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AFL-CIO Joins CWA Call for $4,000 Wage Increase for Working People

Wednesday, December 13th, 2017

The Donald Trump administration repeatedly has claimed that its tax bill would result in a $4,000 wage increase for working people. Today, the AFL-CIO has joined a campaign by the Communications Workers of America (CWA) to demand corporations guarantee this raise in writing. The labor federation is rallying the power of its 12.5 million members and the entire union movement to support this campaign in every industry.

AFL-CIO President Richard Trumka said:

CWA has inspired an innovative movement to demand working people get our fair share and expose the scam that is the Republican tax bill. Working people have heard the same old lies about the benefits of economic policies written by and for greedy corporations for too long. This campaign is about holding corporations and politicians accountable to their claims and getting a much-needed raise for America’s workers.

On Nov. 20, CWA sent a letter to its major employers, including AT&T, Verizon, General Electric Co., American Airlines and NBC Universal, calling on them to commit to that raise in writing. In joining the CWA’s efforts, the AFL-CIO is encouraging all unions from all sectors to join in by reaching out to their employers and encouraging all working people to sign a petition that puts employers on notice that they will be held accountable if the Republican tax bill becomes law. 

In a powerful op-ed, CWA President Christopher Shelton laid out how the Republican tax scam would hurt working people and increase the deficit by more than $1 trillion:

Republicans are on the brink of passing a massive tax overhaul, and it’s looking like the biggest con of the Trump era so far. And that’s saying a lot.

The legislation being jammed through by the House and Senate Republicans is a tax giveaway to corporations and the richest 1 percent, paid for by working and middle-income families.

Across the board, working people will be hurt by this plan, whether by the new incentives to corporations to send U.S. jobs overseas, the loss of the medical expense deduction, new taxes imposed on education benefits, the inability to deduct interest on student loans, the loss of state and local tax deductions, or the forced budget cuts to Medicare, transportation, health care and other critical programs.

Despite the double-talk from Republicans anxious to sell this plan, it’s not hard to figure out who Republicans really want to help. Why else would tax cuts for corporations and tax changes that benefit the wealthiest Americans—like the estate tax—be permanent, while individual tax cuts for middle-income families are only temporary?…

Working people know better than to believe the boss’ promises unless they are in writing. That’s why my union has asked some of our biggest employers to sign an agreement that says if the tax plan passes, working people will get their $4,000.

This blog was originally published by the AFL-CIO on December 12, 2017. Reprinted with permission. 

Don't Pass Huge Tax Cuts for the Wealthy on the Backs of Working People

Monday, November 27th, 2017

Republican leaders in the U.S. Senate have proposed a job-killing tax plan that favors the super-rich and wealthy corporations over working people. We cannot afford to let this bill become law.

Here’s why this plan is a bad idea:

  • Millions of working people would pay more. People making under $40,000 would be worse off, on average, in 2021; and people making under $75,000 would be worse off, on average, in 2027.
  • The super-rich and Wall Street would make out like bandits. The richest 0.1% would get an average tax cut of more than $208,000, and 62% of the benefits of the Senate bill would go to the richest 1%. Big banks, hedge funds and other Wall Street firms would be the biggest beneficiaries of key provisions of the bill.
  • Job-killing tax breaks for outsourcing. The Republican tax plan would lower the U.S. tax rate on offshore profits to zero, giving corporations more incentive to move American jobs offshore. 
  • Working people would lose health care. Thirteen million people would lose health insurance, and health care premiums would rise 10% in the non-group market. Meanwhile, Republicans want to cut Medicaid and Medicare by $1.5 trillion—the same price tag as their tax bill.
  • Job-killing cuts to infrastructure and education. Eliminating the deduction for state and local taxes would drastically reduce state and local investment in infrastructure and lead to $350 billion in education cuts, jeopardizing the jobs of 350,000 educators.

Republican tax and budget plans would make working people pay the price for wasteful tax giveaways by sending our jobs overseas; killing jobs in infrastructure and education; raising our taxes; increasing the number of uninsured; and cutting the essential public services we depend on.

Call your senator today at 844-899-9913.

This blog was originally published at AFL-CIO on November 27, 2017. Reprinted with permission.

About the Author: Kelly Ross is the deputy policy director at AFLCIO. 

GOP Smash-And-Burn Tax Plan Does Nothing for Workers

Friday, October 27th, 2017

Congressional Republicans are selling a trickle-down tax scam times two. It’s the same old snake oil, with double hype and no cure.

A single statistic explains it all: one percent of Americans – that is the tiny, exclusive club of billionaires and millionaires – get 80 percent of the gain from this tax con. Eighty percent!

But that’s not all! To pay for that unneeded and unwarranted red-ribbon wrapped gift to the uber wealthy, Republicans are slashing and burning $5 trillion in programs cherished by workers, including Medicare and Medicaid.

Look at the statistic in reverse, and it seems worse: 99 percent of Americans will get only 20 percent of the benefit from this GOP tax scam. That’s not tax reform. That’s tax defraud.

Republican tax hucksters claim the uber rich will share. It’s the trickle down effect, they say, the 99 percent will get some trickle down.

It’s a trick. Zilch ever comes down. It’s nothing more than fake tax reform first deployed by voodoo-economics Reagan. There’s a basic question about this flim-flammery: Why do workers always get stuck depending on second-hand benefits? Real tax reform would put the rich in that position for once. Workers would get the big tax breaks and the fat cats could wait to see if any coins trickled up to jingle in their pockets.

House Speaker Paul Ryan claimed Republicans’ primary objective in messing with the tax code is to help the middle class, not the wealthy. Well, there’s a simple way to do that:  Give 99 percent of the tax breaks directly to the 99 percent.

The Republican charlatans hawking this new tax scam are asserting the pure malarkey that it provides two, count them TWO, trickle-down benefits. In addition to the tried-and-false fairytale that the rich will share with the rest after collecting their tax bounty, there’s the additional myth that corporations will redistribute downward some of their big fat tax scam bonuses.

A corporate tax break isn’t some sort of Wall Street baptism that will convert CEOs into believers in the concept of paying workers a fair share of the profit their labor creates.

Corporations have gotten tax breaks before and haven’t done that. And they’ve got plenty of cash to share with workers right now and don’t do it. Instead, they spend corporate money to push up CEO pay. Over the past nine years, corporations have shelled out nearly $4 trillion to buy back their own stock, a ploy that raises stock prices and, right along with them, CEO compensation. Worker pay, meanwhile, flat-lined.

In addition to all of that cash, U.S. corporations are currently sitting on another nearly $2 trillion. But CEOs and corporate boards aren’t sharing any of that with their beleaguered workers, who have struggled with stagnant wages for nearly three decades.

Still, last week, Kevin Hassett, chairman of the President’s Council of Economic Advisers, insisted that the massive corporate tax cut, from 35 percent down to 20 percent, will not trickle, but instead will shower down on workers in the form of pay raises ranging from $4,000 to $9,000 a year.

Booyah! Happy days are here again! With the median wage at $849 per week or $44,148 a year, that would be pay hikes ranging from 9 percent to 20 percent! Unprecedented!

Or, more likely, unrealistic.

Dishonest, incompetent, and absurd” is what Larry Summers called it. Summers was Treasury Secretary for President Bill Clinton and director of the National Economic Council for President Barack Obama.

Jason Furman, a professor at the Harvard Kennedy School who once held Hassett’s title at the  Council of Economic Advisers, called Hassett’s findings “implausible,”  “outside the mainstream” and “far-fetched.”

Frank Lysy, retired from a career at the World Bank, including as its chief economist, agreed that Hassett’s projection was absurd.

Hassett based his findings on unpublished studies by authors who neglected to suffer peer review and projected results with all the clueless positivity of Pollyanna. Meanwhile, Lysy noted, Hassett failed to account for actual experience. That would be the huge corporate tax cuts provided in Reagan’s Tax Reform Act of 1986.

Between 1986 and 1988, the top corporate tax rate dropped from 46 percent to 34 percent, but real wages fell by close to 6 percent between 1986 and 1990.

Thus many economists’ dim assessment of Hassett’s promises.

The other gob-smacking bunkum claim about the Republican tax scam is that it will gin up the economy, and, as a result, the federal government will receive even more tax money. So, in their alternative facts world, cutting taxes on the rich and corporations will not cause deficits. It will result in the government rolling in coin, like a pirate in a treasure trove. That’s the claim, and they’re sticking to it. Like their hero Karl Rove said, “We create our own reality.”

Here’s Republican Sen. Patrick J. Toomey, for example: “This tax plan will be deficit reducing.”

If the Pennsylvania politician truly believes that’s the case, it’s not clear why he voted for a budget that would cut $473 billion from Medicare and $1 trillion from Medicaid. If reducing the tax rate for the rich and corporations really would shrink the deficit, Republicans should be adding money to fund Medicare and Medicaid.

While cutting taxes on the rich won’t really boost the economy, it will increase income inequality. Makes sense, right? Give the richest 1 percenters 80 percent of the gains and the remaining 99 percent only 20 percent and the rich are going to get richer faster.

Economist Thomas Piketty, whose work focuses on wealth and income inequality and who wrote the best seller “Capital in the Twenty First Century,” found in his research no correlation between tax cuts for the rich and economic growth in industrialized countries since the 1970s. He did find, however, that the rich got much richer in countries like the United States that slashed tax rates for the 1 percent than in countries like France and Germany that did not.

This Republican tax scam is a case of the adage that former President George W. Bush once famously bungled: “Fool me once, shame on you. Fool me twice, shame on me.”

This blog was originally published at OurFuture.org on October 27, 2017. Reprinted with permission.

About the Author: Leo Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

What You Need To Know About The Michigan GOP’s ‘Right-To-Work’ Assault On Workers

Monday, December 10th, 2012

On Thursday, Michigan Gov. Rick Snyder (R) backtrackedon his commitment to avoid so-called “right-to-work” legislation and by the end of the day, both the Michigan House of Representatives and the Michigan state Senate had introduced and passed separate bills aimed at the state’s union workforce.

Michigan Republicans claim the state needs the measure to stay competitive with Indiana, where lawmakers passed “right-to-work” last year. In reality, though, such laws have negative effects on workers and little effect on economic growth. Here is what you need to know about the state GOP’s campaign:

THE LEGISLATION: Both the state House and state Senate passed legislation on Thursday that prohibits private sector unions from requiring members to pay dues. The Senate followed suit and passed a different but similar measure that extends the same prohibition for public sector unions, though firefighters and police officers are exempt. The state House included a budget appropriations provision that is intended to prevent the state’s voters from being able to legally challenge the law through a ballot referendum. Due to state law, both houses are prevented from voting on legislation passed by the other for five days, so neither will be able to fully pass the legislation until Tuesday at the earliest.

THE PROCESS: Union leaders and Democrats claim that Republicans are pushing the legislation through in the lame-duck session to hide the intent of the measures from citizens, and because the legislation would face more trouble after the new House convenes in January. Michigan Republicans hold a 63-47 advantage in the state House, but Democrats narrowed the GOP majority to just eight seats in November. Six Republicans opposed the House measure; five of them won re-election in 2012 (the sixth retired). And Michigan Republicans have good reason to pursue the laws without public debate. Though the state’s voters are evenly split on whether it should become a right-to-work state, 78 percent of voters said the legislature “should focus on issues like creating jobs and improving education, and not changing state laws or rules that would impact unions or make further changes in collective bargaining.”

THE CONSEQUENCES: While Snyder and Republicans pitched “right-to-work” as a pro-worker move aimed at improving the economy, studies show such legislation can cost workers money. The Economic Policy Institute found that right-to-work laws cost all workers, union and otherwise, $1,500 a year in wages and that they make it harder for workers to obtain pensions and health coverage. “If benefits coverage in non-right-to-work states were lowered to the levels of states with these laws, 2 million fewer workers would receive health insurance and 3.8 million fewer workers would receive pensions nationwide,” David Madland and Karla Walter from the Center for American Progress wrote earlier this year. The decreases in union membership that result from right-to-work laws have a significant impact on the middle class and research “shows that there is no relationship between right-to-work laws and state unemployment rates, state per capita income, or state job growth,” EPI wrote in a recent report about Michigan. “Right-to-work” laws also decrease worker safety and can hurt small businesses.

Union leaders are, of course, aghast at Snyder and the GOP’s right-to-work push. “In a state that gave birth to the modern U.S. labor movement, it is unconscionable that Michigan legislators would seek to drive down living standards for Michigan workers and families with a law that will do nothing to improve either the state’s economic climate or the quality of life for Michigan residents,” RoseAnn DeMoro, the executive director of National Nurses United, said in a statement.

This post was originally posted on December 7, 2012 on Think Progress. Reprinted with Permission.

About the Author: Travis Waldron is is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Travis grew up in Louisville, Kentucky, and holds a BA in journalism and political science from the University of Kentucky. Before coming to ThinkProgress, he worked as a press aide at the Health Information Center and as a staffer on Kentucky Attorney General Jack Conway’s 2010 Senate campaign. He also interned at National Journal’s Hotline and was a sports writer and political columnist at the Kentucky Kernel, the University of Kentucky’s daily student newspaper.

How Small Business Could be Reshaped After Today's Election

Tuesday, November 4th, 2008

Disclaimer: This post is not meant to be an endorsement of any party or candidate but, rather, an exploration of issues affecting small business as shaped by what will *most likely* happen at the polls today.

Today’s election will be historic, no matter the outcome.  If you’re anything near the political junkie that I am, you’ve been watching for the last few days the result projections of some of the major pundits from the basic and cable news networks, as well as from some of the bookies.

If there is a commonality here, it is that Barack Obama looks poised to win fairly big or really big; and that the Democrats will make gains in both the House and Senate – although the Senate “magic 60” number is still a far cry as of this writing.

Yet, if we assume the above, as David Gergen has noted on CNN, even without the Dems getting a filibuster-proof majority in the Senate, they would still have a greatly enhanced ability to push through legislation that supports their agenda, with a president ready (on most issues) to sign it into law.

How would this scenario affect small businesses?  A look at four issues that are central to their survival and success – two of which have been covered at length by candidates of the two major parties and the media, and two of which have been largely ignored – offer a clue.

Taxes

  • Obama’s plan, as detailed on his website, stresses cuts in capital gains taxes and additional tax cuts for corporations that create jobs in the U.S.
  • The Democratic Party website also talks about efforts of the majority Democratic Congress (elected in 2006) to “slash regulations on small companies.”
  • Point of contention: The now-familiar “Joe the Plumber” caveat: Entrepreneurs who start businesses that generate more than $250,000 in annual revenues would see their taxes go up – albeit to 1990s levels.

Healthcare

  • Obama: Establishment of a new Small Business Health Tax Credit to help small firms provide affordable health insurance to their employees.  He has also talked about creating an insurance pool that individuals and small firms can pay into and receive the same benefits that members of Congress receive.
  • Democratic Party: Emphasis on cutting bureaucratic waste – chiefly by standardizing electronic medical records – that would, along with incentives to increase competition among health plans, reduce company-paid premiums over time.
  • Point of contention: Nationalizing healthcare, which would mandate the coverage of children, would keep costs high.

Changes in Labor Laws – Specifically Enactment of the Employee Free Choice Act (EFCA)

  • Obama: A Proponent of the EFCA; wants to make it easier for employees to form unions.
  • Democratic Party: Behind the EFCA. They also list a goal of raising the minimum wage.
  • Point of contention: The EFCA and federal increase in the minimum wage are both hotly contested issues, with adoption of both falling pretty squarely in the “workers, yay; business leaders, nay” columns.  Since the federal minimum wage was just raised in July, the EFCA bill, if it were highly modified, might stand a better chance of gaining the support of small business leaders in the shorter term.

Immigration Reform

  • Obama: Reduce the bureaucracy that slows the process for illegal immigrants to earn legal status, which he argues will “meet the demand for jobs that employers cannot fill.”  Crack down on employers that hire undocumented immigrants.
  • Democratic Party: Supports “economic development in migrant-sending nations, to reduce incentives to come to the United States illegally.” Long-term, this would ensure that tax dollars from businesses as well as individuals aren’t stretched as thin.  The party also echoes Obama’s above concerns.
  • Point of contention: This is a sticking point for leaders of some smaller firms that are actively hiring undocumented workers.  Most other business leaders seem concerned that their taxes are not raised for inadequate or unnecessary measures to secure our borders.

So, would a fly on the wall of a small organization in February 2009 see a noticably different landscape than in the same firm today?  Probably not.  Still, it doesn’t hurt to project how the probable shift in the balance of power in Washington after today will play out for these enterprises.  Who knows, it may even shape smaller-scale efforts – the things we love to talk about and help our clients refine – like employee engagement best practices and workplace team building.

What say you?

(Cross-posted from Winning Workplaces Blog)

Minimum Wage: Keeping It Clean, and Getting it Done

Thursday, February 1st, 2007

The U.S. Senate has just voted to raise the federal minimum wage. After smooth sailing through the House, as part of the “100 Hours” agenda, things hit a snag in the Senate. It’s all about taxes — isn’t everything? The Senate so far is seems unlikely to pass a clean bill that does nothing but raise the minimum wage (as the House did), but instead seems determined to cut taxes for small business owners, who — it is argued — are adversely affected by the minimum wage. Will it be possible to raise the federal minimum wage — ever?

Is it really true that small business owners fare adversely when the minimum raise is raised? Or is that one of those political maxims that has been repeated so many times that everyone believes it? It may not even matter, if we can’t get the minimum wage raise through the Senate otherwise. But those who argue we shouldn’t couple the issue have some strong arguments. A recent Washington Post article by Steven Pearlstein demolishes the typical arguments for coupling minimum wage increases with small business tax breaks one by one.

1. Small businesses with low profit margins will not be able to pass along those costs to consumers.
Pearlstein responds:

To begin, both economic theory and history suggest that small business will, in time, pass on its increased costs to its consumers. Small businesses that pay low wages tend to compete with other small businesses that pay low wages, so they will all face the same cost pressures and respond in similar fashion. The worst that can be said is that a higher minimum wage will add, very modestly, to overall inflation.

(See Washington Post article.)

2. A minimum wage increase will cause small businesses to hire fewer workers.

There is also general agreement among economists that a higher minimum wage, at the levels we are talking about, will have a minimal impact on adult employment. Slightly higher prices might reduce, slightly, the demand for Wendy’s hamburgers, cheap hotel rooms and dog-walking services. But largely offsetting those effects will be the increased demand for goods and services by tens of millions of Americans who will finally be getting a raise. A higher minimum wage doesn’t lower economic activity so much as rearrange it slightly.

(See Washington Post article.)

3. Small business create the majority of new jobs in this country, so we should not pass measures discouraging them from doing so.

[A]s economist Veronique de Rugy of the American Enterprise Institute reported in a paper last year, new jobs have been created by both large and small businesses in roughly the same proportion. In truth, the bulk of new jobs have always been created by a relatively small number of new firms that grow fast and get quite big — think of companies like Southwest Airlines, Google, CarMax. Most have little in common with the small-business lobby in Washington or fast-food restaurant chains or the members of the Kiwanis Club in Helena, Mont. As a rule, companies like these couldn’t care less about the minimum wage or special tax breaks to offset it.

(See Washington Post article.)

Pearlstein also points out that small business owners have already benefited from business tax cuts enacted earlier in the Bush Administration, astutely opining, “If it is now imperative to reduce business taxes when the pay of minimum-wage workers is rising, you have to wonder if there will ever be a time when the small-business lobby thinks it doesn’t deserve a tax cut.”

Despite Pearlstein’s presence in the newspaper of our nation’s capital, and the fact that his ideological bent is hardly that of a flaming liberal, it’s not clear that anyone’s really listening. Except that some small business owners already know better, according to an article which says that a growing number of small business owners recognize that paying a decent wage lowers employee turnover, improves morale and is the right thing to do. “People who tell you that raising the minimum wage will hurt small business are flat out full of it…Small business owners know that keeping workers is easier and cheaper than finding and training new ones…Our long-term employees are way more likely to establish ongoing relationships with customers,” said Lew Prince, co-owner of Vintage Vinyl, a music retail business in St. Louis. (See TomPaine.com article.)

The minimum wage increase has already faced one setback, as an effort to pass a clean bill failed in the Senate. (See New York Times article.) As I write this, the Senate is likely to pass a minimum wage bill with small business tax cuts attached. (See The Reporter article.) Now the two houses of Congress have to reconcile the proposals — never an easy task — while contemplating what the President is likely to do. President Bush has indicated that he would consider signing a minimum wage bill with tax breaks attached, so there’s an interest in getting a bill that will actually be signed into law. (See Statement of Administration Policy.)

But there’s also the little wrinkle that the House of Representatives is supposed to be the body that originates tax bills, and Rep. Charles Rangel, now the Chairman of the House Ways and Means Committee, is insisting that the House take the lead on tax bills, which may delay working out the issues between the two bodies. (See Associated Press article.) Sen. Harry Reid, the Senate Majority Leader, has indicated that the Senate may be open to limiting some of the tax cuts. (See ABC News article.) So despite the House’s swift passage of a clean bill, we may still be in for a long, hard fight before those workers in states without a higher minimum wage are able to benefit from a federal minimum wage increase.

Those small business tax cut bills can occasionally carry the kind of tax cuts that employee advocates can support, such as a provision contained in 2004’s American Jobs Creation Act — part of the Civil Rights Tax Relief Act. (Ironically, the problem solved in part by the 2004 law arose from a provision inserted in the 1997 minimum wage bill, called — you guessed it, “The Small Business Job Protection Act.”) (For more information on the history of this issue, see “The Long and Winding Road.”)

But this time, workers really have to question whether more tax cuts for small businesses are really necessary, or just a way to keep a myth alive until the next opportunity to raise the minimum wage. Perhaps before assuming these accompanying tax cuts are necessary — it would be helpful for Congress and the President to separate economics from politics. They might even conclude — like the Economic Policy Institute did — that a minimum wage increase requires new small business tax cuts, “like a fish needs a bicycle.”

Tell the Senate to Keep It Clean: Pass the Minimum Wage Increase Now

UPDATE: The Senate on Thursday, February 1 overwhelmingly passed a minimum wage bill with the tax increases referenced above. (See New York Times article.) (The blog was originally published before the vote occurred, although the outcome was not in doubt.)

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