House Republican leaders passed Rep. Paul Ryan’s (R-Wis.) budget this week by a vote of 219 to 205, with no Democrats voting in favor. The Ryan budget is chock full of so many terrible ideas that it’s hard to single out the biggest stinkers, but here goes.
1. Raising the Medicare Eligibility Age from 65 to 67. Not only would raising the eligibility age shift costs to 65- and 66-year-olds and to seniors who still qualify for Medicare benefits, but it would actually *increase* overall costs throughout the health care system. Worst. Idea. Ever.
2. Giving Corporations More Tax Breaks for Outsourcing Jobs. The Ryan budget calls for a “territorial tax system,” which would eliminate U.S. taxes on the offshore profits of companies that send jobs overseas. Second worst idea ever.
3. Costing 4 Million Jobs. And that’s only in two years! According to the Economic Policy Institute, the Ryan budget would cost 1.1 million jobs in 2015 and 3 million jobs in 2016. Millions more jobs would be lost in subsequent years.
4. Giving Millionaires a $200,000 Tax Cut. The Ryan budget would cut the top marginal income tax rate from 39.6% to 25%, giving people who make more than $1 million per year tax cuts averaging between $200,000 and $330,000.
5. Turning Medicare into a Voucher Program. The Ryan budget once again proposes to end the Medicare guarantee, which would raise premiums for seniors who choose traditional Medicare and leave traditional Medicare to “wither on the vine” as private plans capture the healthiest seniors.
6. Gutting Education. The Ryan budget would slash funding for kindergarten to 12th grade education by$89 billion and higher education by $260 billion over 10 years, making college less affordable and increasingstudent indebtedness by $47 billion.
7. Gutting Investment in Transportation. The Ryan budget would slash transportation investments by$52 billion in 2015, costing jobs and making America less competitive.
8. Gutting Medicaid. The Ryan budget would cut Medicaid funding by $732 billion over 10 years by turning Medicaid into a block grant program. It would further cut Medicaid funding by repealing the Affordable Care Act, for a total cut to Medicaid of some $1.5 trillion.
9. Slashing Tax Rates for Profitable Corporations. The Ryan budget would slash the corporate tax rate from 35% to 25%, squandering $1.2 trillion to $1.5 trillion in tax revenue over 10 years.
Reposted from AFL-CIO NOW
Tags: Corporate Accountability, Medicaid, Medicare, outsourcing, Paul Ryan, taxes
House Republicans are proposing another enormous tax break for corporations to outsource jobs. The latest Republican outsourcing plan is very similar to the one promoted by former Gov. Mitt Romney in the 2012 presidential campaign, which President Barack Obama said would cost 800,000 jobs.
The outsourcing plan was included in a “tax reform” proposal unveiled recently by the chairman of the House Committee on Ways and Means, Rep. Dave Camp (R-Mich.).
Poll after poll shows America’s working families strongly oppose tax breaks for outsourcing that already exist under current law. This is hardly surprising, since between 1999 and 2010, U.S. corporations eliminated 1 million jobs in the United States while creating 3 million jobs overseas.
Here’s how the House Republican plan would promote even more outsourcing: it would allow outsourcers to pay almost no U.S. taxes on their overseas profits when they send jobs overseas. To be precise, outsourcers would be taxed at a rate of 1.25% on most offshore profits. Obviously, if outsourcers can pay taxes at a lower rate when they send jobs overseas, they’re going to have more of an incentive to outsource.
Here’s how Obama described this terrible idea during the 2012 campaign:
“There’s a new study out by nonpartisan economists that says Gov. Romney’s economic plan would in fact create 800,000 jobs. There’s only one problem: The jobs wouldn’t be in America. They’d be in other countries. By eliminating taxes on corporations’ foreign income, Gov. Romney’s plan would actually encourage companies to shift more of their operations to foreign tax havens, creating 800,000 jobs in those other countries.”
The technical name for this idea is a “territorial tax system.” Why is it called “territorial”? Because the United States would only tax American corporations on their profits within the “territory” of the United States, not on their profits overseas.
A “territorial tax system” is a terrible idea for lots of reasons. As Obama explained during the 2012 campaign, it would encourage job creation abroad instead of at home, lowering U.S. wages in the process and opening up opportunities for multinational corporations to avoid paying their taxes by playing accounting games to pretend their domestic profits are earned in foreign tax havens.
Camp claims several features of his plan would keep multinational corporations from avoiding their taxes. However, as Citizens for Tax Justice (CTJ) explains, “[I]t is impossible to believe they would work since his overall proposal would dramatically increase rewards for any American corporation that can make its U.S. profits appear to be earned in offshore tax havens.”
Unfortunately, the Republican outsourcing plan has not gotten all the bad press it deserves. Why not? Partly because it has been competing for attention with all the other problems with the House Republican “tax reform” proposal. For example, the proposal would increase the deficit over the long term.
In February 2014, the AFL-CIO took a strong position against a “territorial tax system,” arguing that it would increase the tax incentive for shifting jobs and profits overseas. Instead, the AFL-CIO called for the elimination of all—not just some—of the existing tax incentives for outsourcing. What does this mean in practical terms? It means taxing offshore profits no differently than domestic profits—that is, taxing both kinds of profits at the same rate and at the same time. Legislation that eliminates all tax incentives for outsourcing would generate $583 billion over 10 years, and this is the benchmark by which any international tax reform proposal should be measured.
Although prospects for the House Republican “tax reform” proposal are uncertain, the idea of a “territorial tax system” has wide support among Republicans in Congress, was recently endorsed by Sen. Marco Rubio (R-Fla.) and has attracted interest from some Democrats as well. It would be very dangerous to allow this terrible idea to pick up steam.
Reposted from AFL-CIO NOW
Tags: aflcio, Dave Camp, Jobs, Marco Rubio, Mitt Romney, outsourcing, taxes
Sen. Kelly Ayotte (R-N.H.) has a plan. She says that to pay for extending unemployment insurance (UI), we should cut off the Child Tax Credit for 2 million families (5 million children), most of them Latino.
Let’s repeat that because it sounds kind of important.
To help the families of the 1.3 million workers who have been out of work for six months or more and lost their UI payments just before Christmas, Ayotte’s solution is to take money away from poor Latino children whose families are taxpayers.
That may be a valid solution to the extremists who run the Republican Party these days, but it comes across as a vindictive and mean-spirited move to most people, including a coalition of organizations that condemned the proposal in a Monday press conference.
“Senator Kelly Ayotte says she understands families, but her proposal to deny a child tax credit to a taxpaying immigrant family is an attack on innocent children. Pitting children against the long-term unemployed is nothing more than an ugly attempt to derail legislation to extend emergency unemployment for struggling families,” said Sister Simone Campbell, executive director of NETWORK, a Catholic social justice group that is part of the coalition. “Her proposed amendment should be soundly defeated as antithetical to the Gospel call to care for children and those at the margins of society, and to long-held values in our nation.”
The AFL-CIO is also part of the coalition and Executive Vice President Tefere Gebre also condemned Ayotte’s plan: “This cynical proposal doesn’t reflect the America I have come to know and love as an immigrant. My America doesn’t need to pit the jobless against the children of immigrants. We are better than that.”
The proposal targets not only aspiring citizens, but any individual not eligible for a Social Security Number, something that isn’t limited to undocumented immigrants. Ayotte’s proposal would deny Child Tax Credit eligibility to families using the alternate option for those who can’t obtain a Social Security Number, the Individual Tax Identification Number, and who are legally eligible for the Child Tax Credit. This would deny the credit to approximately 5 million children in low-wage families, making it harder for those families to feed and provide housing for these children.
A recent poll on the topic found the obvious that voters oppose cuts to the Child Tax Credit, with 68% of those surveyed in opposition.
Photo by Gage Skidmore on Flickr
Reposted from AFL-CIO NOW
Tags: immigrants, Kelly Ayotte, Latino, New Hampshire, taxes, Tefere Gebre, unemployment, unemployment insurance
The wealthiest 1% contributes too little in taxes. Although tax rates have risen on dividends and the top rate on ordinary income increased this year, this point still rings true.
Watch the video to see what Bill Gates and Warren Buffett say in 2005 about their tax rates.
Reposted from AFL-CIO NOW
Tags: Bill Gates, Corporate Accountability, taxes, Warren Buffett
In addition to short-changing employees and customers, the cheapness of the fast-food industry, which nationally pays its core workers an average of $8.69, leaves taxpayers paying nearly $7 billion annually. That’s the major conclusion of a new report, Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry, from researchers at the University of California, Berkeley. The majority of employees at fast-food restaurants are paid so poorly that they are forced to enroll in public assistance programs, despite the industry making $200 billion a year.
“The taxpayer costs we discovered were staggering,” says Ken Jacobs, chair of UC Berkeley’s Center for Labor Research and Education and co-author of the report. “People who work in fast-food jobs are paid so little that having to rely on public assistance is the rule, rather than the exception, even for those working 40 hours or more a week.”
Only 28% of core fast-food workers work 40 or more hours per week, compared to 75% of the overall workforce. Unlike the common stereotype of fast-food workers, the report shows more than two-thirds of the industry’s core workers are older than 20, 68% are the primary wage earners in their families and more than 25% of them are parents.
“This report shows in stark numbers the larger economic consequences that result from low wages and how it affects all of us, says Sen. Tom Harkin (D-Iowa), chair of the Senate Committee on Health, Education, Labor and Pensions. “In a nation as wealthy as the United States, no one who works hard for a living should live in poverty. Underpaying workers affects us all. These highly profitable companies paying poverty wages should raise wages and listen to their workers’ demands to form a union. We should also increase the minimum wage, as I have proposed. These steps are not only the right thing to do for low-wage workers, but also the smart thing to do for the economy and for taxpayers.”
Fast-food workers receive money from numerous federal programs—receiving benefits at twice the overall rate of the workforce—and the $7 billion total doesn’t include state and local programs. The top federal expenditures on fast-food workers are:
- Medicaid and the Children’s Health Insurance Program, $3.9 billion per year;
- The Supplemental Nutrition Assistance Program, or food stamps, $1.04 billion per year; and
- Temporary Assistance for Needy Families, $82 million per year.
“It just doesn’t make sense that we prepare and cook food for people every day, but instead of being paid enough to feed our own families, many of us can’t afford three meals every day,” says Devonte Yates, a McDonald’s worker in Milwaukee who earns $7.25 an hour. “I don’t want to be on food stamps. I’d rather stand on my own two feet. McDonald’s should raise wages so we can afford decent food for ourselves.”
The report was funded by Fast Food Forward, a New York City-based coalition of workers and labor, religious and community groups. Read the full report from UC Berkeley.
A separate report from the National Employment Law Project looks more closely at the top 10 biggest fast-food companies and finds that they alone are responsible for 60% of the nearly $7 billion in public costs associated with their low wages, despite having more than $7.4 billion in profits last year. McDonald’s workers alone account for $1.2 billion of public assistance spending each year.
Reposted from AFL-CIO NOW
Tags: aflcio, fast food, Jobs, minimum wage, Rights At Work, taxes
City Council candidate Carlos Menchaca
Local and municipal elections matter.
Just ask a service worker in Philadelphia who can’t afford to take a sick day because the city council was one vote short of overriding Mayor Michael Nutter’s veto of a paid sick days ordinance.
Or ask a retail worker in Washington, D.C., where the City Council is currently one vote short of a veto-proof majority in favor the Large Retail Accountability Act (LRAA), which would establish a living wage for big box retail workers.
You can also ask anyone who sends their child to public school in Chicago, where Mayor Rahm Emanuel’s administration has closed dozens of public schools, and where the city’s students are being moved around like chess pieces to make room for a pro-corporate education “reform” agenda.
Yes, city leaders of both parties have been too willing lately to kowtow to corporate interests over the needs of their constituents. But in last night’s New York City primary, there were some signs of hope for working families.
1.) Voters approved of plan to raise taxes on super-rich to pay for schools. To succeed Mayor Michael Bloomberg, one of the richest people on the planet and a staunch defender of rich people’s interests, Public Advocate Bill de Blasio ran on a plan to raise taxes on New Yorkers making $500,000 or more and using the revenue to establish universal Pre-K. The plan was derided by Bloomberg and much of the the city’s wealthy elite.
But yesterday, de Blasio took 40 percent in a crowded primary, a sign that some of the folks in NYC making less than $500,000 a year (roughly, shall we say, 99 percent?) favor balancing out our tax system to bolster basic services.
2.) Opposition to earned paid sick days was a liability. The longtime expected frontrunner, City Council Speaker Christine Quinn, saw her support recede and then evaporate over the summer. Partly, because she was seen as the main obstacle to a paid sick days ordinance for New York City. The ordinance was introduced in 2010 but Quinn refused to bring it to a vote, saying that it would put “undue burden” on NYC businesses, according to the New York Times.
It took three years of pushing from a broad coalition, including the Working Families Party and well-known activist Gloria Steinem, to finally get Quinn to compromise on a sick days ordinance, which sailed through with overwhelming support. Yet her long-held intransigence, which she never truly explained, hurt her in the race, particularly with woman voters.
“We were pleased the bill finally passed,” says Donna Dolan, Executive Director of the New York Paid Leave Coalition, “But all I could think about when I was at the press conference was the number of people I met who had been fired in the past three-and-a-half years.” Voters apparently agreed, giving the once-frontrunner Quinn a third place finish.
3.) The real estate lobby spent big money to beat a local labor leader, but he won anyway. In a crowded primary for the Queens-based 27th council district, I. Daneek Miller came out on top last night. Miller is president of Amalgamated Transit Union Local 1056 and a supporter of affordable housing, so naturally the city’s powerful real-estate lobby was determined to stop him. A real-estate backed PAC spent $261,533 backing up one of Miller’s opponents, but Miller prevailed: the current count gives him a lead of 396 votes.
“There have been tough times for labor and working families,” Miller said last night, “The consensus is: we need a voice. Now we have that voice we set out to represent.”
4.) This 32 year-old won a huge upset in Brooklyn to become council’s first Mexican-American. Sara Gonzalez sat in Brooklyn’s 38th council district for decade, and regularly was a no-show at council meetings and public events. She may have expected a smooth reelection this time around. But Carlos Menchaca, a 32 year-old openly gay Latino community activist, unseated her last night by a 16-point margin. (“Men-shocka!” was the headline in The Brooklyn Paper.)
Menchaca will be the first openly gay elected official to represent Brooklyn and the first Mexican-American on the New York City Council. He was active with the Office of Emergency Management after Hurricane Sandy, especially in badly-damaged Red Hook.
“I’m going to be present. I’m going to be visible and vocal,” Menchaca told supporters last night, “I’m going to be someone that’s on the streets talking directly to the people of Sunset Park about your needs.”
5.) Pro-worker candidates won across the board. The New York Central Labor Council endorsed 43 candidates for City Council in run up to yesterday’s election. 39 of those candidates won outright last night, with two races (Kirsten John Foy in District 36 and Austin Shafran in District 5) still too close to call.
After 12 years of a Bloomberg Administration that was cold to outright hostile to New York’s labor community, it’s heartening to see advocates of working families have such a good night at the local level.
Bonus.) Dante de Blasio’s hair wins mayor’s race, observers say.
Check out this actual headline from USA Today. And this Twitter account. And this cartoon. We can’t remember the last time one person’s haircut played such a decisive role in an election.
What did you think of last night’s election? Let us know in the comments.
Photo of Carlos Menchaca by @lingene_1 on Twitter
Tags: Education, elections, inequality, New York, Rights At Work, taxes, transportation
The radical policies of North Carolina Gov. Pat McCrory and his legislative allies is having the opposite effect they said it would.
North Carolina’s unemployment rate rose to 8.9 percent in July, higher than the national average of 7.4 percent. That makes it the fifth highest in the nation.
Moreover, the sectors that grew are those that have the lowest wages:
Over the past 12 months, the leisure and hospitality sector has added 21,500 jobs, more than any other sector.
[N.C. Justice Center public policy analyst Allan] Freyer said that U.S. Bureau of Labor Statistics data shows that those jobs pay an average of $8.30 an hour.
“That says the state’s growth opportunities are in ultra-low-wage jobs,” Freyer said. “That’s not the direction we want to be going.”
In recent months, Gov. McCrory and his allies enacted enormous cuts to unemployment insurance, which Bill Rowe of the N.C. Justice Center called “one of the most radical, is not the most radical proposals in the country.” They also passed a tax plan that lowers income tax and corporate while slicing the earned income tax credit for struggling families.
Gov. McCrory claimed both measures would help “job creation.” The same refrain was used by Gov. Scott Walker for his actions in Wisconsin to strip collective bargaining rights from public workers and his own tax plan that ended the state earned income tax credit. Wisconsin is also experiencing economic woes, also falling behind the rest of the country on employment.
What both governors are ignoring is that we know the path to prosperity: higher wages, public investment in infrastructure and education, and a tax plan that asks the rich to pay their fair share. Not the exact opposite.
But as McCrory’s recent voter suppression law shows, he’s not really interested in what the people think. He’s more interested in following the Walker model of ALEC-inspired, pro-corporate, anti-worker governance. In both North Carolina and Wisconsin, hundreds have gone to jail in recent weeks for protesting the state’s leadership.
If you’re in North Carolina, join our fight for working families by emailing Catherine at email@example.com.
Tags: Jobs, moral monday, North Carolina, Pat McCrory, Scott Walker, taxes, unemployment, unemployment insurance, voting rights, Wisconsin
The tax structure in Ohio is grossly unfair: the richest 1% pay a state tax rate of about 6.3%. The rest of us pay about 10% to 12%.
There’s a silver lining here: it means that there’s untapped potential revenue to pay for great schools, infrastructure, local government services, health care and more. To fund aggressive job creation improve quality of life, we could simply rearrange the tax code so that the richest Ohioans are paying a bottom-line rate that is closer to the rates that the rest of us are already paying. This would directly create good jobs providing vital services—and it would create private sector jobs by putting money directly into the pockets of the people providing these services. That money would be spent in businesses, who would hire more employees to meet the demand. That’s how economics works when the economy is depressed, like it is right now.
That’s the vision behind Working America’s listening tour and educational campaign around the state budget this year. We reached out to 10,000 members to see how they responded. Members were overwhelmingly supportive of the campaign: more than 3,000 took the time to write personal, handwritten letters about how fair taxes would help their communities. Most of our members are moderates and conservatives, but it doesn’t matter where you stand in terms of political ideology. Hardly anyone thinks that it makes sense, or is fair, for the richest people to pay a far lower tax rate than the rest of us.
Unfortunately, we have a Governor and a legislature whose views on this issue are directly opposed to the views of most working Ohioans. Before he was first elected, the Governor expressed his hope that the income tax would be phased out completely. The income tax is the main tax that richer Ohioans have to pay, but a relatively small share of the taxes paid by the rest of us. Sure enough, Kasich is doing everything he can to make taxes even more unfair. Hi proposed budget would have given the richest 1% of households a hand-out of more than $10,000 per year–but raise taxes on most Ohioans even further. I’m not kidding.
That hand-out was to be paid for by increasing sales taxes, which hit the rest of us much harder than the rich, and in cuts to education and local governments, including public safety. Public pressure from Working America members helped scale back the Governor’s original obscene requests, but he still ended up giving the richest 1% about $6,000 per year. This was paid for by a sales tax hike, and changes that will either hurt schools or increase local levy costs. The Governor’s budget takes money and resources from the rest of us and gives it to the richest 1%. It just doesn’t make economic sense.
The Governor’s theory seems to be that taking money from the rest of us, and giving it to the rich, will create jobs. Administrations since Governor Taft have been testing this theory for a while now. Starting in 2005, we’ve had continual tax cuts for the rich that helped make our taxes less fair. Since then, we have been 47th in the nation in job creation, just like basic economics would predict. The Governor continued with that failed approach in his first budget, and doubled down on it in the last budget. It should surprise no one that, over the last year, Ohio was once again 47th in the nation in job creation…and the jobs that have been created haven’t been very good. Undeterred by the continued failure of the theory, the Governor has continued to double down on his approach.
Working America members were frustrated by Kasich’s determination to make an unfair and destructive situation even worse. So on August 20th, Working America members, along with allies like the Alliance for Retired Americans, held a press event at the Ohio State House. We brought with us more than 3,000 letters to Governor Kasich.
Unfortunately, when members spoke to the governor’s staff about this important question, we were told that the rich already pay plenty, and were briskly sent on our way.
We aren’t deterred by this response. It is often hard to get political elites to understand how disconnected they are from their constituents, but we are strengthened and encouraged by the results of our listening tour. We’re hopeful, because we know that Ohioans across the political spectrum share our perspective, even if some of our politicians do not.
If you’re feeling like we can’t make a difference, I encourage you to join us as we reach out to communities across Ohio. Ask a few people with different political views if they think it is fair that the rich pay a lower tax rate than the rest of us. You’ll discover that you can find common ground with people you would have never suspected.
Tags: budget, economy, Jobs, Ohio, tax fairness, taxes
The North Carolina legislature isn’t in session. But outside the capital of Raleigh, the Moral Monday movement continues unabated. Thousands turned out to voice their opposition to the extremist policies set forth by Gov. Pat McCrory and his allies in the legislature, from voter suppression to a reactionary tax plan to his treatment of public school teachers.
The three protests spanned the state: Charlotte, the biggest city; Burnsville, in the west closer to the Kentucky border; and Manteo, on the eastern coast.
Meanwhile, the Gov. McCrory’s backwards agenda is having an effect on his poll numbers. Public Policy Polling, the most accurate pollster in the 2012 election, found that only 39 percent approve of McCrory, while 51 percent disapprove. The North Carolina General Assembly (NCGA) is doing even worse, with only 24 percent approval. Half of voters, including 21 percent of Republicans, say the NCGA is making their state a national embarrassment.
Here are some incredible images from yesterday’s three-city Moral Monday rally. Thanks to all who tweeted, Tumbl’d, and otherwise shared their photos with the world.
Tags: Education, Jobs, moral monday, North Carolina, taxes, voting rights
AFL-CIO President Richard Trumka called on corporate America today to pay its fair share, saying, “At a time when the 1% have demanded so much sacrifice from working people in the name of deficit reduction, we must ask something of big corporations. That means “revenue positive” corporate tax reform that raises significant amounts of new tax revenue.”
Read the rest of the statement below:
We must start by ending all tax incentives for outsourcing jobs overseas, which would raise more than $583 billion in tax revenue over 10 years.
For many years, the AFL-CIO has called for Wall Street and multinational corporations to pay their fair share in taxes to help pay for the investments we need to make in jobs here at home. However we are concerned that several recent proposals for corporate tax reform do not raise nearly enough revenue because they squander huge sums of money on lowering tax rates for profitable Wall Street corporations.
Wall Street has not been asked to contribute a dime in the name of “shared sacrifice,” while working people have already sacrificed far too much. The suggestion that tax reform should let Wall Street and big corporations get away with paying no more than they pay now is offensive. The suggestion that such “revenue neutral” corporate tax reform should be coupled with cuts to Medicare, Medicaid, or Social Security benefits is an obscenity.
We are especially concerned that proposals to lower the corporate tax rate by a specific amount could lead to cutbacks on tax expenditures, such as the domestic production activities deduction, that encourage manufacturing in the United States. Limiting such expenditures could discourage investment, production, and employment here in America even if the corporate tax rate is lowered.
Finally, we reiterate that the AFL-CIO opposes cuts to Medicare, Medicaid, or Social Security benefits, no matter what form they take and no matter who proposes them.
Reposted from AFL-CIO NOW
Tags: aflcio, budget, Corporate Accountability, Jobs, Richard Trumka, taxes