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income distribution

The income imbalance is gigantic.  You may have see this before.  It is our income imbalance as seen in three perspectives… What it is… versus what we think it is,… versus what we would like it to be.

So what would it take to make it like we would like it to be?

Obviously we would take the top 20% down from 85% ownership to around 30%… a  drop by 55% of the nation’s wealth. That would be divvied up though not equally, among the other four 20%….

So what if we used those numerical principles to tackle income inequality?  Then instead of wealth, simply use the same alignment picked by most Americans to figure out a theoretical income distribution?

In 2007 prior to the Recession American families brought in $7..723 trillion dollars….  one half of that went to the two 20% with incomes over $100,000..

If our aim were to move the slider from 50% down to 35%… then this is how much a percent of national income, the top 10% would take…   From 50% to 35% is 15% and fifteen percent of $7.7 trillion is $1.1 trillion dollars each year…

So basically to get the middle class back to where it was in the past, we need to take $1 trillion a year from the top 10% and give it back to everyone else…

America is roughly at 315 million people. and they live in 123 million households… If we lop off the top 20%, we have 80% left which is 252 million people or 98.4 million households…

Giving us 25 million households giving up their $1 trillion to be split up with 98.4 million households.

The average given would be $40,000 given up by 25 million households per year. And if spread across America’s other 80%, it would average………………..$10,204……

The economic value of that total gets reflected by the memory that the wealthy don’t spend the $40,000 into the economy; they lock it away in stocks. But an yearly extra $10,000 in the hands of the stressed 80%, gives a big boost to economic demand.

And this does not get us to equal. It is just where Americans think the levels inequality SHOULD be.

In fiscal 2014, the federal government collected nearly $1.4 trillion from individual income taxes, making it the national government’s single-biggest revenue source. (Along with corporate income taxes and payroll taxes, other sources of federal revenue include gasoline and cigarette taxes, estate taxes, customs duties and payments from the Federal Reserve.)

WE are saying this now needs to be raised to $2.4 trillion with ALL that average increase borne by the top quintile… As a rough estimate (since they are actually paying near a 25% real tax rate now), because we need double the intake of income, doubling their rates up to the 50% level for the highest margins, would bring us close to parity. Exactly to the level to which Ronald Reagan cut taxes in his first term.

THAT, should give you an indication of where we were at one time, and how bad things have been allowed to slip away from the middle class.

I should add, there is only ONE candidate who is addressing this issue…All other candidates are pandering to those who already “have”…..

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It is rather interesting that in our spirited Republican campaign we get very little substance.  Despite the discussion that Fox would outdo CNBC, most of what was asked of candidates simply didn’t concern me…  I speak for the silent America.

Here is what should be asked.  There is not a right or wrong answer yet.  They haven’t yet been tried.  But our nation is facing some consequential changes and many of us would like to know what our potential leaders would do to face them.

Granted there are both Republican and Democratic responses to these questions.  But America is being denied any discussion upon them… and has its attention diverted to personalities I think, for the sole purpose to keep these burning questions buried, hidden, and never shown the light of day….

  1. How would you fix education in America.  What is your plan and how long do you think it will take before it begins to work?
  2. Why are all the benefits of our work going to a few people
  3. How do we restore democracy?
  4. How do we return jobs to America from overseas without cutting wages to levels seen in countries like the Philippines or China?
  5. How do we stop global warming? 
  6. Businesses hire when demand increases, How do we increase demand?  
  7. What is government’s role in a democracy when it comes to markets?
  8. How do we reduce our prison population?
  9. Who are the largest donors to your campaign and what do they want in return?
  10. How do we prevent gerrymandering?
  11. Estimates for peak oil range from its already happened to at the very latest 2060. What is your plan to deal with the end of oil?
  12. Black people are 4 times more likely to be killed in police custody than white. What do we as a country need to be doing about this? 
  13. How do we return the middle class
  14. How do we create a better Internet?
  15. Why are we outsourcing public schools? 
  16. What do we do about “too big to fail” banks? 
  17. How do we get the influence of big money out of our elections?
  18. Big or little.  What is the perfect size for government in a dollar figure.  How big should it be in $$$$?

There may be more questions that are pertinent. These are a start… Now as Delawareans there is little you can do to affect the national outcome… But just take these questions to our state races and begin asking them there. Ask our future governor; ask our future Senator, ask our future Congressperson.  Print and take this along. If someone else asks a question you were intending, just switch and ask another off this list..

And because you held your representative accountable, we then begin to get the government we deserve.

One parting shot.

In past elections, question like this were asked by our media all the time.  They are purposefully or extremely negligent not to ask them now.

I would normally be crowd surfing or moshing right now.. But Hurricane Bill shut down Firefly cold…  So I’m doing this because sleep is out of the question….  I’m calling tonight….. Fireflop…..

But sometimes great events happen because outside influences jump up and change ones direction.  That sort of happened today as I stumbled on a link I rarely have perused….

One percent of One percent gave 29% of all fundraising for the off election of 2014……  This is the cataclysmic failure of Citizens United, which said undisclosed cash was the same as spouting off the mouth:  free speech and no limits could be applied…

Which is purely ridiculous…

Because if I say…. you’re crazy and you say to me… no, your crazy… we have some sort of balance or equality… But if you say you’re crazy $1.18 billion times more than I do…. then saying the two are equal is like saying a glass of water and Lake Superior are both equal, because they are both made up of water…

Which is purely ridiculous….

Who are these people?

Just 3…. of them, gave over $10 million.  57 more, gave over $1 million….  which puts us up to $87 million of the $1180 millions that made up 29% of all money spent.  The other 31,916 donors, or one percent of one percent of the population, averaged out $34,250 apiece to the candidates of their choice…..

They’re mostly male, tend to be city-dwellers and often work in finance. Slightly more of them skew Republican than Democratic. The last election cycle set records as the most expensive midterms in U.S. history, and the country’s most prolific donors accounted for a larger portion of the total amount raised than in either of the past two elections.  The 29 percent disclosed to the Federal Election Commission in 2014 is a greater share of the total than in 2012 (25 percent) or in 2010 (21 percent)….

These deep pocketed donors were increasingly playing the role of “political gatekeepers.” Candidates needed their backing — and cash — as did the parties and super PACs that depended on the support of the politically active elite.  So unless one receives their select approval… one is doomed from the start…..

What this means… is everyone we elect, must do the bidding of this small group of people if they wish to continue in office… Now it does not take a rocket scientist or political genus to figure out that in the battle between the wealthy and the middle class, whose side these donors will be on……

Which should make it clear why everyone you know and talk to, thinks our representatives are crazy for voting the opposite of how we think they should vote… “What’s wrong with him?” we mutter.

Well, nothing is wrong with him, except for the fact that he wants to get re-elected…. and he therefore has to vote the way his benefactors want him to vote, even if it goes against the majority of his constituency’s wishes…. Because he knows their is a good chance you will forgive him and vote for him again, and again, and again, because that is what you have always done… But piss someone off who gave you $1 million?  You know that $1 million is going into the campaign fund of someone who will run against you… and you can’t match it….

So Citizens United has destroyed democracy and free speech; not risen up to save it…

Which is why, if we wish democracy to continue to be our form of government…. we need to seriously get behind the Constitutional Amendment to overturn Citizens United, and regulate how much wealthy people can spend to control our government…..

In the now classic words of Mitt Romney…..it is obvious that “you don’t matter”.

I really didn’t know that much about them.  So I looked them up.

Did you know that one has to go back as far as James Garfield to find a Commander in Chief who has used less vetoes? (And he was in office only 6 and half months).

Did you know that Barack Obama, our commander in chief, has to veto up to 633 vetoes these next two years before he ties the record of the most by any one president (FDR: 3 and a half terms)?  Does that not put a damper on any argument of over-reaching his authority?

Can you name all the presidents who have the same or fewer vetoes than our current commander in chief?  I’ll try.

  • James Garfield (6 months as President)
  • Milliard Fillmore (2.8 years as President)
  • Zachery Taylor (1.3 years as President)
  • William Harrison (32 days as President)
  • Thomas Jefferson (2 terms)
  • John Adams (1 terms)

All with zero.  He is tied with George Washington, at two.

Now can you name the top ten presidential veto-ers?  Again, I’ll try.

  • Franklin D Roosevelt  635
  • Grover Cleveland 584
  • Harry Truman 250
  • Dwight Eisenhower 181
  • Ulysses Grant 93
  • Theodore Roosevelt 82
  • Ronald Reagan 78
  • Gerald Ford 66
  • Calvin Coolidge 50
  • Woodrow Wilson 44 (tie)
  • Benjamin Harrison 44 (tie)
  • George H.W. Bush 44 (tie)

And just out of curiosity.  Know who had the most vetoes overridden?  The first guy who got impeached:  Andrew Johnson with 15.

It is quite clear that a veto is just another tool put at the president’s disposal.. If the president is provided the opportunity to weld it, one must, both out of Constitutional necessity and a considerable amount of precedence. And if today’s Republicans are thinking of black-balling our president with excessive vetoes, they should think again.  It also appears that vetoing insane pieces of legislation will provide zero negative fall-out, either politically or against ones legacy.

Yesterday, the first day of the Republican Congress, a bill was rushed through the House and passed:  requiring the Congressional Budget Office to use dynamic scoring when figuring out future budgets…

Republicans have been saying lower taxes cause the economy to grow and that growth generates more revenue. They’ve said that for years… We’ve tried it for the past 15 but things got worse for all of us, instead of better…

Last couple of years, under Paul Ryan (that little whiz-boy from Wisconsin), they tried writing budgets for their first time and found, that everything they have been saying, was indeed wrong…  The math would not work out…

The reason the math would not work out, is because of a simple fact that when you don’t pay your bills and instead splurge and waste that bill-money, at some future point there will be a reckoning.   Like if you choose spend your mortgage, electricity bill, water bill, gas bill money on big-ticket orgies, there comes a point where you are left dry, cold, in the dark, and have no domicile.

This is terrible they said… What can we do… ..

The answer obvious to any 5 year old, is to pretend.    We can pretend that we will get tons of money later and pay our debts off then…

So we convince ourselves that IF we spend $10,000 over budget, we will soon be making $100,000 more so we can pay it back then.  IF we get a $10,000 raise every year, then next year we just run the same as this, and have $10,000 extra dollars with which to pay it back.

Now this does work if you are indeed guaranteed to get $10,000 increases every year… What dynamic scoring does is make the assumption we will set-in-stone increases to our salary by $10,000 every year for ten years straight.  So your yearly income will climb like this:

  • Base rate:  $40,000 per year
  • After Year One:  $50,000 per year
  • After Year Two   $60,000 per year
  • After Year Three  $70,000 per year
  • After Year Four   $ 80,000 per year
  • After Year Five   $90,000 per year
  • After Year Six   $100,000 per year
  • After Year Seven $110,000 per year
  • After Year Eight $120,000 per year
  • After Year Nine $130,000 per year
  • After Year Ten:  $140,000 per year

Then what they do is add all these together and come up with an argument like this…  We can easily afford this orgy and hire Taylor Swift to sing for it because look, over ten years we are going to earn $990,000 so we can easily pay back the $10,000 we blow on ourselves right now… ( Now if you’ve been a Republican shut out from parties for a long while, not being invited to do the bump with Jerry Jones) just hearing this may make you decide to jump in, no clothes and all.

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But here is reality… You probably are not going to get a $10,000 (25%) raise… Let us look at this logically.. How long have you been working?  How many $10,000 raises have you ever gotten before?  Did any of your costs also rise with that raise, so you really didn’t have all that money to spend?  Across history, was there ever a time when $10,000 raises per year were the norm?  If not, why would they suddenly start now?

So what usually happens in households that pursue false dreams, is that if they do not tie expenses to actual income, they usually come up short and that shorted gap grows bigger and bigger.

Here is what to expect in reality… The first year we spend $10,000 over what we make.  It is either loaned to us, or we simply just skip paying our bills for one year… The next year we not only again spend $10,000 more than we make, but we still make the same $40,000… So that year on our $40,000 income we owe $10,000 from year one, and $10,000 from year two. We can’t live on just $20,000 in order to pay it all back… So, assuming we will get much more income the following year, we stretch the loan a little further…  But again, no raise comes that year.

Where we pretended that we would be making $60,000 by that year (year 3) {and over the three year span would have accumulated $150,000 (40,000 + 50,000 + 60,000), enabling us to pay back three years ($30,000) of $10,000 overdrafts having $120,000 left over}… Instead due to a lack of “pretended raise” amounts,  we only got $120,000 over those three years, and borrowed $10,000 each year, so our net balance is $90, 000, which as you see divided by 3, equals $30,000 per year, whereas our regular living expenses continued at the original $40,000 per year.Yet we live like we are making $50,000, $60,000, $70,000 each subsequent year due to our over-extended loans….

This is dynamic scoring…. It should be illegal, and until yesterday, it was.

It is possible, it can work if the assumptions work out… So one must look at the assumptions very carefully to see if they are realistic… Dynamic scoring has only one reason for existence.  To convince people who don’t want to spend that hard earned money of theirs on a risky venture, to go ahead and spend it on that risky venture by consoling them it will be painless when looked back upon from the future.

And the” risky venture” this time, is again take the bulk of your money and hand it over to the top one percent, giving them even more power over you… If you do that these people say, money will just grow for them and everyone will be rich…. give them your money; give it to them now.

Alas we’ve tried that already… We didn’t get rich. For it, we got a very deep recession, We got the 1% owning more than ever; the 99% owning less. We got 80% of our population living day to day, week to week, just a little above subsistence…  We went backward.  Now with this Congress we are about to have a new battle of inequality on a level unseen in America, And this time: it will all take place up within the top 1%… Who among them will win the final championship monopoly game?.. Who will lose?… It matters little to most of us, Most of us were eliminated long time ago.

But first, for all of this to occur, they first have to change the way we do math itself in order to justify it, because it doesn’t work out their way using real numbers.  And that, my friends,… is what was done yesterday.

There is Common Core.

There is gross inequality of the top 1%.

There is the need for money.

There is the need to tax the top 1%.

There is the need for a minimum wage that is livable.

There is a need for more funding to keep our infrastructure intact.

There is a need for more cash applied to educating those in poverty.

There is a need for more power not made from carbon.

There is a need to actively insist on lower greenhouse emissions.

There is a need to spend money to buttress our seashores.

There is a need to spend money on fighting diseases such as Ebola.

There is a need to have and 11:1 student teacher ratio in schools at greater than 50% reduced lunch.

There is a need to let teachers teach.

There is a need to make sure all children get three good meals a day.

There is a need to make sure all children receive vaccinations.

There is a need to make sure all failed bridges are repaired.

There is a need to make sure that all Americans can get medical coverage.

There is a need to build for more dams as the West gets parched.

There is a need for higher Social Security payments to those who lost their IRA’s in the last Depression.

There is a need for preserving wildlife rapidly becoming extinct.

There is a need for putting people to work in a CCC type of organization that leaves a lasting legacy on the American landscape.

There is a need for women to never worry about unwanted pregnancies.

There is a need for minorities to never worried about being treated like they are not the majority race.

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As you can see. there is a need.  As you can see some people have all the money.  As you can see the only solution is to tax those at the top fairly (at the highest possible rate) and spend that in rebuilding our nation… Consider it as an equity loan given to the wealthy, whose payment has now come due…..

This will be a brief teaser for labor day… Why, is the middle class (labor) suffering so much today…..

US Corporations get around the US’s high tax rate of 35% by stashing money offshore.  The average corporation pays 12.6% according to the GAO in 2010….  This means that half of America’s corporations pay higher, and half of America’s corporations pay lower…  HALF OF AMERICA’S CORPORATIONS PAY LOWER THAN 12.6%?  REALLY?

During America’s boom times, when the middle class was almost guaranteed a job for life with a pension plan and a gold watch, corporate taxes were set as high as 52.8 percent. Later rates were lowered to 48 percent and then 46 percent.  It was only after 1986 when they were lowered to 35% that the middle class problem begin to emerge….

Across history there is a direct relationship between higher taxes and higher wages… When tax rates are high, wage rates are high. When tax rates are low, wage rates are low.  (As an additional benefit, the higher the taxes, the higher the employment level goes as well.) In fact there is such public good in charging the wealthy higher taxes with no downside, that is is literally amazing we aren’t doing it. Everyone benefits out the gazoo!)

The way America’s corporations get around this 35% rate, is by stashing cash abroad.  There is $2 trillion of America’s money kept overseas, and not brought home to keep it from being taxed… You pay taxes. I pay taxes, yet corporations think they shouldn’t… How fair is that?

Keep in mind.  This is by their own volition. They are not forced to keep that money offshore. They could bring it back anytime they wished.  They choose not to do so… And that money is what funds campaigns for cutting taxes.  That money is what buys both Democrat and Republican allegiance to no-tax pledges.  I would bet that some of that foreign money is in Tom Carper’s, Chris Coons’, and John Carney’s campaign slush funds right now..

$2 trillion at 35% is $700 billion that should have already been in our treasury… That is money we borrowed unnecessarily to cover our expenses which if a proper administration had been in the executive branch would have already been there, from corporations…  The balance, $1.3 trillion would have then been available here and could have been invested in our nation in the form of jobs…

There was some discussion, primarily from Michelle Bachmann, as to give a blanket amnesty on these taxes to get this money back,  But that is like saying you won’t prosecute a bank robber if he comes back and spends his money in your home town…  What bank will he rob next?  And what about all those people who had their money stolen from them?  Michelle and her Republican cohorts seem not to care.

So why are corporations really renouncing their “citizenship?” Simple answer, is they are doing this so they can pocket hoards of “deferred” offshore profits without ever paying the taxes they owe on these profits….

A (different) tax loophole called “deferral” allows companies to avoid being taxed on their non-U.S. profits until they “bring the money home.” Because of this loophole, corporations have been taking steps to make it look as if their profits are made outside of the U.S., and have piled up about $2 trillion in cash that they are keeping out of the country.

Dave Johnson explains. “Here is how the deferral scam works. An American company sets up a non-U.S. “subsidiary” in a tax haven. That non-U.S. company gets or produces goods, services, patents, whatever, at a low price. (This often involves shifting paper (and copyrights, patents) around to make it look like profits are not made in the U.S., but in too many cases this means the U.S. company actually moves U.S. jobs, factories, production, call centers and other assets out of the country.) The subsidiary sells to the U.S. company at a high price. Most or all of the profit is therefore made by the non-U.S. subsidiary, so the profits are considered to be non-U.S. and taxes on those profits are “deferred.” This still counts as profits for the U.S. owner of that subsidiary, but the U.S. company does not have to pay taxes (they are “deferred”) until they “bring the profit home.””

These corporations see that if they renounce their citizenship before the U.S. fixes this loophole, they can just keep the money….

But does this money REALLY stay offshore???  As you would certainly expect, of course not….  The non-U.S. subsidiary company “loans” money to the U.S. parent. So all of the non-U.S. cash actually is available to the U.S. parent. But wait, there’s more. The U.S. parent pays interest to the subsidiary, which is deducted from taxes and reduces the U.S. tax bill even more. ..

If complicated, it isn’t.  I hire you as my buddy in crime.  I give you all my money… I say, look, I’m broke, I can’t pay any taxes!  You lend me my money back to me… I spend it tax free and the money I do make, I write off as interest I give back to you… So I keep everything I make here … No taxes…

Ways to fight this… very important on this Labor Day…

A.  Hold Democrats accountable.  Don’t let them (Tom Carper, Chris Coons, John Carney) get away with helping corporations rob the American workers, who do pay all their taxes and who are subsidizing these corporations money-making schemes.

B.  Support proposals by President Obama to use executive action to stop “income stripping” and to keep “inverted” companies from getting government contracts

C.  Support the Stop Corporate Inversions Act of 2014 in the Congress… Obviously obstructed by Republicans.

D. Support a proposal to tax companies based on their percentage of sales that occur in the U.S.,..

One must wonder, why is this even in the tax code?  The reason is so U.S. companies can use “offshore” profits to invest in growth. This is a win-win because we want U.S. companies to do well, and because the U.S. is supposed to benefit when profits are brought home and taxes are paid….

A very simple way to fight abuse of deferral is to charge a fee of, say, 7 percent a year on all deferred profits. The full amount of taxes is to still be paid when profits are finally brought home, but we collect an additional 7 percent a year until they are….

So enjoy your Labor Day.  We’ve got some real work to begin tomorrow…..

 

 

 

To all those married on the first of July last year, including Sen. Karen Peterson…. Happy Anniversary…

I heard that Patty Blevins stopped the Senate at midnight (July 1) and a cake was brought out and dished out to legislators… I heard Patty prefers chocolate… over yellow…

And Delaware doubled the single sex marriages predicted for its first year…   And while at it, though early, happy anniversary also to those two 80+ year old men who waited 50 years, and got married last July 3….  As one of them told the clerk through tear filled eyes: “you don’t understand.  For the first time in my life, I am free.  I’m like everyone else….”

And what’s up with Greg Lavelle and Gary Simpson not clapping along with the entire General Assembly in congratulating Karen Petersen?  Looked like they were pouting.  Greg wasn’t even going to eat the cake, till McBride allegedly came over and yelled at him!

Douche bags…. Another reason to never vote Republican….

The bridge closing may be a blessing in disguise… It shows the benefit if raising the gas tax 10 cents to pay for our projects….

This gas tax is nothing… We’ve been paying more for a gallon ever since the crash of 2009… We as customers will continue paying the same, and the oil companies and hedge funds will be the ones who can no longer get what they used to get out of a gallon…

In a study earlier this year, we showed all that the price of gas is not based upon supply, but on demand…  States with higher taxes, get their pre-tax gas cheaper than states with little or no tax…  yet they all come from the exact same refineries….

The Republicans who pretend to be against all taxes, are saying this is not affordable…

Here is what they are hiding from you….

Let us take the $20 million needed to repair the 495 bridge….   At ten cents a gallon, that $20 million will come from 200 million gallons….  At an average of 20 gallons per fill-up, that would amount to 10 million fill-ups in this state per year…. Excluding motorcycles and buses, there are an estimated 817,000 vehicles registered in Delaware….. The ten cents tax amounts to 12 extra fill-ups per year….  Of course, that is one a month… like you took an extra trip….

When this tax came out, we were told that 60% of gas sold in Delaware is to out of state vehicles… If that figure is true, then theoretically, you and I would only be accountable for 40% of that cost, which means we’d only fill up once extra for 4 months and have the rest normal…..  Is that really back breaking to us all?

Without the gas tax… it will have to come out of income tax…  If allotted evenly, that 20 million spread over every citizen, amounts to $20 for every man, woman, and child in the state…  (Considering the school population of the entire state k-12 is close to 130,000, then if you add the population from the years 0-4 for an additional 30,000, it would mean that the number of Delawarean paying taxes would be 870,000… )  That $20 million tax spread across all taxpayers evenly amounts to $23 per taxpayer…. per year….

So our choice is having the oil companies and hedge funds pay our tax for us, or to pay it directly out of our incomes….  You will pay the same for gas regardless.  Doesn’t it make sense to be getting something out of it for a change instead of having all our money simply go straight to their profit line?

 

 

Old data transcribed in new format. Now everyone can see…

Just think of doubling that last total is the Keystone Pipeline gets built.