Creating and Enforcing Rules to Benefit American Workers
Subcommittee on Trade, March 26, 2019
As usual, we will preface our comments with our comprehensive four-part approach, which will provide context for our comments. It has recently been updated.
Discussions over Trade are like arguments are like those over immigration, where some business owners want employees to stay in the shadows and be abused, others want legal employees (though non-union – repealing right to work laws would end illegal immigration because no one would hire an undocumented worker with union representation) and still other in the conservative camp simply hate the illegality or the ethnicity of the immigrants.
Attacking unions for the past 30 years has taken its toll on the American worker in both immigration and trade. That has been facilitated by decreasing the top marginal income tax rates so that when savings are made to labor costs, the CEOs and stockholders actually benefit. When tax rates are high, the government gets the cash so wages are not kept low nor are unions attacked.
Too many NLRB nominee filibusters and budget cuts to DOL enforcement have been conscious attempts to break unions by the current minority. Sadly, there is no opportunity to reverse them until the next Congress. So must real consideration of returning to confiscatory taxes on the CEO class of 70% to 90%. These are the only way, aside from an explosion of employee ownership and workplace democracy (including open bidding for CEO pay) to stop the wealthy from union busting and extracting economic rent in the form of lower wages and benefits from workers.
As long as the current tax cuts are in force, the money not collected in taxes should be made up with bond sales, else all sorts of mischief occur in the area of asset accumulation and inflation. Such accumulations are not economic growth, they are the manufacture of speculative investment bubbles that always lead back to recessions and depressions. There is no such thing as a business cycle, only rich people who are undertaxed who invest in garbage and then sell it to the public, like any Ponzi scheme.
We remind the Subcommittee that in the future we face a crisis in net interest on the debt, both from increased rates and growing principle. This growth will only feasible until either China or the European Union develop tradable debt instruments backed by income taxation, which is the secret to the ability of the United States to be the world’s bond issuer. At some point, however, we need incentives to pay down the debt.
The national debt is possible because of progressive income taxation. The liability for repayment, therefore, is a function of that tax. For every dollar you pay in taxes, you owe $13 in debt. People who pay nothing owe nothing. People who pay tens of thousands of dollars a year owe hundreds of thousands. The answer is not making the poor pay more or giving them less benefits, either only slows the economy.
Rich people must pay more and do it faster. My child is becoming a social worker, although she was going to be an artist. Don’t look to her to pay off the debt. Your children and grandchildren and those of your donors are the ones on the hook unless their parents step up and pay more. How’s that for incentive to raise taxes?
Please see Attachment One for our prior comments to the Trade Subcommittee from 2017 and before on Trade, NAFTA and agricultural exports regarding our standard tax plan.
The addition of an Asset VAT should have the same effect as capital gains taxation in our second bullet, but can be collected outside of personal income taxation. This has the added feature of either retaining a personal income tax, but one that can be filed automatically or included in a surtax on the Subtraction VAT filed by employers. We would be glad to help develop these ideas in discussions with staff and direct testimony.
As usual, we will preface our comments with our comprehensive four-part approach, which will provide context for our comments. It has recently been updated.
- A Value Added Tax (VAT)/Goods and Services Tax to fund domestic military spending and domestic discretionary spending with a rate between 10% and 13%, which makes sure very American pays something. A Carbon VAT or C-VAT can be included in this category and would be offset by a lower GST.
- Personal income surtaxes on joint and widowed filers with net annual incomes of $100,000 and single filers earning $50,000 per year to fund net interest payments, debt retirement and overseas and strategic military spending and other international spending, with graduated rates between 5% and 25%. An Asset VAT or A-VAT in long-held assets and a Tobin Tax for short term trades would fund the SEC and pay down the debt.
- Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income cap, which allows for lower payment levels to wealthier retirees without making bend points more progressive.
- A VAT-like Net Business Receipts Tax (NBRT) or Subtraction VAT or S-VAT is the vehicle for tax expenditures for family support, health care and the private delivery of governmental services. It funds entitlement spending and replace income tax filing for most people (including people who file without paying), the corporate income tax, business tax filing through individual income taxes and the employer contribution to OASI, all payroll taxes for hospital insurance, disability insurance, unemployment insurance and survivors under age 60.
Discussions over Trade are like arguments are like those over immigration, where some business owners want employees to stay in the shadows and be abused, others want legal employees (though non-union – repealing right to work laws would end illegal immigration because no one would hire an undocumented worker with union representation) and still other in the conservative camp simply hate the illegality or the ethnicity of the immigrants.
Attacking unions for the past 30 years has taken its toll on the American worker in both immigration and trade. That has been facilitated by decreasing the top marginal income tax rates so that when savings are made to labor costs, the CEOs and stockholders actually benefit. When tax rates are high, the government gets the cash so wages are not kept low nor are unions attacked.
Too many NLRB nominee filibusters and budget cuts to DOL enforcement have been conscious attempts to break unions by the current minority. Sadly, there is no opportunity to reverse them until the next Congress. So must real consideration of returning to confiscatory taxes on the CEO class of 70% to 90%. These are the only way, aside from an explosion of employee ownership and workplace democracy (including open bidding for CEO pay) to stop the wealthy from union busting and extracting economic rent in the form of lower wages and benefits from workers.
As long as the current tax cuts are in force, the money not collected in taxes should be made up with bond sales, else all sorts of mischief occur in the area of asset accumulation and inflation. Such accumulations are not economic growth, they are the manufacture of speculative investment bubbles that always lead back to recessions and depressions. There is no such thing as a business cycle, only rich people who are undertaxed who invest in garbage and then sell it to the public, like any Ponzi scheme.
We remind the Subcommittee that in the future we face a crisis in net interest on the debt, both from increased rates and growing principle. This growth will only feasible until either China or the European Union develop tradable debt instruments backed by income taxation, which is the secret to the ability of the United States to be the world’s bond issuer. At some point, however, we need incentives to pay down the debt.
The national debt is possible because of progressive income taxation. The liability for repayment, therefore, is a function of that tax. For every dollar you pay in taxes, you owe $13 in debt. People who pay nothing owe nothing. People who pay tens of thousands of dollars a year owe hundreds of thousands. The answer is not making the poor pay more or giving them less benefits, either only slows the economy.
Rich people must pay more and do it faster. My child is becoming a social worker, although she was going to be an artist. Don’t look to her to pay off the debt. Your children and grandchildren and those of your donors are the ones on the hook unless their parents step up and pay more. How’s that for incentive to raise taxes?
Please see Attachment One for our prior comments to the Trade Subcommittee from 2017 and before on Trade, NAFTA and agricultural exports regarding our standard tax plan.
The addition of an Asset VAT should have the same effect as capital gains taxation in our second bullet, but can be collected outside of personal income taxation. This has the added feature of either retaining a personal income tax, but one that can be filed automatically or included in a surtax on the Subtraction VAT filed by employers. We would be glad to help develop these ideas in discussions with staff and direct testimony.
posted by Michael Bindner at 10:00 AM
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