It was 7:30 in the morning, and the smallest beneficiaries of the Richard Brandon Head Start Center at 5920 N. State St. followed their young parents into the mass of little portable units. One hobbit-sized girl lifted her legs awkwardly up each of the wooden steps to the main building, keeping her eyes focused on her toes.
This particular facility serves a total of 160 children ages 3 to 4. A second facility not far away offers baby-sitting for newborns and toddlers. Federal grants fund the facility.
Many of the parents dropping their children off at the State Street facility clearly have busy days ahead of them. The women are dressed for business, with office slacks and conservative dress implying a full day behind a desk, counter or food line. Some of the fathers wear smudged but fragrant outerwear suggesting a futile run in the washer the night before. They appear to have a date with a shovel, hammer or socket wrench, but for now their arms are around their kids, forcing one last hug on their struggling boys before the grudging kids escape and join their playmates.
Yolanda Henderson, whose child Jared is following his older twin brothers Jayden and Jaleel through the State Street facility, said she would not be able to handle traditional day-care alternatives to Head Start, which could easily cost more than $150 per week.
"We take care of the entire children's needs: mental health, disabilities, education and health, anything that they need. And we also provide critical support services to parents through Head Start and other programs," Hinds County Human Resource Agency President and CEO Kenn Cockrell said.
The kids get two meals a day, plus snacks, courtesy of the Mississippi Department of Education through their U.S. Department of Agriculture-sponsored child and adult food program. Parents don't pay a thing. Sounds lovely, but the program targets low-income households—very low-income households that generate roughly $22,000 for a family of four. Parents of a disabled child don't have to meet that income cap because a disabled kid is a bigger money-sink than a Bugatti. It's clear that people with these kinds of financial limitations have few day-care options for their kids.
Many of the parents, Cockrell said, qualify as the working poor. They work for minimum wage, which barely sustains them.
"I wouldn't know what to do if it weren't for Head Start. I would not be able to afford pre-school or day care, especially with twin boys," said Henderson, who also praised the program's training. Jayden and Jaleel, she said, excel at Watkins Elementary School because of Head Start's education preparation.
Despite the program's obvious benefit, she and 2,177 other mothers served by the Hinds County Head Start system may have to ask themselves what they will do in its absence if the debate in Congress continues along its current line. Head Start is only one of many programs that face steep cuts if a corporate-backed effort to maximize profits continues to sweep the country.
Spreading the Pain
On Feb. 19, the U.S. House of Representatives, under new Republican management since last November, passed an appropriations bill that virtually yanks the rug out from under the Head Start program in Mississippi. House Resolution 1, according to Mississippi Head Start Association Executive Director Nita Norphlet-Thompson, would cut $25 million from the program in Mississippi. This cut, says the association, amounts to the loss of services to roughly 4,600 children statewide, and could end employment for 1,200 Mississippi Head Start workers.
While House Republicans press the Democratic Senate to get onboard with the cuts, Congress has agreed to a temporary funding plan that keeps agencies funded at fiscal-year 2010 funding levels. The temporary funding plan doesn't virtually deflate the state program, but neither does it address the state's grievous childhood education shortfalls.
"Under the temporary resolution, we'll stay where we are, which won't account for inflation, which won't allow us to serve additional children, but it'll put us in a position that we won't have to cut kids and we won't have to cut staff," Thompson said.
"In a perfect world, we'd get an increase, because right now we're looking at close to 3,000 kids that we have on a waiting list. We'd love to be able to serve more children. That's the idea, but if we can just stay where we are, not lose any of the enrollment opportunities that we have and not have to reduce our employment rolls ..." Thompson's voice then trailed off into silence, as if the prospect of losing the program derailed a train of thought.
These cuts come at a time when Head Start is already about to suffer from the expiration of emergency economic-incentive recovery funds President Barack Obama signed into law two years ago as a component of the 2009 Recovery Act. Obama's signature made possible an additional 914 Head Start slots for children. Combined with the cuts proposed in HR 1, a total of 5,500 children could lose Head Start Services.
Targeting the Poor
The cuts to Head Start are only a scratch in the patina of the House's plan to cut services for the needy. The Center on Budget and Policy Priorities released a report in February outlining what H.R. 1's impact would be state-by-state.
What's clear from the findings is that the Magnolia State, with its disproportionately high population of impoverished citizens, will suffer, if the new House gets its way.
Mississippi's educational programs funded by the U.S. Department of Education, which serve the disadvantaged, would lose $14 million in federal allocations, while school improvement—which the U.S. Department of Education recently renamed "Education Improvement"—would lose $13.4 million. College education for the non-wealthy would take a hit with the state losing $81 million in Pell grants, which CBPP estimates would affect 119,000 Mississippi college students.
But wait, there's more: Employment training also suffers under H.R. 1, which would end federal grants for job training under the Workforce Investment Act, a grant that allocates $17.9 million to Mississippi. The shutdown could end services for nearly 16,000 unemployed state workers, more than 11,000 low-income adults and 6,400 training programs for youth ages 14 to 21, CBPP says.
The same cut would remove $1.6 million from a separate vocational and adult education fund monitored through a Career, Technical and Adult Education program at the U.S. Department of Education.
Also among targeted cuts are $12.3 million for state housing programs, via the Public Housing Capital Fund, which funds repairs for public housing, and $18 million in cuts for the Mississippi Department of Environmental Quality's effort in maintaining clean drinking water.
All of these cuts, of course, mean job losses in the state—Federal Reserve Chairman Ben Bernanke told Politico.com that H.R. 1 would cost "a couple hundred thousand jobs."
Jackson Mayor Harvey Johnson Jr. reacted with horror at $24.1 million in cuts H.R. 1 would bring to statewide Community Development Block Grants, which the mayor said the city uses for economic development and financial assistance to businesses, and which create an estimated 240 new full-time jobs and preserves another 210 full-time jobs over a five-year period.
Within the last five years, the city of Jackson spent $2.7 million on public improvements including street repairs, water and sewer improvements, and development of parks and recreation. Also within five years, the city spent another $1.8 million on public services, including senior and youth projects, employment training, and services for neglected or abused children.
"CDBG is one of the most effective federal domestic programs to revitalize neighborhoods with proven results," Johnson stated in a letter to U.S. Rep. Gregg Harper, R-Miss. Harper voted in favor of the bill and told The Meridian Star that the bill is "fiscally responsible" and "the beginning of federal budget reform that will require more reductions and eventually must reach to entitlement programs if we are to restore fiscal integrity to our nation."
Women's health also takes a nasty turn for the worst, with the new cuts eliminating the Evidence-Based Teen Pregnancy Prevention Initiative at the Office of Adolescent Health and the Title X Family Planning Program, which received $317.5 million in fiscal year 2010. This loss would filter down quickly to Mississippi and other states.
Likewise, the budget proposal also reduces funding for the Centers for Disease Control and Prevention by $850 million, reduces funding for the Maternal and Child Health Block Grant by $50 million and takes $1 billion from nationwide Community Health Centers.
"For every public dollar invested in family planning, taxpayers save $3.74. By eliminating the Title X, (more than) 5 million women across the country will lose access to basic primary and preventive health care. ... Six in 10 women who access care from a family-planning health center consider it to be their main source of health care," said Felicia Brown-Williams, regional director of Public Policy for Planned Parenthood, in a statement.
Brown-Williams said that by helping women avoid unintended pregnancies, Title X-supported centers in Mississippi saved $23.4 million in public funds in 2008, and that the abortion rate in the state would be 68 percent higher without Title X services. She added that H.R. 1 cuts would "impact 106 health departments and community health centers across the state," and that these services helped women in Mississippi "avoid 12,700 unintended pregnancies, which would have resulted in 5,600 births and 5,300 abortions," in 2008.
The bill must survive the Senate, but Senate Majority Leader Harry Reid, D-Nev., so far, is not a fan. Reid told reporters last month that the House budget proposal was not "a compromise," but a "hardening of (Republicans') ... original position" regarding eliminating government.
But why so hard a stance on government services in the first place?
Tougaloo College professor of political science Steve Rozman says it's all about the money and where the wealthy want it to go.
"The question you have to ask yourself," Rozman said, "is how we got from there to here."
A few decades ago, he said, the nation was at a pretty good starting point, with an eye toward its future.
The End of the New Deal
Labor organizations found their voice in the wake of rampant industrialism during the Great Depression of the 1930s, said University of Mississippi journalism professor and author Joe Atkins, who writes on the South's labor movement.
"That was no accident that this was the same decade as the Great Depression," Atkins said. "People finally were in a position to say, 'What the hell have I got to lose?' It was that bad."
The years 1935 through 1939 saw the beginnings of the national health insurance debate with Franklin D. Roosevelt's New Deal, through which the president and Congress created financial relief for an ailing populace falling victim to a worldwide depression.
Roosevelt pushed for national labor and health reform throughout his two terms. The Social Security Act is one of his more popular and enduring creations. In a move resembling the 2009 health-care debate, Roosevelt pushed for a second wave of health-care reform after getting the Social Security Act passed, but Congress, by then, was suffering a brand of cold feet reminiscent of today's congressional conservatives after the passage of the American Recovery and Reinvestment Act. Congress lost its zeal for FDR's government expansions; even the ones that potentially extended health-care coverage.
Still, Atkins said the 1940s through the 1960s, as a result of the remaining tendrils of the New Deal, were some of America's best in terms of economic comfort. Widespread labor agreements in the North secured decent wages for many employees. Even non-unionized employees working two doors down the street benefited in part from other employees' union-orchestrated work agreement because their employers had to compete with unionized employers, who offered great wages and benefits.
But then, things began to take a different turn, said Rozman, who is also director of Tougaloo's Center for Civic Engagement and Social Responsibility.
"I can remember when President Ronald Reagan came in. He gave people the reassurance they wanted to hear," Rozman said. "'Government is the problem, not the solution,' he said, then he booted the air traffic controllers, and destroyed their unions and got people fired."
Rozman said Reagan coupled his anti-labor attitude with a more nationally palatable U.S. foreign policy advocating strength, which reassured people.
But Reagan represented a pendulum swinging to the decades-long onslaught of progressivism that left the nation's older generation reeling at emerging cultural differences.
"Liberalism perhaps pushed too far in the 1960s for some people. You had all these social changes, and we've got a whole pattern from the 1960s and the drug culture," Rozman said.
"Middle America thought: 'Look what's happened. Our whole values system is destroyed, and we have inflation skyrocketing.'"
Then Reagan came along with an assertive foreign policy that effectively out-maneuvered the Soviet Union in the arms race during the Cold War (rather like seeing who can go bankrupt last. We won—sort of—Rozman opines.)
Suddenly, the nation has confidence in itself again after disastrous unemployment, and the economy stabilizes despite blooming debt under the Republican president.
"So Reagan and his policies become the hero," Rozman said, "but you've got to look at the whole broad pattern. Today, for example, we've got a situation where people are frightened again. (Former Republican vice presidential candidate) Sarah Palin, (Minnesota Republican U.S. Rep.) Michele Bachmann—these people could never have represented a political party in the '60s, '70s and '80s, because any party would've been embarrassed to have that kind of personality as a standard-bearer. But now you've got huge numbers of Republicans who see Palin as presidential. This gives you an idea of how frightening people see the future as being."
Reagan's mantra of "government is bad" manages to hang tight in this new era of anxiety, even as middle-class-creating government regulation dwindles and unfettered capitalism funnels wealth back into the hands of the wealthy.
Wages are stagnant, according to the Economic Policy Institute, a nonpartisan think tank that focuses on the interests of low- and middle-income workers. And the rich are getting richer.
"Income growth over the last few decades has been enormously unbalanced, and this must be taken into account as the nation considers shifts in tax policy and develops a fiscal plan that strengthens the (economic) recovery and targets a sustainable deficit," EPI reported in September.
The organization points out that the pre-tax incomes of the nation's upper 1 percent income bracket grew 214 percent, while the incomes of the middle-fifth and lowest-fifth grew 25 percent and 4 percent, respectively, between 1979 and the start of the current recession in 2007.
"This extremely unbalanced growth implies that 38.7 percent of all of the income growth accrued to the upper 1 percent over the 1979-2007 period: a greater share than the 36.3 percent share received by the entire bottom 90 percent of the population,"
Under these circumstances, the wealthy require a system that acts as their champion, Rozman said, a system that defends the growing wage gap. Thankfully for them, a whole region of the nation had already perfected the formula.
The South Leads the Way
The idea of protecting the wealthy and dumping social-relief programs and fair wages is nothing new to the South, which was never known for its outstanding economic safety net or its middle class.
Atkins said the South's history is still suffering the lingering evil of slavery, which later birthed slightly more subtle forms of slavery in the sharecropping and tenant-farming industries. In the South, fair labor could never compete with a crowd of workers ineligible for any pay whatsoever.
"What is slavery if not the cheapest labor of all, even if it did have its own expenses in terms of upkeep. It was controlled labor," Atkins said. "Throughout the course of southern history, with Jim Crow laws and the imposition of sharecropping and tenant farming, it's always been the same story over and over again. You've got a business political elite that for years worked hand-in-hand to maintain a region with the cheapest labor and worst benefits of any region in the country."
The attitude began with a southern mind. For decades, southerners fostered a patriarchal kind of society, dating back to antebellum days, in which wealthy landowners proclaimed to the lower-income brackets that "I will take care of you and yours."
Southerners, said Atkins, culturally re-semble immigrants from southern Italy at the turn of the last century: religious and thoroughly rooted in a hierarchical society. The southern man, by Atkins' description, has an unseemly physical habit of bending at the knees. He respects authority and tends to let authority dominate. Authority, meanwhile, worked in tandem through-out the South with strong religious leaders fostering an attitude of subservience in the community.
"The southern politician, all through the South's history—even the vice president under Roosevelt, John Nance Garner—essentially represented the elite of the South, but they speak the folksy 'I'm one of you' language of the common people, and played to the fear of outsiders, and that helped keep them in power," Atkins said.
Until the second half of the 20th century, poor white southerners barely registered on the radar. The wealthy told them—from the days they took a bullet during the Civil War to protect a rich man's right to own slaves to the days they beat down a black union organizer—that they at least didn't have it as bad as blacks. To keep it that way, the wealthy elite had to ensure that blacks had it bad.
Poor southerners rarely sided with working blacks in this fight, and did their part to keep blacks earning a pittance. But in so doing, Atkins said, the poor southern white man created an impossible competitor. How, he asks, could fair wages compete against the non-compensated work of a slave, or even the dirt-earnings of a black sharecropper?
"Whites competed with blacks for low wages in a race to the bottom, which is where the elite wanted them," Atkins said.
Organized labor and its mantra of fair pay never found love in the South. A comparison between a map of states that seceded from the union at the onset of the Civil War and a map of states with anti-union laws nets a stunning similarity.
In some states, unions can make union membership a condition of employment at some unionized businesses. Right-to-work laws restrict labor unions and employers from making union membership or payment of union dues a condition of employment. Anti-union group
National Right to Work Legal Defense Foundation Inc. describes a right-to-work law as a law that "secures the right of employees to decide for themselves whether or not to join or financially support a union."
Union advo-cates argue that right-to-work laws put union members at a disadvantage in the employment pool because non-union workers who are unbound by union contracts still benefit from union-employer collective bargaining. Critics of right-to-work laws, such as Mississippi Alliance of State Employees President Brenda Scott, say the laws also keep wages as low as possible by removing workers' ability to bargain for better pay.
Scott refers to right-to-work laws as "right-to-work-for-less" laws.
Right-to-work states tend to have a higher rate of workplace fatalities, union advocates say. The AFL-CIO claims U.S. Bureau of Labor Statistics show states with right-to-work laws suffer a 52.9 percent higher rate of workplace deaths. The Louisville, Ky., Metro Council Democratic Caucus also claimed in 2006 that if Kentucky enacted anti-union laws, the state would foster dangerous work environments, arguing that "workplace fatalities per 100,000 workers was highest in right-to-work states."
U.S. Department of Labor economist Matt Dotson would not confirm the AFL-CIO's claims. Dotson told the Jackson Free Press last month that the department keeps a list of annual work-related deaths from each state, but said they do not run a comparison between states with anti-union laws and those without them.
However the characterization, there is no disguising the resemblance between former slave states and current anti-union, right-to-work states. Although right-to-work laws pepper some western states that did not exist at the time of the Civil War, as well as some northern states, Mississippi, Alabama, Georgia, Louisiana and the Carolinas—all of the secession states, in fact—embrace anti-union laws as a natural type of evolution from a slave-based economy.
Atkins said many of the high-profile employers the state managed to snag, even recently, sought to take advantage of the state's right-to-work status.
"Even though we're all happy about the automobile industry with Nissan and Toyota plants opening up in Canton and the Northeast, they came here trying to avoid unions, and to pay some of the cheapest wages and offer the least benefits for car manufacturers, which have had the effect of lowering wages across the country," Atkins said."
Lax on Corporation Taxes
Along with low wages, Mississippi delivers cheap business opportunities to corporations with its generous corporate tax policy, which ranks as the 13th most favorable tax system in the nation for businesses in an index of fiscal year 2011 corporate tax rates. The tax rate may as well be zero in some cases. The Mississippi Legislature Joint Committee on Performance Evaluation and Expenditure Review released a January report showing that in the years 2006, 2007, 2008, 80 percent of corporations doing business in Mississippi paid no state corporate income tax.
In 2009, the number ticked up a tad, with 81 percent of corporations paying zero state income tax. These are not the little guys, PEER reports, but a ranking among the state's largest for-profit corporations as assessed by payroll size.
"In 2006, the Department of Revenue only recorded information for the top 130 for-profit employers, but of these 130 employers, 91 did not pay state corporate income tax," PEER stated, responding to legislators' request for an assessment of the state's 150 largest for-profit corporations. "In 2007, 2008 and 2009, 103 of the 150 largest for-profit employers paid zero state income taxes."
"This is a slap in the face of people who work every day, who provide for their families and who pay their taxes," said Gary Anderson, the state's former chief fiscal officer, who now represents the Mississippi Revenue Coalition, a group seeking to offset drastic cuts to public education with revenue from legal tax-dodgers.
"This is a slap in the face of small business owners of our state who create jobs for Mississippians and who pay their taxes, and a slap in the face of our children because they are the ones who will suffer from cuts in education due, in large part, to low tax collections."
Anderson explained that corporations have an army of accountants working full-time to find new ways to legally exempt their clients from paying state taxes.
One popular method, he said, involves putting the company's corporate headquarters in a different state while raking in tons of cash from Mississippi customers. The companies siphon the cash to corporate headquarters and then pay their subsidiaries' employees through dividends, which the state of Mississippi does not tax.
Not that anybody is trying overly hard to rein it in. In 2008, Gov. Haley Barbour announced the creation of a public-private Blue Ribbon Tax Study Commission, charged to study the state's tax code and deliver suggestions for improvement. The commission walked into the debate with an unmistakable preference for low corporate taxes.
"The Commission believes that growth and job creation must be the primary focus for any recommended changes to the existing tax structure," the commission stated, and then cited a quote from economic index "Rich States Poor States": "States with the lowest tax, spending and regulatory burdens win the competitiveness contest, period. These are primarily in the south and southwest regions of the nation."
"Mississippi has a diversified and balanced tax structure which ranks well in national studies but with room for improvement," per the commission, which included an updated tax-management software system. It offered no opinion, however, on what a 2003 John C. Stennis Institute of Government report called a regressive tax system that demanded more out of the state's poor residents.
The Stennis report "The Mississippi Budget: An Overview of Selected Revenue and Expenditure Patterns" concluded, "Mississippi families making $19,000 or less are estimated to be paying roughly 20 percent of the state and local tax revenues paid by families." The report also described the lowest two income fifths as "estimated to pay 10 and 11.5 percent (respectively) of family income in taxes, while a family in the highest 1 percent pays only 6.9 percent of family income in state and local taxes."
The economic environment of low costs and a large pool of persistently poor workers jives well with a relatively nonexistent regulations policy in selling the South as a destination point for quick profits—like a Third World country.
The South made itself the cheap destination for industry in the U.S.—"smoke-stack chasing," Atkins calls it. The plan works well with industries like the textile trade, that is, until the easy-money industries find even more destitute labor elsewhere, such as in Mexico, Japan and, later, China.
The Mississippi Manufacturers Register, an industrial directory annually published by Manufacturers' News Inc., reported in 2009 that industrial employment in Mississippi fell 5.4 percent between 2008 and 2009. The state lost 10,761 industrial jobs and 158 manufacturers from February 2008 to February 2009, the steepest loss MNI has ever reported for the state, it claims. Plenty of that had to do with the nation's faltering economy, but The Economic Policy Institute reported that Mississippi has been losing the battle to maintain manufacturing jobs since 2001, long before the recession kicked in. Mississippi, in particular, suffered a net loss of 40,900 manufacturing jobs between March 2001 and June 2008, a 3.6 percent decline.
When confronted with the largely unregulated foreign hellholes with a brisk future in child labor and employee abuse, even the state of Mississippi had lost its hellhole advantage.
Still, the Republican Party, and its attendant Tea Party phenomenon, appear to champion smoke-stack economic tactics that consider public programs and investments in institutions like education and child care as impediments to corporate growth.
Gov. Haley Barbour, in defending the state's need to protect its reserve fund, asked House legislators to remove $77 million from the state's education and mental-health budgets in March. Barbour criticized the House Democrats budget compromise proposal for spending $500 million in non-recurring revenue on recurring expenses next year, leaving only $155 million in reserve funds for 2013.
House Appropriations Committee Chairman Johnny Stringer, D-Montrose, and a majority of the House Appropriations Committee took the easy route by refusing to budge on the cuts.
"After watching public schools across Mississippi struggle to survive from $300 million in budget cuts the past three years, I and other state House members do not—and will not—support the additional budget cuts proposed by Gov. Barbour," Stringer said in a March 23 statement.
House leaders were furious in the waning days of the legislative session in March because Barbour had called in from another state to inform them that they had not cut enough from the state's public-education program—a program that House Education Committee Chairman Cecil Brown, D-Jackson, complained had already suffered $300 million in reductions over the last few years.
"The House and the Senate have already voted on an education bill. We agreed on that number, but Barbour wants us to cut it more, and we can't do that," Brown said. "He wanted $77 million in additional budget cuts, we gave him $37 million in additional cuts, trying to compromise with him, but he wants to specifically cut education and mental health, and we've told him we're not going to destroy our school system to put money in the state's reserve fund."
Brown said cuts to education means tax increases on the local level, as districts hike property taxes to cover education shortfalls, and that the poorer districts will suffer more than the districts with healthy tax revenue.
Both Brown and Stringer complained that Barbour was out of town as the March 26 deadline on signing the bill crept to a close. The governor, the representatives complained, was out of state working with people with similar budget-busting priorities. Last month, Barbour and Mississippi House Democrats settled on a budget plan that reduces the state's K-12 education budget by $14 million below 2011 funding levels.
Dixie Whistling Northward
Barbour's presence is much in demand among Republican circles outside the South. Some northern state governors, many elected with the help of Barbour's influence as chairman of the Republican Governors Association, are watching the South and rubbing their chins in hungry speculation.
Wisconsin Republican Gov. Scott Walker capitalized on his state's $3.6 billion shortfall for the next two years by passing legislation through a Republican-dominated Legislature that dispenses with collective bargaining for Wisconsin state employees.
The new law, which also requires almost all public-sector employees to pay more into their retirement pensions and health insurance, also strips them of their ability to collectively bargain for wages not already linked to inflation.
Wisconsin is a bastion for the labor-friendly movement, unlike the South. Wisconsin Democrats, seeing they were outnumbered by Republicans in a vote that would alienate them from their labor-supporting constituents, fled to neighboring Illinois in hopes of blocking a quorum and preventing the passage of the bill. While they were gone, state employees and their supporters packed the Wisconsin Capitol with protests that made Wisconsin ground zero for the age-old union vs. bosses fight that had never taken root in the South.
Republican lawmakers changed the bill to not require a quorum vote, and then passed it without their Democratic counterparts, despite the massive media-grabbing protests. Democratic Dane County District Attorney Ismael Ozanne filed a lawsuit claiming Republicans ducked Wisconsin open-meetings laws by passing the law and that it is therefore void.
A Dane County Circuit Court judge agreed and ordered Secretary of State Doug La Follette not to publish the law. The Wisconsin Department of Justice appealed the temporary restraining order up to Wisconsin Supreme Court, which had not ruled on the matter by April 5.
Walker, meanwhile, praised the bill as a new effort to get spending in Wisconsin back under control, saying "the state's broke," and that the union presence cost the state too much in pay and benefits. He used the state's deficit as a cause, even though Walker had no issue with budget shortfalls when he signed into law a series of tax cuts that Milwaukee's WITI-TV says will add "$117 million to the state's budget problem over the next two years."
Michigan is another union stalwart, with a governor who critics say is leaning on the poor to make life better for corporations. Michigan League for Human Services heavily criticizes Gov. Rick Snyder's plan to cut the Michigan Earned Income Tax Credit.
"The Michigan EITC keeps 25,000 people in working families out of poverty, including 14,000 children," MLHS said in a March 15 statement. "Ending the EITC will push these children into poverty and worsen poverty for 700,000 people."
The league added that Snyder's overall tax proposal is "10 times harder on poor families than that of wealthy families, mainly because of the elimination of the EITC." The Snyder plan, they say, reduces taxes on business by 86 percent, while increasing taxes paid by individuals up 31 percent.
The Institute on Taxation and Economic Policy released its own data in March showing that Snyder's plan increases the tax burden upon the lowest 20 percent income households earning less than $17,000 by 1.1 percent, but only increases the personal income taxes of the state's wealthiest individuals, (those earning $335,000 or more) by 0.1 percent.
Rozman said the changes in Wisconsin, Michigan and some other states signal the spread of age-old southern tradition, which never squared happily with the New Deal or the middle class.
"The New Deal is unraveling, and there's no side defending it anymore," Rozman said. "Democrats do not really have a left wing in this country anymore. Labor was destroyed and its numbers went down dramatically, and the Democratic Party moved to the center, or even center right. There are individual progressives, but there is no clear message that people are able to identify."
It's not really a difficult thing to defend. People generally say government is spending too much, but when you ask them what programs they want cut, they generally choose chimerical budget sinkholes that never made a difference in the first place.
"Usually, they choose things like foreign aid—like it takes up 25 percent of the government, even though it's more like 25 percent of 1 percent of the budget, something like that," Rozman said.
"They want to cut in general and in principal, but when you use specifics, no. They defend it. They defend public education. They defend Social Security, all the government safety-net programs, despite Republicans' increasing call to cut programs to reduce the (federal) deficit."
Senior-citizen advocate group AARP conducted an opinion poll on the 75th anniversaries of Social Security's founding and learned that people still have high regard for Roosevelt's program and most adults (seven in 10, actually) strongly oppose cutting spending on Social Security, even if the cuts serve to reduce the federal deficit.
A March Bloomberg News National poll revealed that the public overwhelmingly opposed significantly cutting education programs, including No Child Left behind, Head Start and subsidies for college loans by 77 percent. Seventy-six percent of people polled also opposed reducing benefits for Medicare, and 62 percent opposed significantly cutting the much disparaged Environmental Protection Agency.
But while the masses appear to want to preserve social programs, the leaders of the movement to remove the New Deal—to essentially southernize the North—have an easier time of tearing down things as complicated and multi-faceted as a federal budget, and the Democrats don't have a clear game plan to defend the sand castle.
"It's very difficult to be pragmatic in the face of true believers, the ones who are behind the demolition of the Deal, who know exactly what they want, which is to be the 'Party of No,' to destroy what exists and create a survival-of-the-fittest society," Rozman said.
Meanwhile, Barbour, a former tobacco lobbyist whose firm Barbour, Griffith and Rogers earned millions peddling the interests of corporations, is touching down in the Midwest and other spots this month, selling to American voters what appears to be an increasingly popular southern strategy of a different bent. His next appearance could be the White House.
Brace yourself, Yolanda.
I don't think it is a Left-wing ideal to protect the rights of workers. It is a center ideal; it is American as apple pie and the Fourth of July. Who can say giving tax breaks to corporations and billionaires and clawing it from Education funding, the hands of the poor, hungry and elderly is anywhere close to Right?
Here is a link to all I said the day the (awesome) cover picture and other pictures in the print version were taken at the "Save the Dream Rally" on March 15th :
"The current model of large business activity in this country is destroying our economy."
"Effective personal income tax was maxed at 25% in 2003, Effective corporate income tax in the same year – 3.4% and those are the TOP numbers."
"Government can not give tax breaks to corporations and take the lost income from the hands of the Citizens."
Brad, we're not a he-said, she-said publication. We research facts, put them out there and provide analysis of them that isn't found in the vast majority of media.
My suggestion: Counter the arguments. Provide links. Let 'er rip.
Rozman said, "...but there is no clear message that people are able to identify."
How is this : Corporations who earn their profits from the Citizens of Mississippi must contribute their fair share of taxes toward sustaining the infrastructure and educational systems that enable and encourage those profits to be made.
"American voters what appears to be an increasingly popular southern strategy of a different bent.
Time certainly repeats itself! I'm not saying we are going back to slavery or Jim Crow, but after Reconstruction and The Compromise of 1877 - it created a very skewed America that made it very difficult for many, however a very few capitalized and that led to numerous monopolies in the early parts of the 1900's.
"Corporations who earn their profits from the Citizens of Mississippi must contribute their fair share of taxes"
Good point, but I have to point this out. Roland Martin, Al Sharpton, Cornell West and numerous other political analysts - have been shouting this one point from the roof tops, that blacks and whites of the very same economic status (working poor and middle class) - vote totally different, and if the latter - especially in Mississippi - will wake up one day and recognize how their votes are being taken advantage of, Corporations and the ultra wealthy will continue to cut corners in regards to their conrtibutions to our infrastructure.
To close out my post, I have to qoute a solid point you made in this article:
"poor white southerners barely registered on the radar. The wealthy told them—from the days they took a bullet during the Civil War to protect a rich man's right to own slaves to the days they beat down a black union organizer—that they at least didn't have it as bad as blacks. To keep it that way, the wealthy elite had to ensure that blacks had it bad.........Poor southerners rarely sided with working blacks in this fight, and did their part to keep blacks earning a pittance. But in so doing, Atkins said, the poor southern white man created an impossible competitor. How, he asks, could fair wages compete against the non-compensated work of a slave, or even the dirt-earnings of a black sharecropper?.........."Whites competed with blacks for low wages in a race to the bottom, which is where the elite wanted them," Atkins said."
Therefor having/creating a very large political group voting against their own economic interests, just to feel superior over somone else, in the same boat as them!
The republican party has exploited this to the fullest! I have a co-worker, that makes the same amount I make, however worked 20+ years longer than I have, is an admitted "conservative" - yet whines and moans when the governor hasn't given a raise? C'mon - you voted against your best interest?
Great article, it was very refreshing to see someone acknowledge what is really going on down here.
- Duan C.
Those purporting to speak the truth should present all views, not just those who represent their own predelictions [sic].
I vehemently disagree, Brad. Truth frequently does not have "another" side.
One of the disservices mainstream media forces on the public are "reports" that simply pit a pair of talking heads against each another. Without commentary or fact checking, they allow people to choose a "truth" that best fits their paradigm, regardless of whether either of them is actually telling the "truth." Outlets that purport to present "balanced" reporting do this really well, when they actually do no such thing, often beginning and ending with the "truth" they want to present and out-shouting anyone who disagrees.
"The" truth rarely exists. When "a" truth (or, as in this story, many truths) is presented, if it doesn't fit our paradigm, it's all too easy to dismiss it all as biased or a conspiracy theory. Whatever. I happen to believe that Barack Obama was born in the state of Hawaii, in the U.S. Lots of folks believe that isn't true, despite all evidence to the contrary.
Like Donna said: Instead of just dismissing the story as biased, bring on the dissent. Facts, please. Links, please. No blogs, thank you.
So, the right wing goes from "Corporations don't pay taxes, they collect taxes" to "Business pays all the bills" Which is it??
The country is not broke. Well, the top 10% that have more wealth than the entire bottom 90% are doing quite well. The problem is they are hording it all and leeching more and more out of the economy. The GOP keeps wanting to cut their taxes and HOPE they let go of some of it and let it trickle down... even though history and experience says they won't. So, the 90% of us who actually pay taxes, have less and less to pay.
Raising taxes by 3% on the top 10% of wealth hoarders would (probably - check the numbers) balance the budget and have our debt paid of in a decade or two.
Everyone - from the CBO to the very economists "The Heritage Foundation" cites for it's praises of the GOP's Ryan plan - say their numbers are INSANE and Flat out Untrue. I believe the economist says, "their numbers require a couple unicorn sightings and other imaginary things" to work.
So, no, when top businesses and wealthy are taking in over 60% of the nation's income and are paying a TOP effective percentage of around 3.4% to fund our infrastructure and educational institutions that ENABLE and help maintain those profits, they are not paying the bills - and, yes, we are going to have trouble fulfilling our other responsibilities.
I am fairly sure that it is corporate psychophants such as yourself that are living in a delusional parallel universe.
George, I'm pretty sure you can make your arguments without insulting Adam, the messenger, because he did a story you don't agree with. Be classier than that, please, and present your facts.
And one could argue that everyone here is "ranting," so no need to try to belittle those who disagree with you. This site encourages real conversation. You're welcome to join in -- but your opinion is no more valid than anyone else's here.
I also haven't seen you present many facts to support your arguments, yet. Feel free.
Same goes to you, Bobby: no name-calling and insults, please, even in response to insults. Our country deserves a higher level of discourse. Otherwise, carry on.
George said : "First, The government is spending way more than they take in."
Exactly. They keep cutting the tax rate and giving deductions to their campaign donors... you know, corporations and the exceedingly rich. So, yes, after giving away huge amounts in corporate welfare, the do, indeed spend way more than they take in.
George said : "They have promised way more than they can deliver."
They were able to deliver when they made the promises... then came "trickle down" economics and gutted the income stream.
George said : "And by the way you cannot balance the budget by increasing taxes to an unreasonable level as it would kill the "Goose so to speak" and it wouldn't balance the budget anyway.
No, not to an unreasonable level, but back to levels they were at in times of prosperity. We should close the loopholes, eliminate the unreasonable deductions (both corporate and personal) and silly corporate subsidies. I suggest putting in a minimum tax - perhaps 2% of real income - no deductions, no income low or high income limits. Reinstate "estate taxes" as well.
George said : "Cuts are inevitable. So look at the facts before you go ranting."
I have (read my blog!). I would propose that you follow your own suggestion. Cuts are inevitable only if we keep pandering to corporations and the already rich. The FACT - you know, indisputable mathematical certainties - is that the wealth and income gap has widened to an extreme point, just like the before the Great Depression. This means that wealth is being leeched out of the economy and into the hands of a privileged few.
The link you provided Proves the whole point. Individual income taxes are at $1.1 Trillion and Corporate income taxes are at $297 billion. Most corporations pay little to no income taxes on their HUGE profits.
Also an issue is the FACT that the ultra rich pay relatively little taxes - not to say their tax bill is not huge, but as a percentage of their real income, they pay less than I do (as a percentage of my real income). Note, please, that it is not "taxable" income, but Real income - before all the handouts and deductions and loopholes and tax havens the rich can use and including 'unearned' income - which should be taxed the same or more than earned income.
"The problem isn’t that the United States is out of money. It’s that a tiny sliver of households are under-taxed. The richest 10 percent of Americans own almost three-fourths of the country’s total wealth. Astoundingly, the most affluent 1 percent of Americans own more than one-third of our total wealth." - from http://www.faireconomy.org/enews/fair_taxation_means_more_brackets_up_top
As for class warfare, Warren Buffett said, "It is class warfare, and my side is winning."
George, saying that the government "doesn't produce anything" is a red herring. Not everything on the planet has to produce salable goods to have value, nor can value always be measured in dollars and cents. The government provides for our defense, most of our childrens' education, and allows most of our elderly and disabled residents to live something close to decently. It also funds and carries out scientific and medical research, adjudicates our laws, provides loans for higher education and a host other benefits. Whether or not you believe the government should provide those benefits to Americans, you cannot argue that they have value and contribute to the quality of life for millions.
Government is a large bureaucracy and inherently less efficient than smaller organizations; however, many multi-national corporations are actually larger than the governments of many countries (in a comparison of revenue and GDP). Big corporations are, therefore, prone to the same bureaucratic inefficiencies as governments but with far less responsibility or accountability.
Pointing to your own WaPo link, corporate taxes amount to 11.5% of the federal government's income. If you compare it to the $14.2 trillion GDP (the market value of goods produced) they pay less than 2 percent (or is it 0.2% ... someone check my math). Meanwhile, corporations are (at last count) sitting on $1.9 trillion in cash. Even when you add in payroll taxes, much of that revenue comes from individual deductions, not employers.
I don't "hate" corporations. I just want them to be a little more accountable to the country (and the people) that makes their wealth possible.
And let's be clear: I pay in to Social Security and Medicare with every paycheck. Neither of those things is an "entitlement" (aka as a government handout). Like the majority of Americans, I have paid for those safety nets for the entirety of my working life. We can fix the prospective Social Security insolvency easily and overnight: raise or (better yet) eliminate the earnings ceiling.
I won't argue that the government spends more than it takes in. That's obvious to everyone that isn't hiding under a rock. But simply cutting (or cutting the wrong things) won't balance the budget. Just like a family where parents have to work two or more jobs to increase their income to make ends meet, some tax increases are in order.
I've been hearing the GOP slobbering about trickle-down economics since the days of Reagan. Cutting taxes on the wealthy and on corporations will stimulate the economy and make everyone better off, they've been saying for the past quarter century. Yet, here we are, with the disparity gap between the rich and the poor the largest it has been since the Great Depression, and (official) unemployment hovering just under 10% (in reality, it's probably twice that). The wealthy have seen tremendous gains through laissez faire economic policies, while incomes for those in the middle class are flat, and the poor are actually poorer than they were in the 1970s, with poverty and "food insecurity" (a nice way to say that you don't know where your next meal is coming from) at an all-time high. I'm not going to repeat the stats; everyone's heard them a thousand times. Suffice to say that the GOP model has yet to work for anyone but the wealthy and no evidence exists that it ever will.
Do we need to get our house in order? You bet. But let's not do it solely on the backs of those who are least able to deal with it. We must increase revenue (raise taxes) AND cut spending. Anything else is just pissing in the wind.
Ronni and Donna,
How about a 2% tax increase on all income levels? Would you be opposed to that?
In case anyone hasn't pointed this out: The government "produced" the Internet. And considering how we've pushed so much manufacturing and bricks-and-mortar to other countries, it's driving a whole lot of our economy.
Independent - I've started considering what a 2% minimum income tax would do. 2% of (gross income minus a reasonable exemption), no loopholes, no write-offs as a minimum payment of taxes. No income limits - low or high.
Already, nobody pay taxes on the first few thousand dollars. Most already pay a big portion of our paycheck in taxes during the year - and if we've done our withholdings properly, we don't owe at the end of the year. But some people and corporations use tax-code trickery to pay nothing, or even get refunds above and beyond what they paid in.
The 2% minimum would be a great Minimum tax rate. I pay 17% of my Gross pay in taxes - my effective tax rate. Some corporations pay nothing or as high as 3.4% of their income in taxes. My proposal would put everyone at an effective tax rate of 2% at least - on all income both earned and unearned.
Everyone would still do their taxes the same and I would probably still pay 17% (actual rate on gross, not marginal rate on 'taxable') - but nobody would pay less than 2%, no matter what deductions and loopholes they try.
It would eliminate tax rebates - or getting back more than you paid in - and eliminate well-off people deducting their way out of paying anything.
Al Gore did not invent the Internet:
- golden eagle
Do you think it would be fair to tax everybody at the same percentage rate of gross income?
I actually had someone cuss me out via email for being a "bleeding heart liberal" who thinks government is our savior and the rich are the devil. Whatever.
So, again, let me be clear: We must cut spending AND raise taxes to get out of our deficit mess. Based on what you said above, I think we can agree on that point. Saying that we have a spending problem and not a revenue problem doesn't make any sense. We have both.
Our difference come, however, in the manner of carrying out those two tasks. I see plenty of government spending that few in Congress are talking about cutting, like our enormous defense budget (more than all other countries in the world combined), or the fact that we spend billions every year on our 40-year war on drugs and another several billion on housing the low-level drug users caught up in that war. Our nation now has a quarter of all the world's prisoners with only 5 percent of its population.
On the revenue side, those who make the most money—as has been shown on this thread and in numerous books, articles and Internet blogs—are simply not paying their fair share. Is increasing tax rates on the top income brackets the only cure. Not likely, but it sure is a good start.
The social safety nets set up after the Great Depression have been, in part, responsible for an extended period of great prosperity and good health in this country. That period began a slide back toward increased poverty and financial inequality during the Reagan era. Today, our economy is more unbalanced than it was in the 1920s. That is also when the whole "government is the problem" meme came into being.
Numerous economists have offered solutions to Social Security's coming insolvency ... such as raising the income ceiling. Instead, we're all too ready to cut programs for the needy. The Congressional Budget Office has said over and over again that simply allowing our health-care system to go on the way it is will cost the nation far more than the health-care reform act passed last year. They also say that most of the cuts in the proposed GOP budget won't make one iota of difference in the deficit. And yet, Americans aren't getting the message.
We do have a choice on where to cut and where to increase revenues, and it's not as black and white as the GOP and the tea party would have you believe. What's required is the will to do it, and neither party has shown much backbone as of late.
It's no wonder, when half of our Congress men and women are millionaires. With all due respect, they're looking out for their own best interests, not that of the American people.
What happening in Greece is due to that country lying about its deficit for years and then having billions due on its bonds this year. Not comparable to what's happening in the U.S., although it will likely affect the U.S. if banks have to default on Greece's debt. Lots of countries across the globe cut taxes while increasing spending, following the laissez faire economic policies of the U.S. It's too bad that they don't work and never did.
For those who say that government is the problem, who do the same people look to when things go wrong? Government. Of course, that's not to say that government is all good all the time.
- golden eagle
Independent, Non-negotiable tax rates that get rid of a myriad of loopholes for hiding/deferring wealth and off-shoring would be a good start. Ending a lot of corporate welfare would be a good start. I honestly don't know whether a 2 percent flat tax for everyone would work. I tend to think a flat tax is at least somewhat regressive, i.e. it's infinitely more difficult for someone with a little bit of money to manage than someone with a lot.
Anyone who breaks out the Al Gore joke in mixed company has spent too much time in the Hannity-Beck bubble. This ain't a tea party rally, George. Try to show some sense of your audience.
No one claims that taxing the rich will solve all our problems. The thing that exasperates people of common sense is that conservatives endlessly repeat such slogans as "we have a spending problem, not a revenue problem," apparently in the hope that endlessly repeating nonsense will make it true. Every serious observer recognizes that we have both.
If you look at corporate taxation, it has fallen from about 6 percent of GDP after World War II to about 1 percent of GDP today. I humbly submit that 5 percent of GDP makes a big difference.
If we collected 6 percent of GDP from corporations today, that would mean an additional $750 billion dollars in revenue, or about 60 percent of our current deficit. Doubtless, some of that money would slip away into tax shelters. But that is no reason not to try to collect it. Somehow, conservatives have turned tax shelters into an immutable law of nature, when the truth is that tax shelters only exist to the extent that we allow them.
We could eliminate the entire shortfall in Social Security simply by restoring Ronald Reagan's reforms of Social Security. Those reforms adjusted the cap on social security taxes so they would affect 90 percent of income. Because the wealthy have collected most of the increase in income over the last 30 years, Reagan's reforms now only collect about 84 percent of income. That explains most of the shortfall.
Increasing revenue alone will not solve out deficit problems, but we have slashed taxes on the wealthy by more than half in the last 30 years. I humbly submit that this makes a difference.
Conservatives have become intellectually bankrupt. How else to explain the Ryan proposal, which claims that lowering taxes by 10 percent will increase revenue by $600 billion? What kind of Laffer curve is that? A pretzel?
You can declare over and over again that the welfare state is unsustainable. You can insist that we have a spending problem and not a revenue problem. To me, you're just saying, "Bring it on." There is no sense in compromising with people who believe that up is down. I only wish the president could figure that out.
- Brian C Johnson
To add a little something else to this debate, I find it amazing - that in a time of economic uncertainity, the two parties are debating idealogy, instead of trying to solve the problem and get this thing fixed.
Who's fault is it? I am pretty sure some will say republicans and some will democrats, or liberals, or conservatives.
- Duan C.
If you want to take much more than that you will stifle business activity. Law of diminishing returns.
George, my argument has never been with the majority of businesses in the U.S.—small businesses—that pay their fair share and more. The issue is with huge corporations and financial companies, multi-nationals that have fleets of tax attorneys to find and manipulate every tax loophole, hide profits in tax shelters, off-shore jobs and then whine when someone asks them to pay U.S. corporate taxes. Companies like G.E., one of the largest corporations on the planet, that pays zero, none, nada, not one dime of U.S. income tax on their billions in profits. And they're not the only ones.
Ronni mentioned that corporation are holding 1.9 trillion in cash. I actually think that is a good thing. As the economy comes back around they have capital to deploy into productive business that will create jobs, profits, taxes, etc.
But here's the problem: the businesses are hanging on to that money saying they won't hire until the economy comes comes back. But the U.S. economy is largely built on individuals spending money. If people don't have jobs, they don't spend. A large part of the blame for the economy not coming back as quickly as it could is the fact that corporations aren't hiring. It's a whole lot simpler than a chicken/egg story.
I've heard it said that Henry Ford's greatest invention was neither the Model-T nor the assembly line. It was the way he created a market for his automobiles by paying the people who made them enough to buy them. In contrast, public corporations treat their employees like cogs in the profit wheel. Not enough profit? Lay people off. Stock pricess bounce back predictably. Problem is, they don't rehire. They just squirrel away the cash to make their balance sheets look better.
The problem is partially medicare, medicaid and social security. I agree. But the tea party and the GOP simply want to slash and burn these programs, removing the social safety nets THAT CITIZENS HAVE PAID INTO for decades instead of coming up with ways to make them work (like health-care reform and raising SS caps). Ultimately, it's the people least able to make it without these programs—the elderly, the disabled, the impoverished—that will suffer the most. And that's simply callous.
What is unfair is the system we have with tax breaks given to select people, business sectors, etc. Which is based on who has the best lobbyist.
Amen. It's called a plutocracy.