Thursday, March 23, 2017

The Rush to Avoid Taxes

We now have less than 30 days to finish up our federal tax forms and get them to the IRS and state capitols. As I noted recently in this blog, "taxes are dues for living in a civilized society". So why do we all seek every advantage to reduce those taxes? We want deductions for our home (interest on mortgage, property taxes, etc.), for our charitable contributions, for state and local taxes paid, the list goes on.

There is an entire industry focused on how not to pay taxes - accountants, tax lawyers, tax preparation firms, all promising big savings if you know where to look and how to manage your affairs to minimize the dues we supposedly pay for a civilized community. Can we deduct our travel expenses for volunteer work, how about the tax credit for our solar installation, or the new energy efficiency changes made to the home?

Of course these are relatively small deductions that save many in the middle class a few hundred, or maybe even a couple thousand dollars in taxes per year. How can we actually minimize our overall tax rate we have to pay? Simple - by managing our funds so that more of our income arrives through capital gains than real work. Not surprisingly capital gains are almost entirely in the hands of the wealthiest. The wealthiest 1% make more than a third of their income from capital gains. The  New York Times reported that "estimates show that nearly 70 percent of all capital gains benefits go to the top 1 percent." 

While the plutocrats and their neighbors cash in at lower income tax rates than middle class citizens with larger deductions and the lower capital gains rate, it seems like nearly everyone is hooked on the notion that paying taxes is something you must avoid. And if you are wealthy enough, you can afford the services of the aforementioned tax consultants to help you do so.


Of course the corporate world, also run by the wealthiest among us, takes tax avoidance to a whole new level, whether it's from hiding income in offshore tax havens, or having their hired lobbyists create a specific tax loophole for them, in exchange of course for a nice little contribution to the legislators that are willing to fill their pockets. Oh yes, again let's not forget how they use their accumulations to take advantage of that low capital gains tax rate.


While I'll admit I don't own a PhD. in economics, looking at changes in the tax rates since World War II shows a striking parallel shift in income inequality. Every time we make yet another reduction in the taxes for the wealthiest, we increase the inequality. The trickle down "voodoo economics" plan boosted by Ronald Reagan never really trickled down. Surprise!!!


Mr. Trump's recent budget proposal accomplishes this not simply by cutting rates directly, which he is certainly aiming to do, but as a recent analysis, reported by the New York Times last week  of the TrumpCare proposal indicates, that $1 Trillion in tax cuts embedded in it will over a decade will find their way into the pockets of the richest Americans.

The House Republican Tax plan as reviewed by the Center for Budget and Policy Priorities shows visually how the tax code may be further loaded to the wealthiest.




So the reduction in progressive taxation that gained steam with Ronald Reagan's "Voodoo Economics" continues.  Or does it actually get worse? If one looks at the holes collectively engineered into the social safety net by the Trump budget proposal,  we can see more and more people falling through it. But in Speaker Ryan's world, "it's their choice". 

If we are to live in a civilized society, that doesn't let our brothers and sisters fall through our porous safety net, we need to all consider paying taxes as our dues. Making that system fairer, i.e., more progressive, is essential to that end. The security of each of us is entangled with the security of all of us. 

One planet, one human family, one common future.

Monday, March 6, 2017

Cashing in on Fear

While it seems obvious to me, evidently it isn't to many Americans. Donald Trump and other fear mongers among us are constantly trying to make us afraid of - immigrants, minorities, Muslims, LGBT, terrorists, criminals, axis of evil....ad nauseum. If they can sell the fear, we're more likely to succumb to their proposed remedy - build walls, more guns, better locks, bigger armies and navies, yada, yada, yada. 

I've been thinking along this line for a long time, but an article recently passed my eyes that put some solid data behind it in "Why Are People So Averse to Facts"  by Prof. Tristan Bridges from the website Sociological Images. The article posted last week discusses the claims of a certain President that crime is on the rise along with the data that shows the opposite. While of course the make believe world of this detached fellow is of interest, what I found more interesting in the piece was data from annual Gallup polls between 1989-2016 that showed the majority of the American public has consistently believed crime was getting worse when it wasn't.


Interesting enough it was just a week ago that the very same author of the crime myth was selling another bag of fear around terrorism. This one comes with an additional $54 billion price tag, on top of the $600 billion we already spend on 'defense'. The lunacy would be laughable if it wasn't so harmful. If our major security concern is global terrorism why would one argue for building up a larger navy, adding 75 more ships to the 275 we already have floating around the world? Are nuclear powered submarines the answer to terrorism? This isn't defense, it's offense!!


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But, let's not let any facts get in the way of protecting us from hyped up fears. Lockheed Martin, Boeing and their collaborators are happy to sell weapons to the US government or any other nation that buys the belief foisted by the Military-Industrial-Complex (MIC) that the latest weaponry and a larger military footprint will bring them peace and prosperity.


The US government even works as arms merchants for these purveyors of weaponry, greasing the palms of the buyer - whether the purchase be planes, landmines (we still haven't signed the convention to outlaw them- one of only 35 countries out of 200), tanks, missiles, whatever. Note simply recent huge arms sales agreements with Israel and Saudi Arabia, and even more recently Vietnam.

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Juxtapose these increases with the announced cuts to diplomacy and foreign assistance announced announced subsequent to the military build-up. Do the proponents seriously believe that we will defeat terrorism with more bullets and less bread? Do they think for a minute that we will win the hearts and minds of those who see us as global bullies as our military might becomes even more expansive?


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The National Priorities Project notes that the $54 billion that will be cut to pay for the expanded  militarism of this regime exceeds the entire budgets of the following:


  • Department of Homeland Security ($48 billion)
  • Housing and Urban Development ($38 billion)
  • Department of Energy ($30 billion)
  • Department of Justice ($29 billion)
  • Department of State ($29 billion)
  • Environmental Protection Agency ($8 billion)
  • National Science Foundation ($7 billion)
  • Corporation for Public Broadcasting ($485 million)
  • National Endowment for the Arts ($148 million)
Meanwhile no mention of cutting the enormous waste in military spending, as noted by the Pentagon's own study last fall that identified $125 billion in waste. Since the Pentagon is never audited, that figure is probably low.  Regardless the American public takes it all in without barely a whimper of protest, evidently convinced that the fear mongering of the MIC and their current White House champion is true. 

If we don't challenge the madness of militarism, we will insure the bullets and landmines we deploy under the guise of 'defense' will continue to harm innocent civilians. Meanwhile robbing both American families and our less fortunate of investments in true human prosperity.

Sunday, March 5, 2017

There's A Change A-Comin', or Is There

One of the surprise results of the November election has been the stimulation of previously docile citizens to engage with the political and policy gears of our nation. I have attended many organizational meeting of groups I’ve been active with for some time, where attendance has doubled or more, seemingly overnight. The newcomers say something like, “I’ve been sitting quietly for too long and I now need to become active.”

With this onslaught of participation organizations, as well as the newly engaged citizens, seek to focus their energies to make a difference. Even for seeming veterans of grassroots, civil society efforts that call for making a difference has been re-energized. But a fundamental question is “How Change Happens”.  This happens to be the title of a new book by Duncan Green, published late last year by Oxford University Press and Oxfam. Green has been active in global development work for decades, most recently with Oxfam. He is a student and practitioner trying to understand what really works! This is written for both citizens and scholars of development in a very readable but well referenced work.

Cover for 

How Change Happens

What he has learned and shared in this insightful book is what he calls a “power and systems approach” (PSA). This is an approach that doesn’t put all of its eggs in a single basket or look for the one sure-fire linear approach to success. It assumes a deeper level of complexity in the systems one is trying to change and therefore the need for curiosity, humility, and reflexivity.

My own experience, not nearly as deeply rooted as Green’s, has been increasingly recognizing that reality. At its base is a recognition that we cannot control all the elements of a system, nor predict them all with any certainty. Green gives example after example of how the unexpected arrives and either thwarts or expedites the desired change of the best laid plans.

Green encourages curiosity, study, reflection, and willingness for trial and error at small enough scales that one doesn’t become trapped with a singular approach. He encourages the effort to understand the system. Where does the power lie? How does one learn to ‘dance with the system’, a recognition of the work of the late systems theorist Donella Meadows. He also looks at the importance of addressing social norms, the role and nature of good leadership, the opportunities and constraints of working through political parties and electoral politics, the concept of positive deviance,and the power of advocacy. Some very brief hints of his thoughts are excerpted below.

  •       Tone and language matter too. I find that a combination of tactical self-deprecation and humor can disarm critics expecting a bout of self-righteous NGO finger-wagging. (p.218)   

  •      A power analysis disaggregates power, exploring the role of ‘power within’ (empowering individuals to become more active), ‘power with’ (collective organization), or ‘power to’ (action of individuals and organizations). That helps move the focus to those people who are often excluded from decision making (women, poor communities, indigenous groups, those living with disabilities) and whose empowerment often lies at the heart of long-term change. (p.243)

  •       Since no amount of upfront analysis will enable us to predict the erratic behavior of a complex system, a PSA interweaves thought and action, learning and adapting as we go. (p.245)

How Change Happens won’t give veteran or rookie citizen activist a silver bullet approach to follow. But the analysis he shares should help situate one’s expectations for success in a more realistic mode. This is the kind of necessary reflection and analysis that is important for long-term change to occur. It provides an equal dose of long-term nourishment for activists to remain in the struggle for a better world for the long haul.

From Poverty to Power


Those interested in following Green’s thinking along this and other issues of human social development can read his blog, From Poverty to Power at Oxfam’s blog site. Or visit the website created around this book with access to parts of the book and links to other resources.


Tuesday, February 7, 2017

Do We Really Want to Build and Defend an Empire?

As veteran defense analyst William Hartung notes yesterday, the new Trump administration is poised to put an already immense defense budget on steroids. He's obviously thinks the condition of our military is deplorable and thus there will be endless flows of additional cash recommended, except perhaps for the boondoggle known as the F-35.

But while Trump is poised to offer a significant injection, all presidents since FDR and the end of WWII have been building our military apparatus in one way or another. As the former general turned Commander-in-Chief, Dwight Eisenhower so vividly warned us upon exiting the office he held for two terms, the behemoth engine of the military-industrial-complex(MIC), will drive us away from repairing and improving our own society.

     Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. The cost of one modern day bomber is the modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals.

And so it has unraveled as Eisenhower warned. Nary a president has escaped its clutches. Even the Nobel Peace President Obama, was arguing for a $1 Trillion dollar modernization effort of our nuclear weapons system, while launching a record number of drone attacks in countries all over the globe. The problems with military spending are so significant and embedded, that hardly anyone in elected office is willing to publicly take them on. The Washington Post reported just last November that the Pentagon's on internal study found $125 BILLION was wasted. And of course, they tried to hide the report. But even since its release, there has been a deafening silence from the Washington beltway, as the lobbyists from McDonnell-Douglas, Lockheed Martin,Boeing, and other (too big to fail) behemoths spread their loot and influence in the halls of Congress.

Then of course there is the revolving door between the Pentagon and the MIC, where former officers move with their significant pensions, to rewards aplenty from the scions of military hardware. Those scions have strategically scattered their plants and contractors around the country to insure that any cuts in government contracts can bring the many impacted congressional districts elected representatives to rise up to thwart them. Thus the long failed history of the  F-35.


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Insulating this cozy brotherhood from any rational questions has been the role of  fear-mongers and empire builders who have argued as former West Point graduate, Lieutenant-Colonel and Professor of International Relations Andrew Bacevich  has written about extensively. In his 2010 book, Washington Rules: America's Path to Permanent War, Bacevich lays out the U.S. sacred trinity of  military policy and practice.

     an abiding conviction that the minimum essentials of international peace and order require the United States to maintain a global military presence, to configure its forces for global power projection, and to counter existing or anticipated threats by relying on a policy of global interventionism." [page 14, emphasis in original].

Bacevich is one of the few scholars willing to stand up to the MIC. Some others have joined him and are sharing their writing through the  American Empire Project, The late Chalmers Johnson, Jonathan Schell  and Howard Zinn as well as contemporaries Noam Chomsky, Tom Englehardt, Nick Turse, Michael Klare and a few more fearless scholars and journalists.

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Fortunately we have a few think tanks that collect and scour the available data and help us make sense of it. As the Pentagon waste study mentioned above hints, the Pentagon is the only department in the government has not had an audit performed. Legislation to require such and audit has been introduced in past years, but even the good old deficit hawks aren't interested is looking at the underbelly of defense pork.

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Nationally we have the National Priorities Project which continues to collect and to prepare useful charts and studies that give us a clue of how the splurging for military impacts us. Particularly useful is data on the impacts at the state level of that spending.





The Project on Government Oversight also hosts the Center for Defense Information where you can read much more on the troubled F-35 or numerous other serious investigations into the MIC.Image result for project on government oversight

Globally we have the highly regarded SIPRI (Stockholm International Peace Research Institute) that annually gathers global data on militarism, arms sales, and other related information allowing some measure of comparison among nation states.
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Former cold warrior, turned critic of American empire, the late Chalmers Johnson wrote a series of acclaimed and powerful books beginning with Blowback: The Costs and Consequences of American Empire (2000) in which he documents the control of the MIC over our foreign and domestic policy and the resulting consequences of that policy and practice. In his final book published shortly before his death in 2010 Johnson summarizes the argument.

       Once upon a time, you could trace the spread of imperialism by counting up colonies. America's version of the colony is the military base. By following the changing politics of global basing, one can learn much about our ever larger imperial stance and the militarism that grows with it. Militarism and imperialism are Siamese twins joined at the hip. Each thrives off the other. Already highly advanced in our country, they are both on the verge of a quantum leap that will almost surely stretch our military beyond its capabilities, bringing fiscal insolvency and very possibly doing mortal damage to our republican institutions. (Dismantling the Empire: America's Last Best Hope).p.114

Johnson goes on in depth to show how this pursuit of empire, this ailment of American exceptionalism, not only robs from our own development and well-being, but sows the resentment that all imperial attempts to control other nations feeds. In a word, blowback. His concerns even before his untimely death were that the horrible events of September 11, 2001 were symptomatic of what will follow any nation that is hooked on militarism.




With the arrival and now solid ownership of the executive branch of government by the combination of the military mindset and the Goldman Sachs greed merchants, there is ample evidence to support the decision January 26th by the Bulletin of Atomic Scientists to move the Doomsday Clock two and a half minutes to midnight. We better heed the calls of Johnson, Bacevich, and others who have seen war and its consequences and question our unfettered support for militarism over human well-being. It's not too late, but it's close.

Sunday, February 5, 2017

Taxes Are the Dues We Pay to Live in a Civilized, Democratic Society

[I attempted to get this viewpoint published in three newspapers in Michigan without success. So I am putting it out there via the blogosphere. Share as you see fit].


Taxes are the dues we pay to live in a civilized, democratic society.

Recent Michigan legislation introduced to eliminate the state income tax therefore suggests the end of our so-called democracy.  We have been accelerating our race towards oligarchy in recent years with the deleterious Citizen’s United case that makes it easier for the wealthy to purchase elections, the recent election handing the 0.1% the reins of government, and the avalanche of mergers and acquisitions that concentrate more wealth and power in fewer and fewer hands.

Who accrues the most from the elimination of income tax? No surprise, it’s the wealthiest among us. And when government is totally starved, who will repair all the market failures and pay for externalities like pollution that aren’t in the private sector’s balance sheets? The extreme wealthy already own our government via fossil fuels, banking, the military-industrial-complex and pharmaceutical conglomerates, with their minions at the top. A functioning democracy would wrestle some of the power back to the citizens. Voting isn’t enough. Citizens need to pressure government to do the right thing.  Democracy is not a spectator sport.

Here’s an example: The poisoning of the Tittibiwassee River from dioxins was largely the work of Dow Chemical upstream in Midland. Once the problem was identified, largely with the help of concerned citizens who live in the watershed, Dow was approached by the DEQ and EPA to fix it. But Dow, now merging with Dupont after swallowing Union Carbide following that firm’s deadly example of citizenship in Bhopal, India, sought delay after delay. The cost of cleanup was substantial, hence their reluctance to finance the repair, a similar story only magnified in Bhopal .  But much of the Dow largess is tucked away in Dow Family foundations, which bequeath some small portion each year to beautify Midland and support other community causes; the benefactors are then showered with adulation from those who benefit from the crumbs from their table.'

When I sat for a brief stint on an environmental advisory panel that looked at that issue more than a decade ago, I noted that tapping some of the Dow Foundation money could easily cover the cost of cleaning up the Tittibiwassee mess. Of course, such a radical suggestion was quickly ignored and the foundations, who weren’t at the table, weren’t offering.

There is something magical about great wealth. We tend to be enamored of it, perhaps imagining ourselves living in palatial surroundings, totally unconcerned about expenditures. Those who argue that the wealthiest among us pay the most in taxes (in real dollars) always neglect a fundamental reality: it’s not how much one pays but how much one has left that really matters.

The median household income in the US is roughly $50,000.  Current Michigan tax (4.25%) on that amount is $2,125, leaving $47,875. To be in the semi-lofty 1% category you need to make a minimum of $429,000, in which case your tax would be $19,072, leaving you a meager $409,928 to scrape by. But this is one year only. If those incomes stay steady for even ten years the one-percenters earn $4,290,000 and pay democracy dues of $190,725, leaving them with $4,099,275 compared with our median family which has earned $478,750. The difference, then, between the two families’ wealth has grown from $362,053 to $3,620,500.


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This is the disease that is spreading rapidly here and abroad. It is now among the highest risk concerns as identified by the World Economic Forum in their recent 2017 Global Risks Report. Our state legislators are oblivious. We shouldn’t be.


Wednesday, January 18, 2017

Two Recent Major Reports of Note

Here are two reports issued in the past ten days from two very different sources that should get way more play than they are receiving. There is a confluence between the two that I shouldn't have to explain once you look at them. One report comes from the international development and relief agency Oxfam, which notes that

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Oxfam’s report, ‘An economy for the 99 percent’, shows that the gap between rich and poor is far greater than had been feared. It details how big business and the super-rich are fueling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics. It calls for a fundamental change in the way we manage our economies so that they work for all people, and not just a fortunate few.[Oxfam press release].

Six of the eight men are from the U.S.

  • Bill Gates (US)
  • Michael Bloomburg (US)
  • Carlos Slim Helu(Mexico)
  • Jeff Bezos (US)
  • Mark Zuckerberg (US)
  • Larry Ellison (US)
  • Warren Buffet (US)
  • Amanzio Ortega Gaona (Spain)
The richest are accumulating wealth at such an astonishing rate that the world could see its first trillionaire in just 25 years.  To put this figure in perspective – you would need to spend $1 million every day for 2738 years to spend $1 trillion, the report noted.

But maybe you aren't concerned about this escalating inequality. Well then, if Oxfam is maybe just a little too liberal of a source for you, check out the World Economic Forum's recently released Global Risks Report 2017. The WEF is the bastion of the world's elite politicians, corporate leaders, and a sprinkling of other big players that meet annually in Davos, Switzerland. They are meeting as I write this.

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This annual assessment based upon a survey of some 700+ leaders offers a glimpse at what we might see unravel in the near future.

Global Risks Trends interconnections



If the elites are concerned enough about the intersections of these global challenges, perhaps we should nudge our elected leaders to enact policies to address them, not to make them worse.