Bottled Water Tax: "The People Deserve To Get Something In Return"

LG John Cherry has an op-ed in the Detroit News today that talks about his plan to restore the Michigan Promise Scholarship with a water bottle tax. Go read it, but here's the best part (emphasis mine):

Right now, bottlers across the state remove water from our wells essentially for free, and we lack the necessary funding to safeguard this precious resource. In other words, we're losing one resource -- our talented work force -- while giving away another resource, our water, for free.

You don't need a Ph.D. in mathematics to solve this terrible equation. It's time for the bottlers to pay their water bill, just like you and I do. We can use the proceeds from that water bill to fund the education that our young people need to compete, as well as protecting the water resources that Michigan desperately needs.

By conservative estimates, a charge of 10 cents per bottle, paid by bottling companies that operate in Michigan, would raise $118 million per year. The cost of the Michigan Promise Scholarship, on the other hand, is about $100 million per year. Not only would this modest charge on each bottle of water that leaves Michigan raise enough funds to pay for the entire Michigan Promise program, we'd still have $18 million a year to spend on wetlands regulation and other conservation initiatives. [...]

This is the people's water, and the people deserve to get something in return.

Ironically, employers like to point out they need an educated workforce to be successful and profitable, and Nestle, the parent company of Ice Mountain, is no exception.

Like every Michigan employer, we rely on an educated workforce.

Yet Nestle is complaining that Cherry's proposal penalizes Michigan employers, risks jobs, and that bottlers may resort to supplying products from outside the state in order to remain competitive on the price consumers pay for bottled water products.

A Nestle Water Company spokesman also claimed that the tax would nearly double the price consumers paid for a case of water.

"Let's look at the math," said Flaherty. "Most bottled water is purchased in cases of 24 bottles of .5 liter size, for about or less than $4.00 per case -- putting the price per bottle at about 16 cents. A 10-cent per bottle tax on Michigan manufactured products nearly doubles the price for consumers, and would be unsustainable in the highly competitive beverage marketplace.

"Consumers are very savvy, and rarely could be convinced to pay nearly double for Michigan-produced bottle water when lesser-priced options exist," said Flaherty. "I challenge you to ask consumers if they'd pay $6.50 for a case when they can pay less than $4 for the same product made elsewhere."

True, consumers are savvy, but we also care about educating our children. I have a suggestion for Nestle. You pay the 10 cent tax per bottle on the water you currently get for free without passing it on to consumers and in return you'll get an educated workforce, an improved "corporate neighbor" image and the gratitude of citizens who just might go out of their way to buy your product. I'd say that's a win-win for everyone involved. After all, your company admitted that bottled water profits were down in part because of public criticism. Why would you want to anger us even more?

Poll: Let The Wealthy Pay Higher Taxes

A new Bloomberg poll shows Americans want the government to do something about the economy.

Americans want their government to create jobs through spending on public works, investments in alternative energy or skills training for the jobless.

They also want the deficit to come down. And most are ready to hand the bill to the wealthy.

A Bloomberg National Poll conducted Dec. 3-7 shows two- thirds of Americans favor taxing the rich to reduce the deficit.

Raising taxes on the rich was popular across party lines too: About half of Republicans back the idea and it is more popular among Democrats and Independents.

Steve Benen summarized the polls results best:

In other words, here's a poll showing widespread support for the Democratic economic agenda.

That's because mainstream America is rational, unlike those teabagger Republicans whose only answer for every problem is cut taxes, cut taxes...


(Cross-posted at Blogging for MI.)

Sen. Carl Levin is The Real Deal

The Republican Party is staking its future on people like Sarah Palin for commonsense solutions to our nation's problems. Meanwhile, Democrats don't have to look any further than Sen. Carl Levin. This is his commonsense approach to paying for the war in Afghanistan.

Higher-income Americans should be taxed to pay for more troops sent to Afghanistan and NATO should provide half of the new soldiers, said Carl Levin, chairman of the Senate Armed Services Committee.

An “additional income tax to the upper brackets, folks earning more than $200,000 or $250,000” a year, could fund more troops...

White House Budget Director Peter Orszag has estimated that each additional soldier in Afghanistan could cost $1 million, for a total that could reach $40 billion if 40,000 more troops are added.

That cost, Levin said, should be paid by wealthier taxpayers. “They have done incredibly well, and I think that it’s important that we pay for it if we possibly can” instead of increasing the federal debt load, the senator said.

"Incredibly well" is an understatement. The Bush tax cuts cost almost $2.5 trillion over the decade after they were first enacted and 52.5 percent of the benefits are going to the richest 5 percent of taxpayers. And, of course, we can't forget the war profiteers cronies who made a killing off Iraq, i.e., Blackwater, Halliburton, KBR, etc.

Had the Bush administration showed some commonsense and opposed tax cuts to pay for increased defense spending, he wouldn't have squandered Clinton's surplus and left office with a record budget deficit of more than $1 trillion.

Traditionally during wartime, taxes have been raised to pay the costs of war, but Bush and the GOP had some grandiose idea that Iraq's oil would pay for the war. So, they drummed up a lie to get things started and proceeded to cut taxes for their rich cronies, leaving our country in economic shambles.

So kudos to Sen. Levin and his commonsense approach to paying for the Afghanistan War. Besides, if rich Republicans have to dig into their trust funds to pay for war, it's a pretty sure bet they won't be so quick to support it.

(Cross-posted at Blogging for MI.)

Americans View the Rich With Rising Skepticism

F. Scott Fitzgerald once wrote, "Let me tell you about the very rich. They are different from you and me."

That segue leads me to an article I read in the LA Times about Americans attitudes toward the wealthy. For decades they've been held up as examples of what we can achieve through hard work and determination, but recent events have people looking at them in a different light, and the belief that the wealthy are worthy is waning.

Thanks in part to AIG, BOA and men like Bernie Madoff, Americans are beginning to realize that the rich have added little value to our economy, and in the case of corporate executives, their huge salaries weren't even based on performance. They made millions even when they failed at their jobs.

And they made millions even when they didn't work. Dumb luck explains their wealth in many cases.

By my count, roughly one-quarter of the names on the Forbes list of the 400 richest Americans got there by inheritance (and by no means have all of them enhanced the family fortune with their own toil or brainpower). A few years ago, it was common to think of the rich as a special breed. We may soon come around to George Orwell's view that the only difference between rich and poor is income -- "The average millionaire," as he put it, "is only the average dishwasher dressed in a new suit."

Except, the average millionaire can still afford health care, a roof over his head and the cost of a college education, while the rest of us struggle to keep our homes, fund retirement accounts, etc. Meanwhile, inequality is now at levels not seen since the Great Depression.

It's no surprise that a recent CNN poll shows that Americans are losing confidence in their ability to keep their current standard of living. People need jobs, good paying jobs, and that means we'll probably need a second stimulus plan, along with progressive tax increases on the wealthy.

But, but, higher taxes make it harder for the wealthy to invest and create jobs, right? Wrong.

It's proper to note that years of study have unearthed no consistent evidence that taxation causes the rich to alter their investing behavior much, at least not until their tax burden reaches a point vastly higher than what Obama contemplates.

"The real rich -- the top 1% -- work very hard for reasons other than money," Reuven S. Avi-Yonah, a tax historian at the University of Michigan, told me this week. The quest for prestige, political power and self-esteem, the ability to control things and people, are all factors in their behavior.

Actually, the original case for a progressive income tax was directed at the real wealthy. Our Founding Fathers sought to break up concentrations of wealth, inherited or otherwise, because they considered these to be undemocratic -- markers of "an aristocratic society, not a free and virtuous republic."

IMHO, it all boils down to two things. Morality: Taxing the wealthy at higher rates than the poor is a moral issue. And it's also a religious issue: If God provides abundantly it is only for the purpose of you in turn giving to those in need.

Republicans Say No to Largest Tax Cut in History

Republicans not only voted against creating jobs when they voted no on the stimulus plan, they also voted against one of the biggest tax cuts in history. Robert Schlesinger at US News gives us the lowdown.

Steven Waldman, a former U.S. News editor (well before I wandered these halls), makes an interesting case that the coming tax cut will indeed be the biggest ever.

The compromise stimulus plan includes $282 billion in tax cuts over two years.

According to the Wall Street Journal, Bush's first two years of tax cuts amounted to $174 billion. A second batch in 2004 and 2005 cost $231. And those were thought to be bigger than the tax cuts offered by Reagan, Kennedy, or others.

But wait, you say, wasn't Bush's 2001 tax cut, at $1.35 trillion (funny how the GOP didn't mind draining one trillion dollars from the government coffers then), the largest in history?

Yes, over the full 10 years of its existence. But over the first two years, as Waldman points out above, the price tag was much smaller. So the Obama stimulus tax cut would be the biggest ever for the first two years.

It's common knowledge that Republicans love tax cuts, so what motivated them to vote against these? I think Steve Benen nails it with this remark:

George W. Bush's tax cuts were long-term income-tax rate cuts, which amounted to a generous break for those at the top, since the wealthy pay most income taxes. Obama's tax cuts, meanwhile, are short-term refunds paid directly to working and middle class families (some of which Republicans have denounced as "welfare").

We can't have money trickling down to the masses. That would ruin their plans to redistribute even more money up to the already wealthy.

By the way, with this stimulus bill, Obama kept his campaign promise to deliver tax cuts, and he's only been in office one month. Meanwhile, we're still waiting for Republicans to deliver on some of that compassionate conservatism they said we'd be seeing.

Wanna scare a Republican?

Show him/her this op-ed - Please Raise My Taxes - written by Reed Hastings, CEO and founder of the highly successful Netflix:

This week, President Obama proposed imposing a $500,000 compensation cap on companies seeking a bailout. It’s a terrible idea. We all want the taxpayers’ money returned, and capping compensation at bailout recipients will just make it that much harder for those boards to hire and hold on to the executives who can lead their companies to compete and thrive.

Perhaps a starting place for “tax, not shame” would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year. Some will tell you that would reduce the incentive to earn but I don’t see that as likely. Besides, half of a giant compensation package is still pretty huge, and most of our motivation is the sheer challenge of the job anyway.

Instead of trying to shame companies and executives, the president should take advantage of our success by using our outsized earnings to pay for the needs of our nation.

Not only will higher taxes on the rich pay for the needs of our nation according to Hastings, but they'll also "finance opportunity for the next generation of Americans."

Makes sense to me, but somehow I don't see Republicans lining up to vote "yea" on that proposal.


(Cross-posted at Blogging for MI.)

Republicans turn their backs on the middle class

Joe Biden is right. It's time to put the middle class front and center. That's the goal of the Obama administration which seeks to put people back to work immediately and create economic growth, and long-term make sure the benefits of that growth reach the people responsible for it - the lower and middle class workers.

I have a question for Republicans. Why are you treating us like the enemy? Some of you are threatening to filibuster the recovery bill and others are complaining the plan is too expensive and could be done cheaper (ergo, the middle class is only worthy of crumbs). Meanwhile, Sen. Jim DeMint (R-SC) offers an alternative plan that would actually cost 3.5 times as much as Obama's. I guess it's okay to spend trillions more if corporations and the rich are the main beneficiaries, eh?

The only comprehensive alternative being offered by Senate conservatives is DeMint’s “American Option: A Jobs Plan That Works,” a series of permanent tax breaks for corporations and wealthy Americans. A new analysis from the Center for American Progress Action Fund finds that the DeMint plan would cost over $3.1 trillion over ten years — more than three times the amount of President Barack Obama’s plan — and be largely ineffective at creating jobs.

The DeMint plan includes permanently cutting the corporate tax rate, totally eliminating the Alternative Minimum Tax, lowering income tax rates for the wealthiest Americans, and eliminating scores of tax deductions that help students pay for college, sick families pay medical bills, and teachers purchase supplies for their classrooms.

How many times does this need to be repeated?

Permanent tax cuts are one of the least effective ways of stimulating the economy according to both Moody’s Economy.com and the Congressional Budget Office. Furthermore, slashing government revenues this permanently would leave deep structural deficits for generations to come.

The whole purpose of DeMint's plan is to make the tax policy changes of 2001 and 2003 permanent. Let's revisit that era, shall we?

"The economy has slowed down, in which case we need to accelerate tax cuts," Bush said in a March 2001 radio address. "You see, tax relief will put money in people's pockets, which will help give the economy a second wind." "By ensuring that Americans have more to spend, to save and to invest, this legislation is adding fuel to an economic recovery," announced Bush in 2003, as he signed his tax cut legislation.

That's not how ten Nobel Laureates saw it. They signed a letter saying the Bush tax cuts were wrong, and 450 economists across the nation agreed.

They were right and Bush and the Republicans were wrong. Bush's tax cuts didn't work.

As Center for American Progress Senior Fellows Christian Weller and John Halpin noted in 2006, the outcome of the 2001 tax cuts was "the weakest employment growth in decades." The 2003 tax cuts didn't fare much better, resulting in job creation that was "well below historical averages." When Bush's White House proposed the 2003 cuts, they promised that it would add 5.5 million new jobs between June 2003 and the end of 2004. But "by the end of 2004, there were only 2.6 million more jobs than in June 2003." As Paul Krugman has pointed out, the belief that Bush's tax cuts successfully stimulated the economy is a form of mythology. CAP's Michael Ettlinger and John Irons wrote in September, "Economic growth as measured by real U.S. gross domestic product was stronger following the tax increases of 1993 than in the two supply-side eras" that followed Reagan's 1981 tax cuts and Bush's 2001 tax cuts. Indeed, employment growth was much stronger post-1993 than post-2001. The average annual employment growth was 2.5 percent after 1993 and just 0.6 percent after 2001. Unfortunately, the supply-side myth that tax cuts cure all still lives on today, as conservatives complain about progressive approaches to fixing the mess left by Bush.

Middle class misery is real. We need real solutions, not mythological ones of the sort being pushed by Republicans. If they really cared about the pain being felt by families across America, they'd stop the games, grow up and get serious about helping us. That hasn't happened and leads me to believe they don't give a damn.

Not so smart Republican economic calls

Time Magazine looks back at what they see as Bush's biggest economic mistakes, adding that "by almost every measure — GDP growth, jobs, median incomes, financial-market performance — he stacks up as probably the least-successful President on the economic front since Herbert Hoover. ... As the decider in the White House for the past eight years, George Bush made some economic calls that don't look smart today. Here are eight of them."

The Big Picture clicked through the list so we wouldn't have to.

1. The Return to Deficits: Bush’s tax cuts and spending increases — and clear disdain for the pay-as-you-go approach that had brought deficits down in the 1990s — brought a return to permanent deficits.
2. Iraq: Even if you think the war did bring benefits to the U.S., they would have to be pretty gigantic to justify the costs of $1-3 trillion dollars;
3. Tax Cuts for the Rich: Bush came to Washington facing almost diametrically opposing economic conditions, yet he offered up the same solutions as Reagan.
4. Financial Regulation: What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating, and that Bush’s “ownership society” push glossed over a lot of potential dangers.
5. Telling Us to Go Shopping: After the 9/11 terrorist attacks, President Bush didn’t call for sacrifice. He called for shopping.
6. Energy Policy: Not much to say here, except that there wasn’t an energy policy.
7. A State of Denial: Every Administration spins and sugarcoats the economic truth. But the Bush White House took this disingenuousness to new levels.
8. The Muddled Bailout: The main problem has been the ambivalence with which both Paulson and the White House have approached the financial rescue.

Bush was the decider, but Republicans were the enablers. They rubber-stamped every idea Bush threw their way, and questioning or discussing the merit behind his plans was verboten or "unpatriotic." After all, Republicans must not be challenged or questioned. They know best.

It turns out they weren't so smart after all, so why do they feel they deserve to be heard?

Republicans, who said they were receptive to Obama's call for a "unity of purpose," promptly tested the day-old administration. They criticized Democratic spending initiatives and requested a meeting with the president to air their tax-cutting plans.

There they go again! Tax cuts, tax cuts, tax cuts. I hope Obama politely listens and then tells them don't let the door hit you "thanks, but no thanks." Why? I'll let this economist speak for me:

Tax cuts won't build schools, or any other public good.

And right now, with so much of our infrastructure in need of attention, we need public goods.

We tried the tax cut approach to stimulating the economy once, we had no choice since Bush and the Republicans would not have passed any other type of stimulus package.

Guess what? It didn't work very well, and we have little to show for it. Had we, say, rebuilt water systems instead, at the very worst we'd have better water.

Republicans, please go back and read #7 above. You don't deserve to be heard as long as you continue to sing the same old song.

Oh, My God

That was House Minority Leader John Boehner's reaction yesterday after Democrats unveiled their $825 billion stimulus plan, which includes twice as much money for spending vs. tax cuts. He's not happy with the all the spending and told PBS NewsHour's Margaret Warner "that we need more in tax relief."

Oh, my God. Is that the only answer Republicans have for every problem? In this case, their answer is wrong according to Joseph Stiglitz (Nobel Prize in economics in 2001) who warns we should not squander America’s stimulus on tax cuts.

What is clear is that tax cuts will not help much. ...

Tax cuts have increased our national debt. They encouraged America to live beyond its means, increasing our liabilities without commensurate increases in assets. Further tax cuts would do the same. Good accounting looks at assets and liabilities. Spending on infrastructure, education and technology create assets; they increase future productivity.

Some of the spending in the stimulus serves multiple ends. Increased unemployment benefits have the largest multiplier effects – cash-strapped families spend every cent given – and meet vital social needs. It is imperative to provide health insurance to the unemployed: without that, a single serious incident can push a family into bankruptcy. Helping the unemployed meet house payments reduces foreclosures, addressing one of the underlying causes of the crisis. There are thus triple benefits.

We are in uncharted territory in this crisis. But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.

Stiglitz has some expert advice for state Republicans who also see cutting taxes as the only solution to budget problems.

Joseph Stiglitz of Columbia University, and Peter Orszag, until recently director of the Congressional Budget Office and now the nominee to direct the federal Office of Management and Budget — wrote during the last recession that spending cuts could actually be more harmful for a state’s economy during a recession than tax increases. ...

“The conclusion is that, if anything, tax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.

And if Republicans think they're appealing to voters with their continual tax cut rhetoric, they're wrong again. By a nearly 2-to-1 ratio, people preferred government spending to create jobs over tax cuts to give Americans more money to spend.

Tax cuts for people who don't have jobs is not the answer. Most Americans understand that. Republicans don't.

McCain plans new tax cut for millionaires

McCain flip-flopped back and forth last weekend about a new economic proposal before finally settling on The Pension and Family Security Plan. Part of his plan proposes cutting the tax rate on long term capital gains and dividends to 7.5 percent in 2009 and 2010. The current tax rate for these capital gains is 15 percent.

Who benefits the most from his plan? Wealthy millionaires like buddies Dick DeVos and George Bush. From the Wonk Room:

Today, the non-partisan Tax Policy Center (TPC) released an analysis showing who would benefit from this cut. Like the rest of McCain’s tax cuts, this one overwhelmingly aids the wealthy, with two-thirds of the benefit going to those making over $1 million:

In 2009, under a plan that lowers taxes on both gains and dividends, those making $1 million or more would get two-thirds of the benefit, and an average tax cut of more than $72,000. Those making less than $50,000 would get, on average, nothing. [emphasis mine]

And according to Jared Bernstein:

The average tax savings for the top 0.1%--income above $3 mil--is $244,000.

Besides, in what world is John McCain living? In case he hasn't noticed, the stock market has been losing value, and losses are already deductible from our taxes.

Jared Bernstein summed it up best: "This isn't a recipe for helping families hurt by the financial crisis and recession. It's a recipe for more income inequality."


(Cross-posted at Blogging for MI.)

Lobbyists and corporations love McCain

This is McCain's idea of putting the middle-class first.

The non-partisan group Campaign Money Watch has come up with another startling figure for those who follow the presidential money chase.

According to an analysis performed by the group, McCain's top fundraisers and aides have collected nearly $1 billion in fees from U.S. companies in the past decade -- specifically, $930,949,819. Using numbers provided by the Center for Responsive Politics, the group also found that officials of those very same companies have given nearly $12 million to McCain's presidential campaign, so far.

"The McCain campaign relies on big money lobbyists, and they'll rely on him," said David Donnelly, director of Campaign Money Watch. "In the 'you-scratch-my-back, I'll-scratch-yours' world of Washington, $931 million gets the special interests the best government money can buy. But just think of the payday these lobbyists might expect in a McCain Administration."

That's good news for lobbyists, not so much for the rest of us. To add insult to injury, McCain wants to cut taxes on corporations, in spite of the fact most corporations, including a large majority of foreign companies doing business in the United States, pay no income taxes.

The Government Accountability Office (GAO) reported that two-thirds of both American and foreign companies doing business here end up avoiding all income tax obligations to the federal government, despite corporate sales totaling $2.5 trillion.

According to the GAO, each year from 1998 to 2005, an average of 68 percent of the foreign companies operating in the United States paid zero federal income taxes. During the same period, 66 percent of U.S. domestic corporations paid no federal income taxes to the government.

The only thing the middle-class can expect from McCain is crumbs.

Defense contractor loophole closed

According to the AP, President Bush closed a loophole yesterday that defense contractors had been using to avoid paying millions of dollars in payroll taxes. [emphasis mine]

Bush signed into law the Heroes Earnings Assistance and Relief Tax Act, which provides tax relief for military families. Included in the legislation is a provision that would treat foreign subsidiaries of U.S. government contractors as American employers. That means they now have to pay the taxes that finance Social Security and Medicare programs. [...]

Lawmakers wanted to end the practice, which has become widespread among American businesses. The Senate Finance Committee estimates that thousands of companies have registered in the Caymans to dodge taxes. The losers, the committee said, are ordinary Americans who foot a larger share of the bill to pay for programs that benefit the elderly and the disabled.

In an example of how much tax revenue was being lost, the Boston Globe reported in April that Kellogg, Brown, and Root, which receives an estimated $16 billion a year for defense contracts in Iraq, avoided close to $100 million a year in payroll taxes by hiring workers through foreign shell companies. That's a large chunk of the nearly $846 million in revenues that The Joint Committee on Taxation estimates will be brought in over the next 10 years by shutting that loophole.

I'm not sure if this will affect Blackwater Worldwide since they're headquartered in Moyock, N.C., but it should since they're violating IRS laws too according to Rep. Henry Waxman.

In a letter to Erik Prince, the Chairman of the Prince Group, which owns Blackwater, Rep. Henry Waxman wrote:

"I have received documents which suggest that Blackwater may have engaged in significant tax evasion. According to an IRS ruling in March 2007, Blackwater violated federal tax laws by treating an armed guard as an “independent contractor.” The implication of this ruling is that Blackwater may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible.

And according to McClatchy Newpapers:

Waxman’s staff looked at the most recent State Department contract and estimated that between May 2006 and March 2007, Blackwater avoided paying $15.5 million in Social Security and Medicare taxes and $500,000 in unemployment taxes.

That's a lot of tax money they owe the country, but Blackwater can afford it. Since 2001, they've been granted federal contracts worth more than $1 billion - contracts that are being paid for by taxpayers.

As Sen. John Kerry said earlier this year, "Failing to contribute to Social Security and Medicare thousands of times over isn't shielding the taxpayers they claim to protect, it's costing our citizens in the name of short-term corporate greed."


(Cross-posted at Blogging for Michigan.)

McCain relies on "experts" for economic advice

You've probably heard that John McCain is considering Carly Fiorina for vice-president and that Phil Gramm is his main economics guru. This shows that McCain really is "Vintage Bush." (Thanks michmark.) He doesn't have to know anything, he just needs to consult with the not so right people.

Let me start with Carly Fiorina, who will be addressing the Detroit Regional Chamber's Mackinac Policy Conference today. As you might recall, Fiorina was ousted from her position as CEO at HP for mismanagement and failing to produce the returns and corporate profits expected. Her position didn't work out too well for workers either. Fiorina executed a merger between HP and Compaq and thousands of employees were laid off as a result. Don't feel too sorry for Fiorna though. She walked away with a $21 million dollar severance package, which was 2.5 times her base annual salary.

Fiorna's employment with HP was a lose-lose proposition all the way around, but that doesn't seem to matter to McCain, possibly because Carly is all for cutting taxes. The Michigan Business Review interviewed her and these quotes pretty much set the tone:

So we've got to get our climate for business better. We have to lower the tax rates at both a federal and a state level. We have to get useless paperwork, bureaucracy and regulation out of the way. We have to motivate businesses to invest.[...]

But Michigan needs to think very long and hard about the tax climate it has compared to the other states.

She was also asked about Hewlett-Packard possibly acquiring EDS and what kind of impact she thought it would have on this state.

And frankly I just don't know enough about it to know what the specific impact on Michigan will be.

But what I can tell you, having done a massive merger myself and executed it successfully, one of the first questions that a chief executive is faced with is, when you are consolidating two businesses, where will the jobs go?

In HP's case, those jobs went overseas to China and Russia because, as Carly said, "there is no job that is America's God-given right anymore."

Not all vice-presidents play an active role in influencing policy, so Fiorina may be benign in that area, but not so Phil Gramm. McCain has made it clear that Gramm is his main economic guru, or as David Corn calls him, Foreclosure Phil.

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.

Tax cuts, free trade, deregulation. McCain is pushing the same agenda that's worked well for the rich at the expense of average Americans, and he aided and abetted by people like Gramm and Fiorina. McCain is simply more of the same from a party that has nothing to offer average Americans.


(Cross-posted at BFM.)

Norquist Approves of McCain

Grover Norquist loves John McCain because he wants to make Bush's tax cuts permanent and reduce the corporate rate from 35 percent to 25 percent. (Have to boost those bottom lines so CEOs can pocket more money.)

From Think Progress: McCain Adopts ‘Entire’ Norquist Agenda, Will Double The Bush Tax Cuts

So what will McCain's plan do for the middle-class families left behind by the Bush administration all these years?

According to a new analysis released today by the Center for American Progress Action Fund, McCain’s new proposals would do the following:

Double the size of the Bush tax cuts, costing more than $2 trillion in their first decade.

Do virtually nothing for the middle class: only 12 percent of the tax cuts will go to the bottom 80 percent of households, while 58 percent will go to the top 1 percent of households. [emphasis mine]

Follow Norquist’s blueprint that’s been called a “stealth approach to tax reform” – and that aims to abandon progressive taxation in favor of a wage tax imposed mainly on low- and middle-income households.

In other words, McCain won't do a thing for the middle-class. McCain=Bush=McSame.

"Don't worry, be happy" is a bunch of bunk

This isn't news to most middle-class Americans.

Even when experts were declaring the economy healthy, many Americans voiced a vague, but persistent dissatisfaction. ...But to many people, something didn't feel right, even if they couldn't quite explain why. [...]

A year ago — months before economic alarms went off — nearly two of three Americans polled by The Rockefeller Foundation said that they felt somewhat or a lot less economically secure then they did a decade ago. Half said they expected their children to face an economy even more shaky.

Other polls have registered similar unease in the past few years, showing large numbers of Americans dissatisfied with the economy, and worried about retirement security, health care costs, and a declining standard of living.

This unease reflects a disconnect between the "our economy is strong" rhetoric coming from Republicans and the reality we're living. Why are Americans feeling so insecure?

Except for the late 1990s, pay has been stagnant for more than a generation, barely keeping pace with inflation. In 1973, the median male worker earned $16.88 an hour, adjusted for inflation. In 2007, he earned $16.85.

For many families, the stagnation has been moderated by the addition of a second paycheck as more women went to work, and their pay rose over the same period.

But the largest gains went to workers at the top of the pay scale. Now, economic worries are rising fastest in households with smaller paychecks, and that chasm is widening.

"Over the past decades, whether inflation was much higher or lower, or incomes grew faster or more slowly, there has never been such a wide divergence in the experiences" separating richer households from poorer ones, Richard Curtin, the director of the University of Michigan's consumer survey said in summing up the most recent figures.

Workers also feel anxious because new jobs being created in this economy come with few assurances:

Rennie Sawade, the son of a Michigan auto worker, majored in computer science because he saw no future on the assembly line. He was rewarded with a job at Oracle Corp., but lost it in late 2005 when the company shifted his department's work to India. Sawade, who lives in Woodinville, Wash. near Seattle, has been unable to find a full-time replacement, instead jumping from contract job to contract job.

The contractor offers a 401(k), but contributions are entirely up to workers. When Sawade's wife was diagnosed with thyroid cancer last year he missed the equivalent of two weeks work — and pay — to take care of her. The job has health insurance but still left the family with a bill for more than $2,000. Contractors call to offer other jobs, but the pay is frequently disappointing, he says.

"It was pretty well known when I was working on my bachelor's degree that the auto industry was going to move overseas," he says. "Everybody said get into technology because you'll have a career. Now it looks like the same thing is happening to technology."

Workers have a choice. They can keep voting against their own self interests (translation, voting for Republicans) or they can vote for leaders who support living wages, unions, fair trade, universal health care, retirement security and a progressive income tax (translation, vote for non-corporate owned Democrats).

Bush's Legacy: Debt

I read this, The Dubious Priorities Of The President’s FY 2009 Budget, and this...

The President’s budget would provide more tax cuts heavily skewed to the most well-off while cutting vital services for low- and moderate-income Americans, generating large deficits, and increasing the strain on states already confronting budget problems as a result of the economic downturn. The budget reflects misguided priorities that would leave the American people more vulnerable in a number of ways.

And I thought, "thank heaven Bush's term is almost over and the next president can start fixing the damage he's done." Then I read Robert Reich's column, Financing the Common Good, and found myself getting nervous.

A new Democratic president will face many of the same challenges Bill Clinton faced at the start of his administration -- but all made worse by George W. Bush. Clinton, recall, inherited a fiscal straightjacket. At the start of 1993, the federal budget deficit was running $300 billion a year as far as the eye could see. Prior Republican administrations had sought to "starve the beast," going deep into the red by spending heavily on defense while at the same time cutting taxes.

Yes, I remember those years, and I see the similarities between the economy then versus today, but it can be fixed. Right?

A new Democratic president coming into office in 2009 will face a national debt much larger than it was in 1993. Despite the $5 trillion 10-year budget surplus that ended the Clinton years, the federal debt at the end of the Bush years will be almost $4 trillion larger than it was then. It will have grown about 70 percent during Bush's reign. If you assume 5 percent interest, the Bush debt burden will require the government to pay its creditors -- prominent among them, the Japanese and Chinese -- $200 billion a year, forever. That will use up a lot of tax revenue even before any of the nation's problems are addressed. In this way, George W. and company have done Reagan one better. They've not only starved the beast through tax cuts for the rich and increased defense spending; they've just about dismembered it. [emphasis mine]

To all the people who voted for Bush, I hope you're happy. You got your short-term monetary gain at the expense of my grandchildren and their grandchildren into perpetuity.

It's a bad time to be a Republican

Democrat candidates across the country have a smorgasbord of issues to pick from on the campaign trail. Iraq and health care are two of the biggest, but "it's the economy stupid" is quickly closing the gap. Here's the bad economic news for Republicans:

The Rasmussen Consumer Index measures the nation’s economic confidence on a daily basis and has now been below the 100.0 baseline level for two full weeks. That baseline was established in October 2001 meaning that economic confidence today is lower than it was in the aftermath of the 9-11 terrorist attacks. [emphasis mine]

Just 13% of Americans now say the economy is getting better while 68% say it is getting worse. Forty-two percent (42%) say the country is in a recession already and another 13% say a recession is coming within six months.

The Gallop Organization got a similar sentiment:

Just 13% of Americans say economic conditions are positive, lowest reading since the Gallup Organization started polling on the question in 1991 — a time when overall consumer confidence was at one of its lowest points in the past 40 years. [emphasis mine]

Even the Republicans' base is feeling the pain according to Bloomberg:

Affluent consumers, pinched by shrinking stock portfolios, falling property values and smaller bonuses, are behaving like their less-well-off peers: They're reining in spending.

That portends a steeper slowdown than originally forecast for the U.S. economy, or even a recession, because the richest fifth of American households accounts for almost 40 percent of consumer spending, the main engine of economic growth.

Yep, it's definitely a bad time to be a Republican. This is the state of our economy today as described by the Pittsburgh Post-Gazette:

But there should be no misunderstanding, whatever the vagaries of presidential politics, that the economy has taken a hammering during Mr. Bush's seven years in power. On the plus side, to the degree that the unemployment rate is a valid measure, it stands at a not-bad 4.6 percent. On the other hand, job creation, although it has had a few good months, has in general been abysmal, not even meeting the 150,000-per-month minimum needed to absorb new entries into the job market.

Mr. Bush's two major tax cuts benefited his base, the rich. The national debt has soared on his watch, resulting in the United States having to spend $200 billion a year on debt service. China holds $1 trillion in U.S. public and private debt, another uncomfortable thought. Mortgage foreclosures are expected to reach 2 million, cutting into both Americans' sense of well-being and their willingness to spend money as consumers -- a development that could be catastrophic for retailers.

Gasoline at more than $3 a gallon, while oil company profits soar, is simply enraging, and no American can be unaware that both Mr. Bush and his vice president, Dick Cheney, came to government from the oil industry. The price didn't go from $20 a barrel in 2002 to nearly $100 today simply because of growing Chinese and Indian demand. The riling of the Middle East that Mr. Bush's Iraq war created has played an important role in that phenomenon.

On a more basic level, the United States -- in no small part because of spending its money on wars and profits to oil companies and defense contractors -- continues to neglect its human and physical infrastructure. America is not educating nearly enough scientists and engineers. Its bridges, roads and technology development continue to get short shrift.

And don't forget about our devalued dollar. OPEC is threatening to dump the dollar and rapsters are rapping about the Euro being the newest "bling".

There's no doubt the president is responsible for the state of our economy, but that doesn't absolve the Republicans who went along with him each step of the way. They are equally responsible. They need to be held accountable too. The voting booth is the perfect place to accomplish that.

Do tax dollars disappear into a black hole?

This is an interesting idea that might be worth taking a look at here in Michigan. From Democracy for Utah:

Utah cities to emphasize the services you get for your tax dollars

The Utah League of Cities and Towns has started a new marketing campaign called "Making Life Better" (brought to you by the same folks who did Utah's "Life, Elevated" tourism slogan) to highlight the services that cities provide (Deseret News):

The league has commissioned eight years of surveys that show Utahns incorrectly believe their hometowns collect a large portion of their taxes but provide few services. [...]

As league policy analyst Neil Abercrombie introduced the statistics from the latest survey done by Dan Jones & Associates, he said, "I'm not going to say people are clueless. Let's just say they're less than knowledgeable about who provides city services."

For example, the survey asked residents whether they had used a municipal service in the past 24 hours.

Sixty percent said yes, but only 15 percent of those said they used a city-maintained street that day, and just 11 percent said they used city-provided electricity and sewer services.

Republicans have done their best to convince people that their tax money just goes into a big black hole. Who would've thought that, in Republican Utah, city governments would want to promote the fact that they provide a lot of services for your tax dollar. [emphasis mine]

According to the Deseret News, the campaign is expected to improve the perception of cities and towns by making it clearer exactly what services are provided with those tax dollars. I think that's a great idea, particularly after reading only 11 percent of Utahns said they used city provided electricity and sewer services! What are they using, candles and outhouses?

For the record, I have a feeling Michigan's residents don't fully comprehend what services they get for their tax dollars either - from the state level on down.

Where was this sentiment months ago?

From the Macomb Daily: Granholm's 2-cent tax doesn't look so bad now

Now that the Lansing budget battle has degenerated into bitterness and brinksmanship, it’s too late for lawmakers to pull back and retrace their steps.

But somebody has to say it: The 2-cent tax on services that was proposed by Gov. Jennifer Granholm doesn’t look so bad now, does it?

No, it doesn't look so bad, and I said that way back in February. Of course, my opinion didn't count, not that it matters. Republicans never wanted a solution. They only wanted to make Granholm look bad.

So, here we sit seven months later on the verge of a state shutdown and this editorial comes to the conclusion that Granholm was right after all, and they give lots of solid arguments to back up their reasoning.

The prospect of an income tax increase has taxpayers up in arms and legislators cowering in fear. Yet, I think we all realize that we’re going to see an income tax boost to 4.6 percent when this melodrama ends.

Compared to the finger pointing and gnashing of teeth in Lansing over the past 10 days, I think the 2-cent tax would have been an easier sell to the constituency — and easier for lawmakers to swallow.

Which would you prefer, a bigger bite out of your weekly paycheck or an extra two cents on the dollar when you get your hair cut or play a round of golf ?

When Granholm proposed the services tax in February, she claimed it would cost the average family just $69 a year. That was probably low, but even if the price tag was $100, that’s about one-third the cost of a higher income tax. [...]

It was a broad-based tax on about 120 services, meaning it would have brought in a lot of money paid by tourists and visitors to Michigan. It would have better reflected the new economy, with service industries emerging as a large and growing sector. It probably would have had minimal impact on Michigan’s national reputation in the business community, since most states already tax a wide array of services.

Most importantly, it would have levied taxes on “discretionary” spending rather than hitting workers’ paychecks. Those who choose to pay for a health club membership or prime seats to a Red Wings game would know that a 2 percent levy was attached.

Anti-tax activists say that people in Michigan are hurting and can’t afford a tax increase. Well, those who are hurting don’t spend money on pedicures and tanning salons and expensive concert tickets. In fact, I suspect low-income families would barely feel the pinch of a tax on services.

In addition, the 2-cent tax would add some symmetry, some logic, to Michigan’s tax system. Why, when we go to a golf course pro shop, should we pay taxes on the purchase of golf balls but not on a round of golf ? Why, when we go to a salon, should we pay taxes on hair-care products but not on a hair cut? [...]

It’s important to remember that the 2-cent tax would have generated $1.5 billion, more than what’s now needed if cuts and reforms take hold. Some controversial levies could have been eliminated from the list of taxable services, or the tax could have been whittled down to a mere 1.5 cents.

But that’s now all hindsight, with our legislators flailing away and embarrassing our state. This whole budget battle could have been avoided if Granholm’s tax had been recognized months ago as a better alternative to a higher income tax.

The GOP failed the citizens of Michigan in their zeal to make Granholm look bad. Was it payback for her punishing win over DeVos? Possibly. Whatever the reason, they need to be held accountable for playing politics instead of working and booted out of office next time around.

Republicans two-faced about taxes

I wouldn't send a Republican to McDonald's with a $20 bill to pick up a hamburger for me. Not only would they keep the change, they'd probably eat my hamburger. How did I reach this conclusion? Follow along.

From Mr. Roger's Neighborhood, I learned that five MI GOP Members of Congress sent a letter to Senate Majority Leader Mike Bishop, House Leader Craig DeRoche, Rep. Joe Knollenberg, Thad McCotter, Fred Upton, and Tim Walberg urging them to hang tough against a state tax increase. Michigan faces a government shutdown if the legislature doesn't pass a new budget by the end of the month. State Republicans want $1 billion in cuts; meanwhile, Gov. Granholm and Democrats called the cuts draconian and said they would hurt our citizens, schools, police, etc.

The Republicans are outraged that Granholm and the Democrats would put people and a decent quality of life ahead of tax cuts. How dare they waste tax dollars they ask? Well, what about Iraq? Where's the outrage about the amount of money we're spending there? We've spent over $500 billion on that lie so far, but according to Daily Kos that's just the beginning.

A new Congressional study finds that President Bush's plans for the U.S. in Iraq over the next several decades will reach the trillions of dollars, on top of the approximately $567 billion the war has already cost. That accounting assumes a significant troop drawdown -- and still tallies a daunting expense for the United States [...] [emphasis added]

A prior CBO study estimated that U.S. costs in Iraq from 2009 to 2017 will total approximately $1 trillion. On top of that, under the reduced-force combat scenario envisioned in this CBO estimate, the U.S. will spend another $1 trillion by 2057 -- the lifespan of the U.S.'s Korean presence to date.

Kos says, "I'd respect the Republicans mishandling this war a tiny bit more if they actually worried about paying for this war rather than blather on about tax cuts."

To paraphrase Kos, I'd respect our state Republicans a tiny bit more if they were honest. They argue that no amount of money is too much to spend in Iraq, but when it comes to meeting the needs of people here at home - the ones who send their tax dollars to Washington to pay for their war - they snap their wallets shut and expect the rest of us to follow along. They know this war is based on a lie, but it's more important to stick to the party line than admit they were wrong.

So you see, it's okay for us to send money to Washington so they can continue their war indefinitely - a war that enriches Republican profiteers and CEO's of defense contractors - but we get nothing in return, not even some change to spend on our schools, infrastructure, health care, etc.

We're being robbed.