generation. So our nation’s plan to get our fiscal house in order should not sacrifice the vitality of our middle class and our commitments to address poverty.
Spending cuts should include reductions in our bloated Pentagon budget. We could save more than $1 trillion over the next decade by eliminating obsolete weapons systems and closing a third of U.S. military bases around the world that contribute little to our real security. We can eliminate corporate subsidies to agribusiness and oil companies, saving tens of billions over the next decade.
We should let the Bush tax cuts for high-income households expire at the end of 2012, as they are scheduled to do.
The Fairness in Taxation Act, introduced by Rep. Schakowsky, would generate more than $74 billion in 2011 by adding tax brackets starting at $1 million in income and rising to $1 billion in income. This policy would not only help close the budget gap but would also reduce the extreme inequalities that have led to the erosion of the middle class.
The road forward requires spending cuts and fair tax increases. Let’s start the next 10 years off on stronger fiscal footing.
Originally posted on Common Dreams.org, May 30, 2011
by Chuck Collins
Republican leaders in Congress have a one-point program for whatever ails the nation: cut taxes for millionaires and large corporations.(Creative Commons image by House GOP Leader)
Got a revenue surplus? Cut taxes. Got a budget deficit? Cut taxes. Got a toothache? Cut taxes.
These politicians are like my uncle who believed the solution to every problem was a wee glass of scotch. They live in a world of magical thinking.
GOP leaders argue that the budget deficit is the great moral issue of our day and requires great austerity.
Yet just before Memorial Day, GOP lawmakers unveiled their bold new economic program. You guessed right: more tax cuts for millionaires, billionaires, and global corporations.
The Republicans’ plan calls for reducing the top income tax rate on millionaires and big corporations from 35 percent to 25 percent — and slashing taxes on income from wealth by cutting the taxes on capital gains and dividends. The plan would accelerate the use offshore tax havens for corporations to move profits overseas to avoid U.S. taxes.
Combined with proposed cuts in Medicare, college aid, environmental protection, elder services, and children’s health care, you get a pretty stark picture of the kind of America GOP leaders would like the bottom 98 percent of us to live in.
The lesson: Beware of any person or party that has a one-point program for everything. The path to our budgetary mess has no simple explanation. And the solution has no single remedy.
If a politician tells you we can solve our budget problems with spending cuts alone or solely by raising taxes, they are blowing smoke. Serious fiscal problem solvers advocate a mix of budget cuts and tax increases.
When faced with GOP magical proposals for additional tax cuts for millionaires and multinational companies, step away slowly, as if you were facing a cobra.
This week marks the 10th anniversary of the 2001 Bush tax cuts that went disproportionately to the wealthy. It’s hard to believe, but a decade ago, thanks to Clinton-era budget rigor, congressional budget analysts forecasted a $5.6 trillion dollar surplus over the subsequent 10 years.
President George W. Bush’s response to the surplus was a huge tax cut, signed into law on June 7, 2001. Six months later, after the 9/11 terrorist attacks and the launch of two wars, those projected surpluses vanished. In 2003, Bush and Congress instituted another tax cut, arguing it was the remedy for a sluggish economy.
Over this last decade, these two tax cuts have cost the nation $2.5 trillion in lost revenue. Almost 40 percent of the tax cuts went to the richest 1 percent of households, people whose annual family incomes exceed $380,000.
Our tax system is millionaire-friendly. The richest 400 taxpayers, whose average income is $270 million, pay about 18 percent of their income in taxes, the lowest effective rate since the 1920s. General Electric, Boeing, and more than 60 profitable Fortune companies pay no federal taxes, thanks to offshore tax dodges and other loopholes.
Spending cuts should start with our bloated Pentagon budget. We can save trillions by eliminating obsolete weapons systems and closing a third of U.S. military bases around the world that add little to our security. Cut corporate welfare for agribusiness and big oil companies, and we can raise another $1 trillion over the next decade.
On the revenue side, lawmakers should reverse the half-century of tax cuts for millionaires and global corporations. If we taxed millionaires and corporations under the same rules we had in place in 1961, we’d generate $716 billion more revenue every year.
We should close overseas tax havens, institute a modest financial transaction tax, and add new tax brackets for incomes over $1 million. This program not only would close the budget gap but offers the added benefit of reducing the extreme inequalities that have led to the erosion of the U.S. middle class.
The road forward requires spending cuts and tax increases on the wealthy. But the first step is to renounce the GOP one-point program of tax cuts for millionaires and corporate tax dodgers.