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Health Care & Environment
02.22 Report: Climate Denier to Lead White House Climate Panel [“Stupid is as stupid does.” –Forrest Gump]
02.22 The Uninhabitable Earth [Lots more important than all other problems put together]
02.16 Toxic black snow covers Siberian coalmining region [0:49 video; If its killing us, stop doing it]
02.16 Renewable energy will be world's main power source by 2040, says BP [But in America's capitalistic bubble, bribed-to-be-biased media and government defy reality]
02.16 What the pesticides in our urine tell us about organic food [What does inaction tell us about capitalism and our government?]
02.14 Exposure to Glyphosate-Based Herbicides and Risk for Non-Hodgkin Lymphoma: A Meta-Analysis and Supporting Evidence [If its killing us, make it illegal]
02.14 To avoid environmental catastrophe, everything must change [Consider why this headline is laughable or confusing to many, if not most, Americans...]02.13 Study Shows Toxic Pesticide Levels in Families Dropped by 60% After One-Week Organic Diet [2:10 video; Produce and canned vegetables laced with toxic chemicals—from fertilizers and herbicides, too—must be quickly phased out to use safe organic alternatives]
News Media Matters
US Politics, Policy & 'Culture'
02.20 ‘Sustained and ongoing’ disinformation assault targets Dem presidential candidates [If you can sense them, block them!]
02.20 Despite the slaughter in Yemen, Britain is still chasing arms sales [and the Great-Again-America is too...Capitalism without morality is horrible]
Economics & Corrupting-Capitalism
International & FuturismSanders Has an Advantage, and It’s Not [Just] About Economics
02.22 When multilateralism crumbles, so does our rules-based order [this enables easier corruption by banks and oligarchs and may result in complete societal breakdown, chaos and war]
02.22 Trump has turned foreign aid into shabby political theatre [Psychopaths are a sub-human species without empathy or morals.]
02.21 John Oliver Compares Brexit ‘Disaster’ to Will Smith’s Genie in Live-Action ‘Aladdin’ (Video) [21:26 video; we’re approaching an Idiocracy-type of society, where stupidity is “normal”]
02.20 House report lays bare White House feud over Saudi nuclear push [Its hard to keep up with all the criminal crap going on...]
Reagan’s Way to Pay for Health Care
Returning to an equal-tax policy—taxing long-term capital gains at the same rate as taxes on earned income—could nearly pay for the health care bill all by itself.
"Afiscal Frankenstein”; so said Rep. Paul Ryan (R-WI) about the health care bill just passed by the Congress. Soulmate Republicans echoed his warning, predicting budgetary doom.
But GOP legislators who cry fiscal wolf are twice trapped. For eight years, they aided and abetted as President Bush turned a budget surplus into a $1.2 trillion deficit. Worse, an inconvenient truth has inconveniently turned up: a tax policy passed by right-wing icon Ronald Reagan could pay for Barack Obama’s health care reform.
The policy is equal taxes on income from wealth and income from work, and it was a key part of Reagan’s Tax Reform Act of 1986. The Act raised the tax on long term capital gains and set the rate the same as that on earned income.
Returning to an equal-tax policy could nearly pay for the health care bill. This simple fact was buried in the 2008 capital gains data released early this month by the Internal Revenue Service. Here are the numbers from a Bloomberg report:
“The [IRS] data show that 11.2 million tax returns out of 142.4 million filed last year reported $447 billion from capital gains. Most of that income, $363.3 billion, was earned by 964,160 households reporting overall income of $250,000 or more.” That $447 billion in gains, the article noted, was down 40 percent from the $749 billion racked up in 2007.
Now for some tax arithmetic. At the current 15 percent levy on long-term gains, the Treasury would have realized $67 billion on the gains for 2008. By comparison, if taxes had been paid at the top ordinary income rates of 33 percent and 35 percent, the Treasury’s take would have risen to more than $150 billion. The difference between the two figures is $83 billion—not far from the new Congressional Budget Office estimate of $94 billion a year for the health care bill. Using the IRS’s gains figure for 2007, and performing the same exercise, the difference would have approached $150 billion.
To be sure, the IRS figures do not indicate what portion of the reported capital gains was long-term (taxed at 15 percent) or short-term (taxed the same as other income). Nonetheless, especially for Blue Dog Democrats and other fiscal hawks, the message is compelling: look hard at Reagan’s tax equity policy.
The Tax Code was taken in the opposite direction long ago. President Clinton lowered the rate on long-term gains to 20 percent. President Bush cut it to 15 percent, little more than half what middle-class Americans pay on their wages. The Bush tax cuts are due to expire the end of this year, returning the capital gains rate to 20 percent. In addition—with fiscal strain ahead, and with Reagan guarding his back—President Obama should map out our return to the equal-tax path.
You can see how Reagan got there by looking into the reason that’s always given for low capital gains taxes—the claim that buying stocks drives the economy, growing new businesses and new jobs. Nice try, but The Gipper saw through it.
Only a trace amount of all the trading on Wall Street grows anything. Small companies with big dreams raise seed money through initial public offerings (IPOs) and secondary offerings. These investments deserve a bigger tax break than they get now; there’s a strong case for making them tax-free. All other stock market gains should be taxed the same as wages (which they were, back when).
Doing so again would raise the cry that the rich were being hosed to pay for health care. On the contrary: tax equity penalizes nobody—on top of which, America’s taxpayers will never recover the hundreds of billions in restored tax breaks that Reagan, citing fairness, tried to end. How to pay for health care reform? It could be as simple as once more levying equal taxes on capital gains and other income. It’s only fair (and Reaganesque).
Copyright 2010 Gerald E. Scorse. Gerald E. Scorse helped pass a bill that tightens the rules for reporting capital gains.* He is a member of Responsible Wealth, an advocacy group for economic fairness.
*”The basis reporting legislation follows years of hard work by Prof. Jay Soled of Rutgers University, Prof. Joseph M. Dodge of Florida State University, and more recently...Gerald E. Scorse, who read about the work of the two professors and decided to make this reform his cause.” – Excerpt from David Cay Johnston’s "Tax Notes" column of 10/13/2008.
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This story was published in the Baltimore Chronicle on April 25, 2010.