Tuesday, June 20, 2017

In their worship of the rich, and adherence to so-called "limited government," conservative voters are raising our taxes, tolls, fees, fines, and utility rates

Above: President Franklin Roosevelt had a "moral commitment to progressive taxation. When it came to taxes, Roosevelt simply believed that rich people should pay more than poor people" (Joseph J. Thorndike, Their Fair Share: Taxing the Rich in the Age of FDR, Washington, DC: The Urban Institute Press, 2013, p. 45). Photo courtesy of the National Archives.

Conservative voters are directly raising your taxes

In 2010, conservative voters in Kansas elected Republican Sam Brownback to be governor, and they've elected other Republicans to lead them in the Kansas legislature. As a result, taxes were cut for the rich and increased on the middle-class and poor (see, e.g., "After cutting taxes on the rich, Kansas will raise taxes on the poor to pay for it," ThinkProgress, June 16, 2015).

In 2014, a conservative talk-show host and public works board member pushed for a sales tax increase to pay for infrastructure in Los Angeles. Sales taxes are regressive: lower income people, who are least able to bear the burden, must pay a higher percentage of their income to satisfy the tax than rich people who are better able to bear the burden.

In 2014, conservative voters in Illinois elected Republican Bruce Rauner to be governor, and they've elected other Republicans to lead them in the Illinois legislature. As a result, taxes were cut for the rich (including a $750,000 yearly tax break for Governor Rauner - a mere coincidence I'm sure). And, to "fix" the budget, Illinois Republicans are now proposing regressive taxes on the middle-class and poor, for example, laundry taxes, Netflix taxes, and higher property taxes, even though Illinoisans "already pay the highest property taxes in the country" ("7 Reason the Illinois Republicans' Budget Plan Fails Taxpayers," Illinois Policy, June 16, 2017).

By worshiping and pampering the wealthy, conservative voters are also indirectly raising your taxes, tolls, fees, fines, and utility rates

Conservative voters keep putting Republicans into high political office. In turn, Republican politicians keep cutting (or trying to to cut) taxes on the rich. They want to reduce top marginal taxes, corporate taxes, capital gains taxes, and they want to fully repeal the estate tax (a tax which only applies to the super-rich). Yes, after decades of trickle-down economics wreaking havoc on our nation (e.g., crumbling infrastructure and a ballooning national debt), conservative voters want to double-down on these disastrous tax policies.

When taxes are cut for the rich, at the federal level, the nation's revenue burden inevitably falls on the middle-class and poor, in the form of increased taxes, tolls, fees, fines, and utility rates at the state & local level. Why is this the case? Because when the federal government is taking in less money than it otherwise would, it is less willing and able to assist the states. And the states are loathe to increase taxes on their rich residents, for fear of scaring them off to competing states. This drives the revenue burden down, in a crushing blow, on top the heads of the middle-class and poor. And the middle-class and poor are largely captive populations; they can't easily move. They're tied to their jobs, or retired on a fixed income where the financial burden of moving is a major deterrent. (By contrast, the super-wealthy can get up and move more easily because they don't live paycheck-to-paycheck or, in many cases, don't work at all - they can sip martinis by the pool, and whimsically move investment money around, just as easily in Florida as in Wyoming).

And so what's the result of our decades-long tax-cuts-for-the-rich experiment at the federal level, promulgated by conservative voters? According to a 2015 report from the Institute on Taxation and Economic Policy, "Virtually every state tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families... The lower one's income, the higher one's overall effective state and local tax rate. Combining all state and local income, property, sales and excise taxes that Americans pay, the nationwide average effective state and local tax rates by income group are 10.9 percent for the poorest... 9.4 percent for the middle... and 5.4 percent for the top 1 percent."

That was the 2015 finding, and the trend is showing no sign of slowing down. Consider the following stories (all are from 2017, except for the commentary about law enforcement fines), and realize that they are being replicated hundreds, even thousands of times across the country, every year.

Higher Bridge Tolls: In the San Francisco Bay Area, large bridge toll increases are being considered. Note: Bridge tolls are regressive, disproportionately burdening the middle-class and poor

More Expensive Toll Roads: In the nation's heartland, "Many Indiana Toll Road Drivers Seeing Big Rate Increase." And in the Republican headquarters of Texas, "The North Texas Tollway Authority announced Thursday that it will increase toll rates for TollTag users from 17.06 cents to 18.01 cents per mile, effective July 1. That adds up to about $40 more per year for people who travel about 20 miles round trip to work. The change is part of a toll rate schedule that calls for increases every other year." Note: Road tolls are regressive, disproportionately burdening the middle-class and poor. (They're also a pain in the ass.) 

Emergency Service Fee Increases: In Mineral County, West Virginia, 9-1-1 emergency call fees are being increased. (Many West Virginia counties also have aggressive personal property taxes, e.g., taxing your dog, and also taxing your lawn mowers, trailers, golf carts, and car, every single year). Note: Emergency fees are regressive, disproportionately burdening the middle-class and poor.

Revenue Generation Through More Aggressive and Menacing Law Enforcement (Fines, Arrests, Court Fees ): When state and local governments need money, they're reluctant to tax the rich, many of whom they're politically indebted to. Instead, they often go after the people who can't easily afford legal protection - the middle-class and poor. This was recently and prominently seen in Ferguson, Missouri, where the U.S. Department of Justice found that "the Missouri municipality funded itself by harassing and fining its residents for trivial offenses." Note: Criminal justice fines are regressive, disproportionately burdening the middle-class and poor.

Water Rate Increases: In High Bridge, New Jersey, the town council voted to make huge increases to the town's water bills, as much as doubling one resident's bill. The increases were needed, it was said, to maintain the water lines. Note: Water charges are usually regressive, disproportionately burdening the middle-class and poor

Sewage Rate Increases: In Jefferson County, Kentucky, sewer rates may go up by about 24%. Yes, not only is the water being taxed more as we drink it, but it's also being taxed more when we pee it out - taxes in, taxes out. Note: Sewer rates are usually regressive, disproportionately burdening the middle-class and poor.

Car and Fuel Tax Increases: In California, fuel taxes and car registration fees are going up to pay for infrastructure improvements. Note: Fuel taxes (despite hand-wringing to the contrary) are regressive, disproportionately burdening the middle-class and poor. DMV fees are also regressive, disproportionately burdening the middle-class and poor.


Above: In this short video clip (with colorful language), George Carlin says we shouldn't blame politicians. Though I don't agree with his entire bit, he makes some good points. At 0:47 he says, "If you have selfish, ignorant citizens, you're gonna get selfish ignorant leaders." Youtube link: https://www.youtube.com/watch?v=CFDND9SRJbs.

Super-wealthy Americans are laughing at our stupidity

As we're being nickel-and-dimed to death, with endless tax increases, toll increases, fee increases, fine increases, and utility rate increases, the super-wealthy are enjoying record wealth. And they will soon (thanks to conservative voters) receive another round of gargantuan federal tax cuts. And we can be sure that these tax-cuts-for-the-rich will be marketed as tax cuts for the middle-class, i.e., "tax cuts for hard-working', God-fearin' families!" Unfortunately, most conservative voters will fall for it, hook, line, and sinker - as they always have, and probably always will. Americans have become, as liberal commentator Thom Hartmann is fond of saying, the "village idiots." We pay more for health care than people in other developed countries, but die younger. We pay more for Internet service than people in other developed countries, but receive slower service. And when politicians give massive tax cuts to the wealthy, we smile goofily and think, "surely, it was for us!"

The New Deal points to a better way

Instead of handing out tax cuts to the rich like candy, and instead of blocking and cutting infrastructure funding (as Republican love to do), there is, believe it or not, a better way. During the New Deal, taxes were significantly raised on the wealthy, and an enormous amount of infrastructure work was done, putting millions of American back to work - many hundreds of thousands miles of roadwork, tens of thousands of bridge projects, thousands of water, sewer, and utility projects, and much more. We're still utilizing many of these infrastructure projects today, as documented by the Living New Deal.

How was this done? Well, let's take the WPA for example. During the 1930s and early 40s, local governments assessed their infrastructure needs and submitted construction plans to federal WPA officials. If the plans were sound, and if the local government could raise about 20% of the needed funds, the WPA would kick-in the rest. To put it simply, the federal government gave massive infrastructure assistance to local communities during the New Deal era. Doesn't that sound better than higher bridge tolls, higher property taxes, higher sales taxes, traffic-congesting toll booths, and the police bearing down on you more and more for revenue-generating fines?

We could do another New Deal, of course, if conservative voters stopped worshiping the rich, if they stopped making empty-headed calls for "limited government" (when it's really good government, and a government for the people, that we truly need), and if they stopped raising our taxes, tolls, fees, fines, and utility rates with their peculiar and self-defeating voting habits.

And maybe, just maybe, the Democratic Establishment could do its part by rediscovering its New Deal roots, challenging its corporate donors, and giving at least some of the nation's conservative voters a better choice next time - a choice that doesn't include a big bank marionette like Barack Obama or a military-industrial puppet like Hillary Clinton. Never forget - many rural areas, like West Virginia, were Roosevelt Democrats before they were Trump Republicans.

2 comments:

  1. I think the fight over the old Glass Steagall act puts our politicians on the spot where they stand, the nation, or Wall Street. "The Chairman of the House Financial Services Committee looked over his shoulder at the pressure of rising Republican interest in Glass-Steagall, in an interview with The Hill today. Rep. Jeb Hensarling (R-TX) preposterously claimed, "If you're attempting to ensure a financial system that minimizes that chance of financial panics, then in many respects, the Financial CHOICE Act can be your 21st-Century Glass-Steagall." The Hill headlined its coverage, "House Financial Services Chairman Won't Support Glass-Steagall Revival." http://thehill.com/policy/finance/336921-house-financial-services-chairman-wont-support-glass-steagall-revival

    Speaking again in the House today on Glass-Steagall reinstatement vs. the "CHOICE" deregulation act, Rep. Marcy Kaptur said: "Mr. Speaker, I rise today to oppose the Financial CHOICE Act, which abandons the American people, as well as safety and soundness, in favor of Wall Street.

    "Six megabanks now control two-thirds of the financial sector in our country, and reaped record profits of over $170 billion in 2016. That's too much power in too few hands....

    "This week, Congressman Jones and I proposed to table the current legislation and replace it without bipartisan bill, the [Return to] Prudent Banking Act, which reinstates Glass-Steagall protections by separating prudent banking from risky Wall Street banking that tanked out economy in 2008.

    "The Rules Committee refused to allow our bill a vote. Nevertheless, we remain resolute. Glass-Steagall is something President Trump ran on, as did Bernie Sanders, and in 2016 both the Republican and Democratic platforms enshrined the policy of restoring Glass-Steagall protections.

    "Americans should know there is a growing bipartisan consensus fighting to protect the progress we have made, rein in Wall Street, and keep the wolves at bay and out of your pocketbook."

    Kaptur and Rep. Walter Jones (R-NC), with 50 co-sponsors, plan more action soon to intensify the Glass-Steagall debate.

    Another respected expert for Glass-Steagall reinstatement, author and former investment banker Nomi Prins, released an strong and lengthy argument for Glass-Steagall today addressed to President Donald Trump. It appears on several progressive news sites. https://www.opednews.com/articles/3/Nomi-Prins-In-Washington-by-Tom-Engelhardt-Banks_Glass-Steagall_Government_Washington-Greed-170608-188.html

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    1. Yep, even some industry big-wigs have called for Glass-Steagall to be reinstated:

      http://www.seattletimes.com/nation-world/banking-empire-builder-flips-flops-backs-glass-steagall/

      As much as big bank executives love to gamble, and playfully move large sums of money around, it makes sense to bring it back (and leave it forever).

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