Recently in Taxes Category

To everyone who claims that our wealthiest citizens pay more than their fair share of income taxes and we should cut them a break because they're the ones who, you know, create jobs in our economy, I have four words for you:

Frank and Jamie McCourt.

The McCourts, who own the Los Angeles Dodgers (so she says; he says he's the owner and she's not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple's divorce case in Los Angeles County Superior Court.

On that sum, they paid zero federal and state income tax. Jamie suggests that some tax breaks will apply this year too.

Measure 66 raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Measure 67 increases business taxes. Fifty-four percent of voters had approved both measures with more than 80 percent of the vote counted late Tuesday.

The opposition ran a well-funded campaign, led by Nike, Columbia Sportswear, and other big businesses. They were joined by Ari Fleischer's FreedomWorks and the libertarian publisher of the Oregonian, who used to be at the Orange County Register before it went belly-up. Together they ran a campaign arguing that the tax increases would worsen unemployment. But 55% of voters have rejected that, and instead showed that when a truly progressive campaign is waged, the right-wingers can be beaten. Even on taxes.

... Their message was deeply progressive:

These reforms protect nearly $1 billion in vital services like education, health care and public safety. These funds preserve class sizes, save jobs for teachers, provide seniors with in-home care, and provide health care for thousands of Oregonians through the Oregon Health Plan. In this time of economic crisis, we must protect those who have been hit the hardest - seniors, children and the unemployed - without putting more of a burden on the middle class.

It's a message that works nationally. And it's a message that'll work here in California. Voters don't like seeing their neighborhood schools close, or mass layoffs of teachers, or ending care for the disabled, or kicking kids off of health care. They don't want it, and are willing to raise taxes to prevent it.

It took years for liberalism's redistributive itch to create an income tax so steeply progressive that it prompts the flight from the state of wealth-creators: "Between 1990 and 2007," Voegeli writes, "some 3.4 million more Americans moved from California to one of the other 49 states than moved to California from another state."

You hear it over and over again from California conservatives, "Cut taxes and cut spending," and "government spending is too high."

So what does this mean to YOU? How does this affect your life?

Simple answer, cutting spending means that your schools, roads, police and fire protection, lines at the DMV, parks, environment, food safety inspections, services to help small businesses and courts all deteriorate. It means that it costs more - much more - for you to send your kids to college. That is what "cut government spending" means.

And in spite of what you think, their promise of cutting taxes rarely means your taxes. There is a huge concentration of income and wealth at the very top, which means that tax cuts really mostly benefit the very, very wealthy. Even the well-known Prop 13, thought of as helping homeowners, shifted the tax burden from the corporate owners of commercial property to middle class citizens. From, Corporate loopholes make Prop. 13 crippling for state:

Thirty years ago, commercial property owners contributed 59 percent of property tax revenues and residential property owners contributed 41 percent. Today, we see a virtual flip: commercial property owners contributed just 43 percent of property taxes in 2008, while residential property owners contributed 57 percent.

Another thing you constantly hear are calls to cut the number of government employees and their benefits. If you think about it, layoffs and pay cuts for government workers (teachers, police, firefighters, road workers, etc.) translates into increasing pressure to cut your own wages as well, plus it means fewer customers for California's small businesses, fewer teachers in our schools, increased crime rates, etc. Cutting their benefits means that your own benefits come under pressure as well.

Conservatives promising that cutting taxes and spending are good for you have held sway for the last few decades. They are always promising that tax cuts will make things better for regular people. But they haven't gotten better. The real tax burden keeps shifting further and further away from the wealthy and powerful and onto the backs of the middle class. Meanwhile the things that our government does for us are reduced and reduced, so life gets harder.

The lesson to learn is: glowing promises of a free lunch usually mean that you are the lunch.

The country is trying to pass health care reform but a single Senator is able to block the popular "public option" and "Medicare buy-in" plans, because he says it is wrong to let the public have any choice besides for-profit companies.  Actually it is one Senator plus the entire Republican caucus - but we already understood that they do the bidding of the big corporations that fund them. The rule of the Senate allow minorities to thwart the will of the people and block bills.

An NBC/WSJ poll that came out yesterday showed that 45% of the public found it unacceptable that the public option was removed, and 42% acceptable, but 58% wanted the Medicare buy-in and only 32% didn't.  But never mind, both of those are out because of one Senator (joining all the Republicans.)  This is a clear example of democracy thwarted.

In California we can't pass a budget or tax corporations or the wealthy to pay for our schools, colleges and universities, reads, etc. for the very same reason.  Our legislature is structures to that a minority can thwart the will of the people.  It requires a 2/3 vote to pass a budget or raise revenue.  And we have a minority that is funded by the big corporations, with one corproate PAC funded by Wal-Mart, Blue Cross of Ohio (?), Reliant Energy and others putting almost $1 million of into just one race last year.

It is time to trust the people and change the system in Washington and the system in Sacramento. It is time for majority rule.

Moderate and conservative Democrats want to empower an outside entitlement commission to reshape major domestic spending programs like Medicare and Social Security, and they're threatening a truly nuclear option to get their way. If Congress does not create this commission, they say, they will vote against must-pass legislation to raise the nation's debt ceiling, which would trigger a default, and, perhaps, economic calamity.

"I will not vote for raising the debt limit without a vehicle to handle this," Sen. Dianne Feinstein (D-CA) told McClatchy. "This is our moment."

About this commission,

As proposed, it would hand a significant amount of Congressional authority over entitlement programs to an outside body. That body would make recommendations that Congress would have to vote on, up or down--no filibusters. That's a bridge way too far for liberals, who see the commission as a backdoor approach to gutting Social Security.

Here's the problem.  Many people believe that there is a problem with Social Security - that it is "going broke."  But the fact is that Social Security has a huge reserve in the bank.  Social Security runs a huge surplus, and that surplus has been added to this reserve every year for decades.  Social Security will continue running a surplus until at least 2017, and can then draw on that trust fund to make up any shortfalls for at least the next 30-40 years.

Ah, but where is that trust fund?  According to a recent Washington Post story, 

The Treasury Department has for decades borrowed money from the Social Security trust fund to finance government operations. If it is no longer able to do so, it could be forced to borrow an additional $700 billion over the next decade from China, Japan and other investors. And at some point, perhaps as early as 2017, according to the CBO, the Treasury would have to start repaying the billions it has borrowed from the trust fund over the past 25 years, driving the nation further into debt or forcing Congress to raise taxes.

So there is the problem in a nutshell. They spent it. They spent it on tax cuts for the rich, and now that people are retiring and want that money, Senator Feinstein and the others don't want to raise taxes on the rich to pay back what was borrowed from the nation's retirement account.

This is the same as the situation in California. They cut taxes and made up the shortfall with various gimmicks, until the gimmicks ran out.  So now that the bill is due the protectors of the wealthiest talk about "spending" - which is government coming through for the people - as the area to cut, instead of turning to the people who received all the benefits of the earlier actions.

Senator Feinstein, keep your hands off of my -- and everyone else's -- retirement account.  You borrowed that money, now pay it back.  Don't think you can solve this problem by asking me to accept less than what I was promised because you handed that money out to the wealthy.  The people who got it should be the ones paying it back, not the people it was taken from.  You already took money from the taxpayers to bail out the wealthiest, don't do it again.