Nel's New Day

April 15, 2015

Tax Day: Bad, Good, Ugly

Filed under: Budget — trp2011 @ 9:11 PM
Tags: , , , , ,

On Tax Day 2015, far fewer people waiting in line because of electronic filing. Wealthy people increasingly pay less and less since the 90-percent tax rate for the richest filers in the 1950s. Every time that the GOP controls Congress, the wealthy benefit from additional tax breaks, and corporations get more subsidies. Every year, the United States has less and less investment funds for the infrastructure, education, climate change, job creation, etc. Corporations have dropped their share of federal revenues by almost three-fourths since the almost 40 percent in 1943 to only 11 percent now. The less that the wealthy and corporations pay, the more the bottom 80 to 90 percent of the people have to shell out.

The corporate tax rate may be 35 percent, but their actual payment is about 13 percent, less than a large percentage of people pay. Some companies pay no taxes. FedEx made profits of $5 billion between 2010 to 2012 and received $10 billion in federal contracts between 2006 and 2012, yet paid no income taxes. With billions of dollars in profit, Verizon and Pfizer paid no taxes while receiving billions of federal tax refunds. In 2013, corporate tax breaks cost U.S. taxpayers $176 billion in revenue, $1,328 per household. These corporate tax breaks have more than doubled since 1993. More is spent on corporate welfare than traditional welfare. Tax breaks, 17 percent of benefits going to the top 1 percent of households, are equal to more than the entire U.S. discretionary budget each year. The revenue loss of over $1 trillion each year is over 1.6 times the 2013 budget deficit.

estate tax

Instead of trying to close loopholes on Tax day, House Republicans are arranging a gift for the top 0.02 percent of U.S. households. Calling the estate tax the “death tax,” GOP members of the House announced a vote to repeal the tax on 4,700 estates out of 2.6 million deaths—one-fifth of one percent. The median household net worth was only $81,200 in 2014. Instead of paying the 40-percent rate, this 0.02 percent owe a rate of only 16.6 percent estate tax, because it applies to only an estate’s value of over $5.43 million. No taxes are required for the first $5.43 million.

If the law isn’t changed, the estate tax will bring in $246 billion in the next decade. Less than 1 percent of federal revenue, “it is significantly more than the federal government will spend on the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Environmental Protection Agency combined,” according to the Center on Budget and Policy Priorities. A common complaint is that the estate tax hurts small and family businesses, including farms. In 2013, the 20 farms and businesses worth under $5 million paid a tax rate of 4.9 percent.

While House Republicans care for the wealthy, they have a budget to eliminate food stamps for 11 million people through a 34-percent reduction. That $125 billion cut from the Supplemental Nutritional Assistance Program (SNAP) will cost the economy 286,000 jobs. As families have less to spend on food, that reduced purchasing power ripples through the economy, translating into job losses not just in grocery and retail stores but also in trucking, warehousing, food manufacturing, farming, and other industries. Money for the wealthy does nothing for job creation, but a woman testifying about her past experience receiving food stamps said, “Without this program, I wouldn’t have been able to start my new career.” Just one week of the proposed estate tax cuts could feed more than 337,000 children for a year. The GOP answer to helping hungry people is charity. I suggest leaving both laws the way they are and create a GoFundMe collection for the top 0.02 percent who pay estate taxes.

This year’s Tax Day is memorable because Congress passed a sane law to end to the annual need for Medicare “doc fixes”–and in a grandly bipartisan manner. Only eight of 100 Senators voted against the bill, two of them the declared GOP presidential candidates Ted Cruz and Marco Rubio. The House passed the bill by 392-37. The bill got out of Congress just hours before Medicare providers would have had a 21-percent cut in payments.

The new law also funds the Children’s Health Insurance Program and community health centers for two more years. Republican Senators also failed to get a “repeal Obamacare” amendment attached to the bill. Senate Majority Leader Mitch McConnell said the bill’s passage is a sign that Congress is “back to work” under Republican leadership. And it took them only 105 days. (More details about the new law here.)

Sen. Bernie Sanders (I-VT) spent his time on Tax Day introducing a bill to recoup $590 billion from 83 companies using offshore tax havens to avoid paying taxes. Senator Elizabeth Warren called on lawmakers to break up big banks and change tax rules that benefit Wall Street.

Abraham Lincoln died 150 years ago today. He is the “Republican” who the GOP drags out into the media to show how wonderful today’s GOP members are. Here is the tweet from the GOP to commemorate his death:

abraham lincoln

And that’s Tax Day 2015.

September 29, 2012

Edie Windsor Fights for LGBT Rights

Last week I had the opportunity to see Edie and Thea: A Very Long Engagement and meet one of the subjects of the film, Edith Windsor. Now 83, Edie met her beloved Thea Spyer in 1965. They got engaged in 1967 and lived together in Greenwich Village until Thea’s death in 2009. The film shows them through the best of times and the most difficult. Thea was diagnosed with multiple sclerosis in 1977, and Edie spent much of the next 30 years caring for her as her health deteriorated.

When Thea was told in 2007 that she might have only a year to live, the couple decided to stop waiting for legalized marriage in New York and settling on a Canadian civil ceremony. Filmmakers Susan Muska and Greta Olafsdottir directed this intimate documentary about two women who stayed in love and maintained their relationship despite legal, societal, and health barriers.

The film touched me even more, perhaps, because my partner and I have been together over 43 years, meeting and beginning our relationship just two years after Edie and Thea did. We experienced discrimination and struggles throughout the same four decades until the more liberal times of the 21st century that still refuses us legalized federal marriage benefits.

Receiving little attention from the world outside the LGBT community, the film might not have gained greater visibility if the U.S. government had not taxed Edie a whopping $363,000 in estate taxes after Thea’s death. The amount of taxes makes the couple sound wealthy; they weren’t. In the 1960s they bought a home in Manhattan and a cottage in the Hamptons, the latter for only $35,000. Inflation increased the value of Edie’s home, drastically increasing the “death tax.” The only reason that she had to pay this federal estate tax is that she and Thea weren’t married in the United States; they couldn’t get married because federal law didn’t allow them to marry. Legally married husbands and wives would not have to pay any of this money.

So Edie sued. In June, a federal district judge in New York decided in Edie’s favor, ruling that section three of DOMA unconstitutionally discriminates against married same-sex couples. Over 18 months ago, President Obama and Attorney General Eric Holder had determined that DOMA was unconstitutional and that they would no longer defend this misguided Congressional act in court. Yet Speaker of the House John Boehner (R-OH) begs to differ; under his guidance, a House committee with a Republican majority has used tax-payer money to employed Paul Clement for a minimum of $1.5 million to defend DOMA and prevent marriage equality.

Two days ago the 2nd Circuit Court of Appeals heard arguments in the case. In his opening statements, Clement admitted that he didn’t have a good argument: “There’s no way to preserve the definition of marriage [as one man and one woman] other than by preserving the definition. It becomes somewhat circular.”

Clement tried to support DOMA with 1972’s Baker v. Nelson, in which two men tried to strike down Minnesota’s ban on same-sex marriage. In this case, the Supreme Court let stand a state law that limited marriage to different sexes, and Clement argued that the appeals court should abide by that precedent in upholding DOMA. Baker was a summary decision without written briefs and oral argument and contained no explanation other than that the constitutional claim of Baker and McConnell did not raise a “substantial federal question.”

Clement acknowledged that times may have changed during the past 40 years but added, “The only thing that hasn’t changed is this court’s obligation to follow Supreme Court precedent.” There is precedent for overturning past Supreme Court decisions during that time. For example, during the 40 years since Baker, 1986’s Bowers v. Hardwick ruling that upheld laws against sodomy was overturned in 2003 by Lawrence v. Texas. Also the Roberts court does not have a reputation “to follow Supreme Court precedent.”

In his rebuttal at the end of the oral arguments, Clements said that saving money is a good reason to preserve DOMA and Congress was “preserving the scope of the benefits programs the way they’ve always been.” He also went back to 1885’s Murphy v. Ramsay that required Utah to declare marriage between a man and a woman as a provision of statehood.

In its 1885 ruling, the Supreme Court wrote that “no legislation can be supposed more wholesome and necessary in the founding of a free, self-governing commonwealth … than that which seeks to establish it on the basis of the idea of the family [is] consisting in and springing from the union for life of one man and one woman in the holy estate of matrimony.” That definition of marriage is “the sure foundation of all that is stable and noble in our civilization; the best guaranty of that reverent morality which is the source of all beneficent progress in social and political improvement.”

Murphy relied on the Dred Scott case, that decided in 1857 that slaves are not citizens of the United States, to reference the “traditional understanding” of marriage.

To summarize Clement’s arguments to preserve DOMA:

  • Supreme Court rulings should not be overturned, no matter how times change;
  • The definition of marriage comes from rulings that prevented polygamy and ensured slavery;
  • All matrimony is “holy” and not civil;
  • Saving money is a good reason to deny rights to LGBT people.

Louisiana’s governor Bobby Jindal has an even stronger reason for opposing marriage equality. He thinks that legalizing same-sex marriage will overturn the Second Amendment: “The reality is today we’re talking about redefining marriage. If the court is allowed to impose and write their own laws and their own views, and overturn those that are done by our duly-elected representatives, what’s to stop today’s [indistinguishable]. Tomorrow it may be property rights, maybe it’s Second Amendment rights. We have got to take a stand against judicial activism.”

While the government can’t prove that it will lose money if marriage equality is legalized, LGBT people can prove that they lose money without it. After a gay, lesbian or bisexual senior dies, the surviving partner is denied Social Security survivor benefits, taxed heavily on any retirement plans inherited from their partners that legal husbands or wives don’t pay, and charged estate tax on inheriting a home even if it is jointly owned.

Surviving partners will probably be forced out of their homes if their names are not on the title, a situation that would not occur if they were legally married. The same thing happens if partners enter nursing homes: federal Medicaid law permits a married spouse to remain in the couple’s home when a husband or wife enters a nursing home but does not grant unmarried couples the same right. These are only a few of the 1000+ federal laws that discriminate against the LGBT community.

Despite a serious heart condition and her grief after the loss of Thea, Edie exudes a positive attitude, displaying an amazing joy for life and enthusiasm for people. Meeting her will continue to be one of the highlights of my life. Thank you for fighting for our rights, Edie!

Civil Rights Advocacy

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. -- Margaret Mead

AGR Daily 60 Second News

Transformational News; What Works For Seven Future Generations Without Causing Harm?

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Jennifer Hofmann

Inspiration for soul-divers, seekers, and activists.

Occupy Democrats

Progressive political commentary/book reviews for youth and adults

V e t P o l i t i c s

politics from a liberal veteran's perspective

Margaret and Helen

Best Friends for Sixty Years and Counting...

GLBT News

Official news outlet for the Gay, Lesbian, Bisexual, and Transgender Round Table of ALA

The Extinction Protocol

Geologic and Earthchange News events

Central Oregon Coast NOW

The Central Oregon Coast Chapter of the National Organization for Women (NOW)

Social Justice For All

Working towards global equity and equality

Over the Rainbow Books

A Book List from Gay, Lesbian, Bisexual, and Transgender Round Table of the American Library Association

The WordPress.com Blog

The latest news on WordPress.com and the WordPress community.

%d bloggers like this: