Category: Contract

Contract For Americans (10/10)

Living Wage – For Your Economic Present

They (the GOP) told us that the tax cuts were going to result in more money for workers.

They lied.  I’m shocked!  Shocked, I tell you!

Guess where the money went?  A lot of stock buybacks and dividend hikes – meaning more money for the corporate owners.  Before it was signed into law, various think tanks predicted that 12-13% of the ‘windfall’ would go to workers, so it wasn’t exactly a surprise that corporations would benefit.  Compared to what happened, that would have been good.  The reality?  3.3% of the tax cut windfall went to employees by one scorecard – $6B out of $177B.

Corporations never went to kindergarten so they don’t know how to share.  So what can we do?

Gradually raise the minimum wage to $15.  Companies that pay their people well have lower turnover, higher job satisfaction and lower expenses.  In addition, putting more money in the hands of poorer people spurs economic expansion because they SPEND the money – they don’t stash it away in the Cayman Islands.  The argument that a higher minimum wage results in more unemployment has been disproven these days in Seattle, and that’s nothing new as history has shown. Trumpanzees like Jordan Rachel say that a $15 minimum wage will make Taco Bell burritos $38. Well, New York City already has a $15 minimum wage and the burritos there are $1.89-$4.49.

Besides – if your company requires its workers to live below the poverty line and be eligible for federal and state welfare programs to feed them so that the owner can make a profit – that business shouldn’t exist.

But what about others?  How about limiting the deductibility of executive compensation to a certain multiplier of the company’s average worker’s salary?  Since 1965, the ratio of executive salary to worker’s salary has gone from 18 times a worker’s pay to 220 times a worker’s pay.  By 2018, it was over 260x. The latest 2020 numbers show this has gotten to an obscene 351x! In Japan, while one meme says it’s 11x, it’s actually 67x. The US numbers are patently ridiculous.  Let’s say, for round number’s sake, that we set a policy of 100x worker’s pay for executive pay.   If a company wants to pay the executives more, they would have two choices.  Either hike worker wages to raise the threshhold, or lose the deductibility of the excess compensation and pay the taxes on that money (in addition to the income taxes that the executive will pay).

“Trickle Down Economic Theory” doesn’t work.  Thinking that a corporation will rain its largesse down to the people is thinking of the most naive kind.  A corporation has no soul.  You generate economic growth by people wanting to buy more goods and services.  With more money, people buy more things – as opposed to stashing their money overseas.

Contract For Americans (9/10)

Social Security Reform – For Your Economic Future

In 2034, the Social Security Trust Fund’s surpluses will be exhausted.  At that point, they will only be able to pay 76% of planned benefits.  As of this writing, that’s 12 years from now.  I’m supposed to retire in just over 7 years.  If I live to be 72, I’ll be in the generation that sees this promise broken unless we do something. Life expectancy in the US is around 79 years.

So what can we do?

Well, there’s the “FICA cap”.  What this means is that Social Security and Medicare taxes are only assessed on the first $147,000 of income (for 2022).  After that, you “get a raise” in that FICA taxes are no longer collected.  This only applies for ‘normal’ income. Anyone who gets their income from dividends or stock options (like the top 1%) doesn’t pay this tax on those ‘earnings’ at all.

If we removed the FICA cap, we could fund Social Security for another 60 years!  That’s a powerful argument. Unfortunately, the latest proposal from Democrats only extends the “depletion date” by a few years. While extending benefits, the proposal only looks at “reapplying” the FICA tax on income over $400,000. In other words, income from $147,001 to $399,999 would still be FICA-tax-free. This is what happens when the President makes a promise not to raise taxes on anyone earning under $400,000. This is in sharp contrast to the cuts that Republicans have wanted to do.

Social Security has been the single-most successful anti-poverty program in the history of the country.  It needs to be fixed. Eliminating the FICA cap is a good idea. If a person makes enough to hit the cap, it means they’ve paid their bills all year until that cap gives them a raise. There aren’t many places where making $150,000 has you “on the edge” tightening your belt until December rolls around.

Contract For Americans (8/10)

Constitutional Amendment – Corporations ARE NOT People

“Corporations and other artificial entities that are created by laws of the States and the Federal Government are not considered persons or citizens of the United States.” — my proposal for a 28th Amendment.

Corporations are not people.  It’s as simple as that.  I will not believe they’re people until Texas executes one.

The Supreme Court’s Citizens United decision said that corporations have free speech rights.  This has resulted in a flood of dark money corrupting our political process.

Then there was the very famous Hobby Lobby case which said a corporation actually had religious rights and could deny contraceptive coverage despite the mandate of the ACA that required helth insurance plans to cover contraception.  This despite the fact that the 401(k) program that is available to management invests in and profits from companies that manufacture contraceptive drugs, including the abotifacents that Hobby Lobby’s owners INSISTED were the reason for denying health insurance coverage to their employees.

Hobby Lobby doesn’t go to church.  The people who own the company do.

Corporations should not have “free speech” rights. The idea of them having “freedom of religion” is ludicrous.

They are not “people”.  This should be obvious.

One major effect of this would be to get money out of politics. If corporations are not people and do not have ‘free speech’, they can be barred from donating to campaigns, PACs, buying political ad time, etc.

A Contract For Americans (7/10)

We’re Not Coming For Your Guns – Understanding the Second Amendment

“A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” – United States Constitution, 2nd Amendment.

“Back in the day”, ‘well-regulated’ meant ‘well-trained’ or ‘well-operating’, meaning you knew how to not only fire, but maintain your weapon.  The “Militia” was anyone who was available to answer the call to arms (and responding to such a call was compulsory in many cases).  The people were meant to have the right to own guns in that context.

But, just as the Constitution has provisions for for denying certain rights to people under certain conditions, gun rights should be no different.

It should be the default position of the government that a citizen over the age of majority should be allowed to have a firearm.  However, the government should also be able to show good cause as to why someone should NOT be allowed to exercise that right.  The mentally ill, convicted felons, spousal abusers – they all come to mind.

I find it fascinating, in a depressing way, that today’s conservative thinks that a convicted felon, upon release from prison, should NOT have the right to vote but SHOULD have their gun ownership rights restored!

“Well regulated” could be considered analagous to what we do with driving – you have to study up and take a test to prove you can handle exercising your rights.  If you do something bad, like driving drunk, those rights are removed.  And let’s not forget the militia part.  Ok, so we don’t all have to enlist in the Army or National Guard – but consider how the military handles the situation of allowing their people to have firearms.  It’s not like they hand out pistols at the induction hall.

Here’s the shocker. Most of the proposed gun restrictions have overwhelming support.

Check this article.

Look at the chart about 7 paragraphs in. It shows the following support:

  • Mental health restrictions: 87% support
  • Universal Background Checks: 81%
  • Require permit for concealed carry: 79%
  • Family-initiated Red Flag laws: 77%
  • Police-initiated Red Flag laws: 70%

The real shocker is that ALL of those proposals are supported by at least 2/3 of Republicans – with Mental Health, Background Checks and Family Red Flag laws drawing at or over 70% support.

Banning assault weapons and high capacity magazines still “net” over 60% support but Republicans drop off to under 40% for an assault weapon ban and just over 40% for banning high capacity magazines.

The desire for REASONABLE gun control is there. It’s the political will that’s missing.

Unless you’re suffering from mental illness, a spousal abuser or a violent felon, Democrats are NOT coming for your guns!

A Contract for Americans (6/10)

Legalize Marijuana and Reform Prison Policy

From January 2014 to July 2017, Colorado surpassed over a billion dollars in tax revenue from legalized marijuana.  Washington was looking at over a quarter of a billion dollars per year back then and is now at over a half-billion collected in 2021 and California is over a billion and a quarter!  Canada started to legalized it in 2018 and the citizens there want the tax revenues to go towards their national health care system instead of anti-drug campaigns. They got more than they asked for – in a good way. In the 3+ years since legalization, cannabis has added $43B to GDP, $15B in federal tax revenues and $3B just in Ontario. British Columbia is collecting $8M per month in excise taxes alone! (Note: $1 CDN = $0.78 USD as of this writing)

Now look at the fact that whites and blacks use drugs in almost the same percentages, yet blacks are arrested FAR more often.  This mass incerceration is expensive and racist.  Drug offenses make up 46% of the federal inmate population.  We could save a lot of money (and ruin far fewer lives) with legalization.  After all, alcohol is legal..

Which brings up the second part of this subject – the prisons themselves.  Private prisons are an abomination.  What started out as a way to save money has become a horror.  Private prisons contract with the government and have minimum quotas on the number of prisoners.  This means the state is guaranteeing a certain number of prisoners to the private company.  This means the state has a vested interest in keeping people in prison – regardless of crime or guilt.

And they’re not even saving money.  In Arizona,  for FY 2010, the average per diem cost was $48.42 in public prisons vs. $53.02 per day in privately operated facilities. In 2019, Georgia’s private prisons cost $5.01 per inmate per day more than public prisons. That’s over $1,800/day more.  In 2013, the nation’s largest private prison operator had a profit of $300M on revenues of $1.6B (about a 19% profit margin).  This money went from taxpayers paying for the prisons to the CCA shareholders.  Is that something we want to be doing? Keep in mind that private prisons pay their employees far less with fewer benefits than public employees. Oh, and not for nothing, I find it strange that prisoners, on average, spend more time in private prisons than in public ones. Adjusting to compare similar crimes, sentencing alone in private prisons averages 23 days more incarceration. On top of that, once in a private prison, inmates end up with more than twice as many infractions resulting in additional prison time (60 to 90 days), compared to public prisons.

This is unconscionable. Keeping people in prison longer so that companies can make more money. That’s not what I was taught about “The American Way”.

If I were emperor, private prisons would be banned.

A Contract For Americans (5/10)

Ending The Wars – Military Common Sense.

$5,000,000,000,000

That’s Five Trillion Dollars.  That’s what the post 9/11 wars have cost us just through FY 2016 in my original “Contract” post and, with interest on the debt included, we were looking at $8T by 2053 if we don’t change our ways.

We hit $8T a lot sooner than 2053. In fact, we already hit it.

To link it to the previous subject – fixing everything on the list from the American Society of Civil Engineers would cost $2.5T more than we’re planning on spending.  The ASCE is only too happy to list the details here.

You read that right.  For less than half the cost of blowing things up and pissing off people all over the world, we could have more employment, better public facilities, smoother roads, stronger bridges and so much more.

In addition, we need to actually listen to our military leaders sometimes and remember what the military is for.  It’s for defending the country – not a jobs program for defense contractors.  For example, we have to stop buying tanks and other equipment that the armed forces do not want and do not need!

Thankfully, we’ve withdrawn from Afghanistan and Iraq – but we’re still stationing troops all over the world. To be fair, there’s some evidence that there’s value in that. Look at how Russia eyes the Baltics (Lithuania, Latvia & Estonia) who are NATO and EU members – but it’s Ukraine (members of neither) that ends up getting invaded. We have similar tensions with China over Taiwan. It’s hard to know how things would play out – and how much Chinese rhetoric is “just words” since their military could be somewhat hollow in some areas (they build aircraft carriers can’t but train enough pilots for them) while other areas seem pretty meaty.

A Contract For Americans (4/10)

Infrastructure – The Job That Keeps On Paying Off

You know, if we return to the tax policies that produced a surplus back in Clinton’s day, THIS would a good place to spend that money.

Roads, bridges, tunnels, levees, dams, water treatment facilities, sewers – all this stuff is falling apart.  We need a LOT of construction workers making decent money working on these projects – and they’ll spend their salaries, growing the economy futher, aka “The Multiplier Effect”.  The Congressional Research Service recently published a report stating that a 1% of GDP increase in public capital investment would increase labor demand by 1.13% in the short term – these would be those “good jobs at good wages” stuff that politicians like to talk about.

And there’s no lack of places needing that kind of money.

The American Society of Civil Engineers produces a Report Card on the state of our infrastructure. And in this “Best Nation On Earth”, what do you think we score?

At the time of this writing, a paltry “C-“. In the time that the ASCE has been doing this (2017 to the current 2021 report), we’ve gone, overall, from a “C” to a “D” to a “D+” before we improved to a “C-” last year. You can read the entire report here.

It’s pretty pathetic when our BEST grade is a “B” in Rail infrastructure. But that just grades what we have. It’s hard to grade something that doesn’t exist – like high-speed passenger rail the way you see it in Japan, France, China, Germany, Italy, Spain, etc.

Our other grades? Here they are by category:
D-: Transit
D: Dams, Stormwater, Roads, and Levees
D+: Aviation, Hazardous Waste, Inland Waterways, Public Parks, Schools, and Wastewater
C-: Energy, Drinking Water
C: Bridges
C+: Solid Waste
B-: Ports

So what will it cost?

On page 7 of the Executive Summary (here) it says that our total needs are just.shy of $6 TRILLION and that $3.35 Trillion is funded, leaving a gap of $2.5 Trillion – but this IS over the course of 10 years (2020-2029, based on current trends). So that $2.5T gap is really around $250 Billion per year. That sounds like a lot until you find out that the Federal Budget includes between $700-$800 Billion EACH YEAR for the Defense Department and Social Security is laying out over $1.2 TRILLION each year.

How would we pay for it?

The original three trillion dollar proposal that the Biden Administration put out had several line items. In addition to the additional tax revenue from the benefits of infrastructure improvements there were 4 categories of “offsets”:

  1. $640B from High Net Worth Individual tax increases: 3.8% net investment income tax increase ($250 billion). 5% surtax on income over $10 million and 8% surtax on income above $25 million (230 billion). Expanded limits on business loss deductions (160 billion).
  2. $325B from Health Care changes and cost reductions: Reform Part D Medicare drug coverage, cap drug price growth and allow targeted drug price negotiations ($160 billion). Repeal drug rebate rule enacted by the Trump administration ($145 billion). Lower disproportionate share hospital (DSH) payments to qualifying hospitals serving large numbers of Medicaid and uninsured individuals beyond 2025 (20 billion).
  3. $180B from “Additional Revenues”: Fund the IRS to reduce the tax gap ($130 billion). Reinstate oil superfund taxes and impose a methane fee ($20 billion). Expand nicotine taxes (10 billion). Reform tax treatment of retirement accounts ($10 billion). Other receipts ($10 billion).
  4. $825 from Corporate taxes: 15% corporate minimum tax on large corporations earning more than $1 billion in profits (raising $320 billion). 15% global minimum tax and reform international taxation (raising $280 billion). Levy a 1% surcharge on stock buybacks, which is the amount that companies spend to repurchase shares (raising $125 billion). Enact other corporate tax reforms (raising $105 billion)

There’s about $2T there and it doesn’t raise a penny on most people. And before you talk about the corporate taxes being passed on, that’s not the government. Corporations are making record profits – meaning profits unlike ANYTHING they’ve seen in history. If they hike prices – remember – the taxes are on PROFITS – so they are saying “We need to keep our billions so we’re hiking our prices”.

Remember. Back when our infrastructure WAS the best in the world, the top marginal tax rate on the wealthy and corporations was 91%. So I don’t believe for a minute that hiking taxes a few percent is going to cause an exodus. It didn’t happen before when the same threat was made. After all, they pleaded for the Trump tax cuts saying it would create jobs and it simply didn’t. The money went to CEOs, for stock buybacks enriching shareholders, and even foreign investors. Shouldn’t have been a surprise. That’s what happened with the Bush tax cuts.

Think of it in fantasy terms. “Listen – if we just give the dragon more money for his hoard, SURELY he’ll invest it and we’ll all prosper!”.

Yes, collecting taxes to spend on infrastructure IS “Socialism”. But the best definition I ever heard of Socialism is:

We, The People.…

A Contract For Americans (1/10)

Taxes – Returning to What Worked

Does anyone remember the last time the government paid all it’s bills and had money left over? Stay tuned….

What should we do about taxes? Well, I’d start with the immediate repeal of the “Tax Cuts And Jobs Act”, passed in 2017 by the Republican Congress and signed into law by President Trump, which, even back then, they knew that it would return us to Trillion Dollar Deficits (like the ones Bush left for Obama). 

This was bad from the get-go as all the enormous corporate tax breaks are permanent while the minuscule individual cuts are temporary. Don’t believe me? It’s right here.  Add to that the fact that people now have to pay taxes on their other taxes. How? SALT limits. This was directly targeted at ‘blue’ states that typically have higher rates on “State And Local Taxes” (like state income, property, sales, etc) and on the alimony that they paid to an ex-spouse. This caught me. Because I live in a state with no state income tax, it has high property taxes. Explain to me why a business is allowed to deduct more than $10,000 in property (and other) taxes, but not me… Because I work in a state that DOES have an income tax, I have to pay that tax (at a higher non-resident rate) as well. Combined, they’re over $10,000 so I end up paying taxes on my taxes. This kills any benefit I had from lower tax rates. About the only positive I can find in this is that I’m unlikely to be audited because this law made it so that, for the first time since 1985, I didn’t have enough deductions to itemize and took the ‘standard deduction’.

So, in this proposal, not only will these bogus cut be reversed, but tax rates will be restored to what they were in the 1990s when (remember when I said to ‘stay tuned’?) we were actually running a governmental SURPLUS.  If not for the policies under George W. Bush (tax cuts, wars, Farm Bill, Prescription Drug Bill), they were predicting, in 2001, an elimination of the entire Federal Debt by 2010.

Don’t believe for a minute when conservatives tell you that high marginal tax rates will chase companies away. The same people who want to bring America back to some idyllic 1950s setting conveniently forget that the top tax rate in the 1950s was 91% and that being in the “top 1%” was a lot different back then than it is now. I mean – back then (until 1982 and Reagan) – stock buybacks were ILLEGAL and there’s good reason to make them illegal again!

And, finally, who’s really carrying the freight when it comes to taxes?

In the 1950s, corporations paid 49% of all Federal tax receipts.. By 2003, that was down to 7.4%

In 1960, the top 1% of households earned 9% of all income, and paid 13% of all taxes. To be in that top 1%, back then, you had to earn $24,435 or $244,606 today. To be in the 91% bracket, you had to earn $200,000 or just over $2 million today (double for married filers).

Today, the top 1% earns 21% of all income and pays 24% of the tax receipts – but that’s income and doesn’t reflect stock/wealth appreciation (which, if you hold it for over a year is taxed at the lower capital gains rate). To be in the top 1% now, you have to be earning just under $600,000/year.

So since “the good old days”, the top 1% ‘threshold’ has gotten more exclusive (fewer people, relatively speaking, making more money) and instead of there being a 31% gap between the percentage of income they got and the percentage of taxes they paid – that gap is now 12.5% (again, not being able to count things like stock compensation). …and let’s not forget that, for 2022, after you earn $147,000 you’re not paying Social Security taxes, either.