Job Creators vs Lucky Ducks

In the last few years two terms have come to creep into discussions about taxation in the US.  These ideas are definitely being driven by the right wing echo chamber.  So today we are going to examine what they are, how they are used, and the reality of people at different income levels.

Lucky ducks–these are the folks that file income tax returns, but whose income after deductions and credits owe no income tax.  The Wall Street Journal editorial pages started this term, and have been using it since 2002.

Job creators–in the past few years this term has been thrown around to describe the wealthy, and defend the lower tax rates that they deserve.  You may have heard something like this, “you don’t raise taxes on job creators during a down economy.”

Why are these terms being used, basically to convince people that the Republican’s economic agenda isn’t class warfare, but fairness.

So let’s breakdown the myth of the Lucky Ducks, these folks don’t make enough to pay federal income tax.  Sadly in the down economy, the percentage of the population that falls into this category has been rising.  As average employees wages have stayed stagnant, this is an inevitable result.

However, when Lucky Ducks is talked about, it is a not used to point out the stagnant wages for the majority of Americans.  It is used to make tax payers think that there are a bunch of freeloaders that aren’t paying taxes.  That those who aren’t Lucky Ducks have been supporting those lazy freeloaders.

But are they lazy freeloaders?  While the statistic that is used is the number of people who file federal income taxes (those with an income) who don’t owe federal income taxes.  People who have no income don’t have to file taxes, so this is measuring people with income, generally workers, who aren’t generally lazy or freeloaders.

In the US working people have to pay payroll taxes, 6.2% to Social Security and 1.45% to Medicare (or 7.65%) and double that if you are self employed as you are paying employee and employer shares.  While these Lucky Ducks are not paying income tax, they are still paying payroll taxes on their income.  Not as Lucky as they want you to think, and be angry about!  That doesn’t get into state income, property or sales tax that these folks likely are paying too (double taxation!!!).

What about the myth of the job creators?  For a few years, I have been hearing this statement, “no poor person employed me!”  In the last few years as the Bush tax cuts were set to expire, and Democrats were looking to let the tax rates go up on the wealthiest Americans the job creators became the endangered species of the Republicans.  To paraphrase a familiar line, “Won’t somebody please think of the  Job Creators?”

But I want to think about this for a moment?  They are trying to say that wealthy American tax payers, individuals or couples, are job creators.  Now I believe that wealthy people do hire other people directly, maybe a housemaid, butler, driver, nanny, exercise coach, dietitian, publicist and so on.  But how many people do they hire?  Does a change in 3% marginal tax rate mean they go from hiring 3 people to 4?  To that 4th person, that is huge, but I don’t call these people Job Creators.

I think we need to start asking Republicans, do you consider yourself wealthy (Mitt Romney), if yes, how many people do you employ.  And when I say employ, you pay the employer share of payroll taxes!  If you hire a service who employs a person who provides a service for you, the service is the employer, not you.  If you create a company and that later employees people, than I will agree you are a job creator, but that isn’t a ton of the wealthy.

I have been thinking about this a for a long time, because we are all job creators if we are actively involved with the economy.  When I go shop at Target or the grocery store I am buy products, along with the other customers.  Our demand for those products are creating jobs for the people extracting the resources that are manufactured (more jobs), then transported (jobs) to a store (jobs).  My demand along with my fellow consumers are creating that demand and those jobs.

Not only that, but the average consumer probably creates more jobs than the super wealthy in most sectors (not Lear Jets).  Think about this, you have a wealthy family that makes $5,000,000.  Maybe they have a principal residence and two vacation properties, a housemaid and a driver.  Then you have 100 families who make $50,000 (same as that $5,000,000 wealthy family) who don’t directly hire anyone and just have one home.  Now those 100 families are going to buy more toilet paper, more toothpaste, food, etc… than the multi millionaire with their 3 homes and 2 employees.  For the people who make toilet paper or toothpaste, those employee’s jobs are based on the demand (job creation) of all them, but it is the demand of the average family collectively that is creating more jobs than the multi millionaires.

It is time for us to think past the language that is being used to support tax policies that benefit the ultra wealthy.  Average Americans are struggling enough in the current economic climate.  We need jobs, not class warfare, but we have been getting attacked for years and usually don’t even realize the Black Ops/Psy Ops that have been waged against us workers.

Lucky Ducks who may not pay any federal income tax definitely pay taxes, and usually are pretty hard workers.  All of us that are buying things are job creators.  The ultra wealthy may create jobs in the luxury industries, but they are not the only job creators and for a large part of society create less jobs (collectively) than the average American, including those who are not working, but still consuming.

-Josh

Sanctity of employees contracts

As focus has shifted from protests in the Middle East to protests in Madison, we need to think about one of the underlying issues of this debate, employee contracts.

For those of you that think this is all about the state budget crisis and that alone, you are very mistaken.  This is about destroying the last institution, the last guardian for middle class and poor Americans from the ruling elites.  This is about destroying unions, so there is a weakened support organization for the Democratic party.  Not that the Democratic party has been the best friend of unions, I often think that many Democratic politicians play them lip service, but it is better than the outright hostility that they face from Republican politicians.

Remember in the spring of 2009 and 2010 when we heard about the on-going obscene bonuses going to folks on Wall Street?  We had funded the bailout of their industry, keeping them employed.  But that wasn’t enough, they had their contracts and we had to pay them bonuses.  But when the outrage over the bonuses came out, I didn’t hear from Republicans asking to make them re-adjust their contracts because of the bailout.  No, they said it was dumb for Wall Street to give huge bonuses, tried to lay blame on Democrats (many which are as beholden to Wall Street as Republicans), but never once pushed for a clawback on bonuses.

Yet, when it comes to bailing out a union industry like big auto, they ask for union members to take a cut.  When they are facing state government deficits, they ask public government unions to alter their contracts and take a cut.

It is not because unionized employees have more income in which to give, no that is what you find on Wall Street.  Wall Street can give more, but are not asked to because they are special, they represent the wealthy class that has an exaggerated importance in our country.  They demonstrate the lie that is supposed one person one vote democracy with their lack of sacrifice and exaggerated importance.

Republican hatred of unions is very clear to those who are willing to listen.  Their willingness to violate contracts in some circumstances and say they are inviolate in other cases shows that they have a political agenda, destroying unions.  As Rahm Emanuel has said, and Governor Walker and his fellow Republican state politicians are taking to heart, “don’t let a crisis go to waste.”

-Josh

The impossible world of Republican Jeopardy

Do you know why there will never be Republican Jeopardy? It isn’t because the may not have the IQ to provide questions to the answers. The problem is every answer is “tax cut” and they never know which question that answer applies to.

Moderator: the answer is tax cuts.
Moderator: Yes, Grover Norquist.
Grover Norquist: what to do when the economy has slow growth?
Moderator: that is not the answer we are looking for this time. Moderator: Yes, Newt Gingrich.
Newt Gingrich: what is the best way to share sacrifice during a war? Moderator: also not the answer we were looking for.
Moderator: Yes, Samuel…I mean Joe the Plumber
Joe the Plubmer: what I need to have the tax lien removed from my house?
Moderator: No, that is not the answer we are looking for, but if you
happen to win you might be able to pay off that lien.
Moderator: Yes, Sarah Palin.
Sarah Palin: what will make me able to see Russia from my house?
Moderator: not the answer. How the heck would you be able to see Russia from your house because of a tax cut?

-Josh

Question of the Day – September 24, 2009

What does Sarah Palin consider the $1305 check she will receive from the Alaska Permanent Fund for just living in the state?  Welfare?  Socialism?  Or her right as a resident of Alaska?

-Josh

Come on Newshour – do the math

Journalism, in the form of newspapers are in state of crisis in the US.  Part of the problem with journalism in general, including at the supposedly liberal hour long Newshour on PBS, is that they aren’t calling people on their lies.

As I pointed out on this post, the Republicans are lying about the increase in the national debt.  Well tonight, I heard the same lies repeated by Rep. John Boehner of Ohio who said this,

And so you’ve got higher spending. You’ve got higher taxes. And then you get to the real whammy, and that’s the national debt.

President Obama’s budget will double the national debt in the next five years. It will triple the national debt in the next 10 years, given their projections.

This is unacceptable. I think it will imprison our kids and grandkids. It will slow our economy. It will slow job growth in America. It’s just not, in my opinion, not the way to proceed.

Remember that the debt is about $11.1 trillion, and if by “their projections” he means the updated CBO projections (pdf) which is $9.3 trillion.

The cumulative deficit from 2010 to 2019 under the President’s proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO’s baseline.

Well the math again shows, that $11.1 trillion plus $9.3 trillion equals $20.4 trillion.  Dividing $20.4 trillion by $11.1 trillion is 184.5% or an increase of 84.5% not exactly doubling, in fact short of doubling.

So I showed I could do math, it would be nice if these journalist had prepped themselves with the likely talking points, after all Senator Judd Gregg’s radio address was 6 days ago using the same lies.  He should have expected it coming, and he should have called him on it.  But it instead we got this question next,

KWAME HOLMAN: The speaker, Speaker Pelosi, says your budget being offered by the Republicans in the House gives too many tax cuts to the wealthiest Americans and does not do those kinds of investments in renewable energy, in education, in health care.  

REP. JOHN BOEHNER: I think we have a responsible budget. It does curb spending. It does curb taxes to allow more investment in our economy.

We’re in the middle of a serious recession. The best way to help solve that recession is to allow American families and small businesses to keep more of what they earn. And, most importantly, we have much smaller deficits as we go forward.

And so I believe that we have a responsible approach to our budget, far more responsible than the budget plan that they’re bringing up.

The point is, we usually know what these members of Congress are going to say, and often it just isn’t true.  So research what you might hear them say in the interview, you know anticipate because it isn’t hard, and then fact check that, and call them on lies when they lie.

-Josh

Senator Gregg (R-NH) thank God he withdrew his nomination

On March 27, 2009, Senator Gregg (R-NH) gave the Republican weekly radio address.

This very serious man (fiscal conservative equals serious), this US Senator, this former nominee for US Secretary of Commerce in the Obama administraion, well he just doesn’t get numbers very well.  This stuff isn’t too hard, we aren’t talking about calculus or multi-variable algebra, this is basic arthimetic.

Taking a couple of snippets out of his radio address, transcript via Christian Science Montior.

Lets start with this scariness from Gregg:

“In the next five years, President Obama’s budget will double the national debt; in the next ten years it will triple the national debt.

That is like saying if you have a $10,000 balance on your credit card, it will be $20,000 in 2014 and $30,000 in 2019.

To demonstrate in real numbers, after all we may not know what the current national debt is, we get this information from Gregg about the run up of the debt in the next 10 years.

“His budget assumes the deficit will average $1 trillion dollars every year for the next 10 years and will add well over $9 trillion dollars in new debts to our children’s backs.

Well, we know $9 trillion is a lot of money.  Heck it is more than the amount that increased during the Bush years ~ $5 trillion.  But to put in proper context, we need to know what the current debt is.  After all, if Obama’s budget triples the amount in 10 years and costs $9 trillion over 10 years, then clearly our national debt is $4.5 trillion, right, that is how the math works out.  $4.5 trillion times 3 = $4.5 trillion plus $9 trillion.  I skipped the algebra part and just gave you the answer, but it looks like this:

3x=x+$9 trillion (subtract x from each side)

2x=$9 trillion (divide both sides by two)

x=$4.5 trillion

But, when I go to the US Treasury Department’s to the penny debt clock, it shows $11,043,588,980,678.90 or a tad more than $11 trillion.  Now clearly, you can see where I am going, Senator Judd “can’t do simple math” Gregg is saying that $9 trillion over the next 10 years will triple the debt, when clearly it won’t even double the debt.

I would have to say, that Senator Judd would do well to skip the math portion of “Are You Smarter than a Fifth Grader” because I can’t see him doing well.

-Josh

Mort Zuckerman advocates for smart stimulus

This weekend on the McLaughlin Group, Mort Zuckerman who is a billionaire, advocated extending unemployment insurance, food stamps, federal aid to states, and infrastructure spending.

These are all things I highlighted 10 months in post about Moody’s analysis, check out the graphic at the bottom of this post.

Remember he is a billionaire, he is a publisher, he wants Americans to be able to buy his products, and I interpret his comments to mean that he wants to focus on supporting American workers more than Wall Street and executives.

He also talked about the risk is not too much stimulus, but not enough, which echoes what Paul Krugman and others have said on this subject.

-Josh

Chris Wallace on auto industry bailout

This morning Chris Wallace in the talking table round of Fox News Sunday compared the airline industry and the auto industry and the extent of the relationship between the customer and the corporation.

In talking about the ariline industry, he talked about how you buy a ticket and they get you there and you are relationship is done (well unless it goes under in the middle of roundtrip).

In talking about the auto industry, he says you buy a GM vehicle and 6 months from now you wonder if a you can get your car serviced at a dealer.

I want to share a little secret with Chris Wallace, you can get your vehicle serviced at some place other than the dealer.  So that concern about the longer relationship with the automaker, well think outside the dealership!

-Josh

David Brooks double dips

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This cartoon dovetails very nicely, and timely (same day), with the point of this blog.  I don’t make any money doing this, and I don’t plan on it.  Granted if someone wanted to pay me, I would take it more seriously and blog more frequently.  I just appreciate that you are reading my thoughts.

While, I don’t get paid, David Brooks, columnist at the NY Times and weekly contributor on PBS’s Newshour does get paid.  Sometimes for saying the exact same thing, which must be sweet!

Here Brooks is talking in his Friday night “deabte” with Mark Shields.

DAVID BROOKS: And they’re free from the corporate cultures, and they’re doing OK, which is not to say that losing Detroit as it exists will not be a cataclysm.

But my basic philosophy — and I think it’s the philosophy that’s been the tradition of American politics of both left and right — is that we have this creative destructive system. Companies rise, companies fall.

We protect workers. We give them a safety net. We give them unemployment insurance, in theory, and I hope we give them health care security in the near future. But we don’t mess up with that creative destructive process.

We don’t get the government in the way of that process, preserving failing companies, because if you do that, you will get — every CEO in America will be saying, “Hey, you helped out those guys. Circuit City, I matter. I’m a newspaper. I matter. Help me out, too.”

And we’ve already got — this has been a boom time for lobbyists already in Washington now, and they’re all lining up to get all this money.

Same day this was his column in the NYTimes,

Over time, American government built a bigger safety net so workers could survive the vicissitudes of this creative destruction — with unemployment insurance and soon, one hopes, health care security. But the government has generally not interfered in the dynamic process itself, which is the source of the country’s prosperity.

But this, apparently, is about to change. Democrats from Barack Obama to Nancy Pelosi want to grant immortality to General Motors, Chrysler and Ford. They have decided to follow an earlier $25 billion loan with a $50 billion bailout, which would inevitably be followed by more billions later, because if these companies are not permitted to go bankrupt now, they never will be.

This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

I acknowledge that it is pressing issue inside the Beltway and as such he felt the need to write about it, and that Jim Lehrer asked about it.  And heck, if I think I come up with a clever frame, I will beat it like a dead horse.  But he is getting paid to say the same thing that he wrote, I for one would ask for a discount when he is double dipping.

I really think we are going to hold Brooks to his enthusiasm for health security for workers.  I am sure he might wiggle out based on ideological differences over how it is structured.  Don’t worry, I am sure his column on the topic will be repeated on the Newshour.

-Josh

McCain on corporate taxes

He is talking about CEO of various corporations who could go to Ireland which has a lower tax rate, and why don’t they go there.  That is a fair question, why don’t they if it would lower their taxes?  Everyone he listed is still in the US with its supposedly too high corporate tax rate.

-Josh

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