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Entries tagged "deficit"Page 1 • 2 • 3 Next
On June 12, 2013, the Institute for Policy Studies released the sixth in a series of reports on the Fix the Debt corporate lobby group. This newest report, Corporate Pirates of the Caribbean, uses Fix the Debt members’ SEC filings to calculate how much they would stand to gain from a shift to a territorial tax system. Such a reform would permanently exempt U.S. corporations’ foreign earnings from U.S. income taxes.
In response to this IPS report, Fix the Debt issued a press release denying that they have ever taken a position on this controversial tax reform and spokeswoman Maya MacGuineas described the report as “lies and mudslinging.”
These attacks on our research conflict with clear statements in support of a territorial tax system, both by Fix the Debt directly and by numerous Fix the Debt leaders.
As we pointed out in our first report, published in November 2012, Fix the Debt expressed unambiguous support for a territorial tax system in a PowerPoint on their web site (see slide 11). The PowerPoint was described as a “CEO Tool” to help business leaders recruit others to join Fix the Debt. This IPS report, The CEO Campaign to “Fix” the Debt: A Trojan Horse for Massive Corporate Tax Breaks, received significant coverage in the mainstream and alternative press.
More than six months later, with this same PowerPoint still on their web site, Fix the Debt is claiming they have never had a position on a territorial tax system. And even though we reprinted the slide in our new report, Fix the Debt spokespeople did not address this obvious inconsistency.
Support for territorial tax reform is a core plank of the fiscal reform plan articulated by Fix the Debt Co-Chairs Erskine Bowles and Alan Simpson. In April 2013, Fix the Debt prominently featured Bowles-Simpson 2.0 on their website. In their piece applauding the new Simpson-Bowles plan, Fix the Debt includes “move toward a territorial system” as one of five key components of the plan.
Our plan puts in place a process for comprehensive tax reform to eliminate or scale back tax expenditures in order to generate nearly $600 billion in revenues for deficit reduction substantially reducing marginal tax rates for individuals, corporations and small business, and moving toward a competitive territorial system while maintaining the progressivity of the tax code.
Excerpted from A Bi-Partisan Path Forward to Securing America’s Future, (aka Bowles-Simpson 2.0) Moment of Truth Project; April 2013, p 7.
Other prominent Fix the Debt leaders have also been vocal in their support of a territorial tax system for corporations:
“We shouldn’t be imperiling U.S. companies to be competitive with our foreign competitors by putting in a tax policy that puts them at a disadvantage. So, I’m very much in favor of a territorial system and that’s what we advocated in Simpson-Bowles."
- David Cote, CEO of Honeywell, CEO Fix the Debt Steering Committee member and Member of the Simpson-Bowles Deficit Reduction Commission, Bloomberg Street Sense, August 27, 2012
The U.S. needs to "allow this territorial system [excusing repatriated profits from being subject to domestic taxes] so that companies can repatriate their earning back to the United States."
- Jeffrey Immelt, CEO of General Electric, Fix the Debt CEO Steering Committee member, exclusive interview with CNN, October 4, 2012
“We need comprehensive business tax reform that will lower tax rates and provide certainty for all businesses. We also need to move to a competitive territorial tax system in line with other major industrialized nations.”
- Doug Oberhelman, CEO of Caterpillar, Fix the Debt CEO Steering Committee (with Mary Andringa), op-ed in Roll Call, June 6, 2012
“Tax policy: I think the President's put out some really good suggestions, but we've got to get to the territorial tax.”
- Andrew Liveris, Chairman Dow Chemical, Fix the Debt CEO Steering Committee member, Kudlow Report, CNBC, April 19, 2012
“One of the things that's always bothered me is that we don't have a territorial tax system.”
- Paul Jacobs, CEO of Qualcomm, Fix the Debt CEO Steering Committee member, USA Today, May 20, 2013
The Fix the Debt campaign appears to be facing a dilemma.
On the one hand, they seem to be trying to recruit and maintain CEO supporters by creating a platform for promoting policies that would primarily benefit large corporations. On the other hand, they are trying to build broad public support through slick PR gimmicks emphasizing a message of shared sacrifice.
Rather than attacking IPS research, they may want to focus on resolving these inconsistencies.
September 5, 2012 · By John Cavanagh
This post originally appeared on Yes! Magazine's New Economy blog.
This fall, the U.S. Congress is going to wage a pitched, dragged-out battle over cutting roughly $120 billion a year to solve the so-called deficit crisis. Vital things like teachers’ jobs and Medicare could well get cut.
The Right is already launching new coalitions to push for an austerity budget, calling for cuts in “wasteful government spending,” including key safety-net programs like Medicare, Medicaid, Social Security, and food stamps. America has overspent, they say. America is broke. But at the same time, they are calling for an extension of the Bush tax cuts and ruling out cuts in military spending—both policies that will increase the deficit.
It doesn’t have to be this way. My colleagues at the Institute for Policy Studies (IPS) have identified seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.
These proposals, from the IPS study called “America is Not Broke,” would also address the two deficits that author David Korten says do more to erode our society than the fiscal deficit does: our social deficits (rising poverty and inequality) and environmental deficits (starting with the climate crisis).
More Fairness, Less Deficit
Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.
- 1. Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.
- 2. Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands.
- 3. Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.
These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn’t have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.
More Green, Less Pollution
The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.
- 4. Tax Pollution: $75 billion per year. A tax on the carbon content of fossil fuels would reduce our dependence on oil while cutting air pollution and emissions of greenhouse gases. And, as economist Robert Frank pointed out on August 25 in The New York Times, “News that a carbon tax was coming would create a stampede to develop energy-saving technologies.”
- 5. End Fossil Fuel Subsidies: $12 billion per year. This call should unite left and right. Why would anyone want to maintain a giant government subsidy to an industry that is the world’s major contributor to fossil-fuel emissions? 350.org has made this a centerpiece of their work. We should be able to win this.
More Savings, Less War
Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.
- 6. End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.
- 7. Close a third of our overseas bases and our Iraq operations: $21 billion per year. Over two decades after the Cold War ended, the United States still maintains roughly 1,000 military installations in other countries. A majority of the President’s own deficit commission, which includes three Republican senators—the National Commission on Financial Responsibility and Reform—backed a proposal to close one third of our overseas military bases.
These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.
In other words, this plan could help erase the nation’s dangerous social and environmental deficits.
Many groups—from Jobs with Justice to National People’s Action to the AFL-CIO—are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation’s safety net. Let’s up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.
November 21, 2011 · By Miriam Pemberton
In its final stages, debate over the supercommittee has boiled down to squeezing new revenues out of millionaires vs. cutting the social safety net. The largest portion of the discretionary budget, however, funds the military — and that fact has been mostly obscured in this equation. With the panel in its final death throes, military spending is emerging from the shadows in the form of “defense sequestration.” This is the requirement that failure would trigger $1.2 trillion in spending cuts over 10 years, half of which would come from the Pentagon's coffers.
Scare tactics don’t tend to produce entirely sensible legislation, and this one is no exception. Yet can these cuts be made with no sacrifice to our security? Emphatically, yes.
The Pentagon and its allies in industry and Congress are warning us over and over that this “doomsday” scenario will leave us weakened and vulnerable. They're ignoring several pretty important facts. The “sequestration” cuts, added to those already planned, would bring our military spending, in inflation-adjusted terms, to its 2007 level. Was anyone talking about doomsday then?
Thirteen straight years of military increases, moreover, have more than doubled the Pentagon's base budget (excluding war spending), bringing it to its highest level since World War II. And these increases have actually expanded the gap between U.S. military spending and the rest of the world. At the beginning of this period, we were spending about a third of the world’s total. Now we're spending about half.
Even if sequestration cuts across all military programs, this sort of ham-handed approach is safely doable. Our blank-check approach to military spending in this century has created waste in every program, waiting to be trimmed. Even as Defense Secretary Leon Panetta works to protect his budget at the expense of all others, his Pentagon remains the only federal department that can't pass an audit of its books.
The Project On Government Oversight has calculated that simply cutting back by 15 percent on the privatization of military functions that has occurred in this period would save $300 billion over 10 years.
Is sequestration the best way to manage a defense drawdown? No. For one thing, the best way would make choices based on how much we need to spend, on what, to keep us safe. A new security strategy could allow us to question, for example, the need for our current “forward presence,” which has between 105 and 125 ships cruising around three oceans nearly all the time, and target savings accordingly in the naval budget. Sequestration bypasses this kind of thinking.
Nor would the sequestration “haircut” do anything good for our enduring unemployment crisis. Military cuts, it is true, will have a smaller impact on jobs than other cuts in the domestic discretionary budget. A study by economists at the University of Massachusetts found that $1 billion in military spending sustains about 11,000 jobs as compared to about 17,000 from an equivalent amount of spending on clean energy. Let's cut spending on military programs we don’t need and invest those savings in job creation by making things we do need.
This is the kind of vision laid out in a new report from my organization, the Institute for Policy Studies. It outlines a set of cuts to those military programs we don’t need, and combines that with fiscal reforms and pollution taxes. The result would be more than $800 billion we can invest in building the kind of country we all deserve.
November 21, 2011 · By Karen Dolan
Thank you to Super-Committee Republicans who remained intransigent in their insistence of governing by and for the 1%, protecting their self-interest and the interests of the Super-Rich and Wall Street Bankers.
Thank you to the Super-Committee Democrats who, though they revealed their willingness, if reluctant, to do the same by putting drastic cuts to vital domestic and earned benefits programs on the table next to revenue-raisers, stood up against a bad deal. The Democrats on the Super-Committee were responsive to the 99% in the end.
The undemocratic, appointed Joint Select committee of six Democrats and six Republicans, a.k.a. the “Super-Committee,” failed to reach an agreement that would have unnecessarily imposed untold hardship on the vast majority of those of us already struggling in a bad economy. If this inability to reach a terrible deal is “failure”, can you imagine what “success,” defined by this crowd would have looked like?
Here’s what success for America’s short- and long-term fiscal health should look like; and thanks to the Super-Committee fail, we might just have the time and political space to achieve some of it:
My colleagues at the Institute for Policy Studies have a newly released Report: America Is Not Broke: How to Fix the Crisis While Making the Country More Equitable, Green, and Secure.
The report asserts that the current economic crisis presents us all with the opportunity and challenge to use our nation’s vast wealth to create a sustainable economy which functions well for all of us.
The Institute for Policy Studies comes up with seven times the total $1.2 trillion over ten years savings that the Super-Committee was charged with finding. Not only would this be success in correcting national priorities and positively affecting the long-term debt, these tax and spending reforms would create a society that works for 99% of us.
If we had the political will to actually achieve success, we could achieve at least $824 billion per year by doing the following:
1) Generate revenue equitably: Going beyond rolling back the Bush tax cuts for the wealthy. The report proposes reforms would generate $375 billion per year. These proposals ensure that Wall Street and the wealthy pay their fair share and also call for a small tax on trades of stocks, bonds, and derivatives as a way to both generate revenue and discourage high-risk, high-frequency trading.
2) Ensure that security spending actually makes our country more secure: A total of $252 billion per year could be raised from smart reductions in the military budget by reducing the enormous number of overseas U.S. military bases; eliminating obsolete and wasteful defense programs; ending the war in Afghanistan as we end the war in Iraq
3) Create a clean, sustainable environment: Eliminating corporate welfare for the oil industry and taxing could generate nearly $200 billion per year in revenue, while creating incentives to adopt green technologies and reduce our nation's dependence on foreign oil.
Finally, though not outlined in the report and admittedly more difficult to achieve, its important to note we need true health care reform so that escalating health costs do not overtake even the most responsible debt-reduction steps. The Center on Economic Policy Research reports that with the current health system, CBO projections show devastating consequences for our budget deficits going forward. But, for instance, if we had universal access to health care and the same per person costs as Canada, we would save $1.2 trillion a year, with $600 of the savings going to the government.
Taken together, this formula for success would put us squarely and strongly on the path to both fiscal sustainability and toward a more equitable and flourishing society.
August 1, 2011 · By Emily Schwartz Greco
It's Aug. 1, 2011. Does President Barack Obama know where House votes for that last-minute budget deal are?
The pact he forged primarily with Republican leadership in Congress after months of wrangling is no compromise. The GOP got just about all the cuts it wanted. The Democratic Party didn't get hardly anything it sought, such as a deficit-shrinking revenue boost or a firm commitment to leave Medicare, Medicaid, and Social Security funding unscathed. If it becomes official, deep social spending cuts will deepen the nation's growing economic woes.
It did sound virtually official when the news broke yesterday. But as of 11:30 a.m. today, the political forecast for passage in the House "is much more cloudy." The Hill is reporting that only 21 representatives are likely to back it and 11 have asserted that they will vote against the deal. That leaves more than 400 House lawmakers undecided with one day to go before the debt-ceiling deadline.
That means there's still hope the nation won't have to eat what Missouri Democrat Emanuel Cleaver, the Congressional Black Caucus chairman, called a "sugar-coated Satan sandwich." Wall Street is blocking efforts to shut down overseas tax-dodging havens that could restore $1 trillion dollars to U.S. taxpayers within a decade, notes Institute for Policy Studies expert Chuck Collins. And a task force led by Miriam Pemberton, another IPS expert, found that trimming just nine military programs could save $77 billion in the 2012 fiscal year alone.
In these difficult financial times our government should perform two basic tasks:
- Stimulate the economy to create jobs.
- Ensure that everyone pays their fair share including the wealthiest Americans.
The budget deal Obama struck primarily with Republican lawmakers does neither. Instead, "the very wealthy will continue to receive taxpayer handouts, and corporations will keep their expensive federal giveaways," Congressional Progressive Caucus co-chairman Raul Grijalva (D-AZ) said. "Meanwhile, millions of families unfairly lose more in this deal than they have already lost."
As Grijalva and many others have wisely noted, Obama has the power to raise the debt ceiling without caving on spending priorities. He could invoke Section 4 of the 14th amendment. Or, even though it sounds outlandish, simply order the mint to produce two platinum coins, both worth $1 trillion. That sounds kooky, but some scholars say it would technically work. And it wouldn't damage the U.S. economy.
This deal will only make things worse for millions of unemployed Americans. Plus, it protects "every single loophole, giveaway and boondoggle in the tax code as a matter of fundamental conservative principle," Republican David Frum argued in a startling commentary.
Our economy needs a new stimulus package, not a poison pill.