Posts from Dave Johnson

Corporate Tax Cuts Are Really Just Tax Cuts For The Rich

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

Republicans are proposing a huge, huge cut in corporate tax rates. They are also proposing to let giant, multinational corporations keep much of the money they already owe on profits they have stashed in “offshore” tax havens.

Lower tax rates mean higher after-tax profits, which increases the value of stock holdings.

Who owns corporate stock, and therefore will receive the benefits of these tax cuts?

Do We All Benefit From Corporate Stock?

Lets look at just who owns corporate stock.

Republicans like to pretend that we are all invested in the stock market, if not by directly owning stocks, then through “our” retirement plans. This is usually repeated and believed by comfortable people who actually do have 401k or other individual retirement accounts (IRAs) through their workplace.

But 45 percent of Americans have no money for retirement at all. Only 44 percent of Americans put anything into a 401k, even if their company offers one — and this number includes workers with only $100 in the plan.

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Tax Cuts Defund the Very Things That Boost the Economy

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

After eight years of complaining about “Obama deficits,” Republicans are proposing huge, dramatic, unprecedented tax cuts, especially for corporations.

President Trump wants the corporate tax rate cut from 35 percent down to 15, denying the government $2 trillion of revenue over the next decade. He is also proposing dramatic cuts to personal income tax cuts that will especially benefit billionaires like him.

Republicans call corporate tax cuts “pro-growth,” saying they will give the economy a boost. Trump’s Treasury Secretary says the plan will “pay for itself with economic growth.”

So now they’re for “stimulus”?

But here’s the real question: do tax cuts actually boost economic growth?

What Tax Cuts Actually Do

In 2012, the Congressional Research Service looked at data from past tax cuts and the effect they had on the economy, and issued a report titled Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945.  What did the study find?

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.

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Polls: People Don’t Know Trump’s Infrastructure Plan Is a Scam

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

Polls show that the public likes President Trump’s plan to spend $1 trillion on infrastructure. That’s because they think he actually plans to spend $1 trillion on infrastructure. He doesn’t. Not hardly. Not by a long shot. In fact…

Infrastructure Spending Is Popular

Polls show the public really likes it when Trump says he plans to spend $1 trillion on infrastructure.

Gallup: Trump Family Leave, Infrastructure Proposals Widely Popular,

Americans are far more likely to agree than disagree with President Donald Trump’s proposals to require companies to provide family leave for parents of a newborn and to spend $1 trillion on infrastructure.

CNN: CNN/ORC poll: Most back boost in infrastructure spending, oppose growing military budget,

Trump’s most popular budget proposals include reducing taxes for middle-class Americans (84% approve) and increasing spending on infrastructure (79% approve).

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An Innovative Solution To Corporate Taxation: Stocks!

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

While we’re talking about taxes…

The Zero Hour with RJ Eskow recently spoke with economist Dean Baker, co-director of the Center for Economic and Policy Research, about “A New Way to Make Corporations Pay Their Fair Share.

 

The idea is, as Baker explains further in the LA Times, to make corporations give the government stock instead of taxes:

If the tax reformers are serious, and I hope they are, here’s one simple way to largely eliminate the gaming opportunities that have made these people rich.

Instead of traditional taxes, the government could require corporations to turn over a portion of their stock, say 25%, in the form of non-voting shares. The government would benefit from any dividends or share buybacks but would have no voice in running the company.

This system would eliminate almost all opportunities for gaming since a company would not be able to deny the government its share of profits unless it also withheld profits from its other shareholders. And we would not call that “tax avoidance” but outright theft – the sort of thing that gets people sent to jail.

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Deplaning of United Passenger Shows Why We Need Corporate Regulation

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

In a democracy, We the People are in charge. We are the boss of the corporations. At least that’s how it’s supposed to work.

Apparently, that isn’t so much the way it is anymore. The United States used to regulate corporations to protect people from concentrated power. Now concentrated power has taken over our government, which fights the people for the benefit of corporate profits.

Or, to paraphrase John Kenneth Galbraith: In democracy, We the People regulate corporations. In deregulated America it’s the other way around.

The Face Of Deregulation

This is what can happen to you now in the United States if you get in the way of something a corporation wants:

Trump Promised Bigly Infrastructure, His Budget Cuts It

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

As a presidential candidate, Donald Trump promised to spend $1 trillion to modernize America’s infrastructure. There were no specifics. As economist Brad DeLong put it, Trump only offered “plans to have plans.”

Now Trump has released a budget outline, and the plans to have plans turned out to be a plan to have no plan at all. Trump’s “America First” budget delivers the opposite of his campaign promises, and it should come as no surprise that when it comes to infrastructure, the rubber doesn’t meet the road.

Transportation Funding Gutted

Trump’s budget guts transportation infrastructure funding, eliminating funding for many popular programs like mass transit funding for cities, Amtrak long-distance trains, and rural air service. It forces privatization of the Air Traffic Control system. According to the Washington Post,

Despite Trump’s push for new spending on transportation and other infrastructure, his $16.2 billion proposed Transportation Department budget represents a 13 percent decline from current funding. A host of rural and urban communities nationwide would lose popular programs.

StreetsBlog explains that, “In keeping with the budget’s general hostility to cities, transit would be hit especially hard.”

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Trump Nominates ‘Alligator’ Clayton To Run SEC

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

Saying on the campaign trail that Wall Street banks and hedge funds are “getting away with murder,” President Trump promised voters he would “drain the swamp” and “reduce the corrupting influence of special interests on our politics.” He was playing on the public’s sentiment that Washington is a swamp of Wall Street and corporate interests, connected insiders who feed off of taxpayers.

Trump’s “closing argument” television ad explained exactly who his villains were. Showing clips of Wall Street, stock tickers, world leaders chumming with Hillary Clinton as well as Lloyd Blankfein, the Chairman and CEO of Goldman Sachs, and billionaire philanthropist George Soros, Trump says in voiceover:

It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.

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Should We Pay the Rich to Build Infrastructure, Then Pay Them to Use It?

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

It’s starting to look like President Trump’s promised $1-trillion plan to rebuild the nation’s infrastructure will be as bad for us as his health care plan turned out to be.

Infrastructure Report Card

The American Society of Civil Engineers (ASCE) has issued their 2017 Infrastructure Report Card. We didn’t do so well. Our “grade” is a miserable D+. Why? Go outside and look around at our out-of-date and crumbling roads, bridges, dams, airports, water systems, and electrical grid.

President Obama was able to address a bit of the problem in the 2009 “stimulus.” This passed because Democrats had supermajority control of the Senate at the time. But then they lost enough seats that Republicans could block things, and block they did. Republicans filibustered everything after that.

Now, after blocking infrastructure projects for seven of the last eight years, Republicans are suddenly talking about how we need to fix our infrastructure. What does this mean?

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Republicans Repealing A Rule To Stop Wage Theft? It’s Who They Are

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

Who could be against rules that try to protect workers from having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations? See if you can guess who.

Last August, President Obama implemented a ‘Fair Pay And Safe Workplaces’ executive order that aims to stop companies from getting federal contracts if they violate labor and civil rights laws, steal workers’ wages and risk their health and safety. Actually, it just says the government will take violations into consideration, and yes, he waited eight years to implement this.

So of course, Republicans being who they are, have now voted in the House and Senate to repeal this act, exposing workers once again to having their pay stolen, having their health and safety put at risk, and being subjected to civil rights and labor law violations.

Obama’s executive order also required companies bidding on federal contracts to disclose if they had been busted for violating federal and state labor laws. Government procurement officers would then try to work with these companies to come into compliance with the laws and could deny contracts if they refused to.

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The ‘Lower the Tax Rate to Boost Businesses’ Competitiveness Scam

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

Now that Republicans are running Congress and the executive branch, they’re planning to “reform” (cut) corporate taxes (again). This time they using the subterfuge of “this will make companies more competitive.” What does that mean? Of course, under Republicans, it really means one and only one thing: cutting taxes on the rich — rich people.

The top corporate tax rate used to be 52 percent. Under President Ronald Reagan it was 46 percent. Then Congress “reformed” corporate taxes and dropped the rate to just 35 percent. (Except for giant, multinational corporations. They were handed a “deferral” break that cut their taxes to zero.)

Corporations used to shoulder 32 percent of the total tax burden. Now they shoulder only 10 percent of the burden — a drop of two-thirds. The difference has been made up from cuts to infrastructure, schools, health care, scientific research and all the things our government does to make our lives better — and to help our economy prosper over the long term.

That’s the trade-off when taxes are cut. It means our government has to cut the things it does to make all of our lives better.

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Union Matters

America’s Wealthy: Ever Eager to Pay Their Taxes!

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Why do many of the wealthiest people in America oppose a “wealth tax,” an annual levy on grand fortune? Could their distaste reflect a simple reluctance to pay their fair tax share? Oh no, JPMorganChase CEO Jamie Dimon recently told the Business Roundtable: “I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that.” Could Dimon have in mind the interest group he knows best, Wall Street? In the 2008 financial crisis, federal bailouts kept the banking industry from imploding. JPMorgan alone, notes the ProPublica Bailout Tracker, collected $25 billion worth of federal largesse, an act of generosity that’s helped Dimon lock down a $1.5-billion personal fortune. Under the Elizabeth Warren wealth tax plan, Dimon would pay an annual 3 percent tax on that much net worth. Fortunes between $1 billion and $2.5 billion would face a 5 percent annual tax under the Bernie Sanders plan.

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No Such Thing as Good Greed

No Such Thing as Good Greed