A Bus Tour Pushes For Higher Taxes on the Rich

Jarod Facundo Next Leader, Institute for Policy Studies

The GOP Tax Cuts and Jobs Act enacted late in 2017, the nonpartisan Congressional Research Service reported late this spring, has been a smashing success — for the U.S. corporations that have been smashing workers for the past four decades. Under the tax cut, the estimated average corporate tax rate has dropped from 23.4 to 12.1 percent while workers have seen “no indication of a surge in wages.”

Now, nearly two years after the legislation passed, organizers want members of Congress to know they’re still fighting this massive upwards redistribution of wealth. To do that, activists have convened a nationwide “Tax the Rich” bus tour to remind the country that the fight for fair taxation is far from over. The tour is sponsored by Tax March, a coalition of over 70 organizations working to create a tax system – and an economy – that helps everyone, not just those at the top.

The bus tour strategically coincides with the first nights of Democratic primary debates. Their 35-day excursion will include 40 events in 19 states and Washington, DC. The final stop will be July 30th in Detroit alongside the next pair of primary debates. Seventy-five percent of people want to raise taxes on the rich, a nationwide survey conducted by Tax March found. The tour is looking forward to elevating that message to a national level. 

Organizers continued to tie their message of economic justice to a wide array of issues during the bus tour’s recent stop in Washington, DC. “People see the rich are getting richer and that their paychecks are not going up,” Tax March Campaign Director Dana Bye told Inequality.org. “Things are not getting easier for them to pay for healthcare. Many of them cannot afford a $400 medical emergency should it occur. People see that this is unfair.”

Jeneva Stone, an activist with Little Lobbyists, illustrated that injustice with her personal story, which she shared at bus tour’s press conference by the National Mall. 

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AFL-CIO Supports Amazon Workers During Strike

Communications Workers Launch Anti-Offshoring Offensive

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

The Communications Workers are launching a summer-long offensive to convince Congress to move against corporate off-shoring of U.S. jobs, especially call center jobs.

In a mass conference call with activists on July 9, union President Chris Shelton urged them to lobby lawmakers – and to get other union members to do so – for two pieces of legislation.

Shelton wants unionists to text “no offshoring” to the phone link 69866, which would go to Congress. He also wants them to recruit five colleagues each to do the same thing. And unionists should sign CWA’s on-line anti-offshoring petition.

And then on August 21, the union will sponsor a National Day of Action on the issue, tackling lawmakers at home during the congressional recess, and calling in to their offices – all to push against offshoring and for two pieces of legislation to cramp it.

One would order firms – such as airlines, stores, banks and big distributors like Amazon – to order their call center responders to tell customers where they are physically located, and give customers the option of demanding and getting their call transferred to a U.S.-based center. That bill has been kicking around prior GOP-run Congresses, unsuccessfully.

The other, which the union is drafting in conjunction with Sen. Sherrod Brown, D-Ohio, would repeal a huge tax break that encourages firms to offshore U.S. jobs. The break was in the GOP-passed 2017 $1.2 trillion tax cut for big businesses and the rich.

That tax break particularly rubs CWA the wrong way, since one of the nation’s biggest telecoms, AT&T – which is unionized with CWA except for its call centers – announced call center moves to Mexico just around the time solons OKd the tax cut.  That cost thousands of U.S. workers jobs, especially in rural areas with few alternatives.

“We are under attack by Wall Street and corporations and their political puppets – destroying our jobs, destroying communities and destroying our lives,” Shelton said.

“We need to stop this offshoring of good union jobs and of all jobs,” he declared. “We’ve heard a lot of promises from politicians” that they would do so, he added. “But once they get elected, they only make the same situation worse.”

 

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More evidence that higher minimum wages largely do what they’re supposed to do

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

Raising the federal minimum wage to $15 per hour by 2025 would lift the pay of 27.3 million workers—17 percent of the workforce—according to a new report from the Congressional Budget Office. It would raise the incomes of poor families by 5 percent and thus reduce the number of people in poverty by 1.3 million. Since these low-end gains would be partially financed out of profits, the increase in the wage floor would reduce inequality.

CBO also estimates that “1.3 million workers who would otherwise be employed would be jobless in an average week in 2025.” Because economists’ estimates of the job-loss effects from minimum wage increase are so wide-ranging—some studies find little-to-no job loss impacts; other find more—CBO estimates that there’s a two-thirds chance that the actual change in employment is between 0 and -3.7 million. Interestingly, -1.3 million is not the midpoint between 0 and -3.7, suggesting the budget office gave a bit more weight to studies finding less evidence of job-loss effects.

Thus spoke Zarathustra the CBO. Should this lead objective policy makers to embrace or eschew the policy to increase the federal minimum wage to $15 in 2025 (assume for this exercise that “objective policy makers” exist)?

I’d give a solid push towards embrace. It’s a progressive policy that’s long been shown to largely hit its goals of boosting the earnings of low-wage workers whose families seriously need the income. Yes, the report warns that some will be hurt by the increase, but the best research suggests their job-loss estimate may be too high. Moreover, even if they’re right, the ratio of helped-to-hurt is 21 (27.3m/1.3m). And given the extent of turnover in the low-wage labor market, many of those 1.3 million workers will eventually find new jobs, jobs which pay a lot better than their old ones.

Full disclosure: I’ve long advocated for minimum wage increases, so my “embrace” won’t surprise those who’ve followed that work. But the reason why I—and, more importantly, progressive institutions like the Economic Policy Institute, CBPP, CAP, and many others—have long advocated for minimum wage increases is that a deep body of uniquely high-quality research finds that prior increases have had their intended effects of raising low-wage workers’ incomes without leading to significant job loss.

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Stock Buybacks are Deadly. It’s Time to End Them.

By Porter McConnell and Luísa Abbott Galvão 

The eighties brought us permed bangs, acid wash jeans, and Gordon Gecko’s “greed is good” mantra. So it’s not surprising that in 1982, among other bad ideas, the Securities and Exchange Commission put into effect something called Rule 10b-18, which granted a “safe harbor” (read: free pass) to company executives who wanted to buy back their own stock to raise its price. The SEC promised it would no longer accuse executives who bought back their own stock of market manipulation, rewarding corporate greed.

What exactly is a stock buyback? Stock “buybacks” are when companies buy back their own stock from shareholders on the open market. When a share of stock is bought back, the company reduces the number of shares left in the market, which raises the price of remaining shares.

Company executives have every incentive to buy back stocks, since most of their compensation today is paid in the form of stock, and a higher stock price makes them personally richer. Executives push companies to buy back billions of dollars of their own stock, juice share prices, and pass on cash to themselves and wealthy shareholders. (If you’re curious about the mechanics, check out this short visualization of how it works, or Rep. Alexandria Ocasio-Cortez’s explainer at a recent House hearing.)

Over the last 15 years, 94 percent of corporate profits have gone to shareholders in the form of buybacks and dividends, instead of to workers and their families.

Stock buybacks benefit people who already have wealth, and those people are more likely to be White, and more likely to be male. Most Americans are not shareholders. Less than half of American households own stock, either directly or through a retirement account. But 94 percent of households in the top 1% own stock.

Even fewer Americans of color are included in the term shareholders. While 60 percent of white households have retirement accounts or hold direct equity in the stock market, only 34 percent of Black households, and 30 percent of Latinx households, have retirement accounts.

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