Max,
I can't believe you are so hostile to a tax plan that is so both amazingly progressive and politically brilliant. The reason the plan has gotten so
mbs: how progressive it is depends on what you're comparing it to. I've already said why it is doomed politically. It is simple, I'll give you that. And Gore's package was complicated, in the sense that it bundled together more items. My point is the Dems need one great thing to counterpose. I can think of three that I talk about in my article-- my own plan, a refundable child tax credit, and a refundable payroll tax credit.
much attention and favorable treatment is because of its great virtue- it is simple to explain and therefore simple for people to understand how much they will save with the plan. During the campaign, Dubya had great fun mocking the complexity of Gore's tax plan. Well, the Progressive Caucus plan has turned the tables and left Dubya scampering to try to defend his plan which is both more complicated and less favorable for most people than the Progressive Caucus plan.
mbs: the GOP does seem a little off its stride on taxes now, tho it's not clear the dividend is the reason. they're also fighting among themselves, and they are being criticized by elites for doing a cut that's too big.
No, it is not a plan a policy wonk would love, but tax policy rarely is made that way. And yes, this plan is designed to challenge and possibly derail Dubya's plan by highlighting how many people get nada from his plan and how tilted it is towards the wealthy. And the plan is working on that pure propaganda front. But it follows basic principles that any progressive should want - a tax credit rather than a deduction and refundable so it applies to people who pay payroll but not income taxes.
mbs: it's not a tax credit, nor is it a tax cut. it has nothing to do with payroll taxes or any other taxes paid. it's a fixed payment, pure and simple. Why, in the wake of "welfare reform," does anyone think the government will send checks to people who don't work and have zero income?
And if we are having a tax cut, what's wrong with just cutting a check, sending the "moolah" share and share alike? When did equality become such a bad thing for progressives to advocate?
mbs: it's the weakest form of equality. my view is the credit should have a rational relationship to income -- it should decline as income rises (as mine does). *that's* redistributive. it should also simplify taxes. We replace 160+ pp of instructions and forms with one page. Most of that is material related to the EITC. I could go on regarding the virtues of our proposal, but the paper is available for downloading free on the EPI web site.
$1200 for a working family of four is not chump change. You would rather have it go to new spending, but who says most of the spending would go to that working family? A lot of folks seem more ready to pile it onto Medicare. Not that I have anything against the elderly, but it would be nice to see more redistribution to working families and their kids.
mbs: it's less than chump change because it won't happen, and everybody knows it. it's a debating posture that probably won't work.
With Jeffords and Chafee already defecting from Bush's plan, both stating that they want it to be smaller and more oriented to such working families, getting a compromise along that lines looks more likely.
mbs: yes but this applies to any number of possibilities.
By setting up a simple and progressive alternative pole of debate, the Progressive Caucus has made such a tax compromise favoring working families far more likely. To me, that is an unmitigated good. -- Nathan Newman
mbs: things are still a bit in flux so better things may be in store, as I noted in my follow-up message.
----- Original Message ----- From: "Max Sawicky" <sawicky at epinet.org> To: "PEN-L (E-mail)" <PEN-L at galaxy.csuchico.edu>; "Lbo-Talk (E-mail)" <lbo-talk at lists.panix.com> Sent: Thursday, February 15, 2001 6:55 PM Subject: The Trouble with Democrats (cont'd)
There have been some very interesting looking threads that I regret missing, but I've been too absorbed in my own policy machinations. For the same reason I'm going to have to sign off until the smoke clears and try to figure out ways of changing my life.
But I can't resist the opportunity to annoy everyone one more time, especially because it has to do with something I'm working on. I will hang around to field some responses, if there are any.
The fabled "prosperity dividend" now being touted by the Progressive Caucus, the AFL, and all my formerly favorite Members of Congress is an unmitigated piece of shit. But let me tell you how I really feel.
The Dems had a unique opportunity when Bush rolled out his tax plan to put forward one that contrasted favorably -- something clear, simple, and progressive. The Pwogwessive Caucus had an opportunity to provide leadership on this same count. They are totally blowing it.
In a forthcoming piece in The American Prospect, I suggest three good ways of doing such a tax cut, one of which is my own proposal with Bob Cherry.
Instead of putting forward a progressive tax cut, we are getting the proposal to take about a third of the on-budget budget surplus (about $750 billion) and divide it equally amongst the population -- about $300 for every man, woman, and child in the nation. The payment, misleadingly described as a "tax cut" or "tax rebate", would be conditional on the surpluses "really being there."
The proposal began in at least two places. One was in the brain of Bernie Sanders, and the other in an op-ed in the NY Times by Richard Freeman and my boss, Eileen Appelbaum. The op-ed was founded on a sensible point: if you want to stimulate the economy, tax cuts are not the best way to go. Too slow and too small. Fine. Better to just send everyone some money, like they do in Alaska every year with state royalties from oil drilling. Fine again.
The trouble is that this idea has mutated into a semi-permanent payment that, more than anything else, certifies the brain-death of Democrats and the non- radical left. Here we have a huge budget surplus, after years of austerity fueled by the assertion that we cannot do anythin until the deficit is gone, and the proposed policy is divvy it up.
The proposal has been getting nice elite press coverage, and I think I know why. It's because the elites don't want any tax cut at all, so by treating this idea seriously they discombobulate G. Bush. I very much doubt this proposal is politically sustainable, so the effect is to cede tax policy to the G.O.P.
It is not sustainable because people in the U.S. don't want the government to send checks to people who don't work or pay taxes. As soon as people figure out this is what is going on, the prosperity dividend will die a well-deserved death, and the road to the Bush tax cut will be clear.
I suspect the Democrats don't want a tax cut either, they only want to stop Bush. Some of them may want to spend later, others to keep paying down debt. Either way, their invocation of austerity policy makes future spending initiatives less probable, not more, IMO. I don't think you can invoke fiscal discipline now, then turn around and say it doesn't matter when you have majorities in Congress. I realize this has not stopped Greenspan or the G.O.P., but the Dems are deeper in this swamp in my view. Nor is it clear that opposing tax cuts gets them majorities in Congress.
The bottom line is the Dems fealty to finanz kapital, whether tactical or strategic, is a cancer on the social-democratic prospect. It will take a populist uprising to get them on some kind of positive track. That's what I'm working on. Right now the action is tax cuts. There will be a large one, and the only issue is how to do it. The dividend is not a tax cut; it has nothing to do with the taxes anyone pays, nor with their contribution to the economy (both intimated by supporters). It is just a payment for Being. It's moolah, nothing more, and it will never happen. Instead G. Bush will get credit for rewarding his supporters, and for lack of an alternative, the Dems will split between those upholding fiscal discipline and those who are bought into the Bush package.
cheerio, mbs