Dana Chasin at 2020 Vision does a good job of encapsulating key issues that surface in the Democratic debates.
Let's get this out first: most listeners will admit that the debates seem both too long and too short, as mentioned on Stephen Henderson's Detroit Today program this Wednesday 1/15 morning. They are too short, because candidates are interrupted at the 30-second time limit and not allowed to develop nuanced, considered answers to questions. They are too long, because they go on for 2 hours. I'd add that they are problematic, because the media pundits have their own views of what creates energetic dialogue that makes good 'copy' for programming, versus the kinds of in-depth discussions about issues like climate change, health care, education, the Supreme Court, congressional oversight/checks and balances, tax policy, wealth inequality and income inequality, plutocracy and oligarchy, etc. that people want to hear.
One important distinction that Chasin notes for thinking about socio-economic programs is the distinction between means testing and universality. A means-tested program is generally available to lower-income people and often phases out and is capped at some income level beyond which it is no available. A universally offered program is one that is available to all, rich and poor alike. So the Earned Income Tax Credit is a means-tested program that is capped (too low, in my view), and Social Security is a universally available program (though there is a graduated payout scale and the funding formula caps pay-ins to the program at a ridiculously low level that means the rich pay only a pittance into the program)
As Chasin notes also, the right tends to reject universally available programs as having unreasonably high costs and allowing for free-riders. The left tends to favor universally available programs for ease of administration and--not noted by Chasin--for the collegiality and collaborativeness they can build in having rich and poor in a program together, where it cannot be dismissed as 'mere' welfare for the poor (which, as we know, often gets translated in the hands of the ultra wealthy like Mitt Romney into "handouts for 'takers' from 'makers')
Two points here about the two most progressive candidates, Bernie Sanders and Elizabeth Warren:
"Sanders is the strongest proponent of universality. ... Sanders has maintained support for universal healthcare (in the form of single payer, Medical-for-all), higher education, and social security expansion." (quoting Chasin in a 2020 Vision emailing)
Quote from Sanders at the debate: "My democratic socialism says healthcare is a human right."
"Warren's policy agenda includes programs that are both universal and means tested. Warren's healthcare and free college program are universal. Her childcare proposal is means tested. ... Warren stands apart from some of her rivals by providing explicit pay-fors, includer her two [per]cent wealth tax levied on the country's wealthiest households." (quoting Chasin in a 2020 Vision emailing)
Quote from Warren at the debate: "The lowliest millionaire that I would tax under this wealth tax would be paying about $19 million in the first year in taxes. If he wants to send his kid to public university, then I'm okay with that."
A week ago (Jan 8, 2020), the New York Times described Michael Bloomberg's plan1 for addressing the income and wealth inequality in the United States that has been a constant topic of discussion by Democratic candidates. Briefly, as with the robber barons of Teddy Roosevelt's age, the wealth of the global commerce titans and particularly the private equity fund buyers and sellers of companies (and layers off of employees) has exploded over the last four decades in the US, beginning in earnest with Ronald Reagan's presidency. Most of the benefits of productivity gains have gone to a very few people at the top, and the bottom 50% of the wealth distribution actually owns a smaller share of the nation's wealth than 40 years ago. The top 1% have gained enormously, and the top 0.5% have been even more enriched. We have ultra multibillionaires like Jeff Bezos who can pay $9 billion to his wife in a divorce settlement and still be the wealthiest man in the world with more than $130 billion in net worth. He earns about $78.5 billion a year (counting value of his Amazon shares) or more than $6.5 billion a month2 and thus exemplifies this new "gilded age" of ultrawealthy tycoons. This exists at the same time that the Trump administration proposes work requirements that will eliminate food stamp aid for 700,000 of hungry Americans and, with other initiatives, will take food stamps from 3.7 million beneficiaries who simply cannot get work that pays well enough to fund a sustainable lifestyle for themselves and their families.3 This will "save" the U.S. about $5.5 billion over five years--less than Bezos 'earns' in a month. This disparity--$5.5 billion to feed 3.5 million hungry Americans versus provide a month's additional wealth for a person already wallowing in wealth like Jeff Bezos--is why it is clear that the US needs to figure out how to respond to the inequality crisis in order to protect American democracy and ensure Americans have a decent standard of living.
Bloomberg's plan seems to be a moderate stance like Obama and Biden that attempts to focus on factors other than the wealth gap and the accompanying power gap that wealth provides. As the NY Times reports, he "frames the economic divide primarily in regional terms--and not along ... rich-versus-everyone-else class lines."1 The Times article notes that his plan is not unlike the charge Obama gave to Joe Biden for the Middle Class Task Force.1
Bloomberg's proposals for addressing the problem are similarly centered on things long discussed and tried that are difficult to do at a large enough scale to make any inroads into the inequality problem or the power gap problem. He is most definitely not proposing a wealth tax. His proposals include a focus on education and skills training, infrastructure projects, and entrepreneurial training centers. Although the GI Bill was a significant part of the post-WWII economic boom because it allowed vast numbers of returning veterans to get a college education, Bloomberg seems to be thinking more of apprenticeships and community colleges (training for a job) rather than university (training for a career and an approach to learning throughout life). The Times notes his interest in raising the minimum wage to $15 an hour, expanding the Earned Income Tax Credit, and encouraging unions while disallowing noncompetes for low- and middle-income jobs.
All those are minimal steps that any progressive candidate should take, but while they may have marginal impact on middle class mobility, they will not do much at all to ease the income and wealth gap that has been caused by technology, globalization, and financialization of the economy together that has measured success almost solely from stock market numbers and thus allowed corporate and private equity tycoons to garner the major gains in productivity over decades while paying their workers too little (or moving offshore to pay even less), combined with a tax system that privileges wealth, including, among a host of others, extremely favorable corporate tax provisions after the 2017 tax legislation, ridiculously low maximum rates on ordinary income, carried interest provision, section 1031 exchanges, section 1202 exclusion for gains on original issue small business stock, capital gains preference, and an absurdly low flat estate tax above a too-high exemption amount with a step-up in basis for heirs.
Bloomberg is a billionaire who is at least aware that the inequality in this country is problematic and needs to be addressed. But like most of the "have-so-much" class, he shows little interest in what is truly required--a shift in the direction of redistribution to balance the distorted seesaw of billionaires getting all the height and the rest sitting at the bottom. FDR's New Deal is said to have worked because the robber barons were scared that the proletariat would rise up in support of communism--the so-called 'red scare' behind the success of social security enactment. There may not be a red scare now (though the Trump campaigners try to paint democratic socialist programs as communism), but there is a real likelihood that the contrast--and possibly real class warfare-- between the squalor and despair of poor families who work hard but cannot fend for themselves and rich kids with silver spoons that only grow bigger and bigger may eventually threaten the global nation of the plutocrats.4
3 Phil McCausland, Trump administration proposals could cause millions to lose food stamps, NBC News (Nov. 30, 2019) (discussing proposed changes to SNAP program that would impose stricter work requirements, cap deductions for utility allowances and 'reform' the way states automatically enroll families when they receive other aid). See also
4. See, e.g., Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich (2012) (described in The Guardian book review as "a necessary and at times depressing book about the staggeringly wealthy"). Freeland is neither Marxist nor socialist, and as I am reading the book, not evenappropriately skeptical of the amount of merit behind the plutocrats' self-claimed meritocracy.
The Republicans in the House and Senate continue on their downhill rush to pass their so-called "tax reform" plan before the holiday break. It's a mad rush to nowhere, a corrupt process of "please the oligarch" that will cause a huge deficit increase (on the scale of $1 to $1.5 TRILLION over ten years) and be used by the Ryan, McConnell and Trump cadre of liars to justify a domino effect of Medicare, Medicaid, and Social Security cuts. It is class warfare of the one percent against everyone else. And it is being sold to the American people with a litany of falsehoods.
Almost all the provisions in the bill are designed to be generous to the ultra wealthy and stingy to the middle class and poor.
Corporations and their owners and managers--among the wealthiest people in the country--get the only permanent tax breaks. It's done in the name of competitiveness, but that's bunk. It essentially encourages corporations to continue to move profits out of the US because foreign profits are taxed at zero while US profits are taxed at 20%. It pretends that the multiple tax breaks for big corporations are necessary (under disproven trickle-down and supply-side theories) to lead to more investment in business in the US and to more jobs and higher pay for workers. But in fact corporations are enjoying record profits under current law and they aren't using those record profits to pay their workers more or to create more jobs or even necessarily to invest in the US. Mostly they are just doing share buybacks for shareholders (ie, owners/managers and other shareholders) that include the wealthiest people who own the most corporate stock. That's because it is demand, not capital, that determines what business expansion is needed and results in labor shortages that give workers leverage to demand more pay. Tax cuts for corporations just add to the already existing capital glut.
The estate tax cut (elimination in the House bill; doubling the exemption to levels that only the very few multi-billionaires will pay any at all in the Senate) ensures that the wealthy will pay almost no tax at all. They borrow against their wealth while alive. Their estates pay no tax on the accumulated wealth when they die. Their children inherit with a "step up" in basis so they get a huge windfall. And their children can pay off the parents' debt by selling a few items (because of the basis step-up, with no taxes either) and live on their windfall without ever lifting a finger to do any real work.
Individual workers really lose out in these bills. Under the House bill, the rate on the lowest wage earners is INCREASED 20%--from 10% to 12%. And all of the 'tax cuts' for ordinary taxpayers sunset after a few years, while the corporate cuts are permanent. Shows where the GOP loyalties lie--not to the worker base that put them in office, but to the wealthy oligarchs like the Koch Brothers who donate to the GOP political campaign chests.
The pass-through provisions (a 23% "deduction" from income before tax is one version)--along with the ability of businesses but not individuals to deduct state and local taxes--are a great boon for wealthy owners of real estate partnership interests, like the Trump family. But they make no sense at all. The more different kinds of income categories that are created with different rates, the more you empower the wealthy to gamesmanship with the tax system. That's what this legislation does in spades.
And after the American people spoke up in Town Hall after Town Hall that they wanted the Affordable Care Act health insurance system protected, the Senate's version of the so-called "tax reform" bill (developed in utter secrecy by Republicans bargaining with Republicans as though nobody else counts) eliminates the individual health insurance mandate (and accompanying penalty). Without that, the entire idea of affordable insurance through government-operated exchanges fails, because the only people on those exchanges will be those who are sick enough or old enough or vulnerable enough to realize that they will need health insurance soon. Insurance works by diversification of risk--that's why the Republican insurance plan in Massachusetts, the model for Obamacare, called for an individual mandate and penalty. Without that core feature, the exchanges can't work because the risk isn't sufficiently diversified. The Republicans who are trying to gut Obamacare know that, and apparently they don't care that this particular "tax cut" will in fact cost more than 8 million Americans the possibility of having affordable health care, likely leading to early deaths for a large number of that group. They don't care, I guess, because "those people" are less likely to be wealthy and less likely to vote Republican. If you are so blinded by partisan fealty that you no longer care about legislating for the good of the nation, you descend to the garbage dump level of this Republican tax bill.
Of course, the elimination of the individual tax cuts, the expansion of the real-estate-industry favorable tax cuts, the inclusion of what can only be called a 'mock' provision to deal with carried interest (it doesn't), the elimination of the medical expense deduction (in the House bill) that will leave the disabled, the injured, and the elderly in dire straits, the decimation of the casualty loss provision that helps ordinary people recover from natural disasters, the huge cutback to the state and local tax deduction for individuals (while continuing to allow it for all businesses)--all these provisions prove that Republicans don't care a fig about ordinary people. We won't be spending money on basic scientific research (needed to be competitive in a global marketplace and needed to save lives from cancer and other diseases). We won't be spending money on infrastructure (needed to have safe roads, trains, airports. etc). We won't be spending money on education (other than Betsy DeVos's favored religious charter schools that teach falsehoods on a daily basis). We won't be creating a sustainable economy that serves all of our citizens.
Oh, but we will be decimating the environment, as Trump's lineup of industry trolls continues to reduce wilderness areas, as Lisa Murkowski sells her tax and healthcare vote to get to open pristine and irreplaceable Arctic wildlife refuge to the oil and gas fossils that have grown obese off 200 years of government subsidies (see The tax bill is bringing drilling in the Arctic National Wildlife Refuge closer than ever, Vox.com (Nov. 28, 2017)), as Zinke reduces FOR THE FIRST TIME EVER national monuments set aside by other presidents so that those obese coal and oil and gas guys can get even wealthier (see Zinke backs shrinking more national monuments and shifting management of 10, Washington Post (Dec. 5, 2017)), as Pruitt ensures that nobody at the EPA does anything to protect the air, water and land from industry pollution, see Goodby science, hello industry, LA Times editorial board (Nov. 6, 2017). .....
The passage of a tax bill that will create an additional one-to one-point-five trillion-dollar deficit is proof that the Republicans don't care if they destroy this country in their effort to return to the Gilded Age of the past (or, in Roy Moore's definition of the time that America was great, the slavery era when (white) families stayed together and were able to sell black babies away from their black mothers (or half white babies away from their raped black mothers)).
What is the Republican response to the deficit and mal-distribution problems created by such a huge tax cut for the already wealthy?
1) The tax cut will pay for itself. This is trickle-down gobbledy-gook. The vast majority of economists and tax experts are quite clear that this is simply not a supportable claim. It's pie-in-the-sky ideology with no basis in fact when there have been a number of attempts to find such a basis. It wasn't true for Reagan, back in an economy for which tax cuts held much more promise of economic stimulus than they do for our current situation. The Kansas experiment shows this trickle-down reasoning is without foundation. Russell Berman, You Better Learn Our Lesson: Kansas Republicans say they are worried that Congress and the Trump administration will repeat the mistake they made in enacting budget-busting tax cuts, The Atlantic (Oct. 11, 2017). But Treasury has now put out a one-page analysis--compared to the careful, extensive, fact-based analyses usually prepared to support well-researched tax proposals--saying that the GOP plan would produce record growth and that growth would pay for the tax cuts. See Alan Rappeport and Jim Tankersley, Treasury Defends Tax Plan Cost with One-Page Analysis (Dec. 11, 2017). Event the speculative Treasury 'defense' assumes away half of the deficit with legislative cuts that aren't even on paper yet. It's pure fiction.
2) Medicare, Social Security, Medicaid (the "entitlement" programs) will have to be cut to make up for any deficits. That, of course, is the underlying plan. See Jeff Stein, Ryan says Republicans to target welfare, Medicare, Medicaid spending in 2018, New York Times (Dec. 5, 2017). Create a deficit and use it to 'starve the government' to justify cutting any programs that don't serve the oligarchs. Most of that minority of people who voted Trump into the presidency (assuming there wasn't a good bit of ballot falsification, which I think went on in Detroit to not count everyone's ballot) will suffer from this--they depend on Social Security when they retire and on Medicaid when they become incapacitated in their old age and need nursing home or assisted living care. Under the Republicans, we'll return to the "good old days" of the Great Depression when old folks became homeless and the government didn't have to bother with caring about the vulnerable.
We all should be hitting the phones and telling every GOP member of Congress that they are not there to protect their wealthy donors: they are there to protect us and ensure that the economy is sustainable and viable for all of us. This tax legislation stinks. Tell Congress to ditch it in the sewers where it belongs.
Betsy DeVos was confirmed as Secretary of Education in a Senate vote that had every Democratic Senator voting against her, along with two brave Republican Senators (Lisa Murkowski, Alaska; and Susan Collins, Maine). Thanks to those no-voters who showed integrity. Regrettably, the vote created a tie, broken in DeVos's favor by Trump's Veep, Mike Pence. Note that the result is that Senators representing by far the vast majority of the American people voted AGAINST DeVos.
As a Michigander, I can tell you firsthand that this is a disastrous choice for the head of the most important Education agency in the country. Betsy DeVos is just another one of Trump's billionaire crony capitalists who are using service in the government--which is supposed to be about service on behalf of We the People--as a way to funnel more money to their fellow crony capitalists through elimination of protective regulations, open exploitation of federal lands, and willful ignorance about the harm that their crony capitalist policies have done and will do to the economy.
ASIDE: Check out, for example, Melania Trump's new lawsuit claiming $150 million in damages from The Daily Mail because it's article on the company she modeled nude for suggesting that the company was an 'escort service' cost her the "once-in-a-lifetime opportunity" to get rich off of her "multi-term" exposure to being the most photographed woman in the world--i.e., (not explicitly stated but clearly implied) her status as First Lady.
Betsy DeVos is an heiress with billions who married into another crony capitalist family with billions. The DeVos family has used its wealth to curry favor and influence in state and federal government. IN particular, Betsy DeVos has been busy using her wealth to remake public education in Michigan in line with her own particular religious and crony-capitalist views on Michigan's education. She supports junk science including "intelligent design", the pseudo-science replacement term for religious "creationism", in an attempt to undo scientific support for evolution. She has pushed charter schools on Detroit--blaming any education shortcomings on dedicated teachers and disadvantaged students in public schools that have been deprived of hundreds of millions of state dollars owed them while turning a blind eye to the abject failures of for-profit charter schools in which 'management companies' rip off taxpayer dollars to overpay executives without having to comply with any of the accountability measures that are pressed on public schools that are underfunded. Betsy DeVos knows nothing about public education, knows very little about the privatized charter schools she pushes, knows nothing about education law, and knows nothing about improving education in inner cities or poor rural areas. What she does know is that she supports any way possible to take taxpayer money and give it to religious and other private schools to use without accountability to the public.
I predict that the result of her term as Secretary of Education will bring further devastation of public schools, more funneling of taxpayer money to line the pockets of private school managers and even less requirements of assessment and accountability from those very managers, a dearth of fact-based evidence for anything in education, more and more rip-offs of ordinary Americans by for-profit purported schools like the fraudulent so-called "university" that was "Trump University"--i.e., a precipitous slide in American education caused by the crony capitalist privatization impulse and real harm to the children and grandchildren of that minority of the American population that voted Trump and his ilk into office.
The result is that tax dollars that public education so desperately needs will be sent instead to the pockets of the already rich. Public education will continue to struggle to innovate and expand programs that can reach underprivileged children who don't have enough food, shelter or home stability to learn well. MOre and more children will be subject to religious indoctrination rather than education, and be less prepared to deal with the global world we all live in and to take the kinds of jobs--like renewable energy, and engineering and medical research--that provide the basis for a broad-based, stable, productive economy that makes life better for all of us.
Trump voters, beware. You thought Trump's promise to 'restore energy jobs' was one devoted to helping you. Look, there are already more jobs in electric power generation from renewable energy in this country than in coal. See, e.g., US solar power employs more people than oil, coal and gas combined, report shows (Independent.co.UK, Jan 23, 1017); There are now twice as many solar jobs as coal jobs in the US (Vox Feb. 2, 2017). The way to 'restore jobs' (whether energy or otherwise) isn't to try to drive the country back to the 1950s when white men were almost the only workers at any decent paying jobs and the multinational corporations had not yet taken over U.S. businesses and moved much manufacturing to other countries. The way to create jobs in the United States is to embrace the creativity and ingenuity of the American people, build an environmentally better world with clean water, clean air, clean food, regulating the companies to protect the people, and teach our children facts rather than "alternative facts" about the world we live in. Climate change denialism, continuation of the hundred-year-old giveaways to oil and gas and coal industry polluters while squelching assistance to the new renewable energy industries; privatizing education and health care (including moving Medicare to the States in a way that would allow them to make serious cutbacks in health care for those on Medicare)--these things that the Republicans stand for will ultimately leave America the Great more of a third-world country and seriously hurt that group of rural and suburban ordinary Americans that voted for Trump more than anyone else. Betsy DeVos is the most obvious example of a Trump crony money-bags who has no business in government, but there are plenty of others that Trump has put forward, such as the EPA director nominee (a person who has filed numerous lawsuits intent on destroying the EPA and doesn't want the government to act to protect Americans from rich polluters), the Labor Secretary nominee (a person whose company has frequently violated worker protection laws and who wants businesses able to make profits by exploiting (and harming) their workers), and the Attorney General nominee (Jeff Sessions, a person who in his career made a point of trying to squelch black vote organization drives).
The Trump administration is engaged in class warfare in its most heinous form--using the agencies of the federal government that are designed to protect ordinary American people to roll back those protections and give away federal resources to crony capitalists. And the Republican party leaders, after their obstructionism of health care and environmental protection for working class folk during the last 8 years, are now rolling over backward in spineless obedience to the Trump machine steamrolling over ordinary Americans' needs.
One of the common assumptions about health care costs (and the costs of benefit programs like Medicare) has been that the increasing life spans of Americans will result in significantly greater health care expenses. It is common knowledge that much of the highest cost medical care occurs near the end of life, as the elderly need more medicines and assistance in daily living. So speculation has suggested that as Americans live longer, health costs will increase correspondingly.
A recent study provides a glimmer of good news--apparently, most of the highest medical care costs occur in the last year of life, even for those that are living longer. That means that the longer lifespans aren't translating into more time in intense medical care, but rather more years of generally healthy and active lifestyle followed by a similar duration of end-of-life care. See Michael Fitzgerald, Old Age May Not Ruin Medicare Budgets After All, Salon.com (Aug. 22, 2013).
What should that information mean for policy makers? It seems to support the progressive, social justice goal of ensuring that we have a system for universal health care coverage like "Medicare for all". Under democratic egalitarianism, a combination of general revenue support and additional premium payments from those who have the ability to pay provides a means for decent protection of all of our citizens and the creation of a just society. By asking those with the ability to pay to carry more of the burden, such a system ensures adequacy for all even in times such as ours when there is extraordinary inequality of wealth or income. Our forebears handled that kind of situation through one-on-one charities, back when communities were much smaller and people knew that they depended on their neighbors for help in tough times, so were willing to help out when they were able. The modern version of that neighborly compassion is a government that creates safety net programs for all of its people, with public programs in those areas where a profit motive interferes with the creation of adequate, sustainable, just programs for everyone. Education and health services are clearly two key areas where people acting together through government create fairer and more adequate systems that serve all of the people.
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