Obama Voices GOP Tax Cut Mantra

President Barack Obama’s emphasis on the need for tax cuts for the middle class invokes the GOP mantra for tax cuts as the primary way to get the economy moving at a faster pace. Obama should be speaking instead of the imperative need to rebuild the U.S. society and that requires stimulative assistance from the national government as the most direct way to do that. Beginning with the Reagan administration, in which the domestic economy was starved so that Reagan could shovel more money to the Pentagon for its massive military buildup, the military infrastructure Reagan created has made it more difficult to significantly reduce Pentagon spending; furthermore, President George W. Bush’s initiation of two wars has led the way to an approximate doubling of the Pentagon budget from the year 2000 to the present.

Civil engineers have been telling the nation for the last three decades that its domestic infrastructure is badly neglected and funding of well over a trillion dollars will be necessary in the next decade to remedy the situation. Obama is proposing $60 billion in infrastructure spending but $60 billion is a small down payment on the accumulated need.

President Obama has set the nation on a perilous course for the future in regard to discretionary domestic spending. Eduardo Porter, who writes on economic matters for The New York Times, says that Obama’s ten-year spending plan calls for cutting the discretionary part of the federal budget devoted to domestic spending to 1.7 percent of economic output by the year 2022, down from 3.1 percent in 2011. (1) Porter says that this “would cut the civilian discretionary budget to the lowest since it has been as a share of the economy, at least since the Eisenhower administration, when a quarter of the population lived below the poverty line.” (2)

It is the public’s appetite for tax cuts and unwillingness to accept cuts to entitlement programs and perceived security needs, catered to by acquiescent lawmakers, that spells continuation of serious deficit problems for the United States. Domestic spending accounts for a relatively small share of the federal budget and massive cuts can be made in security spending — especially Pentagon spending — over the next ten years. All but a tiny part of the Social Security trust fund shortfall projected to occur two decades from now can be covered by raising the FICA tax cap to $250,000; also, a future Medicare funding shortfall can be absorbed by adoption of a single payer health insurance system. Federal income tax rates, including those for the middle class, are at the lowest level since the Truman administration, when we were fighting a costly war in Korea.

What would have been a better taxation plan for the United States? Allowing the Bush tax cuts to expire at their sunset date and adoption of a more robust progressive tax rate system, with a top marginal tax rate of 60 to 70 percent.

“Fiscal Cliff” Talks Not Conducive to Paying Our Bills

The debate over the so-called “fiscal cliff” has already lowered future revenue projections to the point where they will have limited impact on the accumulated deficit. Once more, President Obama has broken his pledge to take Social Security off the table by signaling his willingness to change the Consumer Price Index (CPI) formula to lower future benefit payments.

House Speaker John Boehner’s(R-OH) proposal to increase the tax rate for only those with earned income of over $1 million is silent on whether he would allow tax rates on capital gains and dividends to revert back to pre-Bush tax cuts. If he does not, his tax plan could generate as little as $250 billion over ten yeara.

For his part, President Obama, after insisting that the top two percent of taxpayers must pay more, has lowered the affected taxpayers to the top one percent by proposing to increase the top tax rate only for those earning $400,000 or more. The Tax Policy Center had calculated that raising the tax rates on the top two percent of taxpayers would raise revenue by $442 billion over 10 years. As is the case with Speaker Boehner’s proposal, it is not clear if Obama would allow capital gains and dividend tax rates to revert back to the higher pre-Bush tax rate levels. In any case, Obama’s new proposal would raise well under the $442 billion projected from his original proposal.

As for Obama’s agreement to accept a reduction in the Social Security CPI formula, it would not lead to any immediate revenue increase; it would reduce future benefits for those most dependent on Social Security; and it would not have much impact on Social Security trust fund shortfalls, projected to hit in the early 2030s.

Looking back to when the Democrats controlled the legislative and executive branches of government, a wiser Democratic leadership would have let the Bush tax cuts expire on their sunset date and substituted for them a more robust progressive tax rate structure, in which the top marginal tax rate would have been 60 to 70 percent. In the first three decades following World War II, the top marginal tax rate was never below 70.45 percent, yet that was a time of enormous economic prosperity. Also, given the fact that a majority of the income in the United States is earned by the top five percent of taxpayers, a higher tax rate structure would more fairly tax the incomes of those who earn the lion’s share of it.

Gun Control Debate Way Off Track

Much of the gun control debate focuses on assault rifles, ammunition clips, keeping guns away from the mentally ill and those with criminal records. Also, prayer is employed as one reaction to the latest mass killing; however, prayer will not remove a single firearm from the nation’s extensive inventory. It is also futile to vow that we will not allow something terrible that has happened multiple times in the past to never happen again, as the National Rifle Association(NRA) has recently vowed. The NRA is the most inappropriate organization in the U.S. to make such a vow, as it has opposed virtually every proposed restriction on firearms and ammunition.

Rarely in the gun control debate is a distinction made between long guns (rifles and shotguns) and handguns, yet annual FBI ststistics show that handguns account for roughly half of all homicides and long guns acount for about seven percent. Once more, handguns injure far more people than they kill. The five national commissions established to study the problem of violence in the United States have all identified the handgun as a major contributor to that violence: one of the commissions called for a ban on manufacture and importation of handguns and handgun parts.

Handguns are the primary home defense weapon, because of ready accessibility and being less cumbersome to handle. Yet, home defense weapons are highly problematic, since the Cleveland and Detroit studies — the two most significant studies of home defense weapons — found that four to six family members or visitors to the family are shot for every intruder shot.

In regard to mass shootings, the main solution proposed by those who don’t want any restrictions on their right to keep and bear arms is carry and conceal. The contention is that an armed citizenry would stop firearms violence in its tracks. Mother Jones magazinre investigated 65 mass shootings (defined as four or more persons killed, excluding the shooter) since the year 2002. There was not a single instance in which an armed citizen stopped a shooting. Notably, regarding mass shootings in Colorado and Wisconsin this year, each state had issued about 120,000 carry and conceal permits leading up to the shootings in a movie theater and a religious compound. Neither shooting was stopped by an armed citizen.

Most instances of firearms violence are not caused by those diagnosed with a mental illness associated with outbursts of violence, or have served a term in prison; instead, they occur in family situations, among people who know and interact with one another, among those who feel they have been treated very unjustly, deeply insulted in public, or those without a history of violence who suddenly and unaccountably snap.

Some opponents of gun control claim that hundreds of thousands or even millions of people use a firearm in self-defense every year. Annual FBI statistics show fewer than 1,000 documented cases of firearms used in self-defense.

How does the National Rifle Association fit into this matter of gun control The NRA is subject to a fear described as a “slippery slope” or the camel’s nose under the tent, whereby any restriction on firearms or firearms ammunition not vigorously contested, will lead to more restrictions. When, for instance, a ban was proposed on the production of a bullet that could penetrate a police officer’s protective vest — the so-called “cop-killer bullet” — the NRA opposed it.

The NRA is heavily subsidized by firearms and ammunition manufacturers. The NRA has a big problem, however, because firearms, with minimal maintenance, have a virtually limitless life. Thus, the NRA feels it must oppose even weak measures, such as limiting firearms purchases to one a month. It also helps to explain why a number of years ago the NRA bagaan a big push to persuade women of the need for a protective firearm and be trained in the use of it. The NRA must continue to build its customer base.

In summary, although I would support a ban on semi-automatic rifles and clips holding four of more bullets, the far more meaningful limitation on firearms would be to ban the manufacture and importation of handguns and handgun parts. As a means of cutting down on the large number of handguns presently in the United States, I propose a government buy-back program based on a sliding scale, in which a premium of 10 to 20 percent over the purchase price would be paid at the beginning and payment would cease at the end of the buy-back period: maybe five to ten years. Those later discovered to have a handgun would pay a stiff fine (in the range of $2,000 to $3,000).

GOP Governors Conceal Animus Toward Labor Unions

Wisconsin Governor Scott Walker, Ohio Governor John Kasich and Michigan Governor Rick Snyder share a profoundly anti-democratic trait: all three concealed their animus toward labor unions while running for office. Of the three, Governor Snyder is the most culpable, as he made public statements after being elected that he didn’t want to divide the state, as Wisconsin and Ohio became divided after their legislatures and governors took action to cripple collective bargaining. Moreover, Snyder had assured labor union leaders that he would not support any legal assaults on organized labor. Whereas Walker and Kasich approved legislation to destroy collective bargaining for public employee unions, Snyder approved bills to make illegal the dues structure of both public employee and private sector unions. Governor Snyder would almost certainly not approve a bill allowing businesses to join a Chamber of Commerce without paying required dues.

Governor Snyder has defended his assault on labor unions by contending that the new legislation will bring more business to Michigan; in adddition, he has argued that he will help labor unions by giving every worker the right to refuse to pay union dues. Every worker has the choice of joining a union or a non-union shop. If the worker joins a union shop and has the right to refuse to pay union dues, or participate in any way in union activities, he is nothing but a freeloader.

As for bringing in non-union business, the 23 right-to-work states have lower family incomes — $8,000 less on average, according to the New York Times — have less safe working conditions; and have higher poverty rates. Ironically, the right-to-work states, by and large, pay less in federal income tax than the dollar value they receive in federal government servies.

It is extremely unwise to gut labor unions at a time when the U.S. income gap is growing.

The Michigan legislature is not done with considering measures that are toxic to society. Bills in the hopper include: a bill to give tax credits to fetuses; a bill to let people carry concealed weapons in public schools; and a bill to fight Sharia law — a non-existant threat. Other bills will shut down health providers through burdensome licensing rules; ban all insurance coverage for abortions; allow health providers to refuse to provide medical services — from birth control to blood transfusions — schools legislation to allow vouchers; and legislation to allow the state to take over whole school districts.

In both Wisconsin and Michigan, any claim to purity of motive is tainted by the fact that firefighter and police unions are exempted from the respective legislative actions. These action elevate firefighter and police unions over other public service unions — a questionable assumption — and their exemptions are probably based on the fear that enlarging the circle of animosity could be fatal to GOP election and reelection prospects.

Another strike against purity of motive is the attempt of a GOP legislator to carve out an exemption for corrections officer unions. It may or may not be a motivsting factor that the legislator’s husband is a corrections officer.

President Obama’s Taxation Morass

President Barack Obama’s opening gambit in the “fiscal cliff” dealings was a package of tax increases totaling a little less than $1.6 trillion in additional revenue over ten years. If Obama was trying to erase an image of being a very poor negotiator, who makes major concessions at the very beginning of the negotiations, he has already rhetorically abandoned his gambit and is only demanding a rate hike for the top two percent of taxpayers in order to make a deal. Reports are now circulating that Obama may not demand a tax rate hike from 35 to 39.6 percent but will settle for less — maybe 35 to 37 percent for the top two tax rates.

According to Donald Marron, head of the Tax Policy Center, raising the 33 percent rate to 36 percent and the 35 percent rate to 39.6 percent would raise an additional $442 billion over ten years. If Obama accepted an increase of the current 33 percent rate to 35 percent and the current 35 percent rate to 37 percent, it would raise in the range of $200 to $225 billion over ten years, a mere blip in the accumulated deficit.

Should Obama get Republican lawmakers to agree to any increase in the top two marginal tax rates, it would be considered to be a political victory for Obama but it would be a loss for the nation, because it would represent a clear disconnect with the fact that income is so heavily concentrated among the top few percent of taxpayers. High income taxpayers would be severely undertaxed and the revenue burden would need to fall elsewhere.

After World War II, tax rates far higher than today’s rates existed alongside strong economic growth. Also, the study over a 65-year period by the Congressional Research Service found that high tax rates were associated with savings, investment and productivity growth. When top marginal tax rates are high, as in the first three decades after World War II, there is an incentive for business owners to lower their taxable income by adding to their facilities and/or hiring more workers.

President Obama has put $600 billion in spending reductions on the table. Cuts in Medicare and Medicaid are included, although Social Security is at least tentatively off the table. If cuts are made to current recipients of federal government spending, if would be a repudiation of Obama’s current argument that middle-class taxes can’t be raised, because the money is needed to purchase the basic necessities of life.

An Ax, Not a Scalpel, for Expensive Weapons Programs

The information for the B61 was taken from: Noah Shachtman, “Pentagon Cries Poor, Starts $10 Billion Nuclear Weapon Upgrade,” wired.com/dangerroom, November 20,2012. The information for the F-35 was taken from: Christopher Drew, “Costliest Jet, Years in Making, Sees the Enemy: Budget Cuts,” The New York Times, November 29, 2012.

I. B61 Mod 12s
Refreshing the B61 nuclear weapon from the spin rocket motors to the electric generators will cost an estimated $10 billion. The U.S. has other bunker-busting weapons that might be employed if it were to come to an atomic showdown with North Korea or Iran, with its deeply buried nuclear facilities. These so-called B61 mod 12s are meant to replace the 180 or so earlier models now deployed in Western Europe.

The U.S. European Command — the Pentagon’s top generals in the region — believe there is no military downside to the complete removal of nuclear weapons from Europe, as the U.S. has thousands of nuclear weapons that can be delivered by various means.

But while the Defense Department is trying to save money, the costs of the B61s keepo going up: from $6 billion to $10 billion just this year.

II. The F-35: the Costliest Weapons Program in Military History
The F-35 Joint Strike Fighter is the most expensive weapons program in military history but “it begins its 12th year in development years behind schedule, troubled with technological flaws and facing concerns about its relatively short flight range as possible threats grow from Asia.”

“The F-35 was conceived as the Pentagon’s silver bullet in the sky — a state-of-the-art aircraft that could be adapted to three branches of the military.” Warplanes designed to serve more than one branch of the service have had a history of failure. The F-35 catching hook, for example, designed to snag the catching cable on an sircraft carrier, was placed too near the front landing wheels and couldn’t catch the cable upon landing when tested. Todd Harrington, an analyst at the Center for Strategic and Budgetary Assessments, has said: “They were asking one fighter to do three diffferent jobs, and they basically ended up with three different planes.” Instead of sharing 70 to 80 percent of their parts, now they share 20 to 30 percent of the parts in common.

If the Pentagon sticks to its plan to build 2,443 F-35s by the late 2030s, that would cost taxpayers $396 billion, including research and development, nearly four times as much as any weapons system and two-thirds of the $589 billion the United States has spent in Afghanistan. The long-term operating costs of the F-35 are projected at $1.1 trillion. Analysts say that the Pentagon will be lucky to build even 1,200 to 1,800 of the jet fighters unless it can substantially reduce the cost of each plane.

Much as has been the case with building jet fighters over the past six decades or so, the F-35 is crammed with sophisticated electronic hardware, needing to test and secure 24 million lines of software code. Past experience indicates a lot of downtime for maintenance.

Voter Suppression: GOP Backlash or Ace-in-the-Hole

In May 2011, a poll showed that 80 percent of Minnesotians supported a photo ID law; however, largely due to the efforts of Take Action Minnesota, in the November 6, 2012 election, 52 percent of Minnesotians voted against requiring a photo ID to be able to vote. (1) The fact that photo ID lost so narrowly in what is generally considered to be a blue state, sends a disturbing message about how Democrats are willing to endanger their chances of victory at the polls.

After the 2010 elections, in more than a dozen states, Republicans (primarily) passed voting restrictions, targeted especially at reducing the vote among young voters, African-Americans and Hispanics. The GOP strategy failed in several respects, as black and Latino voters increased their share of the electorate in 2012 compared to 2008. The youth vote rose from 18 to 19 percent and the minority vote, overall, increased from 26 to 28 percent. The black vote rose in Florida, North Carolina, Ohio and Virginia, while the Latino vote grew in Florida, Colorado and Nevada. (2)

One reason that voter suppression may have failed in states with heavy minority populations is that voters were very angry at efforts to deny them the opportunity to vote. Rev. Jesse Jackson expressed it as “If they try to deny 3,000,000 of us the vote, we’ll send 5,000,000 to the polls.” Nonetheless, unequal treatment at polling places may have discourged untold numbers of people from voting: in Arizona, a day after the election, 600,000 early votes and provisional ballots remained among the uncounted, most of them in heavily Latino Maricopa County; twice as many voters had to cast provisional ballots in Philadelphia as in 2008, because their names were missing from voter rolls: (3) and many Ohio early voters in heavily black areas were handed absentee applications while standing in a line to vote. Late counting of provisional ballots is likely the major reason that Barack Obama’s msrgin over Mitt Romney has continued to grow well after the election itself.

Long waits in line were a common occurence: up to five hours in Maryland, seven hours in Florida and similar waits in Ohio. Hart Research Associates found that black and Latino voters were two to three times more likely to stand in line more than 30 minutes than were white voters.

Pennsylvania had the sharpest drop in voter turnout among the swing states, likely mostly due to confusion over the suspended photo ID law. Since the judge who suspended the law said a photo ID was not necessary in order to vote but poll workers could ask for one, state and county officials could and should have informed the public and poll workers that a photo ID was not necessary to vote and would not be requested at a polling place. Even asking for a photo ID aided the vote suppressors.

Despite the anguish, confusion and theft of voters’ time, voter suppression will likely continue, witnessed by Florida Governor Rick Scott appointing the Secretary of State in charge of determining what went wrong in the November election. The current secretary and secretaries of state going back to at least the year 2000 have been notorious for supporting voter suppression. Governor Scott has earned a special place in the gallery of infamous voter suppressors, signified by angry Florida callers to talk show programs, because Scott, a key figure in a billion dollar or more scam of Medicare, has been instrumental in denying their right to vote. Scott was the CEO of the scamming company and took the Fifth Amendment 78 times while testifying under oath.

Footnotes

(1) Ari Berman, “The Voting Rights Fight, The Nation, December 10, 2012.

(2) Ibid.

(3) Ibid.

(4) Ibid.