Tag: Taxation

Jan 01 2011

The Free Lunch Economy vs. The Progressive Era

Crossposted from Antemedius

Under the first U.S. income tax law that was passed in 1913, only 1 percent of Americans were required to file income tax returns, and to be liable to file you would have had to be earning an annual income of about $120,000 in todays dollars. It was passed during a period called the Progressive Era: “a period of social activism and reform that flourished from the 1890s to the 1920s” during which there were widespread “efforts to reform local government, education, medicine, finance, insurance, industry, railroads, churches, and many other areas” of American life.

It was a period of steady economic growth in the U.S. and produced a since unparalleled level of prosperity that lasted for decades. The politics of the era included the concept of an economy of high wages and the idea that American labor could undersell foreign labor by being highly paid, well clothed, well educated, healthier labor with high productivity. The concept of “free market” during the period was an entirely different concept than it is today.

Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and is the author of “Super-Imperialism: The Economic Strategy of American Empire” (1968 & 2003), “Trade, Development and Foreign Debt” (1992 & 2009) and of “The Myth of Aid” (1971).

ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East. Hudson acts as an economic advisor to governments worldwide, including Iceland, Latvia and China, on finance and tax law.

As an advisor to the White House, the State Department and the Department of Defense at the Hudson Institute, and subsequently to the United Nations Institute for Training and Research (UNITAR), Hudson has been one of the best known specialists in international finance. He also has consulted for the governments of Canada, Mexico and Russia, most recently for the Duma opposition to the Yeltsin regime.

Yesterday we heard Assistant Research Professor at the Political Economy Research Institute (PERI) Jeannette Wicks-Lim explain how currently most minimum wage earners in the U.S. can no longer the afford the basic necessities of life, and outline a proposal to combine minimum wage and earned income tax credit policies to guarantee a decent living wage for all.

Hudson here today talks with The Real News Networks’ Paul Jay and concludes that the the U.S economy can again outperform foreign economies with high wages, increased living standards, and with high top tier tax rates producing higher productivity – a progressive concept, like Wicks-Lim’s ideas, that is nearly the exact opposite of the free lunch economic ‘theories’ so widespread today that are behind wall street’s pillaging of the U.S. economy with the support of both major political parties.



Real News Network – January 1, 2011

Higher Taxes on Top 1% Equals Higher Productivity

Michael Hudson: The history of US shows that the economy grows

when top tier tax rates and workers wages are high

Feb 28 2010

Dystopia 18: Greek Revival

A world divided by nationalist struggles and vain fantasies  of dominating the earth’s resources is a world that grows increasingly  insane and self-destructive. Yet many decent and moral people accept the  current construction of politics as a ” given.” They end up  participating in this insanity and calling it “realistic.”

Today,  what people call realistic or common sense, is nothing more than  “inside-the-beltway” assumptions created and maintained by  corporate-dominated media. Only by throwing off those assumptions and  thinking outside the box, can people see the Strategy of Generosity for  what it is – a method to stop insane people who have power from  continuing their disastrous path of destruction.

It is a  delusion to imagine that only one political party or set of candidates  frames our foreign policy in terms of narrowly conceived American  interests. Instead, we must realize that this behavior is a shared  insanity that must be challenged in every part of our political  thinking.  It is just as likely to be articulated by people with whom we  agree, as by people who are overtly reactionary or  ultra-nationalistic.–Rabbi Michael Lerner Tikkun  Magazine Speaking about  the Global Marshal Plan

Nov 25 2009

Congressman Obey, tax phone bills to pay for the war.

House Appropriations Committee Chair David Obey (D-WI) recently suggested putting the Afghan misadventure on a pay as you go basis, as this would make the public aware of the costs. He hinted, and others have more explicitly suggested, that this tax hit the wealthy. I differ.

While I’m all for a progressive tax structure in general, the Afghan War Tax Surcharge, to create maximum pressure to end this ‘dumb war,’ should be in the face of every American. An excise tax on telephone service (30%?) like President Johnson imposed to help pay for his big mistake in Asia, is especially useful, as the bill comes due every month. Label the line on the phone bills clearly AFGHANISTAN WAR TAX SURCHARGE, and we’ll see a monthly wave of irate calls to the White House and Congress demanding we get the fuck out.

Meanwhile, use any boost in income tax on the highrollers to pay for needed domestic programs.

(also at kos’ place)

Nov 02 2009

The Third Estate Wants Its Way Again

This morning’s Politico attributes the death of centrism in the Republican party to the overwhelmingly insatiable demands of the far-right riffraff.   The sans-culottes throngs certainly have pitched some pretty parades over the past few months, haven’t they?  Heads have, metaphorically speaking, rolled and more are almost certain to take their place underneath the unforgiving guillotine.  Yet, to insist that this was a movement spearheaded by the party itself would not be correct.  This summer the GOP establishment tried to harness the energy of the rabble and found that it marched to no one’s orders but its own.  

“I don’t give a crap about party,” said Jennifer Bernstone, a tea party organizer for Central New York 912, which helped to lead the anti-Scozzafava charge. “Grass-roots activists don’t care about party.”

Says Everett Wilkinson, a tea party organizer in Florida: “We are not going to allow our [movement] to be stolen by the GOP or by any political party.”

Sep 18 2009

The Currency of Currency

Mississippi Governor Haley Barbour was recently interviewed by the conservative Washington Times and stated his opinion on a variety of current events.  Barbour’s name has been floated as a potential 2012 Republican Presidential nominee and he appeals strongly to the party’s conservative base.  The most interesting portion of the interview focuses on federal government spending versus state government spending.  Barbour’s reply also reveals how quickly we have forgotten the problems of our past.  Those who advance a states’ rights agenda and hold up the Tenth Amendment as justification often forget the massive problems this country faced when we focused more on individual states at the expense of Washington, DC.  While placing more control in a centralized system of government has created some problems, they are nothing compared to way it was when the reverse was true.  

Mar 16 2008

A Carbon Tax?

One of the most pressing issues facing the candidates is global warming or climate change, whichever you prefer.  I want to talk about ways to stop or at least slow down the effects of said issue, at least from the Dem perspective.  I have listened to the candidates and their positions on helping the planet.  So far I am not too impressed with many of their views.  To me they are given too much time for the elimination of the harmful emissions.  IMO, the popular cap and trade that is being proposed by most candidates will not do the trick.

The leading candidates have the same plan, only with slightly different end goals.  That is a cap and trade system.  That is efforts to curtail emissions through fuel economy standards, biofuel mandates, or appliance standards may be well-meaning, but in my opinion, this is not the answer.  Clinton wants to cut oil consumption in half by 2025; Obama wants to a two-thirds reduction by 2050 and then there is Edawrds who wants an 80% reduction of greenhouse gases by 2050.  All these are cap and trade approaches.

The program that I feel would be better in the control of the situation is an emissions tax.  But it is a TAX!  Yes it is and taxation seems to be an ugly word these days, but if taxation discourages consumption; for example, taxing carbon emissions discourages carbon consumption, why would this be a bad idea?  The less carbon emissions released into the atmosphere the better and more healthy the planet will be.

There are five reasons why the emissions fee or carbon tax is better than the popular cap and trade.  These are the reasons put foward by carbontax.org

   * Carbon taxes will lend predictability to energy prices, whereas cap-and-trade systems will do little to mitigate the price volatility that historically has discouraged investments in less carbon-intensive electricity generation, carbon-reducing energy efficiency and carbon-replacing renewable energy.

   * Carbon taxes can be implemented much sooner than complex cap-and-trade systems. Because of the urgency of the climate crisis, we do not have the luxury of waiting while the myriad details of a cap-and-trade system are resolved through lengthy negotiations.

   * Carbon taxes are transparent and easily understandable, making them more likely to elicit the necessary public support than an opaque and difficult to understand cap-and-trade system.

   * Carbon taxes can be implemented with far less opportunity for manipulation by special interests, while a cap-and-trade system’s complexity opens it to exploitation by special interests and perverse incentives that can undermine public confidence and undercut its effectiveness.

   * Carbon tax revenues can be rebated to the public through dividends or tax-shifting, while the costs of cap-and-trade systems are likely to become a hidden tax as dollars flow to market participants, lawyers and consultants.

The costs passed on to each consumer might be noticeable, but need not excessive. An emission fee of $15/ton or a permit price of $15/ton would increase gasoline prices about 15 cents per gallon and residential electricity prices about ¾ of a cent per kilowatt-hour, according to Joe Aldy of the Progressive Policy Institute.  

The proposals of the “Big 3” take too long to achieve the goal of cutting emissions and saving the planet for future generations.  Personally, since we all are contributors to the problem then we all should be part of the solution and the best solution is the emissions fee.

IMO, a much better idea than the “cap and trade” proposals being offered by the two candidates.