Saturday, August 28, 2010

THE NEW "N" WORD

As Doctor Laura recently discovered, sticks and stones can break your bones and words

can really hurt you. She used the "N" word and endured all the heat and condemnation that

come with it. In politics, the "N" word actually starts with a "T" and saying it out loud can

end a political career. Why?

A few years ago, Swedes were given an opportunity to vote to reduce a high tax burden

(up to 60% of income). They were told a reduction in taxes would mean a reduction in social

services, social safety nets, and most of the government-run services the nation is known for.

They rejected the temptation to pocket a little more coin at the expense of what they

considered a very "civil" society.

For both the nation and California, revenues do not match spending. The federal

government can run deficits. The state government cannot. In both cases, part of the way to

deal with inadequate revenue is to increase taxes. Along with spending cuts, it is the only way

to solve the problem. Spending cuts alone won't do it on the federal level because Medicare,

Social Security, and interest on the debt are locked-in expenses. Add in the military budget

and what is left, even if totally eliminated, will not balance the budget.

In California, voters have tied Sacramento's hands. Proposition 13 limits the ability to

increase property taxes. Proposition 98 mandates how much of the budget must go to

education. Two thirds of the legislature has to approve a budget, meaning the minority can

veto anything the majority supports. There is no way to balance the budget just by cutting

alone. Yet, Whitman says she can balance the budget without raising taxes. She won't say

what cuts she will support, but she has a plan. Ahh-nold had a plan too. He was going to find

billions of dollars of waste, fraud, and abuse. He was going to make government more

efficient. He refused to raise taxes. You know the rest of the story.

Your taxes have been going up for years on the local level in order to make up for the

lack of state and federal money. What did a parking ticket cost twenty years ago? How much

were building permits? What about the cost of a speeding ticket these days; and can you think

of a city, county, or state service you use for which you are not charged a fee? Fees at state

parks and national parks, fees to get a license, professional fees...these are all taxes you are

paying. How much does it cost to go to a museum or the aquarium or the zoo? These are all

taxes by a different name.

Americans today enjoy some of the lowest income tax rates in our nation's history. Despite

what regressives would like you to believe, you are not overtaxed. (I know everyone feels they

pay too much and no one likes them, etc.; but it's true.) Democrats and Republicans have

reduced the corporation tax to almost nothing. The capital gains tax has been cut to about 15%.

Federal income tax rates have dropped from a top rate of 90% in 1960 to about 38% today.

Most Americans pay more in Social Security taxes than income taxes. Corporations have been

given tax breaks to do business abroad and even more to bring some of that business home.

At the same time, President Bush refused to impose a war tax (as was done in Vietnam)

to pay for his disastrous wars. He simply added $1 trillion to the national debt. He cut taxes

for the richest 2%, which reduced revenues by $2.3 trillion. Add in a Medicare Prescription

Drug Program along with the Wall Street bailout and the economic stimulus package, and it's

easy to see where the deficits came from.

To suggest raising taxes as a piece of a fiscal formula to solve our financial woes is

anathema. Why? Do Americans or Californians think there is such a thing as a free lunch?

Do Americans understand nations like China are financing our debt which has national

security implications?

At one time, the University of California system was the envy of the world. It was

virtually free to attend and along with the state colleges and community colleges, provided

vehicles for people to better themselves, be competitive, foster innovation, and attracted

students from around the world. Today, one year at a UC school will cost over $14,000 for

tuition alone. Fewer students are admitted. State colleges face the same fate and for the first

time in history, community colleges are turning students away. Money for basic research is

almost non-existent. Tens of thousands of teachers and public safety workers face layoffs.

The state and federal infrastructures, the roads and bridges, are falling apart. The electrical

grid resembles that of Haiti or Somalia rather than Sweden or Portugal (which by 2050 will

be getting over 40% of all their energy needs from alternative sources). California's levee

system is in terrible shape, a disaster of Katrina proportions just waiting to happen.

When did Americans decide that "taxes" was the new "N" word? When did we stop

demanding government live within its means or raise revenue to make up for the shortfall?

Why would anyone vote for a politician who says this problem can be solved without additional

tax revenue? You know it's a lie. Why do you reward the liars who perpetuate this myth?

I am frequently accused of bitching and moaning without proposing solutions. Here are

some ideas. Amend Proposition 13 so commercial property is no longer exempt from property

tax increases. Change the rules in the legislature so a simple majority can pass a budget and

raise taxes. Increase the state sales tax and increase the state income tax rate for the top 5%

of taxpayers. At the same time, any new state employees have to contribute more to their

pension plans which will no longer be defined benefit programs. Any new start-up business

which employs more than ten people is exempt from state taxes for the first three years.

Drastically reduce the state prison population by putting first-time non-violent offenders on

supervised release and probation saving billions of dollars.

Nationally, increase the age when you can start receiving Social Security benefits to

seventy over a five year period. Means-test Social Security benefits. Tax all income, not just

the first $106,000. Continue to reform healthcare and bring down the cost of Medicare.

Reduce the military budget and once again release all federal non-violent first offenders to

supervised release (saving $3 billion easily). Return tax rates to their 2001 level for the

richest 2% of taxpayers. All new federal employees must contribute more to pensions and

healthcare and except the end of defined benefit plans. Suspend corporate income taxes for

five years for any new company employing over fifty people. End federal water subsidies for

agribusiness and let them pay market rate. End crop subsidies paying farmers not to grow

food and end price supports. Freeze all federal spending at current levels for four years with

any surplus going to reduce the national debt.

Take your pick. Make your own suggestions. However, we have to say the "T" word over

and over again until we are willing to do what is necessary to fix what is broken and leave a

better nation for our children. We must stop voting for the panderers and the liars who tell us

what we want to hear knowing full well it is a crock of "bull-geschichte". What do you think?

I welcome your comments and rebuttals. Please send them to lionoftheleft@gmail.com



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