January 2009 Archives

The key to California's successful business environment are education and infrastructure.  It is not an accident that our semiconductor and computer and Internet industries, and biotechnology and pharmaceutical and genetic engineering and our other world-class competitive industries developed in California instead of in "low tax" states like Mississippi and Alabama.  These industries thrived here because of our well-educated people and our modern, well-maintained infrastructure. 

There has been a dramatic wealth-building return on our investment in education and infrastructure.  Investors could count on California as a good place to start and grow a business, and it has paid off.

But how much would it cost if businesses had to pay fair market value for use of the infrastructure that We, the People built?  What would it cost if companies had to pay the full education cost every time they hire someone who was educated at a California public school or state college or university? 



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Help Stop the Cuts

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Over at SEIUVoice.org there is a petition to Governor Schwarzenegger asking him not to balance the budget using cuts that hurt homecare workers.  The Governor is proposing to cut state funding for In-Home Supportive Services, which helps provide crucial assistance to thousands of elderly and disabled people in California.  The proposal would reduce state funding for homecare workers to minimum wage and eliminate care.  This would cause thousands of workers to lose their health benefits.

here's the thing: it would also force many current homecare patients into nursing homes.  So in future years this would be a far greater cost to the state.

Here is the wording from the petition page:

Dear Governor Schwarzenegger-

Balancing the budget shouldn't be done on the backs of homecare workers whose hard work allows hundreds of thousands of Californians to live safely and with dignity in their own homes.  Cutting California's homecare workers to the minimum wage with drastic cuts in benefits is unacceptable.

I stand in solidarity with the homecare workers who are gathering on Saturday, January 24th in Sacramento, San Francisco and Fresno to stop the cuts.
Go to the page and sign the petition.

Society is only as strong as its weakest link, and it is the responsibility of the people and our government to protect those who are genuinely unable to care for themselves.  We are morally and duty bound to do whatever we can to assure every human being a level of basic dignity. That is what these workers provide for those whom they serve.  We are talking here about cutting this kind of care rather than, for example, asking oil companies to pay something when they take our oil out of the ground to sell back to us.  How have we gotten to this point?


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The New President

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At 12:01pm EST, as Barack Obama took the oath of office to become President of the United States of America, the White House website, whitehouse.gov, switched over to its new format.  The list of menu items on that website includes "Our Government."  It is OUR government, the People of the United States joining together to manage our affairs.

One feature of the new website is a blog.  The first post at the blogs promises Communication, Transparency and Patricipation.  For example,

"One significant addition to WhiteHouse.gov reflects a campaign promise from the President: we will publish all non-emergency legislation to the website for five days, and allow the public to review and comment before the President signs it."
It is OUR government, and a new era has begun. 

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"People are asking if California is governable."  Governor Schwarzenegger said in the State of the State address today that California faces insolvency within weeks.  He said there is more gridlock in Sacramento than on our roads, if that is possible.

The governor gave a very short speech, saying there is no sense talking about education or infrastructure or water or anything else as long as we have this huge $42 billion deficit.

But the fact remains that the state's requirement that 2/3 budget-approval requirement means that the state is, in effect, ungovernable.   A few anti-government extremists are able to continue to block the budget, refusing to compromise or even negotiate, demanding that the state lay off tens of thousands of workers, slash medical help for the elderly, slash police protection and firefighting capability, slash funding for courts, raise class sizes to 40 or 50 students, stop repairing roads and levees and everything else the state government does.

David Greenwald writes at California Progress Report wrote, in State of the People is Grim: More Budget Cuts Are Exactly the Wrong Prescription,
"Budget cuts totaling $16 billion over the last three years have already had severe consequences for the people of California. And the Governor's proposed 09-10 budget would further harm California families and our economy with an additional $17 billion in cuts to schools, health care, homecare, and state services."
Leading up to the speech, David Dayen at Calitics wrote, in The State Of The State Is, Well, You Know, "Typically he has done this speech to coincide with the evening news.  This year he's trying to hide it."

We at Speak Out California want to invite readers to come up with some solutions for the budget mess.  We are working on some ideas for a prize for the best ideas.

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The "Tax Freedom Day" Trick

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It takes a 2/3 vote to pass a budget in California. As we have seen this means any budget that does not completely meet the hard-core anti-tax, must-cut-government position of the Republicans in the legislature is voted down. Even though there is enormous public support for government - schools, roads, firefighters, etc. - they will not compromise at all. They demand that we gut the government, lay off tens of thousands of workers, or nothing. So California races toward economic ruin.

What do your taxes buy you? The average person benefits greatly from strong government. By gathering together into a community that is jointly managed (i.e. government) people can pool their resources and accomplish great things that cannot be accomplished by people who are on their own. Roads and bridges are examples of things that people cannot accomplish individually. Police, firefighters, public schools are other examples. Law and courts and a monetary system are still more. And then there are benefits like Social Security and the "safety net" of programs for people who lose jobs food programs for those of us without enough to eat.

The reason we have almost everything that we value as a society, our education and (until recently anyway) jobs, the internet, buildings that don't easily burn down or blow away, drinkable water coming to our houses and sewage systems leaving them and (until fairly recently, anyway) a health care system that stops epidemics is our government. All of the businesses we see around us exist because of our government -- a corporation cannot even exist without the government that establishes it and the legal system that maintains it.

But there are some who would personally benefit more in the absence of government than in its presence. History has taught that there are some who would organize themselves to take what others have worked to build rather than do that work themselves. One need only look at the walls built around cities in the past to understand this. There have also been organized gangs and other criminal enterprises that take rather than build, and more recently we have seen that organized predatory enterprises also find ways to victimize and prey on people. Fraud, confidence and ponzi schemes, consumer scams and all manner of trickery prey on people who are left unprotected by their community. Government is what has always protected regular people from such predators.

Government -- the people banding together to guard and accomplish their interests -- serves to protect people from those who would just take rather than work with the rest of us to build.

So why did Ronald Reagan famously say "government is the problem" in his first inaugural address and he loudly and repeatedly attack the idea of taxes? The foundation and strength of government is the taxes it collect. Taxes are what provide government with its strength to do all of the good things described above. This is why anti-government ideologues reason that the way to cut government (and thereby bring in its alternative) is to cut taxes. They say that if they can just cut out the foundation of government, it will fall. Or, more famously, that they can "drown it in a bathtub."

One way that anti-government ideologues have worked to accomplish this is to turn people against their own government, tricking people into misunderstanding how taxes work and what government does for them. last week, in What Are Tax Brackets, I explained how one of these tricks works -- that you only pay bracket rates taxes on income that falls in that bracket, not on all income earned up to that bracket.

Another way they turn people against taxation and government is to misrepresent how much is collected and how it is used. Exaggerated statements like, "We pay half our income in taxes" are commonly heard, along with under-representation and misrepresentation of the benefits we receive from government.

"Tax Freedom Day" is one example of this technique. Tax Freedom Day is a product of The Tax Foundation, which is funded by the very same collection of right-wing donors that fund the Heritage Foundation, Cato Institute and so many other components of the anti-government "conservative movement."

Tax Freedom Day is widely publicized by corporate media, and usually described as being when "the average American" has earned enough income to pay their taxes. Tax Freedom Day for 2008 is April 23. To calculate Tax Freedom Day the The Tax Foundation adds up all the taxes paid to the government from all sources, but it only includes certain forms of income. It doesn't include capital gains income, for example, yet includes capital gains taxes on the tax side of the calculation. These misleading calculations of course result in a much higher tax amount than "the average America" really pays. So while they say that 30.8% of "our" income went to pay taxes in 2008, anyone reading this who looks at their own tax bill can see that their taxes are substantially lower than this figure.

So the next time you hear about Tax Freedom Day, keep in mind who is making this claim, and why.


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An error was found in Proposition 8 that may have broad implications for many Californians.  It is hoped that the error is corrected before this weekend's full moon.

Read the story here: Typo In Proposition 8 Defines Marriage As Between 'One Man And One Wolfman'

"Activists on both sides of the gay marriage debate were shocked this November, when a typographical error in California's Proposition 8 changed the state constitution to restrict marriage to a union between "one man and one wolfman," instantly nullifying every marriage except those comprised of an adult male and his lycanthrope partner. "The people of California made their voices heard today, and reaffirmed our age-old belief that the only union sanctioned in God's eyes is the union between a man and another man possessed by an ungodly lupine curse," state Sen. Tim McClintock said at a hastily organized rally celebrating passage of the new law."

This is from The Onion, but it makes about as much sense as what Proposition 8 really says.  Prop 8 wasn't a typo, it was one group of people deciding how another group of people they don't even know should live.

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What Are Tax Brackets?

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In 2009 California is going to have to confront and settle a number of budget issues that we have been putting off for decades. We have been putting off so many necessary decisions -- deferring maintenance of our infrastructure, pushing pain into the future by borrowing, setting aside the needs of our people by cutting school, police, fire and other budgets, and practicing almost every form of avoidance of reality that we could find. 

Well, the karma is coming back on us, all the chickens have come home to roost, we are getting what we gave and we are going to pay for our sins.  (Please leave more cliches in the comments.)

The number one budget issues that has to be confronted is taxation.

So, let's talk taxes, beginning with the basics.  I have found that many people don't really understand how taxes work so I want to write a bit about that here.  One reason for the lack of understanding of taxes is that there has been quite a bit of deliberate misinformation.  By confusing people, the very wealthy and corporate interests have been able to trick people into letting them avoid paying their fair share.  Instead we either take on ourselves the bulk of the burden of paying for democracy, or just borrow and put that burden on our children.

One thing that I have found many people do not quite understand is the concept of tax brackets.

Tax brackets

A "progressive" tax is one where the tax rate increases as income increases.  A progressive tax structure consists of brackets.  You pay a certain tax rate on income up to the next bracket.  After that bracket is reached, a higher tax rate applies to income that is earned that is above that amount.  Let's say that you pay 5% on income below $10,000 and 7% on income above $10,000.  So if you make exactly $10,000 of income the tax is $500.  At $10,100 the tax is still that $500 on the amount below $10,000 and $7 on the additional $100, for a total of $507.  The key point is that only the amount in the new bracket is taxed at the higher rate.

Many people believe that once you reach a higher bracket you pay the higher tax rate on all the income that falls below that bracket amount as well.  I have actually talked to people who think they need to "get their income into a lower bracket" to avoid paying a higher tax rate, because they think that a higher tax rate would apply to all of the income they earned.

Using the example of the earlier paragraph, many people believe that you would pay $707, not $507, on income of $10,100, assuming that the entire $10,100 is taxed at a 7% rate because the total income is above $10,000.  This incorrect belief is one result of anti-tax arguments.  It is also the basis of many tax-avoidance schemes.  

So, to repeat:  If you enter a higher tax bracket, you only pay the higher tax rate on the amount of income you earn that is in the new tax bracket, not on all of your income.

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Comments

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To leave a comment and read comments, click the comment icon just to the right of the date and time at the top of the post.  We will add a "Comments" link soon.

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There is an important opportunity this weekend to elect delegates who will choose the new California Democratic Party Chair at the State Convention in April. With a new leader (Art Torres is retiring from the position which he has held for over a decade), there will clearly be an opportunity for a new direction. We received this email from the John Burton for Party Chair campaign. Given the importance of the race, we wanted to pass this on to you. 

This Saturday and Sunday, January 10th and 11th, every Assembly District will elect delegates to the State Convention. 

The delegates elected at this meeting make up 1/3 of the voters who will choose the Party Chair at Convention in April.  This is a huge opportunity for activists to elect delegate candidates who are committed to electing John Burton as our next Chair!

We need YOU to turnout voters to the delegate elections.  Voters must be registered Democrats who were eligible to vote in the November 2008 election in the district caucus they are voting in.

Please do the following two things to help our campaign be successful this weekend:

#1.  Attend and vote in your district's delegate election.  For a list, go here:  http://www.cadem.org/site/c.jrLZK2PyHmF/b.4818171/k.4638/Assembly_District_Election_Meetings.htm

#2.  Send a personal email out to all your contacts, either in your assembly district, or regional/statewide. (we have attached a sample email alert for a district-specific message, as well as a regional/statewide message) If you use Facebook or another social networking site, send a note to all your friends!  Please cc us on the email at info@burton2009.com!

Every district will elect 12 delegates (6 men and 6 women).  There will be a Burton Volunteer at each site with the list of Candidates pledged to support Burton.  People don't have to know the names ahead of time to go vote.

If you have any questions, please contact us at Shawnda@Burton2009.com

Thanks!

/The Burton Team

Also, we want to refer readers to this post by PeteB2 over at Calitics:

CA Dem Party Delegate Elections are Next Weekend: Support Progressives

Thank goodness the Progressive Democrats of America, SoCal Grassroots, and the Progressive Caucus of the CA Democratic Party have joined together to run Progressive Slate candidates for next weekend's state party delegate elections (election times/locations here).  The statements of the candidates give you so little to go on, and sitting through several hours to hear them speak individually before figuring out who is really the progressives of the bunch is a really arduous thing to go through.  I believe we can really make a positive change in the party by getting real progressive activists in delegate positions who can challenge the party when necessary. 

The list of causes that candidates on this slate need to advocate for is something I agree with nearly to a tee, and I really appreciate that they are laying out what the criteria for selection is.  

Please go read the rest of this post at Calitics.

Give us your thoughts and ideas on where you would like to see the Democratic Party going, now that we've got new leadership in our country and a hope for real change in our country and its politics.



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About this Archive

This page is an archive of entries from January 2009 listed from newest to oldest.

December 2008 is the previous archive.

February 2009 is the next archive.

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