Berkley Bedell Blog

Revenue Matters, Chapter 7-The Tea Party and the Contract for the American Dream

TOGETHER WE CAN follow the example of the Tea Party, and take back the government for the people.

David and Charles Koch are two of the nation’s wealthiest business persons. They did not become that wealthy by making stupid decisions.

One of their best investments, ever, was the funding of the start of a new movement called the Tea Party. The Kochs, or someone advising them, recognized that a significant proportion of our population is upset with what they see happening in our nation and would like to have an opportunity to demonstrate their frustration.

So the Koch brothers helped to fund the beginning of this movement of frustrated individuals, called The Tea Party.

It is not surprising that many of the non-wealthy 90 percent of the people would be upset and frustrated. With the top 10 percent of our people and Corporate America owning more and more of the total wealth of our nation, while everyone else sees their incomes stagnate or declining it is understandable that people are upset. Thank God they are! The last thing we need in America is a complacent population.

As those Tea Party members looked at whom to blame, there was only one obvious culprit - the federal government. So the simple answer was, to cut back the federal government by reducing government spending - and reducing taxes.

By enrolling a large number of frustrated voters, the Tea Party had a significant influence in the most recent election and it now is a major influence in our government, particularly the Republican Party. Their power is intoxicating.

As is so frequently true, their simple answer may appear to be the best answer for the Koch brothers, but it is exactly the wrong answer for 90 percent of the people.

The best thing for the Koch brothers, and the rest of the wealthy and Corporate America may appear to be to continue to cut taxes to the rich, and cut services for the people - exactly what the Tea Party advocates. The worst thing for the other 90 percent is to continue to cut services to the people, and continue to cut taxes for the rich.

The Tea Party has shown us what can be done when the people get sufficiently upset. It is up to the rest of the nation to learn from their example, and take back the government so that it serves the 90 percent of the people that combined have less than 20% of the nation’s financial wealth and are struggling.

Those of us who care about our country, need to follow the example of the Tea Party. We need to organize and make our voices heard.

Since I started to write this book, a new organization has sprung up to challenge the Tea Party proposals. It is called the Contract for the American Dream. It takes its name from a speech by Reverend Martin Luther King, Jr. during the 1963 march on Washington, when he said, “I have a dream. It is a dream deeply rooted in the American Dream.” The movement already boasts over a quarter of a million signers, and is growing every day. Here is the movement’s statement:

“We the American people promise to defend and advance a simple ideal: liberty and justice for all. Americans who are willing to work hard and play by the rules should be able to find a decent job, get a good home in a strong community, retire with dignity, and give their kids a better life. Every one of us - rich, poor, or in-between, regardless of skin color or birthplace, no matter their sexual orientation or gender - has the right to life, liberty, and the pursuit of happiness. That is our covenant, our compact, our contract with one another. It is a promise we can fulfill - but only by working together.

"Today, the American Dream is under threat. Our veterans are coming home to few jobs and little hope on the home front. Our young people are graduating off a cliff, burdened by heavy debt, into the worst job market in half a century. The big banks that American tax-payers bailed out won’t cut homeowners a break. Our firefighters, nurses, cops, and teachers - America’s everyday heroes - are being thrown out onto the street.

"We believe:

"AMERICA IS NOT BROKE. America is rich - still the wealthiest nation ever. But too many at the top are grabbing the gains. No person or corporation should be allowed to take from America while giving little or nothing back. The super-rich who got tax breaks and bailouts should now pay full taxes - and help create jobs here not overseas. Those who do well in America should do well by America.

"AMERICANS NEED JOBS, NOT CUTS. Many of our best workers are sitting idle while the work of rebuilding America goes undone. Together, we must rebuild our country, reinvest in our people and jump start the industries of the future. Millions of jobless

"Americans would love the opportunity to become working, tax-paying members of their communities again. We have a job crisis, not a deficit crisis.

"To produce this Contract for the American dream, 131,203 Americans came together online and in their communities. We wrote and rated 25,904 ideas. Together, we identified the 10 most critical steps to get our economy back on track and restore the American Dream.

 10 CRITICAL STEPS TO GET OUR ECONOMY BACK ON TRACK

            1.    Invest in America’s infrastructure.

            2.    Create 21^st Century Energy Jobs.                

            3.    Invest in public education.

            4.    Offer Medicare for all.

            5.    Make Work Pay.

            6.    Secure Social Security.    

            7.    Return to fairer tax rates.

            8.    End the wars and invest at home.

            9.    Tax Wall Street speculation.

           10.  Strengthen Democracy”

This is the type of movement by the people that I had hoped would develop. I have signed up.

We now have an alternative to the Tea Party. It is an opportunity we needed. Instead of cutting back as is proposed by the Tea Party, we now have an organization that proposes that we charge forward and build the nation that we have always dreamed of.

When the Tea Party and their Republican friends tell us we can-not tax the wealthy and corporate America to return to the Great Prosperity of the past our answer must be a loud and clear. TOGETHER WE CAN charge forward with a Contract for the American Dream!

Revenue Matters, Chapter 6-American Legislative Exchange Council

TOGETHER WE CAN  elect legislators that represent we the people.

If you are not wealthy, or a legislator, you probably are not aware of the many right wing organizations partly funded by Charles and David Koch, two of the wealthiest industrialists in our nation. They include the Cato Institute, a libertarian think tank; Americans for Prosperity Foundation; Freedom Works, which was largely responsible for the creation of the Tea Party; and the National Taxpayers Union.

Eclipsing all of those right wing organizations is the American Legislative Exchange Council (ALEC) that in recent years has reported about $6.5 million in annual revenues. ALEC’s members include corporations, trade associations, think tanks and nearly one third (about 2,000) of the nation’s state legislators (virtually all Republicans). ALEC has two sections, “Public Sector” members (legislators) and “Private Sector” members (Corporations and special interest groups).

According to the group’s promotional material, ALEC’s mission is to “advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty, through a non-partisan public-private partnership of America’s state legislators, members of the private sector, the federal government and the general public.”

ALEC currently claims more than 250 corporations and special interest groups as private sector members. The organization refuses to make a complete list of these private members available to the public, but some of the known members include Exxon Mobil, the Corrections Corporation of America (Operates prisons for profit), AT&T, Pfizer Pharmaceuticals, Time Warner Cable, Comcast, Verizon, Wal-Mart, Phillip Morris International and Koch Industries, along with a host of right-wing think tanks and foundations.

ALEC has nine task forces: 1.Public Safety and Elections; 2.Civil Justice; 3.Education; 4.Energy; environment and agriculture; 5.Commerce; Insurance and Economic Development; 6.Telecommunications and Information Technology; 7.Health and Human Services; 8.Tax and Fiscal Policy and 9.International Relations. Each task force is composed of both legislators and private sector members. Each task force generates model legislation that is then passed on to member legislators for introduction in their home assemblies.

So we have legislators meeting with Pfizer and Philip Morris to fashion legislation that is then passed on to nearly one third of the nation’s state legislative members (about 2,000) for introduction in their state legislatures. If the provided figures are correct, (nearly one third of all legislators --nearly all Republicans) it would mean that over half of all Republican legislators are members of ALEC along with many of the giants of industry.

ALEC claims to have drafted 826 pieces of legislation that were introduced nationwide in 2009, with 115 of them passed into law. That means that an average of 2 pieces of legislation were enacted per state, that were formulated with the help of people representing firms like Exxon Mobile, AT&T, Pfizer, Wal-Mart, Philip Morris, and Koch Industries.

The Wisconsin effort to attack unions, and cut taxes to business and the wealthy has been front page news. What is not generally realized is that ALEC legislation, similar to that in Wisconsin has been introduced in Arizona, California, Illinois, Iowa, Indiana, Kansas, Maine, Maryland, Michigan, Minnesota, Missouri, North Carolina, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Rhode Island, Tennessee, Texas, Utah and Vermont.

This is not government of, by, and for the people!

As I point out in this book, I believe the wealthy and Corporate America are running our federal government, and our Supreme Court. It was a shock to me to learn that they are apparently also running our state legislatures using the Republican members of ALEC.

We have Republican appointed Supreme Court Justices ruling that corporations can give political contributions. We have Republican legislators meeting with corporations to fashion legislation favorable to those corporations. This is not the Republican party of previous times, and the Republicans with whom I served in the U.S. Congress.

TOGETHER WE CAN take back our state and federal governments and turn America around to again have a government of, by, and for the PEOPLE.

Revenue Matters, Chapter 5-The Taxpayer Protection Pledge

A disaster for our nation.

This may be one of the shortest chapters in this book, but it is one of the most important.  Every voter should be aware of what is in this chapter before they vote! The Taxpayer Protection Pledge makes the U.S. Congress unable to function in terms of addressing the problems that require Revenue—which is almost every function of government.

Not many people are aware of the influence of an organization called Americans for Tax Reform, or of their Taxpayer Protection Pledge—and the legislators who have signed it. This organization opposes all tax increases as a matter of principle, regardless of the situation. Their influence has expanded as corporations and the wealthy have become more powerful in controlling governmental policy with their political contributions.

IT IS VITAL THAT THE VOTERS BE AWARE OFTHIS PLEDGE, WHICH GUARANTEES THAT OUR CONGRESS WILL NOT ADDRESS OUR NATION’S PROBLEMS.

According to Americans for Tax Reform as of October 2011, 235 Congressional House Members (A majority of the House) and 41 Senators have signed a pledge not to raise any taxes, no matter what the situation. All but two in the House and 1 in the Senate are Republicans. Here is what the pledge is reported to say: “I (name here) pledge to the taxpayers of the (x) district of the state of (x) and to the American people that I will: 1. Oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses, and 2. Oppose any net reductions or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

This pledge commits those who signed such a pledge to refuse to increase taxes on corporations and those of us who can afford to pay higher taxes no matter what the circumstances. It prohibits Congress from closing any of the tax loopholes that enable General Electric to pay no federal income taxes.

To have over half the members of the House and 41 Senators sign such a pledge may please major corporations, and some of the wealthy, but it makes our federal government essentially non-functional and is a disaster for the people of our nation. As long as such a large number of members of Congress have signed such a pledge there is no hope of our nation charging forward to address our problems until we throw out those pledge signers, including the three Democrats, and replace them with legislators that represent the people, not just their wealthy and corporate campaign contributors.

WORDS CANNOT PROPERLY EXPRESS WHAT A DISASTER THIS IS FOR OUR NATION AND FOR THE PEOPLE!

Today, as is pointed out elsewhere in this book, billionaire Warren Buffet pays taxes at a lower rate than his secretary; many of the wealthy are even asking that their taxes be raised; high income individuals pay Social Security taxes at a lower rate than minimum wage earners; deductions enable some major corporations pay no in-come taxes; our taxes as a percent of GNP are lower than most all of the major industrial nations; our current taxes as a percent of GNP are the lowest in half a century; nearly 10% of our people cannot find a job; we are firing teachers, police, fire fighters, and other government employees because of a lack of revenue; our infrastructure is crumbling; and we need to switch over from fossil fuels to not-polluting energy. We cannot do the things that will take us out of our current economic meltdown without the revenue needed to do so—And those pledge signers have pledged not to do what has to be done to solve our unemployment problem, correct our deficit and bring back the Great Prosperity we once had.

At this time we face a major decision as to what type of nation we want to be. We can be a cut-back nation or a charge forward nation. As a democracy, it is up to us. If we want to end our partisan bickering and work together as we did in the past, it is imperative that we remove those who have signed this taxpayer’s protection pledge and replace them with legislators that recognize that REVENUE MATTERS and return us to government of, by, and for the people.

The 13 Republican members who are reported to have NOT signed the pledge as of October 2011 are these:

Six Republican House member non-signers: Richard Hanna, NY, Bob Woodall, GA., Rodd Russell Platts, PA., Bob Wittman, VA., Frank Wolf, VA,. And Kevin Yoder, KS.

Seven Republican Senate non-signers: Richard Lugar, IN., Charles Grassley IA., Olympia Snowe, ME, Susan Collins, ME., Thad Cochran, MS., John Barraso, WY., and John Hoeven, ND.

Three Democrats are reported to have signed: House members, Robert Andrews, NJ, Ben Chandler, KY, and Senator Ben Nelson, NE.

There is only one way to get back to a functional government that taxes corporations and the wealthy sufficiently to put our people back to work and to address our many problems. IN THE NEXT ELECTION VOTERS MUST KICK OUT THE THREE DEMOCRATS AND ALL THE REPUBLICANS THAT HAVE SIGNED THIS PLEDGE! Thank God we have a democracy where the people have a voice in who is in our government.

People have a choice. They can listen to the slick ads paid for by the political contributions of corporations and the wealthy and send back politicians that will sign pledges not to properly tax those who can afford it. Or we can get up off our fanny and go vote to return us to a nation that charges forward, puts our people back to work addressing our problems without signing pledges that make our government non-functional.

IT IS UP TO US!

Revenue Matters, Chapter 4-Social Security

TOGETHER WE CAN apply the Social Security tax equally to all, low and high income earners. Social Security has been called the crown jewel of President Franklin Roosevelt’s New Deal.

When it was enacted in 1935 the poverty rate of the elderly dropped by 50 percent.

But today because of our budget deficit some are calling on us to cut back on Social Security such as increasing the age at which one may qualify and retire. George W. Bush even tried to privatize Social Security, which, as shown with the recent meltdown of the stock market, would have been a disaster.

Changing one of the most successful social programs of all time borders on insanity!

First of all, contrary to some claims, Social Security is not in financial trouble. The Social Security trust fund as this is written has a $2.8 trillion surplus that is expected to grow to $3.3 trillion by 2020. The Congressional Budget Office projects that Social Security can pay all of its scheduled benefits out of its own tax revenue stream for the next 25 years with no changes whatsoever (there is more of a problem with Medicare and Medicaid but it is caused by problems with our medical system, not our retirement system). Thus we have 25 years to fix future issues by, for example, properly taxing the wealthy, while continuing to provide benefits to society through a program that has stood the test of time since the middle of the last century.

Secondly people need jobs. We need to have programs that en-courage people to retire earlier so that there can be jobs for younger workers.

Medicare is in future financial trouble, but that should be ad-dressed by reforming our health care system as recommended in a future chapter.

Today as people are losing their homes and other assets which they depended upon to help with their retirement, Social Security be-comes more and more important to more and more retirees. However, the amounts paid through the system are frequently insufficient to provide for the type of retirement life they have been dreaming of as their wages stagnate and the wealthy take in more and more of the national income.

Both employers and workers fund Social Security through pay-roll taxes. But for some crazy reason instead of using a progressive system to increase the percentage high-income earners pay we do just the opposite.

We pay Social Security taxes on the first $106,800 of our income, which means that a janitor making $20,000 per year and his employer pay the full 12.5 percent while a banker making $500,000 and his employer pay less than 3 percent. The super-rich do even better and of course hedge fund operators, some of whom who make a billion dollars per year, count their income as capital gains and pay no Social Security taxes at all.

In 2010, 54,000,000 Americans were paying about $702 billion in annual Social Security taxes. Eliminating the $106,800 cap would, according to the Congressional Research Service, yield an additional estimated $129 billion, which would increase the income of the Social Security system by nearly 20 percent. That is to say that if we were to eliminate the cap so that the rich paid at the same rate as the workers, we could eliminate the so called funding problems for the social security system.

Social Security in America pays only 33 percent to 40 percent of a worker’s pre-retirement earnings. In most of Europe that figures is 70 percent to 75 percent. Instead of talking about cutting back on Social Security, we should be talking about finding ways to increase Social Security payments, particularly to those at the bottom of the income ladder.

By doing so we would not only help the retired elderly to live better lives, we would help the economy because their increased spending would help provide more jobs for our unemployed.

TOGETHER WE CAN eliminate the cap in the Social Security collection system so that high income workers pay the same Social Security tax rate as middle and low income persons

Revenue Matters, Chapter 3-Jobs and the Economy

TOGETHER WE CAN put our people back to work eliminating our planetary pollution, rebuilding our infrastructure and bringing back the Great Prosperity of the past.

I started my fishing tackle manufacturing business with one employee-me. When I turned it over to a new President, and went off to Congress we employed over 1,000 people. After going from one to one thousand, I think I know something about what it takes to increase jobs.

Creating jobs has nothing to do with cutting taxes to small business! As is pointed out elsewhere in this book, in the early years of my business career taxes were much higher than they are today, but that did not in any way hinder my growth or my ability to increase employment. I never ever made a business decision based upon tax considerations.

The main thing any business needs if it is to grow and increase employment is potential customers with the money to buy the products or services of the business. Today with the middle and bot-tom 60 percent of the people owning only 1 percent of the nation’s wealth there is inadequate wealth in the masses to generate sufficient economic activity to provide the jobs needed to return to the Great Prosperity of the past.

A billionaire can only eat so much, and wear so many clothes. There is no comparison between what one family with a billion dollars of wealth can spend to energize the economy and what 10,000 families each worth $100,000 can do.

The jobs problem is easy to solve. All we have to do is to tax the wealthy and corporate America sufficiently to get the money needed to put our people back to work rebuilding our infrastructure; pro-viding health care for all; providing for adequate retirement of our elders; making higher education available for all; and ending the pollution of our planetary home. As in the past, the tax revenues generated by people working will help solve our deficit problem—and the people working will spend money to provide jobs for others.

In a society, small business is the major job creator. I believe that is because small business tends to care about its employees; encourage creativity; and be close to its customers. Any successful small business recognizes that REVENUE MATTERS.

Each year as my company grew, the government was our partner. It furnished us the roads we needed to transport our fishing tackle to the dealers that sold our products. It furnished us the fire protection for our factory. It furnished the fishermen and women clean rivers and lakes in which they could use our products. It protected our factory and our employees from any thieves that would rob us.

It also did something vitally important to our growth, our revenue, and our increase in jobs! Particularly in the early years of our growth, it furnished us with a sufficiently large population with enough wealth that they could afford to purchase our products.

When it was formed our nation consisted mostly of farmers and farm families. It took a substantial percentage of our population to raise the food needed to feed all the people.

When I was a boy a significant number of my school buddies were from farms, where a 100-acre farm was considered normal. Today 1,000-acre farms are commonplace and many of the farmers in the area of my own home not only farm but also have other jobs in town. Tractors have replaced horses and mules; machines now pick the corn that was previously picked by hand. Meat and dairy prod-ucts are now produced in factory farms with huge confined livestock operations. We have revolutionized farming so that only a small number of farmers are required to produce our food and fiber.

When I went to Congress in 1975 my fishing tackle manufacturing plant employed 1,000 people and had sales of about $20 million per year. Today that same business employs a similar number of people, but its sales are more than 10 times as much. It is amazing to walk through the factory and see machine after machine doing the jobs that we formerly did by hand.

In manufacturing as well as farming, machines replace more and more workers and fewer are needed to take care of our needs. This should be a blessing. We should be able to work fewer hours and provide a better living for all. But without government involvement corporations will increase workers’ hours, reduce the pay of workers and increase the wealth of executives and stockholders.

Purchasing by the people fuels the economy but there is a vicious cycle when jobs are scarce. Unemployment reduces the purchasing of the people. Less purchasing reduces demand for goods and more un-employment. More unemployment further reduces the purchasing. It is a vicious cycle.

There are answers but they do not always come from the U.S. In 1982 labor unions in Holland agreed to limit higher pay in ex-change for fewer hours of work. Within 10 years, the proportion of Dutch people working part-time increased from 19 percent to 27 percent while the average workweek fell from 30 hours to 27 hours. Unemployment dropped from 10 percent to 5 percent.

Germany and Austria have enacted laws that let employers avoid layoffs by scaling back workers’ hours and pay. For example, 10 percent less pay for 10 percent fewer hours worked, with the government subsidizing the difference in pay.

U.S. workers historically have worked longer hours than those in other industrial countries. Our workers put in an average of 320 more hours per year (two months worth) than in France and Germany. If we were to adopt Germany’s model it would theoretically provide additional employment for nearly 17 percent of our workforce and eliminate our unemployment problem.

One thing seems obvious in the United States.

Capitalism is in trouble in our country. Too many of our citizens are out of work. The wealthiest ten percent of our citizens are getting richer and richer, while the rest are falling further and further behind. Something is going to have to change.

Change is not going to happen in a country without the action of the federal government.

Today the best way to address the massive pollution and infra-structure problems we face is to use our creative industrial base to do the work and furnish the jobs-and tax ourselves, particularly the wealthy to provide the needed funds.

We clearly do not need everyone working 40 hours per week to take care of our basic needs. However, if we are to survive as a species, we urgently need to transform our current energy industry from polluting fossil fuels to non-polluting energy technology. Replacing our gasoline burning automotive fleet, converting our coal fired electrical plants, and doing all the other things necessary to save the planet re-quires two things-money and labor. The money is available by properly taxing the wealth of the wealthy and Corporate America. If it is used to put the unemployed to work the jobs crisis will be solved.

If there ever was an opportunity to make lemonade from a lemon, this is it.

TOGETHER WE CAN tax ourselves sufficiently to put our people to work rebuilding our nation and ending our pollution of the planet.