A Taxing Economy
Today is the deadline
for Americans to file their tax returns. This past year has been tough
on U.S. taxpayers, with
their hard-earned money going toward the Bush administration's
misplaced priorities: a personal
chef for an ineffective Housing and Urban Development Secretary and
new contracts for an exploding
defense contracting industry. Even the Internal Revenue Service is
wasting $37 million in taxpayers' money by hiring expensive,
ineffective private debt collectors to "pursue
tax scofflaws," a task that could arguably be done more effectively
by the agency itself. Most importantly, as Joseph E. Stiglitz and Linda
J. Bilmes note in "The
Three Trillion Dollar War," each American household is spending
approximately $100 each month toward the "current operating costs" of
the Iraq war (p. 138). Not surprisingly, the majority of Americans are
pessimistic about the U.S. economy as the gap
between the rich and the poor widens and Bush's tax cuts fail to
deliver on their promises. Consumer confidence is at an all-time
low, and fewer Americans now "than at any time in the past half
century believe
they're moving forward in life."
FALLING INTO THE GAP: In
January's State of the Union address, Bush claimed, "In the long
run, Americans can be confident
about our economic growth." He has also repeatedly attempted to tie
his tax
cuts and the Iraq war
to economic growth. A new Washington Post-ABC News poll released
this tax day finds that seven
in 10 Americans "now give negative ratings to the president's
stewardship of the sinking U.S. economy." American families are facing
a "perfect
storm" of "[m]assive amounts of debt, falling house prices,
disappearing jobs, flat wages, lower benefits, and skyrocketing costs
for the most important consumer items." This devastating economic
situation has been exacerbated by the Bush administration's
policies. A recent study by the Center on Budget and Policy Priorities
and the Economic Policy Institute (EPI) finds that the "gap
between the richest and poorest families, and between the richest
and middle-income families, grew significantly in most states over the
past two decades." Average income fell by 2.5 percent for people in the
bottom fifth of income earners and 1.3 percent for those in the middle
fifth
but rose nine percent for people in the top fifth. Seventy-nine percent
of
respondents in a new Pew Research Center poll say "it is more
difficult now than five years ago for people in the middle class to
maintain their standard of living."
BOOSTING LARGE CORPORATIONS:
Not only has the income gap widened, but the wealthiest Americans have
also seen their tax rates drop. According to EPI, between 1960 and
2004, "the average tax rate has fallen by about 14 percentage points (from
44.4% to 30.4%) for the top 1% of earners (those making more than
$435,000 in 2007), while it has increased slightly (from 15.9% to
16.1%) for those in the middle 20%." Additionally, in FY 2007, the
nation's largest corporations -- with $250 million or more in assets --
were audited at the "lowest level
in the last 20 years." At the same time, audits of smaller
corporations -- with $50 million or less in assets -- are climbing. The
Bush administration has also been turning a blind eye toward federal
contractors, who owe
$8 billion in unpaid federal taxes. For example, KBR, which until
last year was a subsidiary of Halliburton, has avoided
paying more than $500 million "in federal Medicare and Social
Security taxes by hiring workers through shell companies" based in the
Cayman Islands. The Bush administration has aided this tax dodging. One
of KBR's shell
companies was set up two
months after Cheney
became Halliburtion's CEO in 1995. Congress is currently
considering a bill "to bar federal agencies from awarding contracts to
people or companies that have failed to pay their
federal taxes."
DOUBLE PENALTIES ON DOMESTIC PARTNERS:
Employer-provided health coverage continues to be the backbone of
health coverage for American families. Approximately 60 percent
of Americans received employee health benefits in 2007, with the
majority of employers also providing coverage for the
employee's spouse and dependents. Only 22
percent of employers, however, cover same-sex partners of
employees, and just 28 percent cover different-sex domestic partners.
As a result, "married workers who get family health insurance benefits get
a double benefit -- they get health insurance coverage for their
spouses and children and are not taxed on the value of that coverage."
Workers with an unmarried domestic partner are not so lucky and are
doubly burdened. Their "employers typically do not provide coverage for
domestic partners; and even when partners are covered, the partner's
coverage is taxed as income to the employee." As an analysis
by the Center for American Progress and the Williams Institute notes,
employees with domestic partners "now pay on average $1,069
per year more in taxes than would a married employee with the same
coverage."
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"A multibillion-dollar loophole that would have helped conceal abuse of overseas contracts has been eliminated from a Bush administration proposal to protect taxpayer dollars," after an inquiry from Rep. Peter Welch (D-VT).
FLORIDA: "Florida
continues to be one of the leaders in the number of homes being
repossessed by banks."
HEALTH
CARE: "The American medical system is woefully unprepared for the
flood of aging baby boomers."
ECONOMY:
"As the economy sputters, states are taking extraordinary measures to
help people keep food on the table."
THINK
PROGRESS: Right-wing video warns that "gay activists" are plotting
to "take over the cities of America."
WONK
ROOM: As Earth Day nears, White House pretends to take action
on climate issues.
ATTACKERMAN:
Even the Weekly Standard's Stephen Hayes thinks Iraq War architect Doug
Feith's new memoir is "misrepresenting" the facts.
VF
DAILY: The State Department resisted lifting Nelson Mandela's
travel restrictions for years.
