…and Who They’ve Decided to Help (2)

El Presidente‘s new “stimulus package” and the Democratic roll-over version of same is theoretically meant to stimulate the economy by giving money to people who really need it and will spend it on basic necessities to keep the economy humming. These are the people who haven’t seen a raise in 25 years or have been out of work, yes? Well, no, not exactly.

On Jan. 24, House leaders and the White House announced a preliminary deal that included stipends for all workers and breaks for business, but no money for extended unemployment or food-stamp assistance and no mention of permanent tax changes.

So who’s getting this bail out besides the banks? Guess what George W Bush’s idea of a “needy” consumer who deserves aid might be. Yup, you guessed it: the near-rich.

Elizabeth and Ben Kilgore are back in the real estate market. All it took was a little-publicized section of the economic stimulus package President Bush signed into law last week that lowered the borrowing cost of buying a more expensive home.

***

[I]f the limit on loans backed by a government-backed housing finance entity like Fannie Mae is raised from $417,000 to the full $729,750 she has been hearing about, Ms. Kilgore said, “we will be able to get a 30-year fixed mortgage for less than what we’re paying now plus our homeowner’s dues.”

Mr George “Silver-Spoon” Bush is less concerned with the people about to lose their homes (he’s offered virtually nothing to help them) than he is with making sure the well-off don’t have to scrimp and that they get a good deal on that Big New McMansion they’ve got their eye on. God forbid they should get stuck with a (yecch!) condo. *shudder*

Three years ago, when they bought their first home, they resigned themselves to buying a condominium because it meant taking out a mortgage they knew they could manage.

“This will push us into a price range that’s now financially possible,” said Ms. Kilgore, a real estate agent in Marin County.

Yay! The Kilgores are now Republican for life. Screw the rest of the country. THEY GOT THEIRS! Eyes on the prize, people.

The temporary change in the loan limits is not about to revive the housing market on its own. But in some of the higher-priced regions of the country that have been hit hardest by the flagging real estate market, it could make a big difference. For if anything is going to breathe new life into the local housing economy in places like the San Francisco Bay Area, San Diego, Washington and Boston, it is home buyers emboldened by the prospect of larger loans at lower interest rates.

(emphasis added)

There you go. Things are so bad the upscale markets are starting to weaken, and what does Silver Spoon key on? Hint: NOT the people on marginal incomes who got royally reamed by real estate scam artists and the banks who expected to make fortunes on their predatory practices. No sir. No relief for them. And no relief for housing markets in areas where they’re imploding because wages are low (the South, for instance). No no. We’re only concerned about the “flagging real estate market” in “higher-priced regions”.

Priorities, people. Priorities.

Daniel Billett, a mortgage broker in Seattle, where homes in the downtown area sell for a median price of around $400,000, said that he, like dozens of people he knows, is poised to refinance an existing jumbo loan at a lower interest rate.

“As soon as the loan limits are implemented and lenders are accepting applications. I’ll be the first in line,” said Mr. Billett, whose company, Response Mortgage Services, has been receiving a steady stream of inquiries from clients in recent weeks. “I’m going to save hundreds, and I mean hundreds, of dollars every month on my current jumbo loan, by switching to a conventional loan.”

That’s who Silver Spoon cares about. Not you. Are we clear?

Welfare and Medicaid Cuts Raise Infant Mortality Rate

Conservatives kill babies.

Not with their own hands, of course. They don’t strangle them in their cribs. They let their anti-life policies do it for them.

For decades but especially for the last 12 years, the very same conservatives who scream that the removal of an unformed scut of cells in a womb is murder have been systematically depriving real life pregnant women who will be carrying to term of luxuries like food and adequate medical care because they’re “too expensive”.

At the Federal level, Medicaid and welfare have been consistently cut every year conservatives have ruled the roost in order to trim taxes to the nub for the rich, hand over $$$billions$$$ in corporate welfare to their masters campaign contributors, and prosecute a war nobody wanted on behalf of neoconservative imperialists too dumb to know enough to come in out of the rain. In primarily liberal Democratic states, some of that safety net has been replaced but in the predominantly-conservative Southern states, it hasn’t and the results are coming in. They’re not pretty, but then nothing much in conservative-run America is these days.

The policies of so-called “pro-life” conservatives are raising infant mortality rates in the South to the such a point that Third World countries have lower rates than parts of the US. Are we proud yet?

Continue reading

Bush’s “Health Care Reform” 2: Selling the Scam

In the previous post, I said Bush’s pro-corporate proposal to address the health care problem through tax policy was liable to turn out to be the only initiative in the SOTU that he actually cared about and might try to implement. So far, I seem to be batting a thousand. He hasn’t mentioned the ethanol/alternative fuels thing, and even in the White House nobody knows what “Civilian Reserve Corps” means, let alone how it would be set up, who would be in it, or what it would do. But less than 48 hours after the speech ended, he was already out on the hustings hustling his health care “reform” package. Continue reading

Conservative Tax Policy

FITE Newsletter

Conservative policy has long pushed to shift the federal tax burden off wealth and onto income taxes and state and local taxes. The Bush Administration has accelerated this radical shift away from our historically progressive tax system. They have made clear that a second Bush four-year term would mean more of the same, a direction with profound results.

Even though they’ve already raided the Social Security “lock box”, assaulted the estate tax and driven the country deeply into debt, conservatives ideologues now seek to eliminate all taxes on wealth, further adding to an already crushing tax burden for those who live by their paycheck.

FITE urges John Edwards to wake up to the fact that the “two Americas” he speaks of is becoming a reality more quickly than he realizes.

This very conservative direction is mainly the result of the Democrats having failed to organize around an alternative set of policies. An effective opposition party would have noted that the Republican thrust runs counter to the more successful times of our democratic past. The ‘spreading of the wealth’ in the post World War II period was critical in developing economic opportunity. The massive subsidizing of mortgages by the Veterans Administration and other federal agencies made home ownership possible for millions of families.

Furthermore, FITE has maintained that our place in the world economy would be jeopardized if our fiscal policy reduces educational opportunities. We would then eliminate so much potential brainpower that we will be unable to effectively compete with developing economic powers such as China and India.

Why have the Democrats not responded? This conservative strategy is hardly new. It’s merely a more robust repeat of the first Reagan Administration policies of the 1980’s. The Democrats have pretended that our fiscal condition results from events instead of very intentional policies of conservative ideologues. Currently, the Democrats have limited their (Kerry’s) effort to rolling back a small part of the income tax reductions for the comfortable (above $200,000). This move would raise few funds, it fails to target the real culprits- the extremely rich- and would amount to a tiny asterisk to the uninterrupted Republican effort.

-Richard Sherman

For more, see here.

Taxpayers Paying for Wal-Mart’s Low Wages

People who defend Wal-Mart’s and other low-wage employers say that at least they’re keeping down costs for consumers. Not if those consumers are taxpayers, they’re not. A new study shows what some of us have been saying for a while: Wal-Mart employees are so poorly paid that they still need state aid to get by.

By Abigail Goldman, LA Times Staff Writer

Inadequate wages and benefits force workers at Wal-Mart stores in California to seek $86 million a year in state aid, according to a report released Monday by the UC Berkeley Labor Center.

Moreover, if other retailers cut their wages and benefits to the levels offered by Wal-Mart Stores Inc., the cost to California’s public-assistance programs would rise by $410 million annually, the study said.

In their report, Berkeley researchers Arindrajit Dube and Ken Jacobs contend that more than other retail workers, Wal-Mart employees rely on a variety of public-aid programs, including food stamps, Medicare and subsidized housing.

“In effect, Wal-Mart is shifting part of its labor costs onto the public,” the researchers wrote. “Wal-Mart’s long-term impact on compensation in the retail industry has the potential to place a significant strain on the state’s already heavily burdened social safety net.”


The public debate about whether Wal-Mart benefits or hurts local communities has grown considerably louder over the last few years, particularly in California, where some communities have opposed the company’s expansion plans.The company’s wage and benefit structure was also cited as a reason behind last year’s strike and lockout of unionized grocery workers in Southern California; the largest supermarket chains said they needed to revamp costs to compete with the retail giant.

Dube and Jacobs’ study took into account statewide data on wages paid by large retailers, the numbers of workers throughout the retail industry who use state assistance programs and information gleaned from lawsuits about Wal-Mart’s pay and benefits.


The report found that Wal-Mart’s wages on average were 31% below those of the broader group of large retailers — $9.70 an hour versus $14.01 an hour.And with less earning power, Wal-Mart workers rely more heavily on state resources, Dube and Jacobs found, costing the state $32 million in health-related expenses and $54 million in other assistance.

The study contends that the average non-management Wal-Mart employee receives $1,952 in public assistance compared with $1,401 for workers at large retailers in general.

“The disproportionate use by Wal-Mart workers of the various healthcare and social safety net programs, and the cost that that brings to the state, is an important consideration for policymakers,” Jacobs said in an interview.

Dube and Jacobs noted that other studies have reported similar findings.

In Georgia, a state survey of the state’s children’s health insurance program found that Wal-Mart employees’ families disproportionately relied on the program, accounting for more than 10,000 of the 166,000 children enrolled.

In Congress, a report by Democratic staffers on the House Committee on Education and the Workforce looked at employee eligibility for assistance programs and found that a typical 200-employee Wal-Mart store could cost federal taxpayers $420,750 a year, or more than $2,000 per employee.

Wal-Mart has disputed those findings. (emphasis added by me)

I just bet they have. You know what it means that Wal-Mart’s employees are even eligible for state aid? It means that Wal-Mart, one of the richest corporations in the country if not the world, is paying wages that are below the poverty line. And this is a corporation whose profits are so immense it could easily afford to double the salaries of every worker it’s got and give them decent health care benefit packages and still retain an extremely healthy bottom line. Their excuse for not doing it is a lulu.

Bentonville, Ark.-based Wal-Mart, the world’s largest retailer, maintains that it pays competitive wages and relieves public assistance burdens by giving jobs to many people who otherwise would not be employed.

So if we’re even bothering to pay our workers at all, you should be grateful. It’s a bonus. Really, we’re doing you a favor. You should be happy we put these lazy, good-for-nothing welfare bums to work and got them off the dole–sort of, a little bit anyway. What, you want us to pay them a living wage, too? What are you, a Communist? You should be down on your knees thanking us, not hassling us because we demand they work one day a week for free or lock them in so they can’t goof off or kite some of their measly pay or fire them when they complain about how little they’re making, all that whiny shit about sick kids and they can’t pay the rent, that’s not our fault. We pay a competitive poverty wage, and if they can’t get by on $200 a week take-home when the lowest rent in the area is $700 a month, that’s their problem. This is a business, not a charity.

So listen up, all you pathetic taxpayers, you pay off because if you fuck with us, we’ll scoot these people right back onto welfare and then you’ll be paying all of it, not just 80%. So shut the fuck up. We’re Corporate America and we make the rules. Ask Georgie, he’ll tell you.

GE Re-Writes Tax Code–More Jobs Lost in US

By Jeffrey H. Birnbaum and Jonathan Weisman
Washington Post Staff Writers
Tuesday, July 13, 2004; Page A01

No company in the nation had more to lose than General Electric Co. when the World Trade Organization decreed in 2002 that U.S. tax laws violated international treaties. The multinational conglomerate was saving hundreds of millions of dollars a year in taxes from the export subsidies that the United States had to discard.

But in a two-year campaign, fueled as much by brains as political brawn, GE has shaped the legislation that would replace the old export-promotion law in ways that would allow it to save as much, if not more, in taxes, according to both GE lobbyists and congressional aides. In pursuing its financial interest, the company may also have turned the U.S. corporate tax code away from domestic manufacturing and toward expansion of operations abroad.

“The bill is truly amazing,” said Michael J. McIntyre, a tax law professor at Wayne State University and an expert on international corporate tax issues. “We had an incentive for exports that was illegal and had to be repealed. Now Congress takes the money saved by the repeal and uses it to reduce taxes on the income earned by U.S. companies in foreign countries, thereby making foreign investment more attractive than U.S. investment.”

Advocates and detractors alike say such concerns — broadly shared — make GE’s lobbying feat more remarkable. House and Senate negotiators are expected to begin final talks on the corporate tax bill this week or next. GE’s final push is about to begin.

GE was far from alone in trying to fashion what has become the most important corporate tax bill in nearly 20 years. Lobbyists for the nation’s biggest companies have dusted off their favorite tax benefits and tried to sell them as part of the legislation. As a result, the measure, which began as a simple repeal of the $5-billion-a-year export subsidy, has swollen to include more than $140 billion in tax breaks over the next 10 years.

But GE’s clout stands out. Of one provision eventually worth $2 billion a year, GE will reap an “overwhelming percentage,” said John Buckley, chief tax counsel for the Democratic staff of the House Ways and Means Committee.

“They’re getting a lot more out of this than they ever had” from the export subsidy, Buckley said.


No company spends more on lobbying than GE, according to PoliticalMoneyLine.com — $7.54 million last year alone. Its political action committee, through which it donates to congressional candidates, ranks in total donations among the top 10 of all corporations this year.

A top target: the provision enacted in 1986 that created nine separate categories — or baskets — of overseas business activities. Companies earn credits for taxes they pay to foreign governments and can use them to offset U.S. taxes on overseas profits. But credits earned from one activity could not be used to reduce taxes owed from another business venture, nor could taxes paid in high-tax countries be used to reduce taxable income earned in tax havens abroad.”The whole point of the baskets is to prevent that abuse,” said McIntyre, the Wayne State professor.


There was one reason for GE’s victories, said one lobbyist whose firm worked with the company on the legislation: diligence. General Electric realized more than two years ago that the need to repeal the export subsidy would snowball into a major corporate tax bill. The company’s tax lawyers compiled a wish list and framed the firm’s desires as simplification. The GE team also was among the first companies to sign on to Thomas’s initial efforts to solve the foreign-treaty issue and stuck with him as other businesses and lawmakers fought him at every turn.

Between 1994 and 2001, the company’s effective tax rate was above 30 percent in every year but one, according to Standard & Poor’s. Last year, the firm’s tax payments slid to 21.4 percent of profit even though the top corporate tax rate remained at 35 percent. If the new legislation is signed into law, GE’s tax payments are likely to fall further, said Robert S. McIntyre of the liberal Citizens for Tax Justice.”This is the definition of corporate welfare,” McIntyre said. “To these guys, old tax breaks have become entitlements, even illegal ones.” (emphasis mine)

This is a long article from which I’ve just taken snippets but the whole thing is worth plowing through. It describes in some detail exactly how and who and what tactics GE used to steal upwards of $$2BILLION$$ from the Treasury on the basis of bogus arguments and cooked numbers fabricated by friendly corporate think tanks.

The end result of this bill if GE gets its way–and it will–is a massive new shift in the tax code that will make it extremely cheap, even profitable, for corporations to expand overseas while punishing corporations that create jobs in the US. There is no possible excuse for it; even Republican Sen Chuck Grassley, Chairman of the Senate Finance Committee, thought it was over the line. But the money poured from GE’s corporate coffers and GE got what it wanted. By the time it’s finished, a few select American corporations with huge overseas interests are going to collect in the neighborhood of an extra $$140BILLION$$ in windfall tax relief, allowing them to evade almost entirely their responsibility to support the society that supports them.

That money, essentially embezzled from the Treasury, will have to be paid for by everyone else–from small domestic companies who will be forced to cut jobs, to middle-class taxpayers through eventual tax hikes, to the poor in the form of yet more drastically reduced programs. It is through this method of buying laws favorable to itself that Big Business undercuts democracy and burgles our shared resources.

You knew they were doing it. This articles tell you how they do it.