A financial transaction tax could help ensure Wall Street works for Main Street

In a new report, EPI’s Josh Bivens and Hunter Blair write that a financial transaction tax (FTT).

What this report finds: A well-designed financial transaction tax (FTT)—a small levy placed on the sale of stocks, bonds, derivatives, and other investments—would be an efficient and progressive way to generate tax revenues. Gross revenues from a well-designed FTT would likely range from $110 billion to $403 billion. And net revenues (including offsets from reduced income, payroll and capital gains taxes, and increased borrowing costs) would likely be substantially higher than some other recent estimates indicate. This is mainly because other estimates’ assumptions about the volume of financial transactions an FTT would crowd out are too high, and because an FTT is likely to redistribute rather than reduce overall incomes. Regardless of the level of revenues raised, an FTT would be a win-win for the U.S. economy. Higher revenues would result in more funds for social insurance programs and much-needed public investments. Lower revenues would be the result of the FTT crowding out financial transactions of little value to the U.S. economy. This would boost Americans’ incomes through lowering fees on financial services, such as the management of 401(k)s and other accounts.

Why this matters: As the U.S. economy continues to recover from the 2008 financial crisis and the ensuing Great Recession, an FTT would help ensure the financial sector compensates other sectors of the economy (particularly U.S. households) for the damage the sector inflicted. Through generating tax revenues, decreasing the fees Americans pay on their investments, and shrinking unproductive parts of the financial sector, an FTT would help Wall Street work for Main Street.

Source: A financial transaction tax could help ensure Wall Street works for Main Street

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Banana Republicans

— by CAP Action War Room

The Latest House GOP Meltdown Has Been A Long Time Coming, And It’s Not Just About Them

The same tumultuous group that led the Republican Party to control the House of Representatives is now at the center of the latest and most public display of Republican dysfunction, or as Rep. Peter King (R-NY) calls it, “a banana republic.” Amidst absurd infighting in the House over Planned Parenthood funding, Speaker John Boehner (R-OH) was more or less forced to announce his future resignation, leaving the GOP needing to find the next Speaker. Rep. Kevin McCarthy (R-CA) was the favorite to replace Boehner, until he unexpectedly and dramatically dropped out yesterday afternoon, leading members of Congress to openly weep and pronounce their caucus has hit “rock bottom.”

The media frenzy surrounding these events has focused on intrigue like it is an episode of “House of Cards.” Was there something behind why McCarthy took himself out of the running? Will Paul Ryan step up and run for speaker despite repeatedly pledging not to? But here’s what is much more important: this self-inflicted leadership breakdown is just one more chapter in a story of House Republican recklessness – and their own caucus hasn’t been the only victim. House GOP dysfunction has resulted in a string of harmful policies and American families have paid the price. Here are just a few examples:

  • The GOP orchestrated the reckless government shutdown in 2013 which had a devastating impact on our economy. Republican leaders bowed to the will of their extreme right wing to shut down the government over the Affordable Care Act. The shutdown lost Americans at least 120,000 jobs, prevented sick Americans from enrolling in clinical trials, forced Head Start programs for children to shut down, stalled veterans’ disability claims, delayed $4 billion in tax returns for Americans, and severely hurt small businesses. Overall, S&P estimates that the Republicans cost the United States economy a whopping $24 billion with their shutdown.
  • The GOP has repeatedly used the debt ceiling to manufacture crises. In order to maintain the full faith and credit of the United States and avoid global economic collapse, Congress needs to raise the debt ceiling from time to time. Yet, GOP leaders have repeatedly joined with their unyielding Tea Party caucus to manipulate these once run-of-the-mill debt ceiling increases for their own gain. In 2011, the GOP threatened to force the United States into a default – to “crash the global economy,” as Time put it – which was only averted after both sides agreed to $1.2 trillion in economically damaging sequestration cuts. This behavior led to a U.S. credit rating downgrade. In 2013, the GOP used this brinksmanship again to attempt to make cuts to programs like Social Security, Medicare, and the SNAP food program, again putting the credit-worthiness of the United States in jeopardy.
  • The GOP also used a manufactured crisis to force sequestration cuts that are still hurting the economy today. The Republican-induced sequester disproportionately hurt low-income and middle class families. It led to significant cuts to funding for education, small business, and health research. Sequestration overall will cause approximately 1.8 million people to lose their jobs.

Clearly, the GOP’s inability to control their own party has already caused a lot of damage to our economy and the well-being of American taxpayers. And yet, as their conference devolves again into chaos, they have no inclination to change their backwards policies or irresponsible behavior. They have no plans to avert the upcoming shutdown or increase the debt ceiling, even though the United States could default on its obligations if Congress doesn’t act by November 5th. House Republicans are not only distracted by their internal pandemonium, going into the upcoming budget negotiations they remain committed to the backwards, policy ideas and reckless political strategy that have caused so many problems for themselves, but more importantly for the American people.

BOTTOM LINE: The GOP’s current state of disarray has been a long time coming. The party’s leadership gave in to a minority of its members who are devoted to pushing devastating cuts to working-and middle-class families in pursuit of rigid and impractical ideological principles. The result has been a government in a state of perpetual dysfunction. And while House Republicans may be paying the price with negative news coverage, it is American families who pay the real price of their extreme policies.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe. Like CAP Action on Facebook and follow us on Twitter

The Middle Class At Risk

Jul 27, 2015 | By CAP Action War Room

The Gap Between Rhetoric and Reality of Republican Prescriptions for the Economy

In recent decades, dramatic changes have squeezed the middle class, making it harder and harder for middle-class families to feel economically secure. In response to these changes, GOP candidates have shifted their rhetoric and begun decrying stagnant wages, inequality, and rising middle class costs. For example, in his campaign launch speech Jeb Bush said we need to “make opportunity common again.” Meanwhile, Sen. Marco Rubio introduced his tax plan in an op-ed with Sen. Mike Lee saying, “Too many Americans believe the American dream is slipping away.

But a new report from CAP Action finds that despite its new rhetorical shift, the GOP continues to propose policies that would undercut economic security for working- and middle-class families. Even as Republican candidates talk about restoring the American dream and expanding opportunity to all Americans, they continue to embrace the same, failed policies that have led to middle class Americans being squeezed by rising costs and stagnant wages.

Here are a few of the key facts on how the middle class is at risk and how Republican policies would only make things worse:

  • Republicans continue to support tax policies that favor the wealthy but do little for middle class families. Many of the GOP candidates favor eliminating capital gains taxes, which would do nothing for middle-class Americans. Middle-class families receive very little income from capital gains and dividends: Only 6 percent of market incomes for households in the middle quintile come from business income, capital income, and realized capital gains. The top 1 percent of households, on the other hand, receive more than half of their incomes from these sources. Eliminating capital gains taxes is nothing more than a massive tax cut for the wealthiest few.
  • Republican governors are blocking bills that help families juggle the demands of work and home.Of the 12 states with laws preempting localities from taking actions like increasing the minimum wage or offering paid sick leave, 11 were passed by a GOP governor and legislature since 2011. In particular, Wisconsin Gov. Scott Walker signed a preemption bill that nullified Milwaukee’s paid-sick leave law which would have helped 120,000 Milwaukeeans–or 47 percent of the city’s private sector workforce.
  • Despite the rhetoric, GOP economic policies favor the wealthy. In 2014, 41 Republican senators with an average net worth of $8.1 million, including several eventual presidential candidates, voted against giving low-income Americans a $6,000 raise.
  • Instead of investing in working Americans, Republicans have been slashing key pillars of opportunity, such as education. More higher education cuts have occurred under Republican leadership than under Democrats. Between 2007 and 2014, real state funding for public education grew under Democrats and fell 10 percent in states led by Republicans. This also led to higher tuition increases.
  • Republicans still oppose a minimum wage. If a Republican president spent two terms in office continuing to block a minimum wage increase, like each of their positions today, the value of the minimum wage would fall below $6 in today’s dollars, lowest in 70 years.

BOTTOM LINE: Decades of failed, trickle-down economic policies have left middle-class Americans struggling. Disguising old, top-down policies with new rhetoric is as disingenuous as it is dangerous.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe. Like CAP Action on Facebook and follow us on Twitter!

If you won’t speak up for yourself, who will?

— by Nick Hanauer, via Democracy for America

President Obama and the Department of Labor just proposed giving millions of Americans a raise, increasing the overtime threshold from $23,600 a year to $50,440. From the fearful squawks coming from the U.S. Chamber of Commerce and other business lobbyists you’d think the sky was falling.

But all this trickle-down scare-talk about job-killing regulations and unintended economic consequences is just that — trickle-down scare talk —  without an ounce of empirical data to back it up.

Business lobbies are already hollering this will kill jobs. Baloney. We call it: Chicken Little Economics.

Far from the end of the world, middle-class Americans never did better than when the overtime threshold  —  the annual salary below which workers are automatically entitled to time-and-a-half overtime pay — was at its peak.

President Obama’s plan is a courageous step in the right direction. It’s like a minimum wage hike for the middle class. The Department of Labor has started the rule-making process to make the increase official. They’re taking public comment right now, and we need you to let them know you support it.

Say no to Chicken Little Economics! Join me, Robert Reich, and Democracy for America and tell the Department of Labor that you support President Obama’s plan to raise overtime pay.

A half-century ago, more than 60 percent of salaried workers qualified for overtime pay. But after 40 years in which the threshold has been allowed to steadily erode, only about 8 percent do. If you feel like you’re working longer hours for less money than your parents did, it’s probably because you are.

The erosion of overtime and other labor protections is one of the main factors leading to worsening inequality. But a higher threshold would help reverse this trend.

Under the higher salary threshold, employers would have a choice: They could either pay you time-and-half for your extra hours worked, or they could hire more workers at the standard rate to fill your previously unpaid hours. Employers could put more money into your pockets, or put more leisure time at your disposal while directly adding more jobs. And either would be great for workers and great for boosting economic growth.

Submit your comment to the Department of Labor today: tell them to raise the overtime threshold.

Here’s why the right-wing and the business lobbyists are wrong about overtime. Lower- and middle-income workers don’t stash their earnings in offshore accounts the way CEOs do . When workers have more money, they spend it. Businesses have more customers; and when businesses have more customers, they hire more workers.

A higher overtime threshold would increase total employment, tightening the labor market and driving up real wages for the first time since the late 1990s.

Conservative pundits and politicians will attempt to preserve the status quo by warning that a return to more reasonable overtime standards would somehow cripple our economy, hurting the exact same workers we intend to help.

But that’s what they always warn about every regulation – from the minimum wage, to Obamacare, to child labor laws. Yet it never turns out to be true. And trickle-down economics looks more like Chicken Little Economics with every passing day.

Let’s put an end to Chicken Little Economics. Join me, Robert Reich, and DFA: tell the Department of Labor you support the new overtime rules.

Thank you for taking a stand against income inequality.

Naomi Klein Makes Moral Case for World Beyond Fossil Fuels

Activist and author, Naomi Klein, praises ‘courageous’ invitation by Pope in face of fossil fuel industry’s power

by Nadia Prupis, staff writer

Author and activist Naomi Klein spoke at the Vatican on Wednesday, calling climate change a “moral crisis” that should unite all people. (Photo: Adolfo Lujan/flickr/cc)

Naomi Klein—activist, author, and self-described “secular Jewish feminist”—spoke at the Vatican on Wednesday where she championed the Pope’s message for global action on climate change and made the case for “the beautiful world” beyond fossil fuel addiction.

Klein, who was invited to speak by the Vatican, gave her speech ahead of a two-day conference to discuss the Pope’s recent encyclical, Laudato Si’, on the environment and the threat of the global economic system—subjects that the author of This Changes Everything: Capitalism vs. the Climate knows well.

The encyclical has garnered praise from environmental campaigners like Greenpeace International’s Kumi Naidoo, who called it a “clarion call for bold, urgent action.”

“Pope Francis writes early on that Laudato Si’ is not only a teaching for the Catholic world but for ‘every person living on this planet.’ And I can say that as a secular Jewish feminist who was rather surprised to be invited to the Vatican, it certainly spoke to me,” Klein told reporters ahead of the conference, which is called People and Planet First: the Imperative to Change Course.

She praised what she described as “the core message of interconnection at the heart of the encyclical.”

Klein also expanded on what may appear to be an unlikely alliance with the leader of the Catholic Church.

“Given the attacks that are coming from the Republican party around this and also the fossil fuel interests in the United States, it was a particularly courageous decision to invite me here,” she said, according to the Associated Press. “I think it indicates that the Holy See is not being intimidated, and knows that when you say powerful truths, you make some powerful enemies and that’s part of what this is about.”

“In a world where profit is consistently put before both people and the planet, climate economics has everything to do with ethics and morality.”  — Naomi Klein

“I have noticed a common theme among the critiques. Pope Francis may be right on the science, we hear, and even on the morality, but he should leave the economics and policy to the experts,” Klein said in her speech. “They are the ones who know about carbon trading and water privatization, we are told, and how effectively markets can solve any problem. I forcefully disagree.

“The truth is that we have arrived at this dangerous place partly because many of those economic experts have failed us badly, wielding their powerful technocratic skills without wisdom,” she said. “In a world where profit is consistently put before both people and the planet, climate economics has everything to do with ethics and morality. Because if we agree that endangering life on earth is a moral crisis, then it is incumbent on us to act like it.”

Echoing the Pope’s message to address inequities, Klein said that “our current system is also fueling ever widening inequality.”

But Klein stressed that her appearance at the Vatican did not mean that any one world view was “being subsumed by anyone else’s.”

“This is an alliance on a specific issue. It’s not a merger,” Klein said. “But when you are faced with a crisis of this magnitude, people have to get out of their comfort zones.”

Despite the magnitude of the crisis, Klein stressed: “We can save ourselves.”

“Around the world, the climate justice movement is saying: See the beautiful world that lies on the other side of courageous policy, the seeds of which are already bearing ample fruit for any who care to look.

“Then, stop making the difficult the enemy of the possible.

“And join us in making the possible real,” she said.

The two-day conference, which comes in the lead-up to the COP21 international climate talks in Paris later this year, is being coordinated by the Pontifical Council for Justice and Peace and the International Cooperation for Development and Solidarity (CIDSE), an alliance of Catholic development agencies. Alongside Klein, other speakers include Ottmar Edenhofer, co-chair of the UN Intergovernmental Panel on Climate Change, pontifical council president H.E. Cardinal Peter Turkson, and CIDSE secretary general Bernard Nils.


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