Petition to demand Pentagon financial audit instead of cuts to programs for the 99%

Republicans have forced devastating cuts to vital programs like food stamps and Meals on Wheels to safeguard against “fraud” and “waste.”

But here’s the real fraud: A new investigative report by Reuters shows that the Defense Department waste is so astonishingly bad that the Pentagon doesn’t know how much money it has, where it comes from, or where it goes.
Sign the petition telling Congress: Stop all spending cuts and audit the Defense Department.

We will hand deliver the signatures to Senate Budget Chair Patty Murray (D-WA) and Senate Appropriations Chair Barbara Mikulski (D-MD) who have the subpoena power to start an investigation like this. Please click here to sign the petition.

Just how bad is the waste? Faulty and fraudulent accounting across the Defense Department is so bad that no one actually knows how much money the Pentagon has, how much of it is spent, how much is wasted, how much is stolen, or how much was spent on what it was intended for.

You read that right: No one knows how much money the Defense Department has or spends, or where is goes—not even the Defense Department itself.

And the accounting problems aren’t just money related. Apparently the Pentagon doesn’t know how many weapons it has either--leading them to buy more arms and munitions than they need because they can’t account for the ones they have.

The Defense Department receives one-half of all money appropriated by Congress every year—but it can’t account for any of it. Meanwhile, Republicans have been demanding more cuts to programs like food stamps. It’s outrageous and it needs to stop.
Sign the petition: No more cuts. Audit the Defense Department.

Keep fighting,
Michael Langenmayr
Campaign Director, Daily Kos

Crucial & free film at Salem Public Library -- on the American Gulag -- 8/21, 6:30 p.m.

The House I Live In

The Partnership for Safety and Justice proudly invites you to a free film screening of "The House I Live In." This documentary has received critical recognition for the scope it provides in America's failed war on drugs.

The film takes a comprehensive look at drug abuse as public health matter while investigating public policies, law enforcement and individual lives affected by the so-called "War on Drugs."

You can watch the film trailer online by clicking here.

We hope you can take a summer evening to join PSJ staff, members and supporters to watch this documentary with us. Seats are limited, so please let me know by phone or email if you can join us to one of the following film screenings:

Wed., Aug. 21st: 6:30 pm @ Louck's Auditorium located at Salem Public Library. 585 Liberty Ave., Salem, OR

I'm looking forward to seeing you there,

Cassandra Villanueva
Director of Organizing and Advocacy
Office: (503) 335-8449
www.safetyandjustice.org


PSJ is a membership organization. We rely on the support of our members so we can advocate for programs and policies that create community safety without sacrificing justice. Please make a contribution today to renew your membership.

Stop "Bridgasaurus Boondogglus" petition building up steam!

We're building up steam, but we still need you and all your friends to sign a petition to tell the SKATS agencies to stand up to that most dangerous creature, Bridgasaurus Boondogglus, a fossil unearthed from the 1950s Highway Planning, fossil-fuel wasting mindset.

We need many signatures to tell SKATS to keep Bridgasaurus from putting an $800+ million stomp on the Highland, Grant, and West Salem neighborhoods and from destroying Wallace Marine Park ... not to mention eating up precious resources from everyone in Salem. 

The Chamber of Commerce and the Homebuilders are working day and night to push this monstrosity.  They have paid folks twisting arms in local governments.  We have the facts, logic, reason and common sense on our side, and people power.  But we only have that power if people stand up and say that we're not interested in blowing hundreds of millions on a gigantic time-warp highway dinosaur.

If you want to see how absurd this project is, look at the "funding" options game --
http://salemrivercrossing.org/Funding.aspx

The projected local damage for this thing -- $30,000,000 a YEAR for 30 years -- is the exact amount that Salem-Keizer schools is projected to fall short next year (after already laying off hundreds, including every middle and elementary school librarian).  And that's with the West Salem library hours cut to 16 a week.  And NO transit service on weekends at all, in Oregon's capital city.

We've reached some signers already. But if we are going to have an impact, it's critical that more people sign our petition to Salem Keizer Area Transportation Study agencies.

Our petition is herehttp://signon.org/sign/no-bridgasaurus-in-salem --
please sign and spread it around:  http://signon.org/sign/no-bridgasaurus-in-salem
Can you please forward that link to five of your friends right now -- or to everyone in your address book who will be hammered by this thing?  With your help, we can reach our goal! 

P.S.  If you want to stay involved in the battle against Bridgasaurus, you can get on the No3rdBridge mailing list -- go here and request an invitation to join the list: 
http://groups.google.com/group/no3rdbridge?hl=en

WORD: If you want lower taxes and a better state, listen up! (Oregon Out of Balance)

This group, Partnership for Safety and Justice, is invaluable.  Spending on prisons is THE budget issue for at least the next 20 years.  And it boils down to this:  are we going to spend ourselves broke on policies that we know only fuel the crime and incarceration cycle, or will we support public officials who dare stand up and put out that the prison Emperor is not only buck naked, but is also stealing our future?

 

Related articles

• Oregon prison puzzle: Cut costs but keep public safe

WORD: 3d Bridge a Gigantic Boondoggle

Oregon State Highway 22 (Willamina-Salem Highway) intersects Oregon State Highway 223 in Polk Station. (Photo credit: Wikipedia)

What's most interesting is that the most-reliably anti-tax groups in Oregon, the Chamber of Commerce and the Homebuilders -- two groups that fight ferociously against taxes usually -- got up and waved their hands about "future growth," and made empty claims about the need to build this monstrosity for the vague "future" needs.   Thus, they showed their true colors:  they aren't against making you pay higher taxes, just taxes that provide you with services.  If you have to pay higher taxes so they can make a lot of money, hey, they're all for that.

That tells you just about everything you need to know about this project:  It's nothing but a money grab by land speculators and developers who are salivating at the thought of sprawling all the way to Dallas and all the money they can make if they can buffalo the people of Salem into building them a bridge (and paying for it!) that will only hurt Salem and benefit them.

Not only do we not need this project, it's the epitome of making the problem worse at great expense.  Traffic counts over existing bridges are already declining and will continue to do so, and Salem's congestion problems are not a function of how many lanes go over the river but the idiocy of how we handle the traffic at each end.

Moreover, the Highway Lobby's refusal to apply least-cost planning methods to what little congestion we face in Salem for a couple of brief periods daily tells you everything you need to know -- this isn't a solution to a problem, this is a profitable project that they want to ram down our throats regardless of all other considerations.  If Salem had a serious congestion problem, it would be greatly reduced if not eliminated instantly just by staggering the start times for state government workers and offering good cross-river transit options.  A "fast-pass" electronic toll collection system on the existing bridges would not only provide all the money needed to address the problems with the existing on and off interchanges, it would also encourage carpooling and other reductions in cross-river trips.

Of course, these wouldn't put millions of dollars into the pockets of the land speculators and the concrete lobby businesses who care about nothing but taking your money and making it theirs.

Bridge project is a $687 million boondoggle

On Nov. 5, dozens of Salem residents filled the City Council chambers to say no to building a $687 million bridge and freeway from Highway 22 to Interstate 5.

Their testimony was eloquent and convincing about the fact that this project is destructive, too expensive, not needed and should be rejected by the council. They said we can relieve congestion by fixing the bottlenecks at both ends of the bridges and by improving transit, all at a much lower cost.

Alternative 4D, as the third bridge is called in the staff report, will not relieve congestion on the existing bridges and will destroy 160 residences and small businesses.

The only testimony in favor of the third bridge came from the homebuilders association and the Salem Area Chamber of Commerce, but when pressed by Councilor Chuck Bennett if they would be in favor of imposing tolls or raising taxes to fund the third bridge, they could not give him a straight answer.


The council will hold a work session on Nov. 28 and resume the public hearing on Dec. 10. I hope concerned citizens will mark their calendars and plan to be at the Salem City Council to continue to oppose this $687 million boondoggle.



Jim Scheppke
Salem

LOVESalem Election Endorsements

Ballot Measures: The table above is pretty much right on -- except that it's a firm, big NO & NO on 82 and 83, and it's a regretful NO on 80, a very poorly drafted measure that would do more to discredit a saner approach to marijuana than anything else.  Measures 79 and 84 are particularly horrible, and deserve to be defeated something like 80% to 20% if not worse.

Just how bad is Measure 84?  That's kind of a hard question to answer, since it contains a sneaker provision that nobody's even talking about -- essentially the repeal of ALL capital gains taxes in Oregon, since the measure includes a provision that there are NO TAXES at all for inter-family property transfers.  So someone who inherits 100 shares of MicroSoft or Apple that were purchased back in the 80s, what they will do is "sell" them to a family member before selling them out into the market, and presto! Not only has any estate taxes been eliminated, but also all the capital gains taxes.  In fact, Measure 84 is So bad that Kevin Mannix and the cronies tried to resort to lying about AARP's position on it.  

REMEMBER:  Oregon already has a $15 million property tax exemption for family farms.  There are ZERO family farmers who have any problem paying the estate tax.  The whole family farm thing during discussions of the estate tax is just a bunch of rich folks trying to hide behind a popular myth.

Contested judicial races:  Judge Richard Baldwin (Supreme Court) and Judge Jim Egan (Court of Appeals) are both clearly the right picks by a long shot.

Both Baldwin and Egan are sitting trial judges, and both deserve to go upwards.

In each race, they are the only candidates in their races with meaningful judicial experience.

It appears that Baldwin is a D, while Egan is an R; however, in these nonpartisan races, what counts is that both are committed doing the job with integrity, and both have splendid recommendations from not just clients but also from people they've ruled against.

Both are opposed by the usual cadre of corporate interests who want to be able to sue you at the drop of a hat, but never face justice themselves.

Related articles

• Under threat, Kevin Mannix removes AARP article from Measure 84 website
• Vote 'no' on Measure 84 to end the estate tax: Editorial endorsement
• Measure 84 could cost state more than first thought, report says
• The enormous tax break for the rich hidden in Measure 84

A message we should all endorse

WORD

Surprise! Mitt Romney's favorite kinds of "people" are winning over the real ones

Any surprise that, with corporate owned media dominating nearly all avenues of public information, this is almost entirely unknown in America?

WORD: A beacon of common sense from a LOVESalem foreign correspondent

Image via WikipediaOne of the legion of LOVESalem foreign correspondents corps sends this from the shores of Lake Michigan, with a message clear enough to be seen from sea to shining sea:

I have been following the childish behavior of the elected representatives in federal government for the past several weeks (months?). I am continually amazed at the partisanship displayed by allegedly mature adults who should have the welfare of THE ENTIRE COUNTRY uppermost in their minds.

I have to assume you were all raised in environments which stressed honesty, fairness, compassion and a concern for those among us who are less fortunate. You all know what the right thing to do regarding the current financial situation is. Why is it so hard to get to an equitable conclusion? To paraphrase General Schwarzkopf: everyone knows what is right, the hard part is doing what is right.

In our government, with its huge range of ideology, the goal should be consensus rather than partisanship and compromise. I believe there are some stumbling blocks in trying to reach this goal. First is thinking that consensus is a win-lose situation, rather than the win-win outcome it really is. Second, is that many of you (Congress) appear to say or do ANYTHING you think will assure your re-election. Third, and most important, in my view, is that a large number of members of the House and Senate have been stupid enough to sign tax, marriage, abortion and etc. pledges, proposed by a non-elected, outside party, who has no stake in the potential results of those pledges. It is VERY difficult to back away from the challenge of a pledge, which leaves no room for extenuating circumstances, and still save face.

Ladies and Gentlemen of the United States Congress, you are now up to your eyeballs in extenuating circumstances. It is time to pull up your big-boy, and big-girl, pants, put aside your plans for future employment, realize that YOU are "Washington," stop name calling and come to consensus. Who knows . . . maybe if you ALL opened your minds there might be a third solution out there that is better than the Republican or Democratic plans that have already been proposed. If you can't do this, I think there might be a third choice for representation in the foreseeable future.

Bob Eichelberger
Norton Shores, MI

Watch for the Sausage Being Made in the Rush for the Exits

Image via WikipediaA real Oregon heroine, Jody Wiser, founder of Tax Fairness Oregon, sends this warning about an insanely stupid measure being jammed through at the last minute:

Another Bad Idea Gets Passed – Please Help to Stop It

Thursday was a deeply disappointing day in Salem.

The last two months have been good. I’ve watched as the Joint Tax Credit Committee, whose work this session has been so arduous, cut excessive tax code spending in place after place. They’ve done difficult and excellent work.

But as their final act of the year, they turned around and passed out of committee SB 817, creating the ironically titled “Oregon Low Income Jobs Initiative,” a bill that will actually give $78 million to an out-of-state money management firm and others like it, because they in turn agree to loan no more than $66 million to businesses in Oregon. Think what the Oregon State Bank might have done with that lost $78 million.

The travesty in this ill-considered bill is that if the state itself loaned the whole $78 million out, it could not only be more selective about what businesses it supported, it would get back the $78 million plus interest, and be able to loan that money out again and again. But with SB 817, Advantage Capital and a few other financial management companies will get the $78 million, loan out $66 million for six years or more, and after that, the whole $78 million plus all interest earnings are theirs.

The businesses that will receive the loans set up by SB 817 need not be anything special, need not hire any new employees, need not serve needy Oregonians. They do need to place themselves in lower income areas in Oregon--but the legal definition in the bill includes every acre of several counties and much of downtown Portland, Medford, Eugene, Beaverton and many other communities.

The Oregon New Market Tax Credit (NMTC) piggybacks on the unsuccessful Federal NMTC. According to a GAO report last year based on NMTC’s own data, it’s impossible to know whether its projects would have taken place even without the tax credit. Under the guise of helping needy communities, the Federal NMTC has funded projects like Portland’s Gerding and Schnitzer theaters and the Nines Hotel atop Macy’s.

In the hearing Thursday only one legislator, Rep. Phil Barnhart, asked a single substantive question that showed careful reading of the bill. He rightfully identified the full cost of the bill as $78 million. Reps Bailey and Brewer insisted he was wrong, that it was only $16 million. But Barnhart was right. When they later learned that the cost of the bill was nearly five times more than they thought, Bailey, Brewer, and every other committee member except Barnhart voted for the bill. It now moves to the Senate and House with a “do pass” recommendation.

There is still time to stop this travesty on the Senate and House floors. It may be taken up as soon as Monday. Please contact your State Legislators today and tell him or her that Oregon doesn’t need a tax giveaway that has already been discredited at the Federal level. Instead, let’s use our limited tax revenue for essential services.

Do it, just act:

If you need more guidance on what to ask, consider these points:

Questions for SB 817-1 proponents of the New Market Tax Credits:

· Why would you vote for legislation that passes out tax credits on a first come first serve basis? Don’t you believe the Oregon Business Development Department should choose amongst applicants, funding only those that will provide the best benefits to the low income communities? (Original bill, page 4 lines 33)

· Why would you pass out tax credits for $78 million but say that only 85% of it must be invested in Oregon? (Original bill, page one, line 29) What happens to the nearly $12 million that doesn’t need to be invested in Oregon?

· On page five, lines 28-32 there is another 15% that doesn’t need to be invested in an Oregon qualified low-income community investment. Is that an additional $12 million or the same $12 million as on page one? Can this money be taken as advisor fees for the money management businesses called “Community Development Entities”? The bill has no limits on fees.


· Ten states have had or currently have state side NMTC programs as in SB 817. If this mechanism is expected to bring more Federal NMTC dollars to Oregon, why has it not worked for 9 of the 10 states which have to date received fewer federal NMTC dollars per capita than Oregon receives without a state side program?

· Wouldn’t investing in a state bank be better?

· Without further amendment, it appears that as much as $4.8 million of each year’s $16 million doesn’t need to be invested in an Oregon qualified low-income community business, and that Oregon has no say in which businesses get up to $4 million each.

We note that the Oregon Business Development Department (OBDD) is not advocating for SB 817. This could be because:

1) Oregon already has other loan programs wherein the interest and principal return to the state rather than being lost to “Community Development Entities” (CDEs)

2) Where the costs for managing the programs are far below those collected by CDEs; and

3) Where the OBDD is able to target the loans.

If the Legislature wants state investments targeted to actual job creation in low income communities (as differentiated from moving jobs from one building to another as is typical with NMTC projects) then they should write that legislation.

How much is oil really worth? And what would be left over for other things?

Image by Anders V via FlickrGiven that we've built a society entirely dependent on cheap energy, it's important for leaders and concerned people to think about the implications of that dependence --- such as "What happens to our institutions when energy is no longer cheap" and "how much could we wind up paying for oil, and what would that do to our tax revenue, which is how we pay for public goods like schools, police, fire protection, etc."

Taxes due 4/18 -- time to sharpen the pitchforks and prepare the torches

Image by Mike Licht, NotionsCapital.com via FlickrWord from Chris Hedges:

. . . We will not halt the laying off of teachers and other public employees, the slashing of unemployment benefits, the closing of public libraries, the reduction of student loans, the foreclosures, the gutting of public education and early childhood programs or the dismantling of basic social services such as heating assistance for the elderly until we start to carry out sustained acts of civil disobedience against the financial institutions responsible for our debacle. The banks and Wall Street, which have erected the corporate state to serve their interests at our expense, caused the financial crisis. The bankers and their lobbyists crafted tax havens that account for up to $1 trillion in tax revenue lost every decade. They rewrote tax laws so the nation’s most profitable corporations, including Bank of America, could avoid paying any federal taxes. They engaged in massive fraud and deception that wiped out an estimated $40 trillion in global wealth. The banks are the ones that should be made to pay for the financial collapse. Not us. . . . “The economy is controlled by a handful of economic elites. The necessities of most Americans are no longer being met. The only way to change this is to shift the power to a culture of resistance. This will be the first in a series of events we will organize to help give people control of their economic and political life.”

If you are among the one in six workers in this country who does not have a job, if you are among the some 6 million people who have lost their homes to repossessions, if you are among the many hundreds of thousands of people who went bankrupt last year because they could not pay their medical bills or if you have simply had enough of the current kleptocracy, join us . . .

We will picket . . . Bank of America, one of the major financial institutions responsible for the theft of roughly $17 trillion in wages, savings and retirement benefits taken from ordinary citizens. We will build a miniature cardboard community that will include what we should have—good public libraries, free health clinics, banks that have been converted into credit unions, free and well-funded public schools and public universities, and shuttered recruiting centers (young men and women should not have to go to Iraq and Afghanistan as soldiers or Marines to find a job with health care). We will call for an end to all foreclosures and bank repossessions, a breaking up of the huge banking monopolies, a fair system of taxation and a government that is accountable to the people.

The 10 major banks, which control 60 percent of the economy, determine how our legislative bills are written, how our courts rule, how we frame our public debates on the airwaves, who is elected to office and how we are governed. The phrase consent of the governed has been turned by our two major political parties into a cruel joke. There is no way to vote against the interests of Goldman Sachs. And the faster these banks and huge corporations are broken up and regulated the sooner we will become free.

Bank of America is one of the worst. It did not pay any federal taxes last year or the year before. It is currently one of the most aggressive banks in seizing homes, at times using private security teams that carry out brutal home invasions to toss families into the street. The bank refuses to lend small business people and consumers the billions in government money it was handed. It has returned with a vengeance to the flagrant criminal activity and speculation that created the meltdown, behavior made possible because the government refuses to institute effective sanctions or control from regulators, legislators or the courts. Bank of America, like most of the banks that peddled garbage to small shareholders, routinely hid its massive losses through a creative accounting device it called “repurchase agreements.” It used these “repos” during the financial collapse to temporarily erase losses from the books by transferring toxic debt to dummy firms before public filings had to be made. It is called fraud. And Bank of America is very good at it. . . .

What's behind our budget problems? Tverberg

You don't have to agree with every word to respect the intelligence "Gail the Actuary" Tverberg brings to the task of trying to make sense of what's happening to us. A truly great post that should be read by any person who pays taxes, spends taxes, or enjoys services provided by them.

If "we're broke," then here's why

We're not so broke that we can't spend billions per week on three separate wars, so we're not really broke -- but we certainly have let corporations avoid taxes on massive profits:

You Pay More in Federal Taxes than G.E.

A New York Times article published today explains how General Electric has obtained a negative corporate income tax rate on its U.S. profits. Its public filings show that it had $26 billion in U.S. profits over the last five years. Instead of paying federal corporate income taxes, G.E. actually received a net benefit of $4.1 billion from the IRS over that period.

The article quotes CTJ's director, Bob McIntyre:

“'Cracking down on offshore profit-shifting by financial companies like G.E. was one of the important achievements of President Reagan’s 1986 Tax Reform Act,' said Robert S. McIntyre, director of the liberal group Citizens for Tax Justice, who played a key role in those changes. 'The fact that Congress was snookered into undermining that reform at the behest of companies like G.E. is an insult not just to Reagan, but to all the ordinary American taxpayers who have to foot the bill for G.E.’s rampant tax sheltering.'”

Here are some other highlights:

- President Obama has "designated G.E.’s chief executive, Jeffrey R. Immelt, as his liaison to the business community and as the chairman of the President’s Council on Jobs and Competitiveness, and it is expected to discuss corporate taxes."

- G.E.'s tax department includes nearly 1,000 people who are instructed to "divide their time evenly between ensuring compliance with the law and 'looking to exploit opportunities to reduce tax.'”

- G.E.'s tax avoidance played a starring role in convincing Reagan to adopt tax reform in the 1980s. “'I didn’t realize things had gotten that far out of line,' Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan’s 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent."

- "That pendulum began to swing back in the late 1990s" when Congress enacted a tax break for "active financing."

- G.E.'s tax department's director, a former Treasury official, literally "dropped to his knee" when begging Ways and Means Committee staff, then under the leadership of Congressman Charles Rangel, to extend the tax break for "active financing."

- Rangel reversed his opposition to extending the "active financing" tax break that day, after G.E.'s lobbying and after Congressman Crowley of Queens argued that it would help banks in his district.

- Provisions of President George W. Bush's huge corporate tax cut bill in 2004 were "so tailored to G.E. and a handful of other companies — that staff members on the House Ways and Means Committee publicly complained..."

- "Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment. In that time, G.E.’s accumulated offshore profits have risen to $92 billion from $15 billion."

What Should Oregon do on taxes? An answer

Here's my vote:

The most important thing to remember about taxes and tax policy is the one that is completely ignored in the US and especially Oregon: all tax policy decisions are social engineering, and that discussions that focus solely on the tax revenues and rates are like discussions about sex that focus solely on gametes and DNA mixing . . . a tiny bit of the truth on the topic, but an overwhelming blindness to the some crucial aspects of the subject!

Why is it important to keep the rule that all tax policy decisions are social engineering in mind? Because tax policy debates that ignore this turn into what passes for debates on taxation today: sterile and mindless rows that simply recycle talking points and themes that have been endlessly focused grouped to persuade without informing and to bias the listener towards the preferred outcome for the interest behind the focus group.

Once we recall that all tax policy is social engineering, it naturally invites the question “Ok, so what should we be trying to achieve with our social engineering as we raise money?” A few suggestions:

One, for any given amount of revenue to be raised, the best tax is the one that works in concert to reinforce our other social policies, rather than against them. So, for example, “sin taxes” score high on this criteria, because they discourage things like smoking and drinking, which impose huge costs throughout society. By taxing tobacco and alcohol, we both reinforce the discouragement and get more benefit from our anti-smoking and anti-alcohol abuse dollars.

The short summary of this rule is simple: “Tax bads, not goods.” In other words, as much as possible, we need to be taxing the things we want less of (pollution, activities that harm health, economically wasteful activities), not the things we want more of.

For best results, shift taxes from the desirable things (wages, earnings, productive investments, savings) and put those taxes onto things where we’re already having to pay a lot to counteract their negative effects (not just vices such as alcohol and tobacco but also inefficient processes that produce a lot of waste or consume a lot of nonrenewing resources).

Another useful point to keep in mind: the debate about how much alone is silly because there is no absolute right amount of taxes. In the US, we had great post-war prosperity with 95% top-end tax rates, and today we’re suffering economic collapse with rates about a third of that. Millions today complain that they are taxed too much, while people around the world pay far more than we do, on smaller incomes. So it’s clear that there is no perfect taxation reference level.

Because there is no perfect taxation level, the debate has to include three other critical factors: how much does a tax cost to compute and collect (an efficiency measure), how much does the tax discourage the underlying activity (whether it’s an unhealthy vice like smoking or a socially beneficial one like family-wage jobs), and how just is the tax (social acceptance).

To get the greatest efficiency, we need to tax things that are easily and objectively measured with no need for expert appraisal and no opportunity for concealment. One of the greatest failings of income taxes is that, in the end, a person or corporation’s net income is not so easy to compute, and is subject to myriad adjustments that create huge opportunities for game playing, otherwise known as tax planning and accounting.

Not only is all this planning and accounting an economic burden to society by itself – it’s nothing but fighting over how the pie is sliced, not how to make the pie bigger or tastier – but it creates a distorting force field over our politics. Millions of brilliant minds spend all their working hours figuring out how to minimize the apparent net income (and, thus, taxes) for A, which shoves the taxes onto millions of others, which provides a lot of incentives for both A and all the others to spend a lot of money influencing politicians to see it their way. That’s pretty much what our national level politics has become for the last thirty years: a flock of raucous crows fighting over which one gets more from the spoils.

Another factor to consider is how much a tax actually discourages the underlying activity. The best metaphor for this is the thoroughbred racehorse. A racehorse can easily carry a 120 pound jockey on her back at blazing speed around the track – but tie a 40 pound weight to her foreleg and she will barely move at all. It’s just the same with taxes: some taxes have almost no discouraging effect, while others will cripple an activity. Couple this with the earlier idea – that we ought to always be thinking carefully about the social outcomes our taxes encourage and discourage – and it becomes clear that, to the greatest extent possible, we should want to apply taxes to socially beneficial activities as lightly as possible or, at the least, as smartly as possible so as to discourage the underlying activity the least. (And, of course, conversely, we should want to get maximum discouragement per unit of tax when we’re taxing things like polluting activities or conversion of farmland to subdivisions).

Thus, the current mania in Oregon to cut the capital gains tax rate is revealed to be absurd. The whole argument for cutting capital gains taxes is that we have a high one compared to other states. Well, unless we force all states to have uniform tax systems and rates, some state or other will always have the highest rate of taxation from this method or that one. If being the highest capital gains tax state is bad, then isn’t it equally atrocious that we don’t have a sales tax? The fact is that capital gains taxes sit, like a good jockey, right where they are most easily borne, and they discourage nothing except letting the wealthy few who control the overwhelming majority of capital gains assets have an even greater share of our collective economic pie.

Finally, we need to renew our focus on the justness of a tax. These days, we hear a lot of full-throated claims that taxes need to be lowered on people with high incomes and fortunes because, otherwise, we “punish success.” It’s really a lightweight argument because it’s obvious, given the increasingly concentrated and skewed distribution of our national wealth into fewer and fewer hands, that none of the well-off are being punished enough to be discouraged from being well-off. The talk-radio nonsense about “going Galt” and withdrawing from society are simply a sign of how debased and empty our civic conversation has become. Yes, the wealthy pay more taxes than everyone else. But the bottom line is that the well-to-do capture also capture most of the benefit that the taxes provide. Their outsized control over our political process gives them an equally outsized share of the benefits, causing government to lavish spending in some areas and starve others.

A good example of a more just tax is called a “Tobin tax” after the Nobel prizewinner who proposed it. Tobin noted that a tiny tax, say a quarter of a percent, on stock trades would raise a huge amount of revenue while doing essentially nothing to discourage any economically valuable activity. Even more important, it would exert a slight, persistent pressure to discourage excessive trading that occurs only to take advantage of momentary price differences on different markets (arbitrage). Tobin dreamed up his tax well before the days of high-speed computers wired directly into the stock exchanges (in preferential positions, no less, so that the biggest firms get to trade a few milliseconds before the rest of us) causing billions of shares to change virtual hands in minutes. This entirely nonproductive activity helped cause our economic conflagration and can exist only because we have a stable civil society in which the laws of contract and property are respected. Thus, Tobin taxes are not just highly efficient and easily borne, they are also just.

It’s hard to know if its too late to change the quality of debate, to consider more than just “how much” when discussing taxes. I fear we have become so stupefied by fifty years of television pablum and talk-radio blather that we are incapable of accepting that the tax policy that works best for us personally might not be the best one for our society. What is clear is that unless we start getting a lot smarter about tax policy, we are going the way of all other empires through history, where the leadership quit working for the benefit of the whole and concentrated instead on pleasing the faction that backed them. That sounds disturbingly like our politics today.

Get your two cents in now: What should Oregon do on taxes?

Maybe futile and just an invite to gasbag trolls, but you gotta try: pitch in your thoughts, what should Oregon do about taxes?

The must-read as we debate whether we can afford health care reform

Image via Wikipedia

Tomgram: William Astore, You Have No Say About Your Military

By William Astore
Posted on March 18, 2010, Printed on March 19, 2010
http://www.tomdispatch.com/blog/175219/

When was the last time you saw the headline, “Cost of [Pentagon-weapons-system-of-your-choice] halved”? Probably never. Still, the thought came to mind when this recent Associated Press headline caught my eye: “Pentagon: F-35 fighter jet cost doubles.”

Here’s the story behind it: Since 2001, when an F-35 Joint Strike Fighter was expected to cost an already hefty $50 million, the plane’s cost has soared into the stratosphere (despite the fact that the aircraft itself has barely left the ground). The estimated cost today is $113 million per plane. Yes, that’s per plane. This supposed future workhorse of the U.S. military is now priced like the planet’s most precious gem. It’s also 2 ½ years behind schedule. Keep in mind that the Marines, the Air Force, and the Navy are planning to buy a combined 2,450 of them for what’s now an eye-popping $323 billion. And if you think the costs are likely to stay in the $113 million range, given the history of Pentagon cost overruns, then I have a nice little national security bridge to Brooklyn I think the U.S. public might love.

In other words, if all goes well from here (an unlikely possibility), a single future weapons system is now estimated to cost the American taxpayer almost one-third of what the Obama administration’s health-care plan is expected to cost over a decade. You could even think of the Pentagon’s weapons procurement process as the health-care system of the national security state. Its costs just never stop rising. In fact, the Government Accountability Office pegs major weapons systems cost overruns since 2001 at $295 billion, another near third of the cost of the health-care bill supposedly coming to a vote this week.

And here’s what’s remarkable: You barely hear about such overruns. They’re almost never front-page headline news, even though the money’s being taken from not-so-deep taxpayer pockets. And when truly terrible news, as with the F-35, comes in, all that happens in Washington is that a few politicians mutter a little. John McCain, for example, offered this less than stirring quote on the F-35: “The taxpayers are a little tired of this. I can’t say that I can blame them”; and an irritated Senator Carl Levin, chairman of the Senate Armed Services Committee, said: “We cannot sacrifice other important acquisitions in the DOD [Department of Defense] investment portfolio to pay for this capability.” (Bet you didn’t even know that future weapons were part of a Pentagon “investment portfolio.”) In the case of Secretary of Defense Robert Gates, he’s planning to hold back $614 million in “performance bonuses” from the plane’s lead contractor Lockheed Martin. (And you thought only bankers and financial wheeler-dealers got performance bonuses!) But it’s striking that there are no tea party movements out in the streets of America demanding our money back or claiming that we’re going to be broken by this.

Here’s an American reality: the Pentagon is our true welfare state, the weapons makers our real “welfare queens,” and we never stop shoveling money their way. Somebody should raise a few tough questions about the Pentagonization of our country and its finances. Fortunately, TomDispatch has retired Lt. Col. William Astore, historian and regular contributor to this site, to take on the task. Tom

The Pentagon Church Militant and Us
The Top Five Questions We Should Ask the Pentagon
By William J. Astore

When it comes to our nation’s military affairs, ignorance is not bliss. What’s remarkable then, given the permanent state of war in which we find ourselves, is how many Americans seem content not to know. . . .

Catering to the Automobile is helping bankrupt Salem

Image by Sister72 via Flickr

Now we get to learn how bad the collateral damage will be. The low-budget model fire extinguisher to the right is just an example of the kinds of creative adaptations we'll be experiencing in Salem for the foreseeable future.

Here's a more global look at how various states are faring and what we can expect as the double-dip of the Great Recession really gets underway. Forecast: Severely grim. And we all know how closely tied Salem's economic situation is tied to the overall health of Oregon's budget. Which is to say, Forecast: VERY severely grim.

Best Salem politics joke of 2010 thus far: Mayor Taylor, resolutely mum during the failed Cherriots bond campaign last year, attacking Cherriots for having cut Saturday service entirely.

The Legislature appears to have lost its mind

Groveling before the rich for having dared to pass Measures 66 & 67 apparently, somebody has come up with an absolutely absurd proposal: a big old tax break for the golden parachute set. If the Lege wants to do anything for rich guys getting out of a business, they should do something to encourage the kind of transfer that Bob of Bob's Red Mill engineered for his company, selling it into an employee-stock-ownership plan (ESOP). But the turkey below is --- or should be --- a dead letter.

No Tax Breaks for Golden Parachutes

Tell Chairwoman Burdick to oppose giving another tax break to well-off CEOs.

I can't believe it.

The Oregon House of Representatives just passed a bill that would make "golden parachute" severance packages tax-free up to $500,000 if the applicant agrees to put that money into an Oregon business. This would allow well-healed CEOs to get a tax break of up to $54,000!

However, few working families will be able to save even one penny on their taxes. A recent survey found that 68% of workers did not receive any severance package when laid off.

Right now this special tax break is being quickly pushed through the Oregon Senate Revenue Committee. Proponents of the bill argue that this legislation will help generate jobs by encouraging business growth. It is a well-intentioned idea, but no different from the failed, trickle-down policies of the Bush administration.

Tell Senate Revenue Chair Burdick and her fellow Senators to oppose the "Tax Break for Golden Parachutes Act" today!

http://www.taxfairnessoregon.org/NoGoldenParachutes

While being promoted as a "jobs bill" this new tax break does not require the recipient to create even one job! Oregon has far more effective tools to get unemployed Oregonians working again than another costly tax break for the rich.2

We applaud our legislators for trying to bring back jobs to Oregon, but we should not create more harm than good by repeating the mistakes of the past.

Sincerely,

Noah Heller
Tax Fairness Oregon
Sources:

1. "Half of Workers Who Were Laid Off in the Last Three Months Have Found New Jobs, Reveals Latest CareerBuilder Survey," CareerBuilder, August 5, 2009

2. The Building Opportunities for Oregon Small Business Today Fund (BOOST Fund) gives grants of $2,500 to employers per new full-time job established and offers loans of up to $150,000 for businesses.