Robin Hood and the King

Reverse Robin Hood
According to legend, Robin Hood robbed the wealthy and distributed booty to the poor. Robin Hood in reverse (RHR) works differently. This method is favored by kleptocrats and oligarchs and seeks to enhance the holdings of the wealthiest at the expense of the most impoverished. Let’s talk about the tax bill now approaching the Senate. Read to the end where I unveil its poison pill.

Like the tax bill of 1917, this one also holds out the promise that money will trickle down to those who can use it more. And also like that bill, it puts more money in the hands of those who don’t really need it.

The big difference this time around is that the national debt has ballooned since 2017. This time lawmakers are looking at offsets. They’re considering cuts in programs for people who need them to pay for tax breaks for the wealthy.

For years Republicans have complained about taxes while the government spent. Somebody needs to pay to run the government but magical thinkers believe that tax cuts pay for themselves by invoking some vague and implausible principal. It never happens.

Meanwhile the government continues to borrow as the cost of doing so is becoming unwieldy. Moody’s recently downgraded the country’s credit worthiness. This hurts our nations’s reputation and increases our borrowing costs.

During Eisenhower’s days the highest marginal tax rate was 91 percent. It’s much less now. If the wealthy could tolerate high taxes back then, why can’t they help lower the deficit now? Our current lawmakers will never willingly ask the wealthy to pay their fair share.

The King
The tax bill contains a clause which reads: “No court of the United States may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued.”

This is intended to prevent federal courts from from imposing consequences for contempt of court on top government officials. It would give Donald Trump king-like immunity for violating the Constitution. Though perhaps it's unreasonable to suggest that a twice impeached convicted felon would ever think about violating the Constitution.

If you don’t like how things are going contact your Congress person and Senator.

A lump of coal in your Christmas stocking

Letter to Joe Manchin

Wouldn't you like that though. You've made plenty from coal and another lump couldn't hurt. But consider the majority of Americans who want to stop climate change. We can't stop it until we move away from fossil fuels, and you've opposed taking meaningful action. Do you consider your opposition patriotic? I don't, though I suppose oil and coal industry executives probably do. But they are blinded by their insatiable greed. Greed that makes it okay to spend five decades misleading the public while fully aware of the damage they did to the environment. Five decades ago I walked away from my high school peers in order to avoid the drugs they used. Walk away from your unwholesome peers, Joe. Greed is a drug. It fools those who have too much into thinking they can ignore social responsibilities and not pay their fair share of taxes. Greed lets them think they can destroy their neighbors' yards without harming their own. I suspect that you, too, are addicted to greed. Just say "no" to drugs, Joe, and fix our society and environment now. Our problems can't be kicked down the road any longer. Don't listen to the siren call of lobbyists lest the ship of state shatter upon the rocks of Anthemoessa. Listen to the majority instead.

The only sure thing is climate change and taxes

 

U.S. tax rates change over time. In 1913 the highest earners paid only 7 percent, but in 1918 they paid 77 percent to pay for the first world. During the early 1920s, top tax rates remained higher than today, but in 1925 the highest tax rate dropped to 25 percent. It stayed within a point of that rate until 1932 when it rose to 63 percent. The tax rate continued to climb during the Great Depression and beyond, reaching a high of 94 percent during the final two years of World War II. The rate dropped into the 80s after the war, but was generally around 91 percent between 1950 and 1963. The top rate then moved to 77 percent and began to fall after that, reaching a low of 35 percent in 2003. It remained at that rate until 2013 when it jumped to 39.6 percent. The Tax Cuts and Jobs Act of 2017 (TCJA) reduced the top rate to 37 percent.

Corporate tax rates fluctuate as well. From 1946 through 1949 corporate profits were taxed at a maximum rate of 53 percent. This rate applied to profits over $25,000 and under $50,ooo. The rate fell to 38 percent on profits over $50,000.

Between 1993 and 2017 the highest corporate tax rate was 39 percent on profits between $100,000 and $335,000. Above that amount, the rate dropped to 34 or 35 percent on profits below 15 million dollars. Between 15 and 18.33 million dollars profit the rate returned to 38 percent, before falling back to a top rate of 35 percent. Progressive tax rates increase as income grows, while regressive taxes take a larger bite of income from those with smaller incomes. This period’s tax rates are generally progressive, but don’t entirely follow a straight progressive increase.

The 2017 Tax Cuts and Jobs Act (TCJA) sets a flat tax of 21 percent on corporate profits. Flat taxes are usually considered to be regressive. Large corporations must love TCJA since it forces smaller ones to pay 21 percent instead of 15 percent on their first $50,000 in profits.

During its history, the United States has held debt at various times, but in 2001, it held a surplus. That didn’t last long. Today the national debt is an enormous three trillion dollars. Higher taxes can lower a nation’s debt. The rationale behind TCJA was that lower taxes would pay for themselves by growing the economy. Did it work? The economy did grow a bit, but not as much as predicted. Our nation’s high deficit grew instead of decreased as predicted. According to the Economic Policy Institute, TCJA “did not increase wages for working people, failed to spur business investments, decreased corporate tax revenues, and boosted stock buybacks in its wake.” No surprise here — taxes are paid on profits taken after employees are paid and R&D costs accounted for. There was never any logic to its boosters’ claim that TCJA would increase business investment and benefit workers. Who lobbied for this lie?  The usual suspects,  including among others, the Business Roundtable, the U.S. Chamber of Commerce, and the National Association of Manufacturers. These same organizations plan to lobby against the 3.5 trillion dollar economic plan.

If that economic plan isn’t implemented, there could be a long wait before climate change is meaningfully addressed. The poor also suffer when the wealthy don’t pay their fair share. During the mid-twentieth century when taxes were high the middle class was broader and more affluent than today. Taxing wealth to repair the climate would also benefit the bottom 90 percent of U.S. citizens. Speak loudly Citizen and shame the greedy into social responsibility.

Of mice and (greedy) men

 On the final day of August a Washington Post headline read, “Corporate America launches massive lobbying blitz to kill key parts of Democrats’ $3.5 trillion economic plan.”  A few days later, Paul Krugman, writing for the New York Times, asked, “Why does Mickey Mouse want to destroy civilization?” Krugman explains that the Walt Disney Company is a member of the U.S. Chamber of Commerce which intends to lobby against tax increases on corporate profits which would be used, in part, to pay for the proposed economic plan. Krugman is correct to assume that if climate change isn’t addressed immediately, years could pass before it finally is. By that time, it might be too late to address it significantly.

Members of the U.S. Chamber of Commerce may, or may not, believe in climate change, but they certainly believe that protecting profits from taxation is more important than doing their share to address it. Joining the Chamber in its defense of greed are the Business Roundtable, and PhRMA which doesn’t want the government meddling in drug pricing.

The National Association of Manufacturers is also involved in a lobbying effort. Its senior vice president, Aric Newhouse, said that if the economic plan passes, “manufacturing families will suffer, jobs will be lost.” He’s lying. Profits are taken after employees have been paid, not before. A tax on profits has no effect on labor costs. Who really will suffer? Stockholders, because they receive their dividends after all taxes have been paid. Only the wealthiest Americans have significant stock holdings — they can afford to pay higher taxes, but spend millions to avoid doing so. According to Statista, the top 10 percent of Americans hold 70 percent of the nations’ wealth. Many of the other 90 percent of Americans are but a paycheck removed from homelessness. After seeing this summer’s hurricanes and wildfires, it’s obvious that climate change is coming for us all. It won’t spare the wealthy, even if they believe their money will cushion its blows.

Similar lobbying tactics were used to pass the 2017 Tax Cut and Jobs Act (TCJA). The name itself is a lie. The act failed to create the jobs it promised. According to the Brookings Institute:

"Overall, the TCJA's advocates promised many supply-side benefits and promised they would materialize quickly. But at least for the first two years, the Act failed to deliver its promises on investment and growth, leaving the country instead with higher deficits and a less equal distribution of after-tax income." 

 Gentle reader, consider speaking or writing the idolaters whose Mammon worship blinds them to the catastrophes to come. Here’s some contact information to get you started:

National Association of Manufacturers
(800) 814-8468
(202) 637-3000
info@nam.org

U.S. Chamber of Commerce

(800) 638-6582

(202) 659-6000
membership@uschamber.com
federation@uschamber.com
smallbusiness@uschamber.com
press@uschamber.com

Sample message:

Your company is a member of the U. S Chamber of Commerce which plans to lobby against corporate tax increases slated to be used in fighting climate change. Money can wait, but the climate can't. Stop being so greedy and pay your fair share.

Caterpillar, Inc.

Citi
The Coca-Cola Company
General Electric
PepsiCo
Pfizer
Procter & Gamble
Target
Walt Disney Company