Black People : How the Tax cuts for the Rich will effect the African American community

Discussion in 'Black People Open Forum' started by Ankhur, Dec 21, 2010.

  1. Ankhur

    Ankhur Well-Known Member MEMBER

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    Dr. Maya RockeymooreCo-editor of Strengthening Communities: Social Insurance in a Diverse America

    Posted: December 13, 2010 09:30 AM

    What People of Color Should Know About Tax Cut and Deficit Reduction Proposals


    A lot has been said about the proposed tax giveaway to the wealthiest Americans and the austerity measures recommended by President Obama's deficit commission. However, an analysis of the impact that both proposals would have on black and brown Americans has been missing from the conversation.

    U.S. Census Bureau projections show that the nation is expected to become majority-minority by the year 2042. And, although Census figures indicate that people of color will comprise about 42 percent of the elderly population by 2050, they are likely to become a majority of older adults by the year 2070.

    What has not been made clear to date is that the nation's changing demographics means that today's children of color will predominantly be on the hook for paying for the profligate spending and poorly designed policies of the past 12 years. And that proposals to rein in the deficit by cutting social programs, particularly Social Security, would be put into place just as these children reach maturity. This generational cost shift should be of serious concern to Latinos and African, Asian, and Native Americans for they have benefitted least from the expenditures that caused the deficits and their children are not well positioned to shoulder their costs in the future.

    Federal Reserve data from 2007 shows that for every dollar owned by the average white family, the average Latino family owns 12 cents and the average African-American family owns only ten cents. Given the disproportionate impact of the recession on black and Latino families, this racial wealth disparity is expected to widen in the future, thus further undercutting the economic security of children of the recession generation.

    Since our nation's leaders have decided to shift the costs of today's fiscal decisions to our children, then we owe it to our children to evaluate the various tax proposals in terms of the value they bring to the economy and to families in communities hardest hit by the recession. Experts agree that tax breaks for the wealthiest individuals and estates do nothing to create jobs or otherwise stimulate the economy. So, it should be clear that these tax giveaways are not only highly inefficient they are a boondoggle for the rich at the expense of those with modest means.

    Furthermore, as has been explained by others, the package's payroll tax "holiday" provision is a booby trap for all middle and working class Americans but especially for people of color. This proposal to offer Americans a two percent reduction in their payroll taxes for the next two years is seemingly innocuous until you understand that the payroll tax is the only source of dedicated revenue for Social Security. Therefore, a "holiday" from paying this tax would undercut the program's finances while strengthening the arguments of critics who cite Social Security's long-term financial challenges as a reason for cutting or eliminating the program. Any weakening of Social Security would devastate communities of color who are heavily reliant on Social Security's retirement, disability, and survivor's benefits.
    We must also be wary of the deficit reduction commission's proposal to "fix" Social Security in part by increasing the early and regular retirement ages for this proposal also has the effect of shifting the cost burden onto people of color in a way that should be considered discriminatory in its scope and application. The Government Accountability Office issued a report that underscores how raising the early retirement age would create financial hardships for people, particularly African Americans and Hispanics, who cannot continue to work due to poor health or physically demanding work.

    There are additional negative consequences associated with this approach. As I have argued elsewhere, an increase in the retirement age is a steep benefit cut and it represents a transfer of Social Security wealth from those with shorter life expectancies--a group comprised disproportionately of the lower income, blue collar workers, and people of color--to those with higher life expectancies--a group comprised overwhelmingly of whites, white-collar workers, and wealthier Americans. Ironically, the nation's shifting demographics are not likely to greatly change this equation since children of color are disproportionately affected by the childhood obesity epidemic which, many experts agree, is likely to cause them to live shorter and sicker lives than their parents.

    To be sure, advocates for the commission proposals and the tax cuts would say that I have unfairly maligned their proposals. Deficit commission members, for example, may cite their proposed hardship exemption for people who cannot work past the retirement age as proof that they have accommodated the needs of vulnerable populations. If the hardship exemption is anything like qualifying for disability, it would likely discriminate against those without lawyers, the poor and people of color and it would become a way to control program costs instead of providing cover for those most in need. It also fails to address the racial transfer of wealth issue.
    Similarly, those in favor of the tax cut package as negotiated by the president and the Senate would point to the provisions for modest income households, such as the unemployment insurance extension, refundable tax credit for the low-income, college affordability credit, and refundable child tax credit as proof that they too have accommodated the vulnerable. However, these important provisions are a relatively smaller part of a total package that is heavily tilted towards helping privileged Americans.


    www.huffingtonpost.com
     
  2. Clyde C Coger Jr

    Clyde C Coger Jr going above and beyond PREMIUM MEMBER

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    In the Spirit of Sankofa and Peace and Love!




    Brother, this is done quite often by you, to post a general link to the source of information, but not to the actual story you've cited here at Destee.com. In this manner, you are providing advertisement for the Huffington Post, while readers here at Destee.com must put on a futile search, sometimes we find the story, most times we don't.

    One day brother, the Mods and Admins will catch on to what you've been doing now for a period of time. This is not to get you in trouble, but to provide our readers with instant, repeat instant review of source information...smh, and it shows respect for the Rules of Destee.com.

    You have dodged a bullet recently, how many lives do you have...smh,

     
  3. Ankhur

    Ankhur Well-Known Member MEMBER

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    1 Are you a moderator

    2 Do you think that the moderators have not read my statemnt to you that I am on mnstv2, and unable to post direct links

    3 Are you aware that this was explained to Destee?

    4 So you are saying you do not care about the effect of this bill on the future of the black community?
     
  4. Clyde C Coger Jr

    Clyde C Coger Jr going above and beyond PREMIUM MEMBER

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    In the Spirit of Sankofa and Peace and Love!




    .......Sir, were where you when I posted this thread:

    Millionaires to Obama: Tax us
    http://destee.com/forums/showthread.php?t=66903

    Better still, why didn't you post to it:)

     
  5. Ankhur

    Ankhur Well-Known Member MEMBER

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    Social inequality in America: Tax law will overwhelmingly benefit the wealthy


    By Tom Eley

    Global Research, December 19, 2010
    World Socialist Web Site - 2010-12-18


    The claim by President Obama and Congressional Democrats that the new tax law is an economic stimulus that will benefit working class people is a lie. It is a law tailored to benefit the extremely wealthy.

    At a cost of $150 billion over the next two years, it maintains George W. Bush’s reduction in the high-end income tax rate―for those taking home over $250,000 for married couples and $200,000 for individuals―at 35 percent.

    According to the Center for Tax Justice, the wealthiest one percent of taxpayers will pocket almost $77,000 per year more as a result of the deal. The top 1 percent would take home over 25 percent of the total tax cut; the bottom 60 percent would share less than that, about 20 percent.

    Despite White House protestations to the contrary, there is no reason to believe that Democrats will reverse these tax cuts in two years’ time, when Republicans will control the House of Representatives. Over the next ten years, the perpetuation of the high-end income tax rate reduction will cost $700 billion, according to the Congressional Budget Office, far more than was allocated for infrastructure improvements in Obama’s 2009 stimulus package, the American Recovery and Reinvestment Act.

    The law also includes a number of measures designed to secure the hereditary prerogative of what is, in all but name, an aristocracy. It increases the size of fortunes exempt from the estate tax to $10 million for couples and $5 million for individuals. For fortunes beyond those thresholds, the law will reduce the tax rate to 35 percent.

    The rate was going to reset to 55 percent after this current year’s “holiday” in which the rich could pass on their estates without any taxation. To further sweeten the deal for the rich, the bill includes a measure that will allow multi-million dollar estates settled in 2011 for deaths taking place in 2010 to take advantage of the zero percent tax rate.

    The law also allows the $5 million exemption to apply to gifts and “generation-skipping investments,” making it “much easier for wealthy taxpayers to make gifts during life to grandchildren," according to estate attorney Beth Kaufman of Caplin and Drysdale in a comment to the Wall Street Journal.

    The package also perpetuates for two years the all-time low tax rate on capital gains and dividends at 15 percent, along with a number of additional tax write-offs for corporations.

    In an attempt to provide a degree of political cover for Obama and the Democrats, the bill includes a few measures that ostensibly benefit those outside of the richest one percent of the population.

    The law extends tax cuts introduced in the Bush years for middle and lower income Americans. The working population has realized a much smaller share of the overall tax cut, however, and the money withdrawn from the public coffers will be offset by cuts to social spending. For months the Democrats called for maintaining the tax cuts for all households except for the wealthiest, but have now made into law the Republican position.

    The law also extends funding for federal long-term unemployment benefits for millions of workers for another 13 months at a cost of $56 billion, about a third of the price of the two-year income tax give-away to the rich. Hundreds of thousands of workers have lost their benefits since the November 30 expiration of extended unemployment benefits. Repeatedly held hostage by the Republican opposition and Democratic indifference over the past year, extended federal benefits will almost certainly expire at the beginning of 2012 with Republican control of the House.

    The law also includes a one year Social Security tax cut, by which the payroll tax rate will be reduced from 6.2 percent to 4.2 percent on the first $106,800 of a worker’s wages.

    According to an analysis by the Tax Policy Center, 51 million households―a third of the total―will be worse off as a result of the tax package. This is because for those with the greatest need--couples making less than $40,000 or individuals making less than $20,000―the Social Security tax break will not offset the tax break it is replacing, the Making Work Pay credit, resulting in an average household loss of $210 per year for 45 million households.

    Another 6 million households will loser their Making Work Pay credit and will receive nothing in compensation through the Obama-Republican plan because they are state or local government employees who do not contribute to Social Security.

    Perhaps most significantly, cutting Social Security payroll taxes sets the precedent for further attacks on the federal retirement program. The bill marks the first time in the 75-year history of the program that Congress has intervened to cut the payroll tax rate, and there is a campaign already underway to lengthen the tax “holiday.” This would have the effect of accelerating Social Security’s insolvency. The program is currently not predicted to become insolvent for several decades.



    www.globalresearch.ca
     
  6. Ankhur

    Ankhur Well-Known Member MEMBER

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    Published on Thursday, December 23, 2010 by In These Times
    The ‘Repo-Demo’ Party’s Three Phase Austerity Plan for America
    Get ready for more of the same failed "job creation" policies, enacted by an increasingly unified political eilte
    by Jack Rasmus

    The Bush tax cuts are now extended. What cost $3.4 trillion over the past decade, 80% of which accrued to the wealthiest households and U.S. corporations, will now cost another $802 billion over the next two years and a projected $4 trillion over the coming decade.

    But the Bush tax cut extension just passed by a political elite increasingly united on economic policy—a ‘Repo-Demo’ Party dominated by corporate interests—is only the first of three phases in a new policy offensive designed to protect the incomes of the wealthy and corporate America for another decade, to be paid for directly by middle- and working-class America. Together, the three phases represent the emerging U.S. variant of a general austerity strategy, similar in objective but different in content to other austerity programs now emerging as well in the Eurozone, Japan and elsewhere.

    President Obama's deal with Republican leaders, signed into law December 17, 2010, extended tax cuts for the wealthiest Americans for another two years. (Photo by ALEX WONG/Getty Images)Phase two: draconian spending cuts

    The second phase will likely be implemented in the next three months, before the ceiling on the federal debt has to be lifted. It will take the form of massive spending cuts in the U.S. budget, targeting Social Security and Medicare in particular. (A parallel draconian slash in spending will occur at the state level, targeting Medicaid and education).

    Social Security has been a prime target since the Reagan years. Unable to cut it in the early 1980s, Reagan instead settled on a major increase in the payroll tax in 1984, creating a $2.5 trillion surplus over the last 25 years. However, that surplus was ‘borrowed’ every year by Congress to cover up in part U.S. budget deficits created annually since the 1980s to pay for war spending and tax cuts.

    All that remains of the surplus in the Social Security Trust Fund are government IOUs promising to replace the shortfall when necessary—a replacement we’ll never see in our lifetimes.

    In 2003, Bush II re-opened the attack on Social Security by trying to privatize it, but failed. Despite the accumulated surplus having been drained, Social Security was still annually producing a surplus and was thus financially too stable to convince the public it needed basic change. In contrast, today, as a result of a chronic three year long recession, there is no longer an annual surplus being created. Social Security is just breaking even.

    But implementing the pending payroll tax cuts—part of Phase One—will finally put Social Security in the red, creating for the first time the net annual losses conservatives and corporate America have always needed to push a major gutting of the program. The payroll tax cut is thus the first move in what will prove a general attack on social security that will gain momentum in the coming months. Reagan conservatives have argued it would first be necessary to ‘starve the beast’ in order to dismantle it. For the first time, that scenario will exist.

    Phase three: revising tax code to help the wealthy

    Following the imminent draconian cuts in spending and Social Security-Medicare-Medicaid-Education about to take place in 2011, which lie at the heart of the second phase, the third phase of the new austerity strategy will follow in the summer of 2012. It will take the form of a fundamental revision of the U.S. tax code.

    As part of this general revision, the Bush tax cuts will likely be made permanent for the rest of the decade to come. In addition, personal income tax brackets for the wealthiest households will be reduced to no more than three, possibly two, with a top rate for the wealthy or no more than 28%, representing a return to Reagan years.

    For corporations, depreciation write-offs, a de facto investment tax credit for business, will be accelerated to full deductions in the first year—a measure already just enacted for small business this year. For multinational corporations, the foreign profits tax will be restructured to their advantage. The corporate tax rate will be significantly reduced or even phased out entirely. Not least, the new 2% cut in payroll taxes could also be extended, forcing yet another round of further reductions in Social Security and Medicare benefits and still higher co-pays for retirees.

    To pay for the tax code rewrite and even more concessions to wealthy households, investors and corporations, the middle class will pay more. Adjustments to the Alternative Minimum Tax, AMT, for the middle class will be phased out. And the mortgage interest tax credit will be eliminated in stages as well.

    Same wine in same bottles, with new label

    Obama and the ‘Repo Demo’ Party have launched a PR offensive in the wake of the Bush tax cut extensions, proclaiming that the Bush tax cuts plus unemployment insurance extension plus payroll tax cut together amount to a ‘Stimulus 2’ package that will result in more economic growth and new jobs.

    This is the same old tired song of the Bush administration. In fact, every one of the four major Bush tax cuts passed between 2001-04 was officially called ‘job creation’ bills.

    www.commondreams.org
     
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