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Entries since January 2013Page Previous 1 • 2 • 3 Next
January 18, 2013 · By Sarah Anderson
Republicans seem to have something against tax increases. I get that. But it's still not crazy to think we can win some important revenue battles during Obama 2.0. And given this country's pressing needs – from repairing our infrastructure to rehiring teachers – it would be crazy not to try.
A big question, of course, is how to peel off the 17 House Republicans needed to win anything (assuming all Dems and President Obama are in favor). Openings will come, though, when Republicans need votes from across the aisle on something or other. The even more important challenge is to push progressive reforms into the center of the debate so they get plucked when the stars are aligned.
Here are four that are not only solidly progressive but also have bipartisan potential:
1. Close the carried interest loophole
OK, people, if we can't fix this one during the second Obama administration, I'm giving up on Washington once and for all and becoming a goatherder. How can we continue to allow gazillionaires to pay only a 15 percent tax rate on the profit share ("carried interest") they get paid to manage hedge and private equity funds?
Ray Dalio of Bridgewater Associates, for example, was the highest-earning hedge fund manager in 2011, raking in $3 billion. Forbes calculates that if Dalio had paid ordinary income tax rates, he would have contributed an extra $450 million to the Treasury.
The loophole is so off-the-charts absurd even some hedge fund managers are ready to give it up. Bill Ackman, of Pershing Square Capital, has said he expects the loophole to disappear and thinks his peers won't even mind that much.
Formerly problematic Dems have also changed their tune. Back in 2007, a fix passed the House but never made it through the Democratic-controlled Senate because of obstructionism from Senator Chuck Schumer (D-NY). Thankfully the Senator from Wall Street land has had a rethink.
2. Cap the deductibility of executive pay
The more corporations pay their CEO, the less they owe in taxes. A 1993 law aimed to fix this perverse incentive by capping executive pay deductions at $1 million. The problem is it left a huge loophole for "performance-based" pay. Oracle CEO Larry Ellison, for example hauled in $76 million in stock options and other so-called "performance-based" pay in 2011 – all of it fully deductible. And contrary to Clinton era thinking, stock options do not improve performance. This became abundantly clear after the dot-com crash and the 2008 crisis, when boards helped CEOs recoup their losses by handing out boatloads of new options.
As for bipartisan, "purple" potential, Senator John McCain (R-AZ) co-sponsored a bill in 2009 that would've tightened up the loophole and former Senate Finance Chairman Charles Grassley (R-IA) has made supportive comments. There are also two recent precedents. Both the bank bailout and the health care reform legislation included $500,000 caps on pay deductibility with no performance pay exemptions for financial and health insurance executives. Guess what? The world didn't end.
3. Adopt a financial transaction tax
This is the idea of putting a very small tax on each trade of stocks, bonds, and derivatives. Tax the Wall Street casino? Fat chance, you might say. But there's actually huge momentum on this, both at the grassroots and the policy level.
About a dozen European governments have committed to coordinate such a tax. The details still need to be hammered out, but the proposal on the table is for a tax of 0.1 percent on stock and bond trades and 0.01 percent on derivatives.
Sure, you might say, but have Europeans ever met a tax they didn't like? How are you going to sell this in the land of the "free"?
One major selling point is that by taxing each trade, this tax would discourage the controversial high-speed trading that now dominates markets. The chief economist at the Commodity Futures Trading Commission, the nation's top derivatives regulator, recently found that this automated speed trading is sucking significant profits from traditional investors. And a growing number of these traditional investors are coming out in support of financial transaction taxes.
Even for tea partiers, if forced to pick from a menu of options for raising massive revenue, what do you think they'd go for? One of the numerous proposals (e.g., value added taxes) that would hit the middle class? Or one targeted at the bigtime gamblers on Wall Street who benefited the most from the bailout so hated by the tea party?
4. Close offshore tax havens loopholes
The rampant use of tax havens to stiff Uncle Sam has sparked outrage across the political spectrum. In a nationwide poll, nine out of ten small business owners said it was a problem when big businesses used offshore loopholes to avoid paying their taxes. In the same poll, in which Republicans outnumbered Democrats 2-to-1, two-thirds of small business owners said big business did not pay their fair share of taxes. Even Rush Limbaugh has acknowledged that something is wrong when General Electric pays no taxes despite earning tens of billions in profits.
Closing tax haven loopholes could raise at least $100 billion a year. To move in this direction, Congress could increase reporting requirements. Under the Dodd-Frank financial reform legislation, energy corporations will now have to report on their profits, taxes and other government payments, by nation. This should be extended to cover all corporations. The intent of the Dodd-Frank disclosure is to combat corruption, but it could also help combat tax avoidance. A recent survey of chief financial officers of multinational corporations found 75 percent worry about the reputational impact of their company's tax disclosures.
Let's not be intimidated by Grover Norquist and his irrational tax-hating minions. Obama's legacy — and our nation's economic future — will be determined by our ability to build a solid and progressive revenue base.
Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies in Washington, DC and is a co-author of the Institute's yearly Executive Excess reports on CEO pay. www.ips-dc.org Distributed via OtherWords (OtherWords.org)
January 17, 2013 · By Sarah Browning
The United States “contains multitudes,” as Walt Whitman said. We’re a nation made of millions of stories. It’s one way we understand ourselves as a people, through the story we tell of ourselves. For too long there’s been just one official story and it has been blandly monochromatic: straight, white, and overwhelmingly male.
On Monday January 21, though, the narrative shifts. I invite you to listen closely as Richard Blanco, the poet President Barack Obama chose to read an original poem at his second inauguration, steps to the podium. Because Richard Blanco isn't just a fine poet. He's also Latino. He's also gay.
In three masterful collections Blanco has been telling his own story — of growing up queer in a conservative Cuban exile family, in love with American popular culture, “the boy afraid of being a boy” — with affection and careful, close attention to the story’s richness.
Lest we think the choice only symbolic, the National Book Critics Circle reminded us this week that there are still gatekeepers policing the cultural commons: They chose only white poets as finalists for their annual award, despite many fine poets of color (including Blanco) having released new collections in 2012.
By choosing Richard Blanco, by contrast, the president celebrates our variety: We are queer, we are straight, we are Black, white, Latino, Asian, Native, multi-racial…We are America. Martín Espada, the groundbreaking poet and essayist, reminds us of the broader political context in which this choice is made: “There are Latino writers (myself included) who are banned in Tucson as part of the Mexican-American Studies program outlawed by the state of Arizona, part of the backlash against Latino immigrants in this country. There are gay writers who are accomplished, even brilliant, yet cannot marry and are denied basic civil rights in many states, since discrimination does not recognize accomplishment.”
It’s not an easy task to write a poem for the inauguration, broadcast to millions, and I don’t envy Richard Blanco even one bit. But I love that he is the one taking on the challenge. With so many trying every day to deny our country’s diversity and to drive us apart, President Obama has done something bold: He's chosen a queer Cuban American to bring us together.
Order Blanco’s latest collection, Looking for the Gulf Motel, here.
Read the title poem in the collection here.
Read a queer perspective on Obama’s choice here.
Sarah Browning is Executive Director of Split This Rock, author of Whiskey in the Garden of Eden, and an Institute for Policy Studies associate fellow.
January 16, 2013 · By Emily Schwartz Greco
This week in OtherWords, Jill Richardson says that Beyoncé's high-profile association with Pepsi makes her unfit as a role model for Michelle Obama's Let's Move campaign and Andrew Korfhage calls on President Obama to stop the Keystone XL pipeline. Donald Kaul explains why he thinks that Chuck Hagel would make a good Pentagon chief and Sarita Gupta praises Hilda Solis's performance as Labor Secretary.
- Filling Solis’s Shoes Won’t Be Easy / Sarita Gupta
Obama's first labor secretary has been a watchdog for workers.
- A Key Proposal for the Administration’s Second Term / Andrew Korfhage
It's up to Obama to stop the Keystone XL tar sands pipeline.
- What Happened to the Violence Against Women Act? / Leslie Watson Malachi
Republican efforts to prevent expanded protections for these at-risk groups made all women lose important protections.
- The Real Obama Emerges Again / Jill Stein
Thanks to the budget deal, Obama's second term is starting with more of the same disappointments.
- We Don’t Need a Secretary of Militarism / Donald Kaul
Chuck Hagel proved to be an intelligent, reasonable man with a reputation for honesty in the Senate, and these days that qualifies for sainthood.
- Making the Tax Code Safe for America’s Aristocracy / Sam Pizzigati
Tax-free gifts are solidifying the nation's financial dynasties.
- Beyoncé’s Not-so-Super Move / Jill Richardson
Our president and first lady ought to reconsider their relationship with the popular singer now that she's becoming the face of PepsiCo.
- Why does a university need a Chief Marketing Officer? / Jim Hightower
"Let there be money" is the new academic aspiration.
- Giving Away the Store / William A. Collins
The whole business of giving tax breaks to businesses to lure them to a particular place is largely a scam.
- Tar Sands Illustrated / Khalil Bendib Cartoon
January 15, 2013 · By Emira Woods
"There cannot be a military solution to this crisis in Mali," Emira Woods said on the PBS NewsHour. "The crisis has its roots in political and also economic processes, with people in the northern part of the country feeling completely marginalized from the rest of the country."
Woods is the co-director of Foreign Policy in Focus at the Institute for Policy Studies. You may read the full transcript of her comments on the NewsHour's website.
"So clearly what you had was an opportunity because of the intervention, the NATO intervention in Libya, unleashing weapons, both from Qadaffi's coffers as well as from the international community, weapons flowing from Libya, across borders of Algeria, into northern Mali, to be able to actually create a crisis, and further destabilize northern Mali," said Woods. "So I think what you have is a situation where unilateral intervention could create complications down the road, both for civilians that could be targeted in these airstrikes, as well as for further complicating a political crisis that may not be resolved militarily."
January 10, 2013 · By Tiffany Williams
Once again this year, President Obama has declared January as “National Slavery and Human Trafficking Prevention Month,” and in his address he calls on the “national mission” to fight human trafficking.
This month, we rededicate ourselves to stopping one of the greatest human rights abuses of our time. Around the world, millions of men, women, and children are bought, sold, beaten, and abused, locked in compelled service and hidden in darkness. They toil in factories and fields; in brothels and sweatshops; at sea, abroad, and at home. They are the victims of human trafficking — a crime that amounts to modern-day slavery.
As Americans, we have long rejected such cruelty. We have recognized it as a debasement of our common humanity and an affront to the principles we cherish. And for more than a century, we have made it a national mission to bring slavery and human trafficking to an end.
For 13 years, our project Break the Chain Campaign at the Institute for Policy Studies provided direct social services and counseling to immigrant survivors of human trafficking and worker exploitation. Our clients were largely women from Africa and Southeast Asia who had come to the US to work as domestic workers in the homes of wealthy families, diplomats and employees of the World Bank and the IMF. When they fled the abuse, they faced a new fear: being undocumented in America.
The issue of immigration, and immigration reform, is tied inextricably with the issue of human trafficking, especially as heightened border control measures lead people to turn to riskier pathways in order to provide food, shelter, and opportunities for their families.
Immigration will be near the top of President Obama’s political agenda in his second term, and organizers are already gearing up for campaigns that will put human dignity, family preservation, and pathways to citizenship at the forefront of these discussions.
In the meantime, working within the enforcement-focused paradigm that we have now, anti-trafficking advocates are faced with the challenge of undocumented immigrant survivors being too afraid to report domestic violence, sexual assault, human trafficking, and other crimes.
We commissioned a group of public policy students from George Washington University to write a brief report on what we’ve been calling the “dual mandate” of the U.S. Government (particularly Department of Homeland Security): to identify and serve trafficking survivors, and to combat unauthorized immigration, and the conflicts that can arise when the two areas of work overlap.
In advance of the release of this brief report, which we expect within the coming weeks, we’ve compiled some of the key findings on the fact sheet, Key Facts from “The Dual Mandate: Immigration Enforcement and Human Trafficking.”