Thursday, October 27, 2011
Wednesday, October 26, 2011
Occupy Atlanta
Errin Haines
The Associated Press
ATLANTA—With helicopters hovering overhead, police moved into a downtown Atlanta park early Wednesday and arrested around 50 Occupy Wall Street protesters who had been camped there for about two weeks.
Like in many other cities, protesters had been camping in Woodruff Park to rally against what they see as corporate greed and a wide range of other economic issues.
Before police moved in, protesters were warned a couple times around midnight to vacate the park or risk arrest.
Inside the park, the warnings were drowned out by drumbeats and chants of "Our park!"
Organizers had instructed participants to be peaceful if arrests came, and most were. Many gathered in the centre of the park, locking arms, and sang "We Shall Overcome," until police led them out, one-by-one to waiting buses. Some were dragged out while others left on foot, handcuffed with plastic ties.
Police included SWAT teams in riot gear, dozens of officers on motorcycles and several on horseback. By about 1:30 a.m. Wednesday the park was mostly cleared of protesters.
State Sen. Vincent Fort was among those arrested and had come to the park in support of the protesters in recent days. He said the police presence was "overkill."
"He's using all these resources ... This is the most peaceful place in Georgia," Fort said, referring to Atlanta Mayor Kasim Reed. "At the urging of the business community, he's moving people out. Shame on him."
Reed told reporters he had serious security concerns. They were heightened Tuesday when a man was seen in the park with an AK-47 assault rifle, the mayor said. He said authorities could not determine whether the weapon was loaded, and were unable to get additional information about it.
Occupy Atlanta organizers said the demonstrators who were arrested would go before a judge Wednesday morning. They were planning a march from the park to the jail shortly before the court hearings.
"It's real simple: This is a crisis of priorities that this small group of campers ... is the greatest threat in this city. It's outrageous," said organizer Tim Franzen.
Reed on Monday said he planned to revoke the permit allowing Occupy Atlanta protesters to live in the park, but was vague about when that might come.
Late Tuesday, police started surrounding the park at a busy intersection, and some protesters gathered up their tents, pillows, sleeping bags and other belongings, saying they didn't want to lose them. Right after the order to leave, some did, standing outside the barricades.
Hundreds of others stood on Atlanta's famous Peachtree Street, booing police. They shouted "Shame!" and "Who do you protect? Who do you serve?"
Reed said he was upset over an advertised hip-hop concert that he said drew 600 people to the park over the weekend but didn't have a permit and didn't have security guards to work the crowd, calling it irresponsible.
In Oakland, California, police shot tear gas in response to rock throwing from some of the demonstrators who had gathered there, authorities said.
Why the USA should spread the wealth
Why the USA should spread the wealth
By Mark Thoma, The Fiscal Times
America sacrificed equity for the false promise of efficiency and growth, and society is now more unequal than at any time since the early part of the last century.
Many economists worry that making societies more equal through income redistribution or other means reduces economic growth.
This big trade-off between equality and efficiency, which is supported by comparisons of capitalist and socialist countries, implies that there's a limit to how much redistribution a society should pursue. At some point, the trade-off of more equality for less output -- which worsens as we push toward more and more equality -- becomes intolerable.
However, while the trade-off is quite unfavorable as we push to extremes, recent experience suggests there is a wide region where the trade-off is hard to detect. Thus, worries about this trade-off appear to be overblown.
For example, the Bush tax cuts were justified, in part, by the assertion that equity had overshadowed efficiency in tax policy. Taxes on the wealthy, and the inefficiencies that come with them, were much too high, it was argued, and lowering taxes would cause output to go up enough to lift all boats substantially.
Accordingly, the lower end of the income distribution would fare much better after income trickled down than it would under redistributive policy.
The economy did grow after the Bush tax cuts, but the rate of growth was unremarkable, especially for jobs, and there's little evidence that they caused large increases in output growth, as promised.
In fact, there's little evidence that the Bush tax cuts had any effect at all. The trade-off simply wasn't there.
And the tax cuts at the upper end of the income distribution did nothing to correct for the fact that although worker productivity was rising, wages remained flat -- a problem that began in the mid-1970s.
This was an indication that something was amiss in the mechanism that distributes income to different members of society. Workers were helping to increase the size of the pie, but income did not trickle down, and their share of the pie was no larger than before.
This is not the only way in which the distribution of income has become disconnected from productivity. While some argue that those at the top of the income distribution earn every cent they receive, and hence deserve to keep all of it, there is plenty of evidence that the compensation of financial executives, CEOs of major corporations and others at the top of the pyramid far exceeds the value of what they contribute to society.
That holds true even without the 2008-09 financial crisis, but how, exactly, can we justify the extraordinarily high income of this group when the result of their actions was to ruin the economy?
If those at the top of the income distribution receive far more than the value of what they create, and those at lower income levels receive less, then one way to correct this is to increase taxes at the upper end of the income distribution and use the proceeds to protect important social programs that benefit working-class households, programs that are currently threatened by budget deficits.
This would help to rectify the maldistribution of income that is preventing workers from realizing their share of the gains from economic growth.
And there is another reason why taxes on the wealthy should go up. Someone has to pay taxes, and the question is how to distribute the burden among taxpayers. Many believe, and I am one of them, that progressive taxes are the most equitable way to do this. In particular, the guiding principle is that the last dollar of taxes paid should cause the same amount of sacrifice for rich and poor alike.
There has been an attempt to make it appear that taxes are mostly paid by the wealthy; the deceptive claim that half of the people pay no taxes is part of this. But taxes are less progressive than before the Bush tax cuts, and when all taxes at all levels of government are taken into account, "the U.S. tax system just barely qualifies as progressive," according to a 2010 report from Citizens for Tax Justice.
We face a choice between cutting key benefits for the middle class and creating an ever more unequal society, or raising taxes on the wealthy to preserve the social programs that lower-income households rely upon.
We hear that raising taxes is unfair and that tax increases will harm economic growth. But there's nothing unfair about correcting the maldistribution of income that we've seen in recent decades, or about making sure the burden from paying taxes is more equitable than it is now.
And there's no reason to fear that economic growth will be lower if taxes are increased. Cutting taxes on the wealthy during the Bush years didn't stimulate growth, and raising taxes back to the levels we've had in the past -- when growth was quite robust -- won't have much of an effect either.
By Mark Thoma, The Fiscal Times
America sacrificed equity for the false promise of efficiency and growth, and society is now more unequal than at any time since the early part of the last century.
Many economists worry that making societies more equal through income redistribution or other means reduces economic growth.
This big trade-off between equality and efficiency, which is supported by comparisons of capitalist and socialist countries, implies that there's a limit to how much redistribution a society should pursue. At some point, the trade-off of more equality for less output -- which worsens as we push toward more and more equality -- becomes intolerable.
However, while the trade-off is quite unfavorable as we push to extremes, recent experience suggests there is a wide region where the trade-off is hard to detect. Thus, worries about this trade-off appear to be overblown.
For example, the Bush tax cuts were justified, in part, by the assertion that equity had overshadowed efficiency in tax policy. Taxes on the wealthy, and the inefficiencies that come with them, were much too high, it was argued, and lowering taxes would cause output to go up enough to lift all boats substantially.
Accordingly, the lower end of the income distribution would fare much better after income trickled down than it would under redistributive policy.
The economy did grow after the Bush tax cuts, but the rate of growth was unremarkable, especially for jobs, and there's little evidence that they caused large increases in output growth, as promised.
In fact, there's little evidence that the Bush tax cuts had any effect at all. The trade-off simply wasn't there.
And the tax cuts at the upper end of the income distribution did nothing to correct for the fact that although worker productivity was rising, wages remained flat -- a problem that began in the mid-1970s.
This was an indication that something was amiss in the mechanism that distributes income to different members of society. Workers were helping to increase the size of the pie, but income did not trickle down, and their share of the pie was no larger than before.
This is not the only way in which the distribution of income has become disconnected from productivity. While some argue that those at the top of the income distribution earn every cent they receive, and hence deserve to keep all of it, there is plenty of evidence that the compensation of financial executives, CEOs of major corporations and others at the top of the pyramid far exceeds the value of what they contribute to society.
That holds true even without the 2008-09 financial crisis, but how, exactly, can we justify the extraordinarily high income of this group when the result of their actions was to ruin the economy?
If those at the top of the income distribution receive far more than the value of what they create, and those at lower income levels receive less, then one way to correct this is to increase taxes at the upper end of the income distribution and use the proceeds to protect important social programs that benefit working-class households, programs that are currently threatened by budget deficits.
This would help to rectify the maldistribution of income that is preventing workers from realizing their share of the gains from economic growth.
And there is another reason why taxes on the wealthy should go up. Someone has to pay taxes, and the question is how to distribute the burden among taxpayers. Many believe, and I am one of them, that progressive taxes are the most equitable way to do this. In particular, the guiding principle is that the last dollar of taxes paid should cause the same amount of sacrifice for rich and poor alike.
There has been an attempt to make it appear that taxes are mostly paid by the wealthy; the deceptive claim that half of the people pay no taxes is part of this. But taxes are less progressive than before the Bush tax cuts, and when all taxes at all levels of government are taken into account, "the U.S. tax system just barely qualifies as progressive," according to a 2010 report from Citizens for Tax Justice.
We face a choice between cutting key benefits for the middle class and creating an ever more unequal society, or raising taxes on the wealthy to preserve the social programs that lower-income households rely upon.
We hear that raising taxes is unfair and that tax increases will harm economic growth. But there's nothing unfair about correcting the maldistribution of income that we've seen in recent decades, or about making sure the burden from paying taxes is more equitable than it is now.
And there's no reason to fear that economic growth will be lower if taxes are increased. Cutting taxes on the wealthy during the Bush years didn't stimulate growth, and raising taxes back to the levels we've had in the past -- when growth was quite robust -- won't have much of an effect either.
Tuesday, October 25, 2011
Monday, October 24, 2011
Saturday, October 22, 2011
Tuesday, October 18, 2011
An Open Letter to the Occupiers
You have awakened the sleeping giant, too long dormant, but ever present, deep in the American democratic spirit. You have given voice and space to the unspoken feelings of countless others about something that has gone terribly wrong in our society. And you have sparked a flame from the embers of both frustration and hope that have been building, steadily, in the hearts of so many of us for quite some time.
Throughout history, often it has been left to the youth of a society to do that, and you boldly have stepped into the role of the emerging generation, which sometimes means saying and doing what others only think. You have articulated, loudly and clearly, the internal monologue of a nation.
Some of you have told me that you expected only to foment a short-lived protest and that you were as surprised by this “movement” as anyone else. Try to listen and learn from those whose feelings and participation you are evoking by encouraging more reflection than certainty.
While there are some among us who may misunderstand your motives and message, know that you are an inspiration to many more.
One of you told me in New York City last week, “This is not a protest, but a think tank.” Another of your compatriots wanted me to understand that you are trying to build something in Liberty Square that you aspire to create for our global village — a more cooperative society.
Most telling to me was the answer to the first question I asked of the first person I talked to at the Wall Street demonstrations. I inquired of one of the non-leaders who helped lead the first days of Occupation what most drew him to get involved in the demonstration and he replied, “I want to have children someday, and this is becoming a world not good for children.”
My 13- and 8-year-old boys came to mind when I heard his answer, and I felt thankful. It is precisely those deepest, most authentic feelings and motivations that should preoccupy you, rather than how best to form and communicate superficial political rhetoric.
You are raising very basic questions about an economy that has become increasingly unfair, unstable, unsustainable, and unhappy for a growing number of people. Those same questions are being asked by many others at the bottom, the middle, and even some at the top of the economic pecking order.
There are ethics to be named here, and the transition from the pseudo-ethic of endless growth to the moral ethics of sustainability is a conversation occurring even now in our nation’s business schools (if, perhaps, secreted inside the official curriculum).
Keep pressing those values questions because they will move people more than a set of demands or policy suggestions. Those can and must come later.
And try not to demonize those you view as opponents, as good people can get trapped in bad systems and we’ve seen a lot of that. Still, you are right for saying that we all must be held accountable — both systems and the individuals within them. It is imperative that we hear that message right now.
The new safe spaces you have created to ask fundamental questions, now in hundreds of locations around the country and the world, are helping to carve out fresh societal space to examine ourselves — who we are, what we value most, and where we want to go from here.
Instead of simply attacking the establishment “economists,” you can become the citizen economists, like the young economics major I met at the Wall Street occupation who discussed with me new approaches for society’s investment and innovation. We desperately need new vision like hers to come up with alternative ways of performing essential functions.
Keep asking what a just economy should look like and whom it should be for. They are noble questions. But you’d do well to avoid Utopian dreaming about things that will never happen. Look instead at how we could do things differently, more responsibly, more equitably, and yes, more democratically.
Don’t be afraid to get practical and specific about how we can and must do things better than we have in recent years. One of our best moral economists, Amartya Sen, says that “being against the market is like being against conversation. It’s a form of exchange.” You have begun such a conversation about what markets could and should be. Keep talking.
Even in forums where business and political leaders meet, they too are asking those questions and using terms like “a moral economy” as a way to interrogate our present and failed practices. I’ve been in such a gathering this week — just days apart from visiting yours — where the participants slept on featherbedding in five-star hotels rather than in pup tents on the sidewalk. And yet, surprisingly, they were asking many of the same questions you are.
Keep driving both the moral and practical questions about the economics of our local and global households, for that is what the discipline was supposed to be about in the first place.
I know you believe that the leadership on Wall Street, and Constitution and Pennsylvania Avenues have all failed you. Indeed, they have failed us all. But while you feel betrayed by both our business and political leaders, don’t give up on leadership per se.
We need innovative leadership now more than ever. And you are providing some of it.
Think of stewards rather than masters of the universe as the model for leadership.
And remember, nonviolence is not just a critical tactic but a necessary commitment to moral and civil discourse that can awaken the best in all of us. There is much to be angry about, but channeling that energy into creative, non-violent action is the only way to prevent dangerous cynicism and nihilism that also can be a human response to the injustice and marginalization many people now feel.
The anarchism of anger has never produced the change that the discipline and constructive program of non-violent movements has done again and again.
I remember what it feels like to see your movement as a lead story on the evening news every night, and the adrenaline rush that being able to muster 10,000 people in two hours’ time to march in protest against injustice and inhumanity can bring. I was in your shoes 40 years ago as a student leading demonstrations against the Vietnam War, racism, and nuclear proliferation.
I would advise you to cultivate humility more than overconfidence or self indulgence. This really is not about you. It’s about the marginalized masses, the signs of the times, and the profound yearning for lasting change. Take that larger narrative more seriously than you take yourselves.
Finally, do not let go of your hope. Popular movements are the only force that truly brings about change in society. The established order is never as secure and impervious to change as those who preside over it believe it to be.
Remember that re-action is never as powerful as re-construction. And whatever you may think of organized religion, please keep in mind that change requires spiritual as well as political resources, and that invariably any new economy will be accompanied by a new (or very old) spirituality.
So I will say, may God bless you and keep you.
May God be gracious to you and give you -– and all of us — peace.
Jim Wallis is the author of Rediscovering Values: A Guide for Economic and Moral Recovery, and CEO of Sojourners. He blogs at www.godspolitics.com. Follow Jim on Twitter @JimWallis.
Monday, October 17, 2011
Friday, October 14, 2011
Welcome to the Poverty Thunderdome
Earlier this week, professional loudhailer Bill O’Reilly welcomed — well, welcomed might be a bit generous — radio and TV host Tavis Smiley and Princeton University professor Cornel West to his FoxNewsChannel show to yell at them….I mean, to interview the pair about poverty in America and the Occupy Wall Street demonstrations.
To call it a “dust up” doesn’t quite capture the full throttle epic clash of personalities.
(Read more about what the Huffington Post called “nothing short of a cable news classic” HERE.)
Printed here below is my favorite exchange.
Frankly, the written word doesn’t do it justice, so you might consider grabbing a couple of friends for a dramatic reading:
The Poverty Thunderdome from cathleen falsani on Vimeo.
SMILEY: I’m still going to finish my point. You’re right to go after Stanley O’Neal. I know you didn’t mean to do this. I don’t want to believe you meant to do this, but Stanley O’Neal, there are four or five black CEOs in this country. You choose a guy at Merrill Lynch to make him the poster guy for all the folks on Wall Street.
O’REILLY: Oh Tavis knock it off with the black business, will you? Oh stop.
(CROSSTALK)
SMILEY: Bill, why — why Stan O’Neal as opposed to all the other guys who do this?
O’REILLY: This is one of the most egregious things that happened. We — we treat everybody the same here, Tavis.
SMILEY: But no you do not.
O’REILLY: It doesn’t matter whether they’re black or white.
SMILEY: Bill, the bottom line is what we’re talking about here is fairness. We’re talking about justice here. We’re talking about not protecting Wall Street. Not one — they’ve been arresting protesters, Bill, left and right, arresting protesters left and right. now the talk on Fox News is that it’s costing taxpayers money for police to do their job. Not one bankster, not one Bill, they can arrest hundreds of protesters but not one banker has gone to jail to pay for his crimes.
O’REILLY: Because they didn’t violate any laws, Tavis.
(CROSSTALK) OOOOOOOOOOOOOOOOOOOOOH!!!
WEST: Brother Bill, how do you know? How do you know?
O’REILLY: OK, hold it. Hold, all right, knock it off.
WEST: There’s been no investigation of all the predatory lending. (INAUDIBLE) Why would you say something like that, brother? You don’t even have the evidence. You don’t know.
Yeah.
In August, Smiley and West, who together host the radio program also called “Smiley & West,” embarked on a national “Poverty Tour,” a road trip “to highlight the plight of the poor people of all races, colors, and creeds so they will not be forgotten, ignored, or rendered invisible during this difficult and dangerous time of economic deprivation and political cowardice.”
On his PBS talk show this week, Smiley has been highlighting the issue of poverty in the United States, with guests including West, Vicki Escarra (CEO of Feed America), Health and Human Services Secretary Kathleen Sebelius and Columbia University economist Jeffrey Sachs.
Smiley will conclude his week-long focus on poverty Friday with our very own Sojourners CEO, the Rev. Jim Wallis.
To call it a “dust up” doesn’t quite capture the full throttle epic clash of personalities.
(Read more about what the Huffington Post called “nothing short of a cable news classic” HERE.)
Printed here below is my favorite exchange.
Frankly, the written word doesn’t do it justice, so you might consider grabbing a couple of friends for a dramatic reading:
The Poverty Thunderdome from cathleen falsani on Vimeo.
SMILEY: I’m still going to finish my point. You’re right to go after Stanley O’Neal. I know you didn’t mean to do this. I don’t want to believe you meant to do this, but Stanley O’Neal, there are four or five black CEOs in this country. You choose a guy at Merrill Lynch to make him the poster guy for all the folks on Wall Street.
O’REILLY: Oh Tavis knock it off with the black business, will you? Oh stop.
(CROSSTALK)
SMILEY: Bill, why — why Stan O’Neal as opposed to all the other guys who do this?
O’REILLY: This is one of the most egregious things that happened. We — we treat everybody the same here, Tavis.
SMILEY: But no you do not.
O’REILLY: It doesn’t matter whether they’re black or white.
SMILEY: Bill, the bottom line is what we’re talking about here is fairness. We’re talking about justice here. We’re talking about not protecting Wall Street. Not one — they’ve been arresting protesters, Bill, left and right, arresting protesters left and right. now the talk on Fox News is that it’s costing taxpayers money for police to do their job. Not one bankster, not one Bill, they can arrest hundreds of protesters but not one banker has gone to jail to pay for his crimes.
O’REILLY: Because they didn’t violate any laws, Tavis.
(CROSSTALK) OOOOOOOOOOOOOOOOOOOOOH!!!
WEST: Brother Bill, how do you know? How do you know?
O’REILLY: OK, hold it. Hold, all right, knock it off.
WEST: There’s been no investigation of all the predatory lending. (INAUDIBLE) Why would you say something like that, brother? You don’t even have the evidence. You don’t know.
Yeah.
In August, Smiley and West, who together host the radio program also called “Smiley & West,” embarked on a national “Poverty Tour,” a road trip “to highlight the plight of the poor people of all races, colors, and creeds so they will not be forgotten, ignored, or rendered invisible during this difficult and dangerous time of economic deprivation and political cowardice.”
On his PBS talk show this week, Smiley has been highlighting the issue of poverty in the United States, with guests including West, Vicki Escarra (CEO of Feed America), Health and Human Services Secretary Kathleen Sebelius and Columbia University economist Jeffrey Sachs.
Smiley will conclude his week-long focus on poverty Friday with our very own Sojourners CEO, the Rev. Jim Wallis.
Thursday, October 13, 2011
Cain's 9-9-9 tax plan is simple: Most will simply pay more
Cain's 9-9-9 tax plan is simple: Most will simply pay more
Cain's 9-9-9 tax plan is simple: Most will simply pay more
By John W. Schoen, Senior Producer
When it comes to Republican presidential candidate Herman Cain's proposed 9-9-9 tax plan, there’s one thing all sides agree on: it’s very simple.
If you're a corporation, own a small business or count yourself among the richest Americans, you'll simply love it. If not, you'd simply pay a lot more in taxes.
Everyone hates the current tax code. A Congressional supercommittee is attacking the mess as part of a broad proposal to balance the federal budget. President Barack Obama wants to pay for his jobs stimulus package by raising taxes on the wealthiest households. Corporations are agitating for a “tax holiday” to bring home over a $1 trillion in profits stashed overseas to avoid the IRS back home.
Now Cain, who has recently surged to the front of the pack of GOP presidential contenders, is drawing attention to a radical idea. Rather than slog through the political morass of overhauling the existing system, just scrap it entirely. No more deductions, exemptions, incentives and tax loss carry forwards
In its place, Cain wants the government to pay its bills with three sources of revenues held to single-digit rates: a 9 percent tax on all consumer purchases, a 9 percent “business” tax and a 9 percent income tax.
Cain claims the plan is already generating popular support among voters, which will make it much easier to implement in the political quagmire that has numerous tax reform proposals.
“I can be walking through the airport going through security and a TSA agent will say, ‘Hello Mr. Cain: 9-9-9,” Cain recently told CNBC. “If the public understands it, they will support it and demand it. That is going to be the difference. It is not a complicated piece of legislation.”
But the odds are much higher that, when the public understands it, the vast majority of taxpayers will be horrified to realize they face a huge tax increase. That assessment comes from Bruce Bartlett, a senior official in the Reagan and George H.W. Bush administrations, who described the plan as a “distributional monstrosity.”
“The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase” Bartlett recently wrote in the New York Times. “Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived.
The reason the plan would hit poor people much harder that the wealthy is also simple. The current tax code provides a series of deductions, credits and exemptions that ease the tax burden on all households, but they have a greater positive impact those at the bottom of the income ladder. As a result, some 38 percent of U.S. households pay little or no taxes. They would now suddenly be hit with what amounts to a tax bill that represents 27 percent of their income, according to USC law professor Edward Kleinbard, who published a paper this week calling the 9-9-9 plan “a terrific example of fiscal hocus pocus.”
“It is presented as a low-tax panacea, but it actually would raise the tax bills of many Americans very substantially,” he said.
Though he's gained political momentum by hammering away at the plan's simplicity, Cain has had a harder time explaining how the plan would benefit the average household. In a recent appearance on MSNBC’s The Daily Rundown with Chuck Todd, Cain explained that a family with annual income of $50,000 would come out ahead under the 9-9-9 scheme. But as my NBC News colleague Domenico Montanaro found upon closer examination, the numbers Cain offered just don't add up.
The plan would certainly benefit some households. Owners of small businesses would be among the biggest winners, said Kleinbard, because they could pay themselves with dividends (which would no longer be taxed) instead of wages. That would effectively reduce their tax rate to about 18 percent.
Kleinbard also found that the plan would have some significant unintended consequences, including what amounts to a phantom tax on existing savings. For example, if you bought a new car with money you’d stashed in a savings account, accumulated from earnings, investment gains or interest or dividends that you’ve already paid taxes on, you’d now have to pay yet another 9 percent on the new car.
That phantom tax, which would apply to any purchase made with existing wealth, “may come as a big surprise to Mr. Cain and his followers.”
Cain and advisors who have reviewed the plan insist that it would collect enough money to replace the current tax code and not add to the federal budget deficit. But until Cain presents a more detailed proposal, those estimates are all but impossible to verify.
That uncertainty has drawn fire from the political right. Many support the idea of a flatter, more regressive tax than the current system. But they worry that Cain‘s plan could make it easier for the government to raise revenues.
“The challenge is creating a (business tax) and a sales tax and keeping the income tax having three taxes all of which can grow,” Grover Norquist, head of Americans for Tax Reform, told MSNBC. “It’s like having three needles in your arm taking blood out. It’s much more dangerous than just one.”
Critics of Cain’s plan argue that he’s hoping that widespread dissatisfaction with the current system will prompt voters to overlook the plan’s numerous pitfalls.
NYU law professor Daniel Shaviro thinks part of the popular appeal of Cain’s plan is that it appears to hold tax rates to single digits – even though the cumulative tax paid by most households would amount to 27 percent. Borrowing from Cain, Shaviro offers and even simpler solution to make existing tax code much more palatable
“Replace the 35 percent annual income tax with a 3-3-3-3-3-3-3-3-3-3-3-3 monthly tax on annual income,” he recently wrote on his blog. “After all, who's counting if the 12 monthly taxes actually add up to 36 percent annually?”
Cain's 9-9-9 tax plan is simple: Most will simply pay more
By John W. Schoen, Senior Producer
When it comes to Republican presidential candidate Herman Cain's proposed 9-9-9 tax plan, there’s one thing all sides agree on: it’s very simple.
If you're a corporation, own a small business or count yourself among the richest Americans, you'll simply love it. If not, you'd simply pay a lot more in taxes.
Everyone hates the current tax code. A Congressional supercommittee is attacking the mess as part of a broad proposal to balance the federal budget. President Barack Obama wants to pay for his jobs stimulus package by raising taxes on the wealthiest households. Corporations are agitating for a “tax holiday” to bring home over a $1 trillion in profits stashed overseas to avoid the IRS back home.
Now Cain, who has recently surged to the front of the pack of GOP presidential contenders, is drawing attention to a radical idea. Rather than slog through the political morass of overhauling the existing system, just scrap it entirely. No more deductions, exemptions, incentives and tax loss carry forwards
In its place, Cain wants the government to pay its bills with three sources of revenues held to single-digit rates: a 9 percent tax on all consumer purchases, a 9 percent “business” tax and a 9 percent income tax.
Cain claims the plan is already generating popular support among voters, which will make it much easier to implement in the political quagmire that has numerous tax reform proposals.
“I can be walking through the airport going through security and a TSA agent will say, ‘Hello Mr. Cain: 9-9-9,” Cain recently told CNBC. “If the public understands it, they will support it and demand it. That is going to be the difference. It is not a complicated piece of legislation.”
But the odds are much higher that, when the public understands it, the vast majority of taxpayers will be horrified to realize they face a huge tax increase. That assessment comes from Bruce Bartlett, a senior official in the Reagan and George H.W. Bush administrations, who described the plan as a “distributional monstrosity.”
“The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase” Bartlett recently wrote in the New York Times. “Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived.
The reason the plan would hit poor people much harder that the wealthy is also simple. The current tax code provides a series of deductions, credits and exemptions that ease the tax burden on all households, but they have a greater positive impact those at the bottom of the income ladder. As a result, some 38 percent of U.S. households pay little or no taxes. They would now suddenly be hit with what amounts to a tax bill that represents 27 percent of their income, according to USC law professor Edward Kleinbard, who published a paper this week calling the 9-9-9 plan “a terrific example of fiscal hocus pocus.”
“It is presented as a low-tax panacea, but it actually would raise the tax bills of many Americans very substantially,” he said.
Though he's gained political momentum by hammering away at the plan's simplicity, Cain has had a harder time explaining how the plan would benefit the average household. In a recent appearance on MSNBC’s The Daily Rundown with Chuck Todd, Cain explained that a family with annual income of $50,000 would come out ahead under the 9-9-9 scheme. But as my NBC News colleague Domenico Montanaro found upon closer examination, the numbers Cain offered just don't add up.
The plan would certainly benefit some households. Owners of small businesses would be among the biggest winners, said Kleinbard, because they could pay themselves with dividends (which would no longer be taxed) instead of wages. That would effectively reduce their tax rate to about 18 percent.
Kleinbard also found that the plan would have some significant unintended consequences, including what amounts to a phantom tax on existing savings. For example, if you bought a new car with money you’d stashed in a savings account, accumulated from earnings, investment gains or interest or dividends that you’ve already paid taxes on, you’d now have to pay yet another 9 percent on the new car.
That phantom tax, which would apply to any purchase made with existing wealth, “may come as a big surprise to Mr. Cain and his followers.”
Cain and advisors who have reviewed the plan insist that it would collect enough money to replace the current tax code and not add to the federal budget deficit. But until Cain presents a more detailed proposal, those estimates are all but impossible to verify.
That uncertainty has drawn fire from the political right. Many support the idea of a flatter, more regressive tax than the current system. But they worry that Cain‘s plan could make it easier for the government to raise revenues.
“The challenge is creating a (business tax) and a sales tax and keeping the income tax having three taxes all of which can grow,” Grover Norquist, head of Americans for Tax Reform, told MSNBC. “It’s like having three needles in your arm taking blood out. It’s much more dangerous than just one.”
Critics of Cain’s plan argue that he’s hoping that widespread dissatisfaction with the current system will prompt voters to overlook the plan’s numerous pitfalls.
NYU law professor Daniel Shaviro thinks part of the popular appeal of Cain’s plan is that it appears to hold tax rates to single digits – even though the cumulative tax paid by most households would amount to 27 percent. Borrowing from Cain, Shaviro offers and even simpler solution to make existing tax code much more palatable
“Replace the 35 percent annual income tax with a 3-3-3-3-3-3-3-3-3-3-3-3 monthly tax on annual income,” he recently wrote on his blog. “After all, who's counting if the 12 monthly taxes actually add up to 36 percent annually?”
Monday, October 10, 2011
OccupyWallStreet:
#OccupyWallStreet: Hand Gestures, Health Care and the Birth of a New Paradigm
by Tim King 10-07-2011 05:40 pm
NEW YORK, N.Y. – Brendan, with his shaved head, tattoos and tight black t-shirt, looks like he should be a bouncer at a night club.
Instead, he is standing at the entrance of the outdoor media center here in “Liberty Park.”
“And demand some jobs!!” the crowd chants in response as a large group of demonstrators migrates toward the cameras.
Sitting on the ground by a granite bench, a smaller group of protesters doesn’t even look up and continues its discussion. They are busy debating the best way to coordinate the flow of information through all of the various working groups, back to the General Assembly (the democratic decision making body) and then out to other “Occupy” groups across the world.
A drum circle formed at one end of the park and a blue grass trio plays to a small crowd at the other end. Every once in a while you’ll hear someone on an acoustic guitar singing a 60’s protest song. A small team hurriedly works “the kitchen” where all the food supplies are gathered. They rush to put out all of the donations they are receiving and answer questions about what food is vegan.
It can be hard to walk around in the afternoon when the crowd grows and tourists stop to take pictures and video. Throughout the day here at the #OccupyWallStreet mass demonstrations in New York’s financial district, you can find small and often somber groups meeting.
They have agendas, a facilitator, a time keeper, and someone to keep track of the “stack” — the list of people waiting to make a point or ask a question.
And they also have a system of hand gestures — a sort of gonzo sign-language adaptation of Roberts Rules of Order — designed to keep the discussion and decision-making process both democratic and efficient.
When someone agrees with a point the speaker is making, the crowd raises two hands in agreement. When the crowd disagrees, hands quickly go up, making a downward pointing motion. To call a “point of process” crowd members shape their hands into a triangle to stop discussion. Speakers who wander off topic are quickly redirected and reminded of the point being discussed in the agenda.
These working groups bring their recommendations to the #OccupyWallStreet General Assembly, which takes place once a day. A vote is taken to determine consensus before a recommendation is passed along to the G.A.
Anyone participating in the General Assembly can block a proposal by forming an X with their arms. Participants make their case and then a revised proposal is put forth. The revised proposal can then be passed with a 90/10 consensus.
Bre, a college student studying economics who has taken the semester off to participate in the protests, said that what is seen in the park is only a small example of what is occurring more broadly throughout the #OccupyWallStreet movement. When she talks about what is happening in that park and now across the world, you can tell she has started to develop here own succinct means of description but still doesn’t have practiced talking points.
“The intellectual capacity of this movement is enormous,” Bre said. “We are having city planners come down, economists and web experts all helping to build the infrastructure for a larger movement.”
Another participant said that “protest” is the wrong word for what is happening in “Liberty Park.”
“It’s really more of a ‘think tank,’” he said.
Drew, was hard to get a hold of. Our conversations were squeezed in between his busy schedule of meetings. He is in his mid-20’s and had been working freelance web design when he decided to devote himself full time to planning and executing the “Occupation.” Early planning meetings drew a good crowd of people but they never expected the demonstrations in Lower Manhattan to last more than a few days.
He uses the term “suicidal” to talk about the systems — political and economic — currently at work in the United States. “It simply doesn’t work to have an economy based on infinite growth when you life in a finite world,” Drew says. Changing the “suicidal” status quo, he says, requires a radically different way of living in and viewing the world.
The Wall Street protests in New York, while something of an ideological Eden where these new ways of living and thinking are being formed, are not without their own set of societal ills. There are a few trouble makers who don’t embrace the peaceable ethos of the majority, and a few reports of theft. (Some equipment has gone missing, for example.)
“Now, we are having to figure out the basic processes of how decisions are made,” Drew says. “We’re trying to figure out our own democracy.”
But, he says, demonstrators are trying to create systems of ersatz governance that are both realistic and a challenge to the current “paradigm” of broader U.S. culture and society.
Despite a few hiccups, by and large Drew believes the growing community of protesters — designing and building their own culture, really — is functioning well.
“This park is a microcosm of what we want to create,” Drew says, between bites of pizza — known as “occu-pies” at the demonstrations.) “Everybody has health care, enough to eat and the people own the media.”
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