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article imageOp-Ed: The American GOP: Spoon-feeding the rich, bankrupting the nation

article:307407:40::0
By Daniel R. Cobb     Jun 7, 2011 in Politics
The GOP has executed the largest transfer of wealth in U.S. history. Due to unfair tax schemes and an obsession for selling out to corporations while hobbling the middle class, the U.S. has record numbers of billionaires and people living in poverty.
The world's most powerful political block is the U.S. Republican Party, a party that dominates American politics, is heavily funded by the world’s wealthiest corporations and individuals, and devoutly caters to their class. While progressive nations struggle with efforts to advance the quality of life for the average citizen, the U.S. Republican Party makes little effort to hide its true allegiance. In good economic times and bad, even in the face of dangerously high U.S. deficits, the Republican Party’s decades-old obsession is still to cut personal income taxes for the rich, cut corporate income taxes, cut capital gains taxes, and cut inheritance and estate taxes, all while slashing programs that benefit those truly in need.
After decades of fiscal mismanagement, the consequences are clear. Today the effective income tax on the wealthy is the lowest it’s been since 1932, nearly 80 years. The highest personal income tax rate is 35%, but because of numerous loopholes, most of which can only be used by the rich, the wealthiest Americans pay only 17 percent of their income in taxes (Atlantic Wire). The extension of the Bush tax cuts passed in 2010 will, on average, give $146,000 in annual tax savings to each of the wealthiest Americans. This is more than three times the income that the average American will earn in one year. (Mother Jones)
And it’s not just wealthy individuals. Despite trillions of dollars in sales, many highly successful of companies doing business in the United States pay no federal income taxes. This is because even though the corporate tax rate is set at 35%, the smorgasbord of Republican-favored loopholes and credits dramatically reduces or even eliminates the corporate tax bill. (Reuters News, New York times)
Two glaring examples are General Electric and Exxon-Mobil. In FY 2010 GE globally generated $149 billion in gross income and $13.8 billion in pretax income, with $5 billion of that earned in the U.S, but GE paid no federal income taxes. In fact, it recorded tax credits of more than $3 billion. Yes, American taxpayers gave GE $3.3 billion, almost the same amount that GE paid out in foreign taxes. (New York Times)
In 2010 Exxon-Mobil, the most profitable company in the world, earned over $30 billion in profits on gross revenue of over $350 billion and paid no U.S federal income taxes. In fact, the industry receives over $4 billion per year in direct taxpayer handouts to promote drilling - as if the energy industry needs to be motivated to drill. This contradiction is obscene. (New York Times)
Corporate taxes accounted for about 9 percent of all U.S federal revenue in 2010. At a paltry $191 billion, this is equal to only 1.3 percent of the nation’s gross domestic product. Other industrial countries collect roughly 2.5 percent of output, or twice what the United States collects. Compared to the rest of the world, corporations in the U.S. are under taxed by roughly half. Yet the Republicans insist on cutting corporate income taxes even more. (New York Times)
Consequences
Nations are measured by the standard of living of their citizens, by factors like infant mortality, life expectancy, access to health care, income disparity between the rich and the poor, and real wage growth. Americans often claim proudly and naively that the U.S. leads the world in most of these metrics, but what are the facts?
Current tax laws, loopholes, and preferential legislation have made the richest Americans stratospherically wealthy, while middle-class wages have stagnated for decades and nearly 50 million Americans have slipped into poverty. Cuts to social programs such as student grants and low interest loans, child nutrition programs, low-income housing programs, and job re-training programs result in millions of lost opportunities to fundamentally change the status quo. In 1987, the average bonus on Wall Street was $30,000 (in today’s dollars). Shockingly, the average Wall Street bonus in 2007 was $180,000, a six-fold increase - while average American wages have stagnated.
Over the last 20 years, the average American’s income has remained flat, yet the wealth amassed by the rich has exploded. According to data from the Internal Revenue Service, in 2008, the top 3 percent of Americans earned nearly $25 trillion, equal to 30 percent of the total income earned in America. Additionally, the top 0.6 percent of returns, 1 million filers, accounted for nearly 18 percent of the nation's total income, or $14 trillion.
The income gap between the rich and the poor is more severe today than at any time since the 1920s, just before the start of the Great Depression. According to the American CIA, income disparity is more severe in the United States than in 97 other countries, including China, Iran, Russia, Egypt, and all of Europe. Nearly 1 in 3 American working families is struggling just to meet basic needs. Except for the privileged top 3 percent, the United States is falling behind.
Fully 28,000 American children under one year of age die each year in the U.S. The infant death rate declined from 1950 until 2000, but has since remained at around 6.8 deaths per thousand births. In 2005, the U.S. was ranked 30th in the world for infant deaths, equal to Poland and Slovakia, and behind nearly all other industrialized nations including Canada, most of Europe, and Israel. The rate of infant deaths in Japan is 2.9, less than half of the U.S. rate. For the U.S, this is a travesty. (Reuters News)
According to data from the American CIA, the U.S. ranks 50th in life expectancy against other nations, down from 11th place 25 years earlier. A person born in the United States in 2011 will live an average of 78.4 years, while the average age at death for a citizen in Macao is 84.4, and 89.7 in Monaco. (CIA World Fact Book)
Republican obsessions are not limited to giveaways to the wealthy. Following are some of the most recent examples of the long-term, legislative battle the party has waged on the health and well-being of the middle class and those suffering in poverty. One can go back decades and find hundreds of examples.
Senate Republicans Block Boost in Minimum Wage - Los Angeles Times, June 2006
Senate Republicans block minimum wage hike - Reuters News, Jan 2007
Republicans call for lowering, eliminating federal minimum wage - Examiner, Oct 2010
Republicans Block 9/11 Health-Care Bill - Wall Street Journal, Dec. 2010 ... A bill to provide health care for sick Ground Zero workers failed a Senate vote, as Republicans remained united in opposition...
Republicans block child nutrition bill - | The Raw Story, Dec. 2010 ... Republicans block legislation to feed more children, improve school lunches.
GOP Senator Mike Lee of Utah: Federal ban on child labor is unconstitutional - The Raw Story, Jan. 2011 ... New Republican senator wants to throw out half-century-old child labor laws that have already been upheld by the Supreme Court.
House GOP Block Extension of Jobless Benefits - CBS News, Nov. 2011 … Republicans in the House Thursday blocked a bill that would have extended jobless benefits for the long-term unemployed through the 2010 Christmas holiday season.
House Republicans want to cut WIC by 10% - CNN, Feb. 2011 ... In the middle of the worst recession since the Great Depression, Republicans plan to cut funding for mothers in need of food assistance and related services provided by the federal Women Infants, and Children (WIC) nutritional program.
House Republicans' Spending Bill Would Cut Pell Grant The Chronicle, Feb. 2011... For millions of Americans, the only way out of a recession is education. However the Republicans pushed to cut the Pell Grant by $845 to each of the neediest students now, and make 1.7 million students ineligible for Pell Grants.
Republicans Move to Block COBRA Benefits Extension - Rollcall, Feb. 2010 ... GOP denies an extension of unemployment insurance and COBRA health care benefits to millions of unemployed.
GOP blocks Senate action on mine safety bill - Coal Tattoo, Sept 2010 ... Following a decade that saw 70 deaths in six major coal mining disasters in the U.S., the Obama Administration proposed badly needed mine safety reforms. The Republicans quickly moved to block the rules, claiming they were too expensive and would hurt industry profits.
White House slams Republican offshore drilling bill - Reuters News, May 2011... Following the Deepwater Horizon disaster that killed 11 and injured 17 workers and created the worst oil-related environmental disaster in world history, the Republicans moved to defeat new drilling safety reforms.
Republicans block investigation of BP oil spill Youtube, MSNBC, Sept. 2010... In a stunning and grand display of irresponsibility and abuse of power, Senate Republicans blocked the subpoena power of the bipartisan commission investigating the infamous BP Oil spill. What possibly criminal behavior by BP officials did the Republicans not want to have discovered?
Republicans block attempt to repeal $21 billion in Big Oil subsidies - Think Progress, May 2011... The oil industry is the most profitable in the world, yet the U.S. taxpayer subsidizes the industry to the tune of $21 billion. Republicans block Democratic attempts to eliminate these costly and completely unnecessary subsidies.
Republicans block Wall Street reform bill - TheHill.com, Apr. 2010 ... Following the most destructive meltdown in the American financial system since the Great Depression, senate Republicans worked to block a Democratic effort to bring needed reform and oversight to Wall Street. Who benefits? Possibly criminal bankers and investment houses.
Republicans Block Bill to Tax Firms That Export Jobs - NPR, Sept. 2010... Unbelievably, American companies are actually given tax breaks by the U.S. for sending job overseas. To correct this costly absurdity, Democrats proposed a Senate bill that would tax companies that send jobs overseas and reward those that bring them back. Republicans promptly blocked it.
Republicans block campaign finance disclosure bill - CNN, July 2010... In the wake of a Supreme Court ruling that gave corporations and wealthy individuals the ability to secretly spend unlimited sums of money on political campaigns - thereby defeating over 100 years of U.S. campaign finance laws – the Democrats proposed the Disclose Act. The Act would have required the disclosure of all political contributors and their amounts. Of course, the Republicans reliably blocked passage of the Disclose Act.
Senate Republicans promise to block all legislation until Bush tax cuts are extended - Newsweek, Dec. 2010... Yes, you read it correctly. Republicans refused to consider all other legislation and effectively shutdown the U.S. Congress until the Democrats agreed to extend the Bush tax cuts. President Obama had already agreed to extend tax cuts for the middle class, but for the Republicans, tax cuts for the rich always take top priority.
Bachmann plan would cut veterans benefits - Air Force Times, Jan. 2011 ... Tea party favorite Rep. Michele Bachmann, R-Minn., has unveiled a plan for cutting $400 billion in federal spending that includes cutting veteran’s disability payments.
The end of Medicare/Medicaid: Republican cuts target Medicaid, Medicare - cleveland.com, Apr. 3, 2011 ... The Republican Medicare/Medicaid proposal would move seniors to private insurance carriers and eliminate Medicare and Medicaid as they currently exist. Much of the decade’s increase in health care costs can be blamed on the insurance companies – the five largest carriers earned $11.7 billion in profits in 2010 - a staggering 51% increase since 2008. The Republicans think this is how health care should be managed for the entire country: Give it all to the insurance companies, who cut patient services, cancel policies when patients gets sick, push premiums through the roof, and pocket record profits and CEO bonuses. Republicans Protect Billions in Health Insurance
In such a severe recession, the millions of unemployed Americans who have lost health care, are barely living month-to-month, are unable to adequately feed their children, or are trying to advance through education, these millions of people are the least able to absorb cuts to services. Yet, the endless Republican drumbeat is to give away billions in tax cuts to the rich, who do not need the money, by slashing critically important social programs and exploding the federal debt. The stated Republican belief is that somehow, this free wealth will trickle down from the rich to the poor. This logic is not only absurd, it’s a callous expression of contempt for millions of Americans. And this dogma has been proved utterly false in this recession by a few simple facts: Many large corporations are now enjoying record profits but are NOT hiring because they have been able to squeeze even more productivity out of workers frightened of job loss. Businesses only hire when they absolutely must, not when they are moved by benevolence.
The giant tax refunds for the wealthy don’t go to purchase the necessities of rent, food, appliances, utilities, clothes, etc., but are simply invested in CDs, tax shelters, stocks, foreign investments, etc. These investments don’t stimulate the economy directly and may actually have a negative effect because money in foreign investments leaves the country. In fact, as reported in the Atlantic, testimony given by the non-partisan Congressional Budget Office found in September of 2010 that the $100 billion in tax cuts given to those with income above $250,000 would no affect on reducing the unemployment at all. None.
Based on Republican priorities, we can’t help the poorest among us to lift themselves up, but we can give $21 billion to the wealthiest companies on earth. We can’t help our own young people get through college, but we can give billions in tax cuts to the wealthiest who do not need the money. We can’t provide needed nutritional and medical assistance to unwed mothers or afford to pay full disability to our veterans, but we can buy a new $8 billion nuclear-powered aircraft carrier (globalsecurity.org).
The rationale the Republicans use to keep throwing billions of dollars at the wealthiest while the nation sinks into economic despair is utterly broken, and decades of history prove it. And the message sent to our own fellow American citizens, many of them veterans of our ongoing wars? You don’t matter. This obstructionist, Republican dominated government simply does not work for you. In fact, if you're lucky enough to be employed, you work for it.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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