The news isn’t good: Texas is facing a crisis in health and human services, education, and clean air and water. If our leaders continue to fail to address these pressing concerns, the prosperous future of our state is at risk.
Unfortunately, Republican leaders from Rick Perry on down refuse to address the reality faced by most Texans, and too few Democrats seem willing to draw a line in the sand and stand firmly in favor of restoring cuts to education and expanding access to health care.
Lt. Gov. David Dewhurst says the Texas Senate will push for expanded tax cuts, adding relief for research-driven businesses and broadband and telecom companies to a package that already targets electricity ratepayers and small business.
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Dewhurst said the exemption of research and development costs would cost about $240 million.
A fourth proposal the Senate backs is a sales tax refund for telecom, Internet and cable TV companies, he said. Its cost would be capped at $50 million a year.
While Perry has said lawmakers should pay for some part of the tax cuts with rainy day dollars, Dewhurst said the Senate wants to pay for at least half of the tab with available general-purpose state revenue.
“Whether part or all of the rest would come from the rainy day fund is not decided,” he said.
Yes, tax cuts take precedence over funding public education, a finding a way to bring health care to close to 2 million uninsured Texans, to name just two of the festering issues in Texas. Our state leaders really have misplaced priorities. But it likely has everything to do with the needs of those at the top of the wealth spectrum. That is who our democracy listens to, not those that are truly in need.
State leaders like to brag about Texas’ fast growing economy and low unemployment, but rarely do they mention the high poverty rate and so far they don’t appear inclined to pass any new laws to deal with it.
The unemployment rate and the creation of new jobs are the statistics most often cited by Gov. Rick Perry to brag on Texas, and unemployment is among the lowest in the country at 6.2 percent. That’s well below the national average of 7.7 percent.
Perry also uses the Texas Enterprise Fund and the Emerging Technology Funds to encourage employers to relocate to Texas and create new jobs in the state, adding hundreds of jobs every year. Employment, though, is not the only measure of economic prosperity. There is the question of quality of life.
The number of Texans living in poverty rose for a third consecutive year in 2011, adding more than 214,000 people to total 4.6 million. That’s 18.5 percent of the population, 3 percent higher than the nation as a whole, according to the U.S. Census Bureau. [Emphasis added]
It also does a great job of pointing out the difference between Republicans and Democrats in Texas, when it comes to fixing the problem.
The two biggest predictors of poverty are poor education and chronic health problems. Only about 80 percent of Texans have a high school diploma, the second lowest in the country, and Texas has the highest number of uninsured citizens.
Politicians of all stripes decry the high poverty rate in a Texas, but what differs is how to deal with it. Republicans hold every statewide elected office, control both houses of the Legislature and Perry’s appointees direct every state agency.
Perry’s oft-repeated formula for economic growth is low taxes, few regulations and limited lawsuits. Going into the legislative session that begins Jan. 8, he has promised to limit state spending to less than population growth plus inflation.
To help the poor and unemployed, he has proposed requiring drug testing as a condition for some people to receive welfare benefits, to make sure they are employable.
“Being on drugs makes it much harder to begin the journey to independence, which only assures individuals remain stuck in the terrible cycle of drug abuse, desperation and poverty,” Perry said last month.
“Extending taxpayer-funded benefits while ignoring a behavior that could make it virtually impossible for someone to enter the workforce or finish school, sends them down the road to a much bleaker future.”
Democrats are pushing for state government to provide services they believe will help people move out of poverty, including restoring $5.4 billion cut from the public school budget and nearly $1 billion cut from higher education.
Democrats also want the state to expand Medicaid to provide 1.5 million Texans with health insurance at a minimal cost to the state through 2020. Most Democrats fiercely oppose the drug testing proposal.
“To automatically assume that a single mother, a recently unemployed veteran, or a teacher who lost his or her job because of Governor Perry’s budget cuts is a drug user is shameful,” state Rep. Trey Martinez Fischer, D-San Antonio, said. “When a family is in crisis, we have a moral obligation to provide assistance as soon as possible.” [Emphasis added]
The GOP is for more of the same and demonizing the poor and less fortunate, the Democrats are for finding reality-based solutions that help everyone get ahead.
For all intents and purposes, it would seem that 2012 was a bit more than just OK for a lib-lab like myself. It provided more hope–at least more ganas to fight–for public policies beneficial to Latinos. And because the policies would benefit Latinos, they would benefit most everyone else–even the 1%. Of course, I speak in a national sense, since Texas Latinos have more of a fight against the Tea Party’s scorched earth agenda in the Texas Legislature.
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Let’s face it, when Republicans are in power, the only policies having anything to do with Latinos have been negative–Voter ID, cuts in public education, sanctuary cities laws, etc. Democrats, although defending on most aspects of the progressive agenda Latinos seem to support, failed on comprehensive immigration reform, which I’ve argued encompasses all other issues in one way or another, and was the basis of most of the negativity coming from Republicans.
But in 2012, it seems to me that we have a political savings account in which we’ve saved up our well-earned political pennies to expend on a positive political agenda. And it’s time we do. Not only the voters, but any progressive Latino elected official, too. The Latino electeds should not just wait to be told that it’s their turn, and neither should the Latino electorate wait. Whatever the outcome, it is the fight that matters and empowers us for the future.
Now, it may seem to any right-wing Republican or to any white liberal who thinks he/she is doing Latinos a favor, that I’m being too Latino-centric. Well, I started this blog because no one was mentioning Latinos in the progressive conversation, unless it was to chastise our voter turnout on the day after election day. So, let’s toss the hurt feelings aside and begin an inclusive progressive movement. Don’t try to do Latinos any favors with pats on the head, but do some listening, instead.
In 2012, Latinos sent a message and have become part of the conversation–even though most of the TV talking heads on Sunday morning aren’t Latinos, but that’s a whole other battle. But it is up to the Latino electorate (and not just those individual Latinos on end-of-year “Top 10? lists) to continue pushing beyond Election Day to ensure our elected officials create public policy that is beneficial to all.
There are so many families in Texas who are living in poverty through no fault of their own – because of unforeseen medical bills or a layoff. People that are victims of circumstance, and are working hard to get out of their situation but can’t. Far too many of us are just a job loss or a medical emergency away from being in the same situation. That’s what this trailer for a documentary called A Fighting Chance brings to light.
Anyone who want to learn more can check out this free screening and discussion of the documentary on December 6th, via the CPPP, A Fighting Chance.
We are thrilled to share the two-minute trailer of our 30-minute documentary A Fighting Chance, which sheds light on what it really takes for families to survive and thrive in Texas and exposes the tough choices families must make on a daily basis.
The film will chronicle every step of their journey as they fight to meet their most basic needs. Thanks to the generosity of Methodist Health Care Ministries, the Annie E. Casey Foundation, and the Citi Foundation, we hope to touch the hearts and minds of Texans by exposing the harsh reality of poverty and challenging our common assumptions.
A Fighting Chance will air on KLRU Austin, the local PBS station, and others statewide in a few weeks. If you are in Austin, please join us next week for a premiere screening of the film followed by a panel discussion:
The gap between the top one-fifth and the middle one-fifth of Texas families is also the 7th highest among the states.
The average household income for the richest one-fifth of Texas households is 2.9 times greater than the average for the middle one-fifth. The gap between the very highest income – the top 5% — and middle one-fifth is even greater; the top group has an average income 4.8 times as large as the lowest.
The current inequality reflects a long term trend: since the late 1970s, through the mid 2000s, the inflation-adjusted income for the poorest one-fifth of Texas families has remained flat – growing by only 2.4%. During the same time period, the income of the middle one-fifth improved only a little more – by 16.4%. But the top one-fifth saw its income grow by 58.9% and the top 5% saw a whopping 96.0% job in household income.
Texas’ inability to fund public services is directly linked to this growing income gap. Our tax system depends heavily on the sales tax and similar consumption taxes on gasoline, tobacco, and alcohol. These taxes each take a much greater proportion of the income of lower- and moderate-income families than from higher-income families.
This unbalanced tax load makes it harder for struggling families to support themselves and gather assets to support personal investments in education or housing. It also means that the revenue the state needs for public investments cannot keep up with the growth in needs, since our tax system is too closely linked to the incomes of the lowest-income families, which has failed to grow over the past decades.
The best solution is to adopt a state personal income tax, which reflects a taxpayer’s ability to pay, with higher rates on those with higher incomes.
To improve our current system, the Legislature should subject the entire Tax Code to a sunset review, to eliminate outmoded business tax breaks, wasteful property tax exemptions, and other special treatments enjoyed by higher-income households and corporations.
The full report can be read here and Texas state report here.
The politicization of next year’s budget cycle – started today by Dewhurst and Straus – will only make inequality worse in Texas. It’s time to do what’s best for the people of Texas, and not ideological purity.
Here we go again. We’re about to spin back into the biennial vortex in Texas there’s talk about taxes, loopholes, and reform but nothing gets done. The reason nothing gets done is because the regressives that run our state don’t want anything to get done. They see little, if anything, wrong with out current tax and revenue system in Texas. That shouldn’t shock anyone, since they’re responsible for setting it up.
I agree that it’s a sucker’s bet to think that the Lege will try to fix Texas’ tax code in any meaningful way. Nobody likes having to take votes that may later be used as clubs against them in a campaign, and the lobbyists swarm like no other time when someone’s tax break is on the line. But such an overhaul has to happen eventually.
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As I’ve said many times before, nothing will change until the state’s leadership changes.
What I’ve said many times is that we can’t expect our current leaders who believe government is the problem, to know how, or even try for that matter, to use government for, or as part of, a solution. The regressives don’t think there’s a problem, and the Democrats and progressives try to nibble around the edges in the austerity frame of the regressives. This article from George Lakoff, from 2011 during the Wisconsin public pension fight, makes the case pretty good sums it up pretty good, What Conservatives Really Want.
The central issue in our political life is not being discussed. At stake is the moral basis of American democracy.
The individual issues are all too real: assaults on unions, public employees, women’s rights, immigrants, the environment, health care, voting rights, food safety, pensions, prenatal care, science, public broadcasting, and on and on. Budget deficits are a ruse, as we’ve seen in Wisconsin, where the Governor turned a surplus into a deficit by providing corporate tax breaks, and then used the deficit as a ploy to break the unions, not just in Wisconsin, but seeking to be the first domino in a nationwide conservative movement.
Deficits can be addressed by raising revenue, plugging tax loopholes, putting people to work, and developing the economy long-term in all the ways the President has discussed. But deficits are not what really matters to conservatives.
Conservatives really want to change the basis of American life, to make America run according to the conservative moral worldview in all areas of life.
In the 2008 campaign, candidate Obama accurately described the basis of American democracy: Empathy — citizens caring for each other, both social and personal responsibility—acting on that care, and an ethic of excellence. From these, our freedoms and our way of life follow, as does the role of government: to protect and empower everyone equally. Protection includes safety, health, the environment, pensions and empowerment starts with education and infrastructure. No one can be free without these, and without a commitment to care and act on that care by one’s fellow citizens.
The conservative worldview rejects all of that.
Conservatives believe in individual responsibility alone, not social responsibility. They don’t think government should help its citizens. That is, they don’t think citizens should help each other. The part of government they want to cut is not the military (we have over 800** military bases around the world), not government subsidies to corporations, not the aspect of government that fits their worldview. They want to cut the part that helps people. Why? Because that violates individual responsibility.
He then discusses what needs to change.
What is saddest of all is to see Democrats helping them.
Democrats help radical conservatives by accepting the deficit frame and arguing about what to cut. Even arguing against specific “cuts” is working within the conservative frame. What is the alternative? Pointing out what conservatives really want. Point out that there is plenty of money in America, and in Wisconsin. It is at the top. The disparity in financial assets is un-American — the top one percent has more financial assets than the bottom 95 percent. Middle class wages have been flat for 30 years, while the wealth has floated to the top. This fits the conservative way of life, but not the American way of life.
Democrats help conservatives by not shouting out loud over and over that it was conservative values that caused the global economic collapse: lack of regulation and a greed-is-good ethic.
Democrats also help conservatives by what a friend has called Democratic Communication Disorder. Republican conservatives have constructed a vast and effective communication system, with think tanks, framing experts, training institutes, a system of trained speakers, vast holdings of media, and booking agents. Eighty percent of the talking heads on tv are conservatives. Talk matters because language heard over and over changes brains. Democrats have not built the communication system they need, and many are relatively clueless about how to frame their deepest values and complex truths.
And Democrats help conservatives when they function as policy wonks — talking policy without communicating the moral values behind the policies. They help conservatives when they neglect to remind us that pensions are deferred payments for work done. “Benefits” are pay for work, not a handout. Pensions and benefits are arranged by contract. If there is not enough money for them, it is because the contracted funds have been taken by conservative officials and given to wealthy people and corporations instead of to the people who have earned them.
Democrats help conservatives when they use conservative words like “entitlements” instead of “earnings” and speak of government as providing “services” instead of “necessities.” [Emphasis added]
In Texas we’re going to be looking at billions in surplus and likely over $10 in the Rainy Day Fund. In other words, Texas is not broke! What we should be focusing on are the issues of poverty and education. As well as what keeps people out of poverty – health care, a living wage, food, and a roof over their head.
It’s long past time Democrats and Progressives in Texas went about creating that long-term plan and began hammering home the message. And the CPPP’s updated report, Who Pays Taxes in Texas?, is the perfect template.
Our quality of life in Texas depends on our public structures—including public education, child health services, and transportation infrastructure—maintained by Texas tax dollars. A good tax system would not only provide adequate revenue to maintain these structures, but would also match the share of taxes paid with the share of income earned by each Texas family. The Comptroller’s 2011 study of the fairness of the Texas state and local tax system, Tax Exemptions and Tax Incidence,idemonstrates conclusively that low-and moderate-income Texas families bear a disproportionate share of state and local taxes. We need a fairer system to fund public structures so we can improve and maintain Texas families’ quality of life.
Offering the people of Texas a clear alternative to what we currently have should be the focus for the future. This cannot and will not change until we change the leadership of our state.
We stand for a living wage. Wages are subnormal if they fail to provide a living for those who devote their time and energy to industrial occupations. The monetary equivalent of a living wage varies according to local conditions, but must include enough to secure the elements of a normal standard of living–a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit of reasonable saving for old age.
“Most Americans don’t realize how unequal our country really is.”
That comes from this PBS News Hour item from 2010 on Americans perception of inequity in the United State, Land of the free, Home of the poor. It’s based on a study which asks Americans to choose between three wealth distribution models and pick which one they prefer. Here are the pie charts and what the study found.
We had 7,000 people distributed around the U.S., different levels of income, education, wealth, political opinions — 92 percent of the Americans picked Sweden over the U.S. When we broke it by Democrats and Republicans, Democrat, it was 93 percent, Republican, it was 90.5 percent.
So there’s a difference, but the difference is tiny. And one of the possibilities is that, when we dig deep down and we ask people to examine their core beliefs about a just society, Americans are really quite consistent in terms of thinking this is way too much inequality, and we want something that is much more equal to Sweden.
Because most Americans don’t realize how unequal our country has become, is why this problem isn’t getting fixed and can’t be fixed. There is no way to fix a problem, if most aren’t even aware there is a problem. And, of course, those at the top don’t see it as a problem.
The reason to point all of this out is that this and the fact that until we become a more equal society, as we once were, prosperity for all will not return to our country. And this not even being addressed in our current campaigns for President and Congress. Which is what this article points out, Prosperity economics: Answering America’s top unasked questions.
Economist Dean Baker was one of the pioneers of blogging in the late 1990s, when his “Beat the Press” blog began as a weekly online column consisting of concise critiques of economic stories in the New York Times and Washington Post. He’s still at it, but with more continuous posting and a wider range of targets – up to and including America’s establishment press corps as a whole. Such was the case with a recent post, “‘Are Americans Better Off Today Than They Were Four Years Ago?’ The Question That Exposes Incompetent Reporters”.
Why is this question a sign of incompetent reporting? Baker deftly explains:
“Suppose your house is on fire and the firefighters race to the scene. They set up their hoses and start spraying water on the blaze as quickly as possible. After the fire is put out, the courageous news reporter on the scene asks the chief firefighter, ‘is the house in better shape than when you got here?’
“Yes, that would be a really ridiculous question… A serious reporter asks the fire chief if he had brought a large enough crew, if they had enough hoses, if the water pressure was sufficient. That might require some minimal knowledge of how to put out fires.
“Similarly, serious reporters would ask whether the stimulus was large enough, was it well-designed, and were there other measures that could have been taken like promoting shorter workweeks, as Germany has done.”
There’s one more point Baker could have made: Even if you want to know what shape the house is in and why, you have to ask these other questions in order to make sense of the situation. Even wrong questions make more sense when you start with the right ones.
Unfortunately, what Baker is pointing out is not merely a matter of individual bad reporting. Rather, it reflects on the American media establishment as a whole – and the incompetence affects virtually every issue in the news, not just economics. I could write an entire column on that topic – from the Iraq War to the housing bubble and the Great Recession that followed, America’s media establishment has been either AWOL or wrong about the biggest political stories of the new millenium. It’s not just that they got the wrong answers. As Baker makes clear, they were asking the wrong questions.
But there’s a more immediate reason to take note of Baker’s point: Because it applies equally well to coverage of the economic choices before America today. The questions Baker raised – was the stimulus large enough, was it well-designed, could other measures have been taken – are backward-looking ones, but it’s not that hard to come up with forward-looking ones, too. Here are two obvious important ones, for example: “How do we get tens of millions unemployed, and underemployed back to work?” and “How do we rebuild the sort of sustained, broad-based prosperity that America and Western Europe enjoyed in the post-World War II era?”
There is no clear correlation between tax cuts for high earners and economic growth, according to a new study by Congress’ nonpartisan policy analyst.
“There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth,” concluded a report by the Congressional Research Service released Friday. “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.”
So, if tax cuts for the wealthy doesn’t spur economic growth then what does? For the answer to that check out this report, Prosperity Economics. Here’s a synopsis:
Dynamic, innovation?led growth, grounded in job creation, public investment and broad opportunity
We must take immediate action to jumpstart our sagging economy. In the future, we need to invest in people and productivity that will lead to good jobs and rising wages. Growth alone is not sufficient to sustain our nation. We need long?term growth that is broadly enjoyed, sustainable in light of our resource and energy constraints and driven by investments in our workforce and strong collective bargaining rules that raise our standard of living.
Security for workers and their families, the environment and government finances
Markets work better when working families feel a basic security for their futures. A dynamic and competitive market requires a strong foundation that is reinforced by programs like Social Security and Medicare that guarantee a secure retirement and access to health care. Markets also work better when governments have the resources to operate smoothly far into the future. These resources are best raised through a progressive tax structure that supports the middle class; no more tax giveaways for corporations and super rich.
Democratic voice, inclusivity and accountability in Washington and the workplace
Money is increasingly corrupting and corroding democracy. When economic winners are allowed to write the economic rules, the rest of America becomes poorer and our political system weaker. For democracy to thrive, strong Unions, and empowered citizens and community organizations are needed to ensure that workers and the broader public have an organized, effective voice in our politics.
Also check out this infographic, which explains Prosperity Economics very well. Fixing this problem can’t be done by the current political structure and leaders. It can only be done by the people. It has to be done by building and movement like the Progressive and Populist movements of last century. Reading this memo would be a good place to start.
Progressives and Democrats cannot possibly match the vast financial resources of business and the wealthy and must turn to building powerful, long-term grass-roots organizations. That makes “Working America” the most important political project in America.
Last night former President Bill Clinton in his speech to the Democratic National Convention, did what he as always done so well. Clinton laid the case out very simply for reelecting President Barack Obama. Using “arithmetic” and simple lines like this to show why Obama must get another term.
In Tampa, the Republican argument against the President’s re-election was pretty simple: we left him a total mess, he hasn’t cleaned it up fast enough, so fire him and put us back in.
That is just so simple and true – the GOP should not be allowed to have the keys back. Of course the true fix for our economy is jobs, but not just any ‘ol jobs, but well paying jobs. But it’s become harder and harder to create those kind of jobs because one party is in an “alternative universe”, as Clinton said last night. Corey Robin explains so well in this post, We’re Going To Tax Their Ass Off!, how the Democrats and the GOP have shifted rolls on deficits over the last 40 years. Here’s an excerpt, on how the GOP changed.
What was the takeaway for Friedman? In Newsweek, he wrote: “I have concluded that the only effective way to restrain government spending is by limiting government’s explicit tax revenue—just as a limited income is the only effective restraint on any individual’s or family’s spending.”
Greenspan made a similar claim before the Senate Finance Committee in 1978: “Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending.”
But it was probably Wanniski, more than anyone, who best understood the political ramifications of a shift away from deficits and balanced budgets. With an almost Schmittian attention to what he called “the political tension in the marketplace of ideas,” Wanniski insisted that conservatives frame the Glaubenskrieg of the two parties as a struggle “between tax reduction and spending increases.” Without that stark choice, he wrote, the Republicans would forever play the part of the disappointed, disapproving, and ultimately powerless parent: “As long as Republicans have insisted upon balanced budgets, their influence as a party has shriveled, and budgets have been unbalanced.”
From that came things like “no tax” pledges, and intransigence. And we know that the new mantra from the GOP, but cynically only when they’re in power is, deficits don’t matter. But while deficits don’t matter to the GOP anymore, neither do good paying jobs that are the foundation of the middle class. And, unfortunately, the Democrats aren’t focusing enough on them either. This recent post from Dan Froomkin lays out the issue pretty well, Obama, Romney and the Low-Wage Future of America.
To the extent that there has been any attention paid to public policy issues amid all the mud-slinging in the 2012 presidential campaign, the most frequent subject has been jobs — and which candidate can create more of them over the next four years.
So far, that debate mostly involves attacking the other guy, rather than advancing any real solution. The Obama campaign has been trying to define Mitt Romney as an effete champion of outsourcing (with some justification) while the Romney camp has dwelled on Barack Obama’s failure to reignite the job market (also with some justification, though in some significant part the failure is because of GOP obstruction).
Their descriptions of their own plans are no more edifying. As the incumbent, Obama has to run on his record — and despite his talk of bold solutions, that means either exaggerating his successes or making a lot of excuses.
Romney, meanwhile, offers little more than a collection of vague allusions to the wholly disproven theory that tax cuts lead to hiring.
The fact is that there is no Democratic jobs plan, if Republicans are able to keep either their control of the House or their ability to paralyze the Senate, or both. And there is no Republican jobs plan at all.
So what’s the press to do? There’s some value in differentiating between the two positions, which in this case has the added advantage of exemplifying each party’s central weakness (in one case a failure of will, in the other a departure from reality).
Froomkin goes on to quote from several recent books on the issues of wages, jobs and poverty. They all come to the same conclusion as to why none of this is likely to change soon.
Neither party, Jeff Faux argues, is addressing the economic realities that make this the most likely future for our country — because changing course would require massive government intervention. There’s a pretty strong consensus among all but the most ideologically conservative economists that the solution would involve considerable public investment in education, infrastructure, and green energy, new policies to promote domestic manufacturing, more activist regulation of the financial industry in particular, and a more progressive tax structure.
But no matter who wins the election, Faux said, the governing elite has pretty much already ruled out that agenda, in favor of light regulation and governmental austerity.
“I think Romney and Ryan are reactionary disasters. But the last four years should have told us something, and that is the power of big money to intimidate the Democrats,” he said. “The deal has already been made … Government over the next 10 to 15 years will be starved for revenue.”
Still, Faux argues, someone should be making the argument to the public that “Hey, this is a big country. It needs a big government to solve its big problems.”
He ended by asking several questions that are not being answered.
With so much at stake, journalists have good reason to go beyond the empty sound bites and, at the very least, ask people who talk about creating jobs: What sorts of jobs?
But beyond that, it’s worth exploring the question of why a much bigger government response to the jobs crisis is so far off the political agenda of the governing class? How did that happen? Who benefits? And who loses? Those are certainly more intriguing things to ponder than whose zinger zinged the most.
Clinton made the case for that last night.
It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics, because discrimination, poverty and ignorance restrict growth, while investments in education, infrastructure and scientific and technological research increase it, creating more good jobs and new wealth for all of us.
Yes the only way out of our current state will be to increase short-term deficits a little more, in order to put Americans back to work, and educate our youth. By ending the Bush Tax Cuts and the two wars he got us into, which are the main sources of our deficit, we can take care of a good chunk of it. The rest will go away once our return on the investments in our country reignite our economy.
Those investments should be along the lines of what this Demos report recommends, Millions to the Middle. In it they lay our 14 policies that should be advanced to firmly re-establish the middle class in America.
Our policy agenda is based on the three broad pillars of middle-class opportunity and security: investments in human capital and education; support for growth, job creation, and career development; and helping Americans build assets.
We have a choice in November as Clinton stated last night.
People ask me all the time how we delivered four surplus budgets. What new ideas did we bring? I always give a one-word answer: arithmetic. If they stay with a 5 trillion dollar tax cut in a debt reduction plan – the – arithmetic tells us that one of three things will happen: 1) they’ll have to eliminate so many deductions like the ones for home mortgages and charitable giving that middle class families will see their tax bill go up two thousand dollars year while people making over 3 million dollars a year get will still get a 250,000 dollar tax cut; or 2) they’ll have to cut so much spending that they’ll obliterate the budget for our national parks, for ensuring clean air, clean water, safe food, safe air travel; or they’ll cut way back on Pell Grants, college loans, early childhood education and other programs that help middle class families and poor children, not to mention cutting investments in roads, bridges, science, technology and medical research; or 3) they’ll do what they’ve been doing for thirty plus years now – cut taxes more than they cut spending, explode the debt, and weaken the economy. Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left. We simply can’t afford to double-down on trickle-down.
President Obama’s plan cuts the debt, honors our values, and brightens the future for our children, our families and our nation.
The only choice for getting our country where it needs to go is by reelecting Barack Obama.
Those two links highlight very well the state of our state. We’re 1st in taking care of businesses, and 44th in taking care of children. That’s a strong indictment of the legislative and economic priorities our elected leaders have taken over the last several decades.
While the safety net in Texas was never particularly strong, we used to make public education a priority, had affordable higher education, and a solid – pay as you go – transportation infrastructure. Those, at least somewhat, enabled more equality, social mobility, and kept poverty from skyrocketing. But those days are no more. If the theory of trickle-down economics were true, we should all be swimming in prosperity. Obviously that is not the case.
To put this in perspective most states fund their government with a balance of three taxes major taxes – sales, property, and income. Texas doesn’t have an income tax, has an under performing business tax causing annual shortages, and now we’re supposed to start looking at doing away with the property tax. That not only makes no sense it’s crazy.
Let’s boil down what Hilderbran is saying. As we face another budget shortfall, it’s time to begin the long process of abolishing the property tax in Texas. But first we need to cut education spending more, (reduce the growth in property tax revenues being used for schools). Because the property tax provides the majority of the money for public education. It’s a lot of money to replace (over $40 billion/yr.), and if it was just done away with it would have to be replaced by something that would generate many billions of dollars. And the only suggestion offered is to double the sales tax.
It’s hard to find the starting point for attacking this, but here goes. Texas already has one of the most regressive tax systems in the United States. Which means the less money a person makes in Texas the higher a percentage of their income they pay in taxes, and vice versa. The main reason for that is because our sales tax is so high. The sales tax is a very regressive tax. Another reason is because Texas does not have an income tax, one of the fairest taxes. The property tax is a much less regressive/fairer tax then the sales tax. Which makes it easy to see that removing the property tax and replacing it with a higher sales tax would hurt poor, working and middle class Texans, while making it better for wealthy Texans. (See Who Pays Texas Taxes).
A state income tax is the progressive solution for what’s needed in Texas. Instead those in power are discussing how much to increase the tax burden on those at the bottom, and how much to decrease it on those at the top, GOP Battle Brewing Over Texas Taxes.
Moving Texas away from such heavy reliance on property taxes has been a key plank for conservatives for more than a decade. Like TXCCRI, the Texas Public Policy Foundation has also written extensively on the issue, providing the intellectual background for discussions in the Capitol and around the state.
Of course, the devil is in the details of which property taxes are abolished, and what – if anything – replaces those revenues.
Mr. Hilderbran has offered no immediate solution on that front, but as chairman of the House Ways and Means Committee, he would have a front-and-center seat in any such discussion.
State Rep. Jim Keffer today unveiled a new study he commissioned to seriously evaluate the impact of replacing Texas property taxes with consumption taxes. The study was conducted by former Deputy Comptroller Billy Hamilton who sliced and diced the proposition.
His primary thesis is startling.
Hamilton writes, “One thing is certain. The tax rate would be eye-popping. The property tax currently produces more than $40 billion a year in Texas for all local governments. The state sales tax in 2011 produced about $21.5 billion at a tax rate of 6.25 percent.”
He continues that to simply replace the missing revenue would require adding another 11.6% to the current 6.25% charged by the state. Add the additional 2% collected by cities, counties and transit authorities, and suddenly the sales tax rate jumps to a staggering 19.85%.
In commissioning the report as part of his project, Texas Tax Truth, Keffer is challenging two vocal proponents of the property tax—sales tax swap: the Texas Public Policy Foundation and Tim Dunn’s Texans for Fiscal Responsibility/Empower Texans administered by Michael Quinn Sullivan..
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Advocates argue that eliminating some sales tax exemptions would expand the base of taxable items and reduce the rate. But Hamilton points out that the Legislature has preferred to increase exemptions rather than eliminate them and that the current list of exemptions including food, medicine and real estate have been in place since 1990.
Hamilton also explains that eliminating property taxes would deny virtually all local governments’ and school districts any independence since they would have to come hat in hand to the state for any and all funding.
Anyone who watches the Legislature knows that one of things it does best is cost-shift downstream to local governments while withholding funding. Local control sounds good but is a mirage if local taxpayers have no control over their own tax dollars.
But the free market would work. A 20% sales tax would create and economic bonanza for Texas’ neighboring states as people voted with their feet. Hamilton does not mention it but Texas retailers complained about all the sales they once lost to Amazon because of a meager 8.25% cost advantage when Amazon did not collect sales tax.
The full report can be read here, A “Big Idea” That’s a Bad Idea for Texas. While the report highlights how extremely bad this idea is, this point in particular is galling.
The new tax would be more regressive in its effect on low- and middle-income Texans than the current tax system in that even if the consumption sales tax is “revenue neutral,” it could be a tax increase for many working and retired individual Texas taxpayers. (To see how regressive Texas taxes are see the chart on page 13 of this report, Understanding Texas Taxes 2011.)
And a decrease for those at the top, of course. Instead of talking about eliminating taxes with a more regressive tax, we should be talking about making taxes in Texas more progressive with a state income tax. An income tax would enable property taxes to be lowered, while finally getting those at the top of the income level in Texas to pay their fair share.
I had a discussion with a fellow Democrat this week and as we talked it became clear that they believe the number one issue facing our country is inequality. I’m in complete agreement. This is an issue I’ve posted on many times, and it’s clear that nothing is going to change until the people have had enough. And that hasn’t happened yet.
Until that does change little, if anything, can be done. And if may take a full economic meltdown, another Great Depression, before there’s enough public outrage to get things changed. Democrats in Williamson County and throughout Texas find it hard to see the light at the end of the tunnel. The only solace is that change, when it comes, can come quickly once the situation changes, (see Egypt, Libya, etc..).
We had a thriving middle class once in this country. It drove our economy to unprecedented economic growth and equality. Our public and higher education systems were the envy of the world. We the people, government research and development, put a man on the moon, and created the internet. Today the commons have been corporatized, public territory ceded to profit first organizations, the middle class is in a shambles, while inequality and poverty increase at levels not seen in decades.
Too many Americans have been tricked into believing that the government can no longer help them and their families. Until enough people realize that as a lie, take back the government, and use it to bring economic equality back we will continue in this depression. It’s the inequality stupid.
Houston janitors will strike for the third day in a row. Already this week, janitors have gone on strike against one employer at Greenway Plaza buildings, another at 363 North Belt and tonight the strike will expand to two buildings against the employers charged with cleaning at Four Oaks Place, Wells Fargo Tower and 1330 Post Oak. These contractors have responded to employees’ efforts by interfering with their rights to engage in union activity protected by federal law.
Despite cleaning the offices of some of the richest corporations in the world, including JP Morgan Chase, Chevron, and ExxonMobil, janitors in Houston are paid as little as $9,000 a year, and many work two to three jobs just to survive. A janitor would have to work more than 2,000 years in order to earn what the Exxon and Chevron CEOs make in just one year, and 2,500 years to earn just what JP Morgan CEO Jamie Dimon took home last year.
“I am paid so little that I have to work two jobs just to make sure my family has what they need. I’m only able to see my two kids about an hour a day,” says Cirilo Solo, a janitor who works for Pritchard. “We spoke up for a better life and now they’re violating our rights.”
This is the second time janitors in Houston have gone on strike—this time to protest unlawful conduct. In 2006, janitors in Houston went on strike and touched off a flurry of activity including multiple days of civil disobedience, marches and rallies that propelled the plight of Houston’s low wage workers into the national spotlight.
Since 2006, the growing gap between the 1% and the 99% has become a pressing political issue as the number of low wage jobs increases, the middle class shrinks and corporations refuse to pay their share of taxes, create good jobs, and reward the hard work of their employees.
The problem is particularly poignant in Houston. Named the nation’s “No. 1 Millionaire City” for annual growth in millionaires; 1 in 5 people working in Houston make less than $10 an hour, and Texas is tied with Mississippi for the highest proportion of minimum wage jobs in the nation.
Texas Democratic Party Chair Gilberto Hinojosa recently released a statement in support of the janitors (via jobsanger).
“If corporations want to be considered people, then they need to accept the belief that we are our brother’s keepers,” said Gilberto Hinojosa, the newly elected chairman of the Texas Democratic Party. “Hard working people in America should not be shamed. Honest work should receive honest pay, but Republicans want to repeal the minimum wage to make people work for $2 an hour. Then Republicans want to whine about paying for heath care for children of American parents who have jobs. It is shameful.”
“Grotesquely overpaid CEOs and upper management expect the men and women who work hard and play by the rules to be forced to beg for public assistance just to support themselves, much less a family. That is a disgrace not only to the America we love, but also to God,” Hinojosa stressed. “These striking workers are seeking a living wage for their work in cleaning the offices of Texas millionaires and one percenters, who not only refuse to pay a decent wage for honest work but are also enlisting Republican support to protect them from paying their fair share of taxes.”
“Democrats, along with labor unions, have been cleaning up corporate messes, both literally and figuratively, for far too long. Corporations are attempting to maximize profits at the expense of the taxpayers who must provide medical care and food assistance for workers’ families, even though the breadwinners are working full time. That is not the America we love,” Hinojosa continued, “and the workers and taxpayers in this country should be enraged about it.”
Chairman Gilberto Hinojosa and The Texas Democratic Party calls upon Texas Democrats and all Texans who support the right to a living wage to make a meaningful stand by helping on the picket line, signing the petition at http://1.seiu.org/page/s/houston-needs-a-raise.
I completely agree with what jobsanger writes:
I may have misjudged the new chairman of the Texas Democratic Party. I had thought he would continue the same old moderate to conservative policies of the last leadership. In the past, the state party leadership avoided any issue that might seem progressive and cost them conservative votes (votes they weren’t going to get anyway). A good example of that would be the union janitor strike in Houston (where the janitors are trying to get a livable wage).
But the new party chairman, Gilberto Hinojosa, has come down squarely on the side of the striking janitors, and he has done so publicly. This is a progressive stand, and one that I wholeheartedly support. I hope this is indicative of future actions Mr. Hinojosa will take. If so, the Texas Democratic Party might once again give Texas voters a real choice (instead of a parade of Republican-lite conservatives that have marked candidates in the recent past).
Texas taxpayer money is regularly given away to corporations that bring low paying jobs to the state of Texas. As Paul Krugman pointed out last year, The Texas Unmiracle. Texas is a cheap labor state, and corporations love that. It increases their profits, which they’re able to hoard because of the cheap taxes for corporations in Texas.
What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state.
Thankfully, the local debate over whether to grant Maruchan Inc. of Japan millions of dollars to pay people very little money to make noodles has transcended the mere question of how many workers it would employ.
And it’s heartening — in a depressing sort of way, of course — that some of us are actually worried.
We are worried because the people making the noodles would earn minimum wage: $7.25 an hour, less than a living wage.
At the risk of dampening anyone’s good cheer, here are a few more reasons for us to be worried.
Texas already ranks first in the nation for jobs at or below the minimum wage.
(Go Texas! We’re No. 1!)
In fact, 37 percent of all jobs added in Texas in 2010 paid minimum wage or less. Overall, about a third of all jobs in Texas fail to support a family of four.
Also, the gap between the rich and the poor in Texas is greater than the gap in 40 other states, and it’s increasing. Perhaps this is because Texas workers are more productive than the average American worker, yet they’re also less well-paid.
What are the consequences of a low-wage economy?
Here’s one: Texans carry more credit card debt, ranking among the highest in the nation in 2009 and 2010.
The American city saddled with the highest average credit card debt in 2010?
It was San Antonio, at $5,177
To be fair, Bexar County commissioners preparing to shell out $5.8 million in incentives to Maruchan Inc. are not purporting to lead a pep rally.
Precinct 2 Commissioner Paul Elizondo conceded the deal amounts to a “dilemma,” although he said, “A job is a job. We need to get as many of them as we can.”
And here’s where the American Dream — or the “Texas Miracle” — collides with reality.
“Everybody needs to work, particularly in Texas because the social safety net is so thin,” said Cal Jillson, a political science professor at Southern Methodist University. “And one of the reasons it’s so thin is so when jobs like this become available, there’s a lot of competition for them because Texans have no choice but to work, and to work at whatever job’s available.”
In other words: Low taxes not only create jobs, but also result in low services and low wages.
But low wages, low taxes, (on the wealthy that is), and low services also keeps poor, working, and middle class Texans fighting amongst themselves for an ever-shrinking piece of the pie. Which is an old trick.
Now, what does all of this mean in this great period of history? It means that we’ve got to stay together. We’ve got to stay together and maintain unity. You know, whenever Pharaoh wanted to prolong the period of slavery in Egypt, he had a favorite, favorite formula for doing it. What was that? He kept the slaves fighting among themselves. But whenever the slaves get together, something happens in Pharaoh’s court, and he cannot hold the slaves in slavery. When the slaves get together, that’s the beginning of getting out of slavery. Now let us maintain unity. - “I’ve Been to the Mountaintop” by Dr. Martin Luther King, Jr.
To a remarkable extent, inequality, which fell during the New Deal but has risen dramatically since the late 1970s, corresponds to the rise and fall of unionization in the United States.
The passage in 1935 of the National Labor Relations Act, which protected and encouraged unions, sparked a wave of unionization that led to three decades of shared prosperity and what some call the Great Compression: when the share of national income taken by the very rich was cut by one-third. The “countervailing power” of labor unions (not just at the bargaining table but in local, state, and national politics) gave them the ability to raise wages and working standards for members and non-members alike. Both median compensation and labor productivity roughly doubled into the early 1970s. Labor unions both sustained prosperity, and ensured that it was shared; union bargaining power has been shown to moderate the compensation of executives at unionized firms.
However, over the next 30 years—an era highlighted by the filibuster of labor law reform in 1978, the Reagan administration’s crushing of the PATCO strike, and the passage of anti-worker trade deals with Mexico and China—labor’s bargaining power collapsed. The consequences are driven home by the figure below, which juxtaposes the historical trajectory of union density and the income share claimed by the richest 10 percent of Americans. Union membership has fallen and income inequality has worsened—reaching levels not seen since the 1920s.
Here’s a video explanation of the graphic, also from EPI.
It’s hard, looking at this information, to understand where the objections to unions come from for working class people. In the context of this reader comment at TPM, Tough Love, Or Actually No Love. The comment focuses on all that is wrong with unions and why they are disagreeable. But at the end talks about how what unions have done and worked for is needed, as well as the need for more.
While I understand that Unions have bettered the lot of all employees, like the 40 hour work week, and occupational safety standards, it is not necessary to have trade unions to improve workers conditions. The conditions for all employees, not just Union workers, can be improved by statute. For example, it is disgraceful that there is no guaranteed vacation for American workers. While for the most part, people are offered vacation days as part of there employment, partly because of the efforts of Unions, why shouldn’t there be a federal or state law mandating a certain amount of PTO tied to how many hours worked? How about having a national labor or industrial policy? These would have a far greater chance of success than trying to revive a nineteenth century institution.
What is obvious there is the disconnect between what’s needed and how to get it. How, in our current system, do we get “a statute”, aka a law passed? Obviously it has to be done by our elected officials. And that means, somehow organizing workers and working class people, to fight, lobby, advocate for these statutes.
The other thing that is obvious from the comment is that most people are sympathetic about the needs of workers and working class people. They just don’t see a viable way of bringing that about. If not unions the what?
