Letters from an American - March 1, 2024

Episode Date: March 3, 2024

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March 1st, 2024. Today, President Joe Biden signed the continuing resolution that will give lawmakers another week to finalize appropriations bills. Lawmakers will continue to hash out the legislation that will fund the government. Republicans have been stalling the appropriations bills for months. In addition to inserting their own extremist cultural demands in the measures, they have demanded budget cuts to address the fact that the government spends far more money than it brings in.

As soon as Mike Johnson, a Republican of Louisiana, became House Speaker, he called for a debt commission to address the growing budget deficit. This struck fear into the hearts of those eager to protect Social Security and Medicare, because when Johnson chaired the far-right Republican Study Committee in 2020, it called for cutting those popular programs by raising the age of eligibility, lowering cost of living adjustments, and reducing benefits for retirees whose annual income is higher than $85,000. Lawmakers don't want to take on such unpopular proposals, so setting up a commission might be a workaround. Last month, the House Budget Committee advanced legislation that would create such a commission.

The chair of the House Budget Committee, Jody C. Arrington, a Republican of Texas, told reporters that Speaker Johnson was 100% committed to this commission and wanted to attach it to the final appropriations legislation for fiscal year 2024. The law is currently being hammered out. Congress has not yet agreed to this proposed commission and a recent data for progress poll showed that 70% of voters reject the idea of it. This week a new report from the Institute on Taxation and Economic Policy, or ITAP, a nonprofit think tank that focuses on tax policy, suggested that the cost of tax cuts should be factored into any discussions about the budget deficit. In 2017, the Trump tax cuts slashed the top corporate tax rate from 35% to 21% and reined in taxation for foreign profits. The ITEP report looked at the first five years the law was in effect.

It concluded that in that time, most profitable corporations paid considerably less than 21% because of loopholes and special breaks the law either left in place or introduced. From 2018 through 2022, 342 companies in the study paid an average effective income tax rate of just 14.1%. Nearly a quarter of those companies, 87 of them, paid effective tax rates of under 10%. 55 of them, 16% of the 342 companies, including T-Mobile, Dish Network, Netflix, General Motors, AT&T, Bank of America, Citigroup, FedEx, Molson Coors, and Nike paid effective tax rates of less than 5%. 23 corporations, all of them profitable,

paid no federal tax over the five-year period. 109 corporations paid no federal tax over the five-year period 109 corporations paid no federal tax in at least one of the five years the Guardian's Adam Lowenstein noted yesterday that several corporations that paid the lowest taxes are steered by chief executive officers who are leading advocates of stakeholder capitalism. This concept revises the idea that corporations should focus on the best interests of their shareholders to argue that corporations must also take care of the workers, suppliers, consumers, and communities affected by the corporation. The idea that corporate leaders should take responsibility for the community

rather than paying taxes to the government so the community can take care of itself is eerily reminiscent of the argument of late 19th century industrialists. When Republicans invented national taxation to meet the extraordinary needs of the Civil War, they immediately instituted a progressive federal income tax because, as Representative Justin Smith Morrill, a Republican of Vermont, said, the weight of taxation must be distributed equally,

not upon each man an equal amount amount but a tax proportionate to his ability to pay but the wartime income tax expired in 1872 and the rise of industry made a few men spectacularly wealthy quickly those men came to believe they rather than the government should direct the country's development. In June 1889, steel magnate Andrew Carnegie published what became known as the Gospel of Wealth in the popular magazine North American Review. Carnegie explained that great inequality and the concentration of business, industrial and commercial, in the hands of a few, were not only beneficial, but essential to future progress. And, Carnegie asked, what is the proper mode of administering wealth after the laws upon which civilization is founded have thrown it into the hands of the few? have thrown it into the hands of the few. Rather than paying higher wages or contributing to a social safety net, which would encourage the slothful, the drunken, the unworthy, Carnegie

wrote, the man of fortune should consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer in the manner which in his judgment is best calculated to produce the most beneficial results for the community the man of wealth thus becoming the mere trustee an agent for his poorer brethren bringing to their service his superior wisdom experience and ability to, doing for them better than they would or could do for themselves. This wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if distributed in

small sums to the people themselves, Carnegie wrote. Even the poorest can be made to see this and to agree that great sums gathered up by some of their fellow citizens and spent for public purposes from which the masses reap the principal benefit are more valuable to them than if scattered among themselves in trifling amounts through the course of many years. gathered among themselves in trifling amounts through the course of many years. Here in the present, Republicans want to extend the Trump tax cuts after their scheduled end in 2025, a plan that would cost $4 trillion over a decade, even without the deeper cuts to the corporate tax rate Trump has called for if he is reelected. for if he is re-elected. Biden has called for preserving the 2017 tax cuts only for those who make less than $400,000 a year and permitting the rest to expire. He has also called for higher taxes on the wealthy and corporations, which would generate more than $2 trillion.

Losing the revenue part of the budget equation and focusing only on spending cuts seems to reflect a society like the one late 19th century industrialists embraced, in which a few wealthy leaders get to decide how to direct the nation's wealth. In other news today, Alexei Navalny's parents held a funeral for the Russian opposition leader and buried him in Moscow. Navalny died two weeks ago at a penal colony in Siberia, where Russian President Vladimir Putin had imprisoned him on trumped-up charges after failing to kill him with poison. Navalny fought against Putin's control of Russia by emphasizing the corruption and illicit

fortunes of Putin and his associates. Russia specialist Julia Yoffe of Puck News noted that a million Russians have fled the country since the February 2022 invasion of Ukraine, and that many of them were Navalny's supporters. Still, many thousands turned out for the funeral and the procession, throwing flowers at the hearse as it made its way to the cemetery. A woman at Navalny's funeral compared Navalny and Putin. One sacrificed himself to save the country. The other one

sacrificed the country to save himself.