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Entries since June 2011

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Pawlenty's Tax Proposal Caters to the Richest Americans

June 9, 2011 ·

GOP presidential candidate Tim Pawlenty observed the 10th anniversary of the Bush tax cuts by proposing $2 trillion in additional tax cuts, primarily for millionaires and global corporations.

The former Minnesota governor wants to eliminate the federal estate tax, the nation's only levy on inherited wealth. He wants to lower top tax rates on the rich from 35 to 25 percent. He wants to only tax income from work, not wealth — by eliminating all capital gains taxes.

This makes Tim Pawlenty a billionaire's dream candidate.

He sure knows how to mark an anniversary. The 2001 Bush tax cuts were a $2.5 trillion mistake that put us on the road to fiscal instability. At the time, Congressional budget analysts projected a $5.6 trillion surplus that supposedly would mount up over this past decade.

But even after the rosy projections turned to red ink, the tax cut bonanza continued. Congress engaged in a "decade of magical tax cut thinking," responding to each economic challenge with a one-point program: cut taxes for the wealthy and expand tax loopholes for global corporations. Pawlenty's absurd proposal is the latest articulation of the Republican Party's math-defying magical thinking.

Bob McIntyre, the director of Citizens for Tax Justice argued in 2001 that the tax cut was a bad idea — that it was overly tilted to benefit the rich — and would eventually lead to deficits. Last week, His organization released a report projecting that another 10-year extension of the Bush tax cuts would cost $5.5 trillion. Add in Pawlenty's tax program and we can look forward to $7.5 trillion more in red ink.

An Economic Policy Institute report points out that the Bush tax cuts cost over $2.5 trillion over the last decade. An estimated 38 percent of those tax cuts — almost $1 trillion — went to households in the richest 1 percent, those Americans with annual incomes that exceed $645,000. Pawlenty's proposals are probably even more regressive in terms of who benefits.

Recent IRS data reveals that the richest 400 U.S. taxpayers have seen their effective tax rates fall to their lowest levels since prior to the 1930s Great Depression. Their effective tax rate has fallen from 51.2 percent in 1955 to 18.1 percent in 2008, the most recent year that we have data for. According to the Citizens for Tax Justice, Pawlenty's plan would cut taxes for this richest 400 by 73 percent.

 There is some good news, however. The 10th anniversary of the Bush tax cuts has focused new attention on the irresponsibility of cutting taxes on the wealthiest Americans and corporations even more. Grassroots groups convened actions and press events around the country to dramatize the link between the tax cuts and local budget cuts that worsen unemployment.

 Their message is getting louder and clearer: No more budget cuts until millionaires and corporate tax dodgers pay their fair share. Raising taxes on the rich has to be on the table going forward.

 Activists are also coalescing around a number of revenue proposals that could raise trillions of dollars over the next decade. One initiative is the Fairness in Taxation Act, introduced by Rep. Jan Schakowsky (D-IL). Her legislation would add additional tax rates for millionaires and generate $74 billion a year. "Middle-class and low-income families didn't create these budget deficits or reap economic rewards over the last generation," Schakowsky wrote in a Chicago Tribune op-ed. "So our nation's plan to get our fiscal house in order should not sacrifice the vitality of our middle class and our commitments to address poverty."

Domestic Worker Rights Movement Gains Traction in California and Geneva

June 8, 2011 ·

Domestic workers rally in Sacramento. Photo courtesy of Jobs with Justice

This week, a delegation of domestic workers from the National Domestic Workers Alliance left for Geneva, Switzerland to attend the annual International Labor Conference held at the International Labor Organization (ILO) every summer. Last June, member countries voted to have a convention (instead of the weaker option, a recommendation) on "Decent Work for Domestic Workers," and on June 16 they will vote on its passage. NDWA members are representing the United States as the labor arm of the tripartite system of the ILO (labor, employers, and governments), thanks to an historic partnership with the AFL-CIO (who are usually at the table representing US labor). The AFL-CIO has opened up seats in the delegation so that domestic workers can share their own testimony and experiences, and have a vote.

The convention would provide minimum protections for domestic workers around the world — including provisions related to contracts, payment, sleeping and living conditions, and even withholding of passports and other protections aimed at addressing the inherent danger of exploitation faced by domestic workers in many countries, including the United States.

Here's an excerpt from an e-mail I just received from Jill Shenker, the NDWA field director:

We will write more soon, but tonight, at 9:14 pm, the governments, employers, and workers at the ILO adopted the 19 articles of the International Labor Convention for Decent Work for Domestic Workers. It was an amazing negotiation process and the text sets forth fundamental labor standards for domestic workers — a huge step forward in our struggle to win human rights for domestic work, recognition that we deserve labor protections like any other worker, and respect for the fact that domestic workers are a force to be reckoned with! At the end of the session tonight, the domestic workers from around the world burst into song — first a song from our domestic worker sisters in South Africa, and then "Solidarity Forever," and you could feel not only the tremendous victory for domestic workers, but also the injection of spirit for the trade unionists, governments, and ILO staff

This year, the NDWA delegation, and its sister organizations from around the world, has been busy educating themselves and their fellow domestic workers on the ILO process, the rights outlined in the draft Convention, and even the next steps they will need to take to push for widespread ratification of the Convention. While the US government has been very supportive of the Convention and has provided very progressive responses to the questionnaire that is used to help the ILO develop the Convention, whether the United States will ratify the Convention remains to be seen. What we do know is that the more rights domestic workers gain in the United States, the closer the US will be to being able to reconcile U.S. laws with the international law proposed (a necessary factor for ratification).

To that end, domestic workers in California had a huge victory this week as the California Domestic Worker Bill of Rights (closely modeled on New York State's Domestic Worker Bill of Rights that was signed into law last August) was passed out of the Assembly.

For centuries, domestic work (including housekeeping, childcare, and caring for individuals with disabilities and seniors), has been undervalued despite its enormous importance to families. It is, as many workers, economists, and advocates have observed, "the work that makes all other work possible." In the United States, this workforce is comprised largely of immigrant women of color — so in addition to the work itself not being considered "real" work, the individuals are vulnerable to gender and racial discrimination that makes organizing for rights an even harder task. Our labor laws do little to ameliorate this problem, specifically excluding domestic workers from many fundamental labor protections, including the right to organize and in some cases even the right to minimum wage and overtime compensation. The link between our country’s history of slavery in agriculture and domestic work, and the fact that these two industries remain among the least protected, isn't a coincidence.

I'm happy to have played my part in the struggle for justice and recognition of domestic workers, as a social worker, writer, researcher, facilitator, note-taker, food orderer, and friend. As an ally, I know my role, and it is powerful to know that this movement for domestic worker rights is being LED by domestic workers themselves. In countries around the world, they have challenged discrimination, challenged exploitation, and challenged the idea of others speaking for them. In their organizing, domestic workers speak to more than just abuse, they also share personal stories of affection and bonding with the employing families. Most tell me they really enjoy and love the work of care, and only wish to be granted the same rights and respect that other workers receive. The victories in New York and California and this new ILO convention are only the beginning of what we hope will be a transformation in this industry.

Nurses Join Call to "Tax Wall Street"

June 7, 2011 ·

A swarm of around a thousand nurses in scarlet scrubs descended on the U.S. Chamber of Commerce in downtown Washington today, calling for a new national agenda funded by taxing Wall Street.

Nurses display a banner calling for a tax on Wall Street. Photo by Sarah Anderson

At the door to the Chamber’s headquarters, they were greeted by tuxedoed gentlemen with sashes bearing the names of Wall Street firms. They held out buckets for cash donations (I didn’t see much actual money going in).

The rally, organized by National Nurses United, was part of a series of activities to promote what they are calling a “Main Street Contract” to increase spending on jobs, healthcare, education, and other urgent needs. 

At a press conference on June 6, NNU Executive Director Rose Ann DeMoro explained that they are calling on Congress to enact a tax on financial transactions as a way to pay for the contract. 

Such taxes are designed to generate massive revenue while also discouraging the kind of short-term purely speculative financial activity that serves no social purpose. The way they work is by placing a very small fee (0.25% or less) on each trade of stocks, derivatives, foreign exchange, and other financial instruments.

DeMoro said that NNU members along with other unions and allies plan to demonstrate June 22 on Wall Street as part of an international day of action on financial transactions taxes.

That date was selected because it falls on the eve of a European Council meeting in Brussels. Progress on this issue has been moving fast in Europe and there are high hopes that European countries, at least those in the eurozone, will reach agreement soon to coordinate the adoption of financial transactions taxes. Leaders of Germany and France have been the biggest champions, and there are reports this week that their two governments are coming closer to consensus on the technicalities (instruments covered and at what rates). 

This could put healthy pressure on U.S. policymakers to open their minds to an idea that progressives have been pushing for decades.

Explosive Nuclear Spending

June 7, 2011 ·

The world's spending more than ever on nuclear weapons. The eight nuclear powers — Britain, China, France, India, Israel, Pakistan, Russia and the United States — plus North Korea, which aspires to join the atomic club, are collectively pouring approximately $100 billion into their nuclear weapons programs this year.

And, according to the Stockholm International Peace Research Institute (SIPRI), more than 5,000 nuclear weapons are now deployed around the world.

With social spending cuts on the rise in too many countries to count, there's a petition to "cut nuclear weapons and the $1 trillion per decade we spend on them, instead of cutting the things we really need," writes Bruce Blair on Time.com. "Citizens need to bring this to the attention of their governments urgently. You can sign the petition here: www.cutnukes.globalzero.org."

You can also check out this OtherWords op-ed by Kingston Reif on New START, and this column by William A. Collins that calls for scrapping nuclear weapons and reactors.

Bonn Climate Talks

June 7, 2011 ·

The Institute for Policy Studies has joined with Friends of the Earth International, Jubilee South Asia, Pan Africa Climate Justice Alliance, Third World Network, and other movements and organizations fighting for climate justice in the international policy arena at the UNFCCC intercessional talks in Bonn.

We will provide regular updates on key policy areas and issues being debated here at the climate talks — such as emissions reductions, climate finance, halting deforestation, and carbon markets, among other issues.  We invite our allies to use these updates to help inform regional and national activities, provide information for media outreach, and enhance national and regional advocacy plans. Please feel free to circulate.

Update No. 1: Bonn Climate Negotiations

The Big Picture

United Nations climate negotiations resumed in Bonn, Germany, on June 6. This session follows the slow progress made at earlier talks in Bangkok in April, and are essential for building momentum toward the Durban climate conference in November.

The Bangkok talks were focused on setting the agenda for the negotiations for the rest of the year and were setback by divisions between countries over the scope of international climate talks. In Bangkok, some rich developed countries insisted on limiting the negotiations to implementing the narrow range of issues agreed at Cancun; in contrast most countries supported continuing under an agreed workplan from 2007 (the Bali Action Plan).[1]

The Bonn talks are to be based on the broad agenda advocated by most countries in Bangkok, but the clash in the "paradigm" for the negotiations will underline further disagreements in Bonn. These fault-lines include:

  • Setting binding emissions reduction targets through the Kyoto Protocol
  • Insufficient emissions reduction targets currently on the table
  • The Green Climate Fund

1. Setting new binding emission reduction targets in 2011?

The Kyoto Protocol represents the current model of international climate law – it requires developed countries to set binding emission reduction targets and to meet them over a 5 year period. The first five-year period ends in 2012 and time is running out to agree on targets for the next ‘commitment period’ (2013-2017/2020) in accordance with the mandated negotiations, which have been running since 2005.

Developing countries, particularly the Africa Group, have made clear that a continuation of the Kyoto Protocol is essential, as it provides a paradigm of legally binding emission reduction targets. Some developed countries, including Russia and Japan, have indicated they will walk away from their international legal obligations to agree commitments for the period after 2012. The United States is similarly opposed to binding emissions reduction targets. Instead of negotiating science-based targets reflecting their fair share of the global effort, they are now proposing a “pledge-based” system in which each country does whatever it determines domestically.

Bonn represents a pivotal moment for the future of the Kyoto Protocol. The Bonn climate talks need to pave the way for agreement in Durban on the next phase of legally binding emission reduction targets. Durban is the last chance to agree, as the first phase of commitments ends in 2012. If there is no agreement in Durban, the world may be faced with climate anarchy, without an international regime in place.

2. Will those new pledges be enough?

The latest science shows that negotiators at Bonn will be out of touch with what the latest science clearly requires if the world is to avert dangerous climate change. The current pledges risk warming of 2.5 to 5 degrees according to the United Nations Environment Programme. The problems with developed countries’ proposed targets are manifold: they are too low to meet what the science requires but they are also accompanied by ‘creative accounting’ proposals which result in emissions reductions only on paper. Furthermore the extensive use of offsets will see rich countries shift the burden for reducing emissions to developing countries – while doing almost nothing at home.

Analysis revealed in Bangkok showed that when emission reductions were converted into gross amounts – rather than percentages – it was clear that developing countries’ pledges for emission reductions were even higher than those from developed countries (3.6 Gigatonnes to occur in developing countries with only 1.9 Gigatonnes to occur in developed countries).[2] Together, these pledges fell well short of the 14+ Gigatonnes the UN says is necessary to be on path to remain below 2 or 1.5 degrees C.

In addition, the emissions reduction targets proposed by developed countries are ridden with loopholes. The rules currently being considered do not take into account emissions from shipping and aviation, overestimate emissions reductions by forests and land use in developed countries and allow the carry-over of unused pollution permits and offset credits . This means that the total emission of developed countries could actually increase even if their ‘official’ targets say they are making reductions.[3]

The debate over these rules, how they shift the burden of reducing emissions to developing countries and whether they are in line with the science will be of central importance in Bonn – particularly as the agenda sets particular time for addressing this issue.[4]

3. Creating a "Green Climate Fund"

In Cancun, one of the few areas of agreement was the establishment of a "Green Climate Fund" (GCF) to oversee the collection and disbursement of "climate finance." Currently the details of the GCF are being negotiated by a ‘Transitional Committee’ (TC) which has already met in Mexico in April and again in Bonn from May 30.

Flashpoint issues in the negotiations of the GCF have already included the role of the World Bank as its trustee, given concerns regarding its potential conflicts of interest due to its role in financing fossil-fuel based projects, and its practice of mixing roles as a banker, financial advisor and project implementer (known as the "Arthur Anderson syndrome" following the financial crisis). This conflict may be compounded by proposals relating to secondments and staffing of the new fund, which draw heavily on the World Bank as a source.

Similarly, many observers are concerned that the process of the GCF is off-track. It is currently heavily focused on technicalities and structure – without having agreed to what the priorities of the fund should be or the actual scale of public funding. In Cancun, countries agreed to a "goal" to "mobilize" $100 billion by 2020 from “a wide variety of sources”. However, developed countries are yet to commit to any specific level of public funding.

A further critical question here is what a "balanced" allocation of finance between adaptation and mitigation really means.[5] It is to be expected at Bonn that developing countries, who are the most vulnerable to climate impacts, will push the GCF to identify the needs and priorities of recipients before designing structures to best meet those needs.

Finally there is concern that the GCF is too focused on "private finance" options (through loan guarantees, publicly-provided insurance, or other risk sharing instruments) and thus risks putting too much power into the hands of profit-driven interests. Market failures and distortions by private interests are a significant structural cause of the climate crisis and many countries fear a continued focus on the private market could have the effect of financing projects that are ineffective at confronting climate change but are very effective at transferring public monies into private coffers. These countries and observers will be pushing for the GCF to be primarily funded through public sources (including innovative mechanisms such as Special Drawing Rights and the "Robin Hood Tax").

 

[1] See recent affirmation of the importance of the Bali Action Plan and the Kyoto Protocol at the India-Africa forum, 25 May 2011, (para 7), http://pib.nic.in/newsite/erelease.aspx?relid=72319

[2] Stockholm Environment Institute, “The Implications of International Greenhouse Gas Offsets on Global Climate Mitigation” (March 2011), www.sei-us.org/Publications_PDF/SEI-WorkingPaperUS-1106.pdf

[3] Stockholm Environment Institute, “Assessing the current level of pledges & scale of emission reductions by Annex I Parties in aggregate, AWG-KP In Session Workshop, Bonn, 2. August 2010; and, Kartha, S. “How Accounting Tricks, Loopholes, and Strategic Carbon Banking Could Negate Developed Countries’ Copenhagen Pledges”, Tellus Institute Brown Bag Lunch Series, 10 November 2010.

[4] On Thursday 9 June 2011 according to preliminary schedule.

[5] This is a reference to the objective of the fund from the Cancun outcome document – see Annex III of 1/CP.16, http://unfccc.int/resource/docs/2010/cop16/eng/07a01.pdf#page=2.

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