To President Obama et al: Just the beginning" Since when is 4-450K/yr defined as a middle class income? What diabolical policy is yet to emerge from this politically "engineered" crisis? You and I both know that Social Security, having zero to do with our economy other than having served as a "fiscal piggy bank" for the D.C. politicos for the past several decades, now requiring some reimbursement of all of those IOU's (Special Treasury Notes), is something that these folks want to avoid... at all costs. In all of this mess, the greatest concern of "our" representatives is protecting the assets and incomes of their benefactors... and that ain't US! So expect them to place the burden on OUR backs as much as possible.
Below, I offer some suggestions for solving our economic problems, however I recognize that we live in the real world and with a political system that permits the "buying of political power" with money, it is those with the MONEY that control the system in their best interests which are not necessarily in line with our needs or unwittingly even in theirs over the longer term.
As I have been saying for the past several years both as a citizen and a candidate for congress, the overall problem with the American economy is the rise of "Corporatism" as the dominant force in our political sphere. Money IS all that matters in politics, so much so that the vote of the people is merely a formality. Over 98% of elections are won by the candidate with the most money... BIG MONEY! Insider Money!
BIG Money "buys" policy that may work for the "buyer," (Corporate America and The Top 1%), but fails miserably for most everyone else. Together with a CORPORATE owned media, lax regulation of major sectors of our economy in particular Wall Street, "We The People" have borne the cost of Corporatist Politics. As this paradigm has "matured" over the past 25 or 30 years, the inevitable result is the dysfunctional macro-economy that we are now experiencing.
Whether through loss of a career, a home through foreclosure or opportunity that should have been there after graduation, "We The People" continue to pay the price for ill conceived or even criminal policies put forward, or purposefully left unopposed, by what is supposed to be OUR "representation" in Washington. The only credible excuse being that both major political parties have been complicit in fostering this paradigm.
The middle class over the past 30 years has been systematically undermined and decimated by the overall negative effect of supply side tax policy/trickle down economics. Again, since when is 4-450K per year "Middle Class?" The only credible goal of legitimate economic reform should be the reversal of these destructive policies in order to begin the process of re-building the middle class... It is WE who are the true economic engines creators of jobs in this country.
It is high time that WE elect policy makers that understand how a thriving economy works when the costs and benefits of our economy are fairly distributed. The problem remains as it has for the past several decades now is "HOW" when BIG MONEY is the sole determining factor of who gets elected.
I could spend a lot of time laying out statistics and details that further describe how all of this took place, but I think that you the voter will be more interested in hearing solutions. Here is a link to a fantastic article ( 21 $Trillion Dollar Hoard Hidden from Taxman by Global Elite! ) that quantifies explicitly the cumulative consequences of trickle down. Excerpt from guardian.com article: "A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary -13 trillion ($21tn) of wealth offshore -- as much as the American and Japanese GDPs put together -- according to research commissioned by the campaign group Tax Justice Network."
A summary of the focus of my platform to Reform and Rebalance OUR Economy is as follows:
- Advocate for legislation to End Illegal Home Foreclosures.I will advocate for the repeal of Gramm-Leach-Bliley Act thus reinstating The Glass Steagall Act which would separate investment banking from commercial banking... and from my perspective, I would advocate for a stringent law that would end... "Too Big To Fail."
- Prompt repeal of The Commodity Futures Modernization Act which allowed for the development of sophisticated derivatives such as Credit Default Swaps which contributed mightily to the destruction of our economy. This law also can be blamed for the wild swings in energy... read that... gas prices which appear to rise and fall dramatically for little or no reason.
- I would advocate for instituting a Variable Labor Cost Tariff on Imported Goods which would be based on a comparative factor of labor cost differential between the country of manufacturing origin, and the U.S. domestic cost of labor for the same product type. The heart of my concept is that the factor would disadvantage to a considerable degree the current low cost of offshore labor (often pennies per hour), by accomplishing two major economic goals for labor. I developed this policy as a candidate in the 2012 election.
Benefits of Variable Labor Cost Tariff on Imported Goods
1.) This policy would remove the incentive for off-shoring more jobs because the labor cost advantage present previously would be eradicated.
2.) "The tariff" would remove the disincentive for increasing wages in foreign manufacturing, since the cost will be present either in the form of a tariff or wages. Retail price increases will be fairly nominal and predictable as available product substitutes contribute to price competition that will prevent steep price increases for the most part. The tariff would default bottom out at zero for products manufactured in high wage nations such as Germany, where labor costs often exceed those in the U.S.
3.) This tool is what has been missing in U.S. Trade Policy and would if implemented even in a limited form, serve to bolster the leverage of labor not only in the United States but worldwide.
4.) The result from a macro-economic standpoint will be increased economic growth secondary to broadened distribution of income, resulting from increases in overall domestic employment associated with implementation of this policy.
Economic Policy Goals and Recommendations
- WE must advocate for the criminal indictment and prosecution of Wall Street executives responsible for the losses on "Main Street!" Including present and former government officials! I will advocate making student loan debt dischargeable in bankruptcy.
- Increase the Federal Income Tax Rate on both earned and unearned income of $250,000-$1,000,000 to 39% marginal rate.
- Increase the Federal Income Tax Rate on both earned and unearned income of $1,000,001-$5,000,000 to 45% marginal rate.
- Increase the Federal Income Tax Rate on both earned and unearned income of $5,000,000-$10,000,000 to 50% marginal rate.
- Increase the Federal Income Tax Rate on both earned and unearned income of over $10,000,000 to 55% marginal rate.
- Open Medicare enrollment to ALL American citizens as an option, NOT a mandate... with affordable premium levels based on IRS reported Federally taxable income. A maximum cap on premiums would place an upper limit on cost. (Please refer to Health Care Solutions for details)
- Create Federal Tax Incentives to develop a plan to partner with cities, states and private industry to develop a world class public transportation system in urban areas supported by high tech suburban feeder transportation (train/bus) systems... where the voters demand it.
- R epeal the mandate for ethanol in gasoline, as it provides no environmental benefit, is harmful to engines, decreases fuel efficiency/lowers gas mileage while increasing the cost of many food products.
- Develop policies for investing in renewal of our transportation infrastructure through investment tax credits for alternative energy development in a more efficient decentralized power generation and distribution structure/power grid. Such a change in policy will generate thousands of skilled trade and associated employment alone.
- Revise tax policies that "level the playing field for small business." This can be accomplished by advocating business/tax policy that promotes expansion of small business, while working to decrease the advantages/loopholes that large corporations have over their smaller counterparts.
- Put in place tax credits for conversion of our commercial trucking fleet, in particular large vehicles to more cost efficient and plentiful domestic natural gas. Such a policy will decrease our reliance on imported petroleum products, provide some environmental advantages while also lowering aggregate energy costs.
- Prompt defunding of the Afghanistan/Iraq/Pakistan theatre of operations which will generate a CBO projected operational cost savings of approximately Half a Trillion Dollars going forward through 2021.
- Act to re-institute Federal pay as you go budget rules as a means of controlling federal spending.
- Avoid at all costs ANY legislation that allows for U.S. corporations and/or their subsidiaries to be granted a "Tax Holiday" in order to return earnings/profits to the U.S. either tax free, or subject only to an outrageously minimal tax.
- Put in place legislation to repeal the tax loophole that allows foreign subsidiaries of U.S. Corporations to avoid paying federal taxes on income generated by foreign operations.
- Increase the Federal Estate Tax Exemption to $8 Million while also increasing the Federal Estate Tax Effective Rate to 55% from the current level of 35%.
- I would seek to designate as well, Profit Distributions from Chapter S Corporations as being subject to FICA tax to remove that GAPING Loophole!
- Legislate equal tax treatment of capital gains and earned income, thus restoring a modicum of equity to our federal tax policy.
- Eliminate the "carried interest" tax loophole that allows private equity fund and hedge fund partners to claim their earnings as capital gains, thus paying an extremely low tax rate. This loophole will be eliminated automatically if we restore the current preferred tax treatment of capital gains to that of appropriate marginal income tax rates associated with that of earned income as recommended above.
Taken together or in part, changes such as these will serve to return control of our nation to the great unwashed majority, where it belongs. This will only happen however if there is enough public furor to put in place public funding of political campaigns through repeal of the egregious Citizens United SCOTUS decision and the institution of Public Funding of campaigns for Federal office. I will discuss election issues in an article to come, which having run for office in Florida several times, I have seen just about all that one can stomach. Thank you. Your comments are invited. John Russell, MS/ARNP-C, MBA/HCSM