One of the biggest tax loopholes that helps keep hedge fund managers in the top 1 percent would be closed by new legislation introduced this week by Rep. Sander Levin (D-Mich.).
Currently, people who manage other people’s money—like 1 percenter Mitt Romney did at Bain Capital—only pay 15 percent tax on the income they receive as compensation, compared with the up-to-35-percent many Americans pay on their income. Says Levin:
There is absolutely no reason why income earned for managing other people’s money shouldn’t be taxed in the same way as income earned teaching or working in a factory. This loophole for years has unfairly enabled some of the highest-paid individuals in the country to sharply reduce their tax bills and it is time to close it once and for all.
The technical term for those earnings is carried interest. In exchange for providing the service of managing their investors’ assets, fund managers often take a portion of a fund’s profits, or a carried interest, usually equal to 20 percent of such profits. When a significant portion of funds profits are long-term capital gains, the carried interest is taxed at the 15 percent capital gains rates.
Levin’s bill—The Carried Interest Fairness Act—would force the 1 percenters to pay taxes on that income at the same rate we all pay on our income.
Romney’s ability to pay a lower percentage than many taxpayers who aren’t wealthy will only feed the concerns about widening income inequality in the United States. But this isn’t a case of the rich playing by a different set of rules than everyone else. It’s a case of the rules benefiting them far more than most.
As part of health care reform, the Dept. of Justice and the Dept. of Health and Human Services have taken serious action to combat Medicare fraud—and it’s working. From the Huffington Post:
Federal authorities say they recovered $4.1 billion in health care fraud judgments last year, a record high which officials on Monday credited to new tools for cracking down on deceitful Medicare claims.
The recovered funds are up roughly 50 percent from 2009.
“Fighting fraud is one of our top priorities and we have recovered an unprecedented number of taxpayer dollars,” Sebelius said in a statement. “Our efforts strengthen the integrity of our health care programs, and meet the president’s call for a return to American values that ensure everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”
Officials credited the spike in recovered funds in part to strike force teams set up in fraud hot spots around the country, including Miami, Detroit and Los Angeles.
The teams charged 323 defendants, who collectively billed the Medicare program more than $1 billion last year. That includes a massive bust in February 2011, in which more than 100 doctors, nurses and physical therapists were charged with fraud in nine states. Stopping Medicare’s budget from hemorrhaging that money will be key to paying for President Barack Obama’s health care overhaul.
By focusing on eliminating Medicare fraud, the Justice Dept, and the DHHS have recovered $4.1 million, up 50% from 2009. It’s a success of the Affordable Care Act we can already see. That’s good news for Medicare, for the Obama administration, and most of all, good news for U.S. taxpayers.
Working America delivered a thousand postcards to Pennsylvania Gov. Tom Corbett asking him to enact a fair budget. Learn more.
For some of us, this week brought some post-Super Bowl malaise. But we were snapped back to reality by the new fronts opened up in the coordinated, relentless, nationwide War on Workers.
In Arizona, Governor Jan Brewer and the runaway legislature went medieval on public workers, with four bills that go much farther than Scott Walker’s union busting measure in Wisconsin by banning public sector collective bargaining outright. Coincidence? Absolutely not. According to a report by John Nichols, Walker flew to Arizona last year to urge fellow ALEC-lovers to follow his lead. Even more reason to shut down the ALEC corporations on February 29.
Speaking of Walker, the Wisconsin governor has taken his act on the road, with speaking events and fundraisers in Naples, Florida and Washington, DC. Not only is he getting protested at every stop, but all this money-grubbing and glory-hogging is taking him away from his supposed “real job” of putting Wisconsinites back to work. But even as he ignores his state’s problems, he’s still getting help from the powers that be – a Koch-backed group just dropped in $700,000 of pro-Walker ads.
But the biggest news of the week came yesterday: after years of wrangling, the five biggest banks and 49 state Attorneys General came to an agreement on a $26 billion housing settlement. Sound like a lot? Well, not when you compare it to $700 billion in negative equity, and not when you consider the $2,000 pittance checks that will be sent to Americans who have lost their homes, or that this settlement only helps 300,000 homeowners refinance. Experts including our Executive Director Karen Nussbaum stressed that this settlement should not be the end – “this is like pocket change” – but a down payment on future assistance and future investigations of the abuses that wrecked the economy.
Meanwhile, Susan cheered the bipartisan opposition to voter ID in Maine, Mike Hall covered a bill that would end Cayman Island-style tax shelters, David Fernandez reflected on Working America and BCTGM’s work with Texas truck drivers, Seth clocked out with Stephen Colbert, and Doug explained why “ask Ellen Degeneres for checks” is not a long-term education funding policy.
Yes, this week brought challenges, but we all survived better than Rick Scott’s Facebook page. Have a great weekend, Working America!
The news from today’s job report is strongly encouraging. In January, our economy added a net 243,000 new jobs, and the unemployment rate fell to 8.3%. And as economist Jared Bernstein points out, it’s not just the big numbers that matter, it’s the trend—the economy is going in the right direction.
Let’s not forget, though, that while an upward climb is welcome, there’s still more climbing to do. The recession of the past few years put in a huge hole—by late 2008, the economy was dumping hundreds of thousands of jobs every month, and it took major, determined effort to get the economy to start adding jobs again. We’re still trying to recover from that recession and we haven’t gotten back to pre-recession levels yet. And the effort to recover is being actively undermined by job cuts at the state and local level.
One bright spot is that things are looking up for veterans. Veterans returning from Iraq and Afghanistan had an unacceptably high unemployment rate of 13%. That rate has fallen to 9% in the latest report—still high, but a huge improvement for people who have served our country overseas. The only portion of President Obama’s American Jobs Act that Congress was able to pass was a set of incentives to help businesses hire veterans. Imagine if two other key portions of the AJA—a bill to help states keep teachers, firefighters and police on the payroll, and a bill to invest in infrastructure and construction—had passed instead of being blocked by Republicans in Congress.
The economic recovery is still fragile enough, and unemployment still high enough, that we need to keep supporting those out of work by extending unemployment insurance. Pulling away that lifeline would be a real hit to families and to the economy as a whole. We should also renew the payroll tax holiday that helps put extra money in the pockets of 160 million working people.
The Affordable Care Act has saved nearly 3.6 million people enrolled in Medicare $2.1 billion on their prescription drugs in 2011, finds a new report by the U.S. Department of Health and Human Services (HHS). HHS Secretary Kathleen Sebelius says the health care reform law signed by President Obama in 2010:
is already saving money for millions of Americans with Medicare. As we move forward, we will close the donut hole completely and save even more money for everyone with Medicare.
The Affordable Care Act—which Republican lawmakers are fighting to repeal—provides a 50 percent discount on brand-name prescription drugs and, beginning this year, a 14 percent discount on generics. Last year, it provided a 7 percent discount on covered generic medications for people who hit the prescription drug coverage gap known as the donut hole, with more than 2.8 million beneficiaries receiving $32.1 million in savings on generics.
Overall, the 3.6 million Americans who hit the donut hole saved an average of $604 on the cost of their prescription drugs. The Affordable Care Act closes the donut hole completely by 2020.
Click here for a state-by-state look at donut hole savings figures for today’s donut and herefor a fact sheet.
Last night’s State of the Union address revolved around themes of fairness and rebuilding America’s middle class. As in any speech of this size, there was a lot to absorb. What we found most interesting was President Barack Obama’s emphasis on not repeating the mistakes that led us to the economic catastrophe of the past few years.
It’s encouraging that President Obama paid special attention to the issue of housing and financial-sector fraud. Tens of thousands of Working America members and union members called for a real investigation into banks and their role in causing the housing crisis, and the President announced the creation of a new task force to investigate fraud in his speech last night.
We will have to watch this task force closely. We can’t have an investigation just for show, one that doesn’t take a comprehensive look at wrongdoing and impose real penalties. What powers will the investigators have, and who are they? The co-chair of the panel is Eric Schneiderman, the New York state Attorney General who has led opposition to a bad deal, which is encouraging. But David Dayen, a close observer, is skeptical of the panel and thinks it may be a way to ease us into an insufficient settlement. As we’ve said before, we can’t accept a deal that lets big banks break the law and abuse consumers without being held responsible.
The State of the Union message showed that, in many ways, President Obama is attuned to the economic crisis that’s still ongoing in our country. His insistence on extending the payroll tax cut for working families is important, as is his attention to investing in infrastructure jobs and schools, which creates jobs now and builds economic strength for the future. His proposals on job training and support for companies that “insource” good jobs to America’s communities are encouraging as well.
Our members understand that politics is about priorities. With limited resources, we have to choose whether to keep tax breaks for the very wealthiest and for corporations that outsource jobs, or whether to use those revenues to support programs that seniors, students and families depend on. President Obama showed that, like most Americans, he’d choose the latter. Now it’s up to Congress to decide where they stand.
Republican presidential campaign pyrotechnics can’t hide the record of a party that has turned its back on ordinary Americans. It’s worth remembering how, a year ago, the Republican-majority House of Representatives tried to repeal the 2010 Affordable Care Act.
What would have happened if they had succeeded?
2.5 million young adults would have no health insurance.
2.65 million seniors would have paid $1.5 billion more for prescription drugs.
24.2 million seniors would pay for preventative services they are getting for free.
And that’s just the beginning. A short report from the White House highlights how the Affordable Care Act is making insurance more available and affordable for millions of Americans.
It’s good reading at a time when the Affordable Care Act repeal is still a GOP battle cry, with all the presidential hopefuls and most Republicans in Congress vowing to overthrow the law—and trying to scare voters in the process.
Check out the Center for American Progress’ animated video (above) explaining the benefits of reform. The video was developed by MIT economist Jon Gruber, an adviser on both the Affordable Care Act and the Massachusetts health care reform program.
“Have we become so dysfunctional that even when we agree on things we can’t do it?” President Barack Obama asked today. It’s a good question.
We’re still not really close to an agreement on an extension of unemployment insurance and the payroll tax cut that will expire in ten days. The easy answer is for the House to pass the short-term extension passed by an overwhelming bipartisan margin in the Senate—but the Tea Party radicals who keep Speaker John Boehner on a short leash are preventing that. The President is pushing hard to try and break the deadlock this week.
The consequences of failing to pass an extension? Millions of people cut off from the lifeline of unemployment insurance, and 160 million people facing a payroll tax hike. “”So many of these debates get reduced to which party is winning and which party is losing,” Obama said in a statement today, “but we should remind ourselves this is about the American people.”
Obama said that more than 30,000 people have written in to explain what the end of the payroll tax cut and unemployment benefits would means to them. For working-class and middle-class families, those dollars represent heating oil, food, gas for your car to get you to and from work, or school supplies. For the economy as a whole, it’s fewer dollars that van flow to local businesses.
“This is exactly why people get so frustrated with Washington,” Obama said. He’s right. It’s time for Boehner to get it together and pass the Senate’s bipartisan compromise, and then get to work on an extension for the rest of 2012.
Rick Perry is still Governor of Texas. Rick Perry is still running for President of the United States. He is still making money as the author of the bestselling book Fed Up! Our Fight to Save America From Washington, which decries the role of government in our lives.
And yet, Rick Perry is retired. According to the Texas Tribune, Governor Perry officially retired in January so he could start collecting pension benefits.
Perry makes a $150,000 annual gross salary as Texas governor. Now, thanks to his early retirement, Perry, 61, gets a monthly retirement annuity of $7,698 before taxes, or $6,588 net. That raises his gross annual salary to more than $240,000.
Not only is he getting a bump in his take-home pay now, but he can expect another one when he leaves the governor’s office. Perry is in two public pension systems: the “employee class” and the “elected class.” He only retired from the former.
While public workers see their pensions slashed across the country, small government champion Rick Perry gets to retire not once, but twice with pension benefits courtesy of Texas taxpayers.
Most people who spent their careers railing against government spending would think twice before simultaneously drawing salary and pension from the public dole.
But this is Rick Perry, a politician who has always exceled in manipulating public institutions for personal gain.
As Governor, Perry has made little effort to hide the way he rewards his wealthy campaign donors with government contracts. Matt Taibbi, the formerly Moscow-based journalist who did a feature about Perry for Rolling Stone in October, even compared Perry’s Texas to a Soviet protectorate. With a confusing track record that swings back and forth between open hostility with the federal government (suggesting that Texas secede from the United States) and what some would call government intrusion (mandating HPV vaccines), all of Perry’s actions can be explained by who was giving him money at the time, and what business they were in. Perry’s chief of staff, for instance, got a lucrative lobbying job for the pharmaceutical giant Merck right before the HPV vaccination order provided Merck a windfall of public money.
Is your stomach flipping? It should be. This is exactly the kind of cronyism, nepotism, and back-door dealing that makes the other 99 percent of us sick.
But now that Perry is so openly cashing in on Texans’ tax dollars, why not play the game with him?
Here’s how it will go, Rick. You’re bringing home an annual $240,000 worth of hard-earned taxpayer cash, so it’s time to do us a few favors:
Raise the Texas minimum wage –The so-called economic “Texas miracle” was built on extremely low-wage jobs. Let’s raise the state minimum wage above $7.25 per hour and put some real spending power in the pockets of working families who need it most.
Rebuild crumbling infrastructure – In his piece, Taibbi details how Perry granted a huge contract to a big donor for a nuclear waste depository. Now that it’s our dollars in Perry’s pockets, it’s time for him to use some lucrative bridge and road repair funds to put thousands of unemployed Texas construction workers and engineers back to work.
The Obama Administration has proposed some new regulations to protect home care workers. From the New York Times:
Labor unions and advocates for low-wage workers have pushed for the changes, contending that the 37-year-old exemption improperly swept these workers, who care for many elderly and disabled Americans, into the same “companion” category as baby sitters. The administration’s move calls for home care aides to be protected under the Fair Labor Standards Act, the nation’s main wage and hour law.
These workers, according to industry figures, generally earn $8.50 to $12 an hour, compared with the federal minimum wage of $7.25 an hour. The White House said 92 percent of these workers were women, nearly 30 percent were African-American and 12 percent Hispanic. Nearly 40 percent rely on public benefits like Medicaid and food stamps.
While industry experts say an overwhelming majority are paid at least the minimum wage, many do not receive a time-and-a-half premium when they work more than 40 hours a week. Twenty-two states do not include home health care workers under their wage and hour laws.
Home care workers assist elderly people with all aspects of their lives, including bathing, exercise, and remembering to take medications. They may also prepare meals, and do housework. They may be dealing with clients in varying stages of dementia. There’s a great deal of skill required to do this kind of work.
These are also workers who don’t get sick days, any sort of benefits, and if their client dies – well, that’s just too bad. No more paychecks for them.
Predictably, the opposition is gearing up:
“The president’s goal is commendable, but the likely result of this new rule is reduced hours for home care workers and higher costs for taxpayers,” said John Kline, a Minnesota Republican who is chairman of the House Education and the Work Force Committee, and Tim Walberg, a Minnesota Republican who heads the panel’s subcommittee on work force protections. “Moreover, our nation’s elderly may pay the greatest price in the form of more costly services and fewer opportunities to obtain the care they need in the comfort of their own homes.”
In other words: Caregivers are good enough to take care of the elderly, but what they do isn’t real work, therefore they don’t deserve the sort of protections that other workers are entitled to.