Monthly Archives: May 2009

Tax Not in Anger

I’m for increasing taxes on “the rich” for the same reason Willie Sutton robbed banks: “That’s where the money is.”

I do not resent people for being rich and have no desire to “punish them for being successful,” as conservatives charge.  Particularly if rich folks have done something worthwhile to earn their money, like inventing Google, I think they should have at least three really big homes, five cars, a yacht, lots of money for vacations, and access to a private jet so they don’t have to deal with the rest of us.

Furthermore, I don’t think it’s immediately clear that they are not paying their “fair share” of taxes now, as liberals charge.  After all, the top 1% pays nearly 40% of federal income taxes, and the top 5% (President Obama’s definition of the rich) pay more than 38% of all taxes – federal, state and local.  Those are pretty good shares for such a small group.  What would be a fair share for them?

Citizens for Tax Justice (CTJ) recently calculated that in 2008 the top 5% received about 36% of all income in the U.S. and paid 38% of all U.S. taxes.  So, if you get more than a third of all income, you should pay at least that much of the taxes, and the rich are currently doing that.  But our long-standing moral concept of fair taxation is that those who receive more should pay a higher share of their income because they can afford to.  The easiest way to see this is to use the conservatives’ concept of taxes as punishment.  Using CTJ’s numbers for 2008, ask yourself the following question:

Who is “punished” more by their total tax burden: the family who earns $66,000 and pays about $20,000 in taxes or the one who earns $1.4 million and pays some $400,000 in taxes?

The first family’s $66,000 is the average gross income of the fourth quintile of taxpayers – those from the 60th to 80th percentiles in the income scale, earning roughly from $60,000 to $90,000.  The second family’s $1.4 million is the average for the top 1%.  If you look at what is left after each family pays all their taxes, it’s clear that the $20,000 from the first family is a much heavier burden.  Depending on the size of the family and where they live, it could mean the difference between having what the Economic Policy Institute calls a “basic standard of living”and not.  On the other hand, we could double the amount of taxes on that top-1% family, and they would still have $600,000 — more than enough to live very handsomely regardless of where they live and the size of their family.  Even doubling their tax burden, they would still be punished less than the $66,000 family.

The idea of paying a higher share if you can afford it is the basic principle of progressive taxation.  And the shocking thing about the numbers above is that though the federal income tax is progressive, the other taxes we pay are not – the federal payroll tax, most state income taxes, all sales taxes, and even property taxes.  Thus, when CTJ calculated total tax burdens at all levels of government, that average “middle class” family at $66,000 paid nearly the same share of its income (30%) in taxes as the average millionaire family (30.9%)

People in the bottom quintile get even more punishment.  They had an average gross income of $12,000 in 2008, according to CTJ, and while these folks famously pay nothing in federal income taxes, they paid almost 7% of their meager incomes in payroll taxes and nearly 12% in state and local taxes.  Even though they pay a much lower share of their income in taxes (18.7%) than either the middle-class or the millionaire families, I’d argue that the $2,200 they did pay is dramatically more punishing than either the $20,000 or the $400,000 the other families paid.

What this means is that to adequately share tax punishments, we need to make the federal income tax much more steeply progressive than it is in order to offset the punishing effects of all the other flat-rate taxes everybody pays.

What’s more, if you want to do all the things in President Obama’s 10-year, after-the-recession-is-over budget (and I do), we’re going to need to raise taxes on somebody, and the President has pledged not to do that on anybody with less than $250,000 in income. Fortunately, the Institute for Policy Studies (IPS) in early April released a report that provides a menu of tax increases primarily on the top 5% that would produce more than “$450 billion in revenue from those with the greatest capacity to pay.”

The study, titled Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly, is a bit on the angry side about income inequality.  The authors are especially exercised about the top 1% increasing its share of total income (before taxes) from about 11% in 1986 to about 22% now.  That’s more than $1 trillion transferred from the rest of us to them every year. The IPS tax proposals are all economically sound ones that have been proposed before, but having them all in one place with the amount of revenues each can be expected to raise is highly convenient.  You may or may not share the authors’ moral outrage at “the Great Tax Shift” since 1980, but they clearly show where the money is and how to get it.  Willie Sutton would have appreciated that practical approach.

Jack Metzgar

Crisis and Coverage: Hearing Working-Class Voices

For generations, people have understood and accepted that the news media has the power to set the public agenda through how it covers major stories.  How well does the media bear that responsibility?  Some argue that the news is gathered “objectively” in adherence to basic principles of newsworthiness, including such factors as timeliness, proximity, relevance, weight, impact, and controversy.  Others propose that the process of is more subjective, governed by patterns of conduct, gatekeeping, framing, and a hierarchy of credibility.

The hierarchy-of credibility highlights the way reporters rely on official sources seen as having the credibility to speak as experts.  Because of this, individuals with more power and prestige, usually officials in government and business, are represented more favorably in media coverage. Sociologist Howard Becker explains that “credibility and the right to be heard are differently distributed through the ranks of the system.” Those with the most prestige are given the right to control public discourse.  Those without power and prestige are often left out of news coverage, even though they are also, in many cases, most directly affected by policies and events.

  1. During disasters, reporters often have limited access to the traditional “credible” news sources.  Under pressure to air information as quickly as possible, reporters don’t have time to seek out “official” sources. On the ground after a natural disaster, campus shooting, or other crisis event, journalists interview anyone affected, involved, or aware of a situation.

This is the point when reporters are most likely to talk with working-class and poor people who aren’t usually seen as having significant credibility.  Their interpretations of situations or events are often dramatically different than the views of officials whom reporters normally interview.  The stories generated through this type of reporting often represent situations more fully, and they reflect perspectives that probably interest more readers.

We saw this most clearly during Hurricane Katrina.  The nation learned of the massive social problems in the Gulf Coast not from government sources but from individuals whose stories of despair captivated the nation’s attention long enough for some reforms to be enacted.

Hurricane Katrina also highlighted how relying on “credible” sources can erase not just voices, but whole stories.  Shortly after Katrina, in September 2005, the public editor of The New York Times acknowledged that his paper had failed the public by ignoring the New Orleans story before the hurricane:

The New York Times assumes a responsibility to alert its readers to significant problems as they emerge in major cities such as New Orleans. Poverty so pervasive that it hampered evacuation would seem to have been worthy of the The Times’ attention before it emerged as a pivotal challenge two weeks ago. And the inadequacies of the levee system deserved to be brought to the attention of readers more clearly long before the storm hit (14).

Of course, The New York Times was not the only paper to have missed the story of poverty and despair in New Orleans in the years before the hurricanes.  The disaster triggered an awakening of journalists to issues of poverty, race, and class. Historian Dan Carter told a Copley News Service reporter that it sometimes takes a natural disaster to reveal a social disaster: “Usually, there’s not a lot of interest in issues of poverty except when there’s something dramatic. By and large, the poor are simply out of sight, out of mind.”

The disaster effect can extend beyond a moment of crisis.  Michael Massing noted that in the days after Katrina, reporters began “asking more pointed questions at press conferences, attempting to investigate cronyism and corruption in the White House and Congress, and doing more to document the plight of people without jobs or a place to live.”   And he posed a critical question: “Will such changes prove lasting?”

Massing’s question was, of course, rhetorical.  We know that reporters all too quickly returned to relying on official sources from the top rungs of the hierarchy of credibility.  Why?

Some have argued that it’s a matter of habit, but the status quo is supported by the structure of the newsroom.  In many newsrooms, reporters are assigned to cover specific beats, such as government organizations, the police, religion, or entertainment. This helps reporters develop relationships with highly-placed sources that can give them access to important information, but it can encourage the habit of returning to those same sources day after day, looking to them for news and tips rather than talking with ordinary people.

Other institutionalized facets of traditional newsgathering operations also help perpetuate the status quo, such as the near-constant need to meet deadlines.  While newspapers now have fewer reporters covering the news, they also have more deadlines than ever – not just the daily deadline for the print edition but also additional deadlines for more frequently-updated online editions.  No wonder reporters rely increasingly on their most familiar, most obviously credible sources.

The value of going beyond the usual sources has become clear in recent months.  As the recession deepens, reporters have told stories not only about bank presidents, the CEOs of the auto companies, and government officials managing the bailout, but also about ordinary people displaced from their homes, struggling to find a new job, and responding to government strategies for addressing the economic crisis.

Now would be a good time to take Massing’s question to heart:  will this change last?  Can journalists continue to tell not only the official story but also the on-the-ground, face-to-face story of how people are surviving and struggling through the current not-so-natural disaster?

Alyssa Lenhoff and Tim Francisco

Who Really Runs the Place

Memories may be fading, but I’m sure most of you have some vague recollection of last year’s presidential election.

Come on, you remember.  Lots of bad TV commercials.  Debates that weren’t.  New and vibrant versus old and tired.  America turned blue.  The first African-American president.  Attractive wife.  Cute kids. Election night speech in front of Greek columns.  Hope.  The “dream” come true.

Hell, there was even a parade in January.

Yeah, that election.

I’m willing to wager that like me, most of you voted for Barack Obama.  We did so because we craved change; a shift of power from the war mongering, detainee torturing, job exporting, business-butt-kissing Republicans to a champion of the working class.

I’ll also wager you thought that’s what we got when Barack Obama raised his right hand and took the oath of office.  That’s why we shared a sense of excitement and exhilaration.  Things would be different now that Washington was controlled by a young, strong progressive president with a mandate in his pocket and a Democratic Congress at his beck and call.

Health care reform.  A solution to the foreclosure crisis.  Assualt weapons banned.  Cheaper student loans.  It was all coming and coming rapidly.

Uh, not so fast.

As recent events—or lack thereof—have demonstrated, you can elect all the new presidents you want, but that doesn’t mean things are going to change.  Because, it seems the people — that’s you and me — don’t run Washington. All those government buildings?  Not ours.  The millions of federal employees whose salaries we pay?  They don’t work for us.

How do I know?  Dick Durbin said so yesterday on the floor of the Senate.  Venting his frustration when 11 Democrats joined Republicans to kill legislation giving federal bankruptcy judges the power to renegotiate the terms of predatory mortgages and thus help middle-class families keep their homes, the Illinois senator did something strange and wondrous: he told the unvarnished truth:

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

They own it.  They do.  Need more proof?  OK, let’s talk about Sallie Mae, the quasi-federal agency that guarantees student loans made by private banks.  That Obama guy, the one we elected, he wants to do away with Sallie Mae because doing so will free up $94 billion that can then be given directly to students in the form of Pell Grants.

Great idea.  Who could possibly oppose it?  One guess.  Did you say banks?  You win.  And who did the banks hire to lobby on their behalf?  Tony Podesta, a major Democratic fundraiser whose brother John served as Bill Clinton’s last chief of staff and head of the Obama transition team.

According the New York Times, Mr. Podesta already has plenty of Democratic allies in Congress, including legislators who represent districts where Sallie Mae has offices.  As a result a simple, smart idea — giving student loan money directly to needy students instead of filtering it through banks that make billions for pushing paper around — may be dead.

It turns out, however, that the banks aren’t the sole owners of the house of government.  I guess it’s kind of a time share thing.  One of the co-owners, and I’m sure this won’t come as a huge shock, is the health insurance industry.  Access to high quality, affordable health care was one of the primary issues in last year’s campaign.  John McCain had a goofy scheme that would have taxed employee benefits and protected the huge profits of insurers.  Barack Obama didn’t really have a plan, but we trusted that when push came to shove he’d back real reform that would hold down costs and provide coverage for the more than 45 million Americans who don’t have it.

One way to do that, and one concept he did embrace, was the formation of a government operated health care plan that would compete with the for-profit insurance industry.  While not quite the single payer system progressives yearn for, it was a start.

So, when the president convened a health care summit to tackle the issue who dominated the conversation?  Karen Ignani, the front person for the AFL-CIO during the 1993 health care reform effort—until she turned traitor and went to work for America’s Health Insurance Plans, the trade group that represents the nation’s for profit health insurance companies.

It appears that AHIP isn’t thrilled about the prospect of competing with the government.  Not good for insurers’ bottom lines, you see.  So they proposed other ways of reducing costs that experts, including the Congressional Budget Office, have repeatedly said won’t work.  That doesn’t matter to Ms. Ignani and the companies she shills for.  They, and other groups that sell insurance including AARP, aren’t interested in reform, they’re only interested in running out the clock, just as they did in 1993.

Did our champion, our working-class hero, stand up, smite Ms. Ignani, and tell her that universal coverage, not preserving insurance industry profits, was the goal of his administration?  Well, no.  And he wouldn’t let anyone else do it, either.  Congressman John Conyers and Dr. Oliver Fein, two long-time advocates of the single payer solution who were reluctantly admitted to the meeting after first being denied invitations, were expressly forbidden to speak.

The President has been similarly unwilling to tangle with another group of longtime Washington squires: the NRA.  Despite the fact that once-banned assault weapons were recently used to kill four cops in San Francisco, three in Pittsburgh, and are the weapons of choice of both domestic psychopaths and Mexican drug lords, the administration has signaled that it’s not willing to throw its weight behind an effort to once again prohibit guns that have only one purpose: killing human beings as quickly and efficiently as possible.

While some progressives are growing restive with Mr. Obama’s timidity, I’m willing to give him a break.  After all, he just moved in and wants to show he’ll be a good tenant.  And he’s busy doing other things, like fixing the economy by doling out hundreds of billions to the bankers who screwed it up in the first place.  But sooner or later he’s going to realize that while bankers, insurers, big oil, gun nuts, and the pharmaceutical industry may own the building, working families issued his four year lease.  If he wants an extension in 2012 he’ll need to invite us over for a chat—no matter how uncomfortable it makes the landlords.

Leo Jennings