June 29, 2011

Racing against an August deadline, the White House and congressional negotiators engaged in rhetorical fencing Wednesday but made no discernable progress on a debt-reduction deal. Meanwhile, more than 78,000 of you so far have signed a letter by Sen. Bernie Sanders urging President Obama not to capitulate to Republican demands to exclude taxes from the discussion about deficit. "I am concerned about deficit reduction," Sanders said, "but we can do it in a way that does not attack programs that millions and millions of children, elderly, and working families are terribly dependent upon." He laid out several ideas.

1) Repeal Bush-era tax breaks for the top 2 percent of Americans. That would raise at least $700 billion over the next decade. When Bill Clinton was president, taxes were raised on the top 2 percent. What happened?  More than 22 million jobs were created, and Clinton left office with a huge budget surplus. Sanders laid out six other ideas.

2) A 5.4 percent surtax on millionaires and billionaires would raise more than $383 billion over 10 years, according to the Joint Tax Committee.  A millionaire's surtax has the support of 81 percent of the American people according to NBC News and the Wall Street Journal.

3) The U.S. government is actually rewarding companies that move U.S. manufacturing jobs overseas through loopholes in the tax code known as deferral and foreign source income.  During the last decade, the U.S. lost about 30 percent of its manufacturing jobs and over 50,000 factories have been shut down. If we ended the absurdity of providing tax breaks to companies that ship jobs overseas, the Joint Tax Committee has estimated that we could raise more than $582 billion in revenue over the next ten years. 

4) Ending tax breaks and subsidies for big oil and gas companies would reduce the deficit by more than $40 billion over the next 10 years.  The five largest oil companies in the United States have earned about $1 trillion in profits over the past decade.  Meanwhile, in recent years, some of the very largest oil companies in America like Exxon Mobil and Chevron, as I pointed out earlier, have paid absolutely nothing in Federal income taxes. In fact, some of them have actually gotten a rebate from the IRS.  That has got to stop.

5) If we prohibited abusive and illegal offshore tax shelters we could bring in $1 trillion over 10 years. That says to the corporations and the wealthy: Sorry, you are no longer

going to be able to stash your wealth in the Cayman Islands and avoid paying taxes.

6) If we established a Wall Street speculation fee of less than 1 percent on the sale and purchase of credit default swaps, derivatives, stock options and futures, we could reduce the deficit by more than $100 billion over the next decade and also tell Wall Street we are not going to tolerate the outrageous behavior which led us into this recession in the first place.

7) If we tax capital gains and dividends the same way we tax ordinary work, we can raise more than $730 billion over the next decade. Why should somebody who clips dividend coupons pay a substantially lower tax rate than somebody who is out working on our streets or is a nurse or is a teacher? Warren Buffett has often said he pays a lower effective tax rate than his secretary. Today, the effective tax rate of the wealthiest 400 Americans is just 18 percent, the lowest on record.

8) A progressive estate tax on inherited wealth of more than $3.5 million would raise more than $70 billion over 10 years.  We could reduce the deficit in a fair way while ensuring that 99.7 percent of Americans who lose a loved one would never have to pay a dime in federal estate taxes.

9) We also need to reduce unnecessary and wasteful spending at the Pentagon, which now consumes over half of our discretionary budget.  Since 1997, our defense budget has virtually tripled going from $254 billion to $700 billion.  Further, we also must end the unnecessary War in Iraq and the War in Afghanistan as soon as possible.  These wars have gone on long enough.  Reducing Pentagon spending by at least $900 billion over 10 years is something that we can and must do. 

10) If we required Medicare to negotiate for lower prescription drug prices with the pharmaceutical industry, we could save over $157 billion over 10 years.  As a result of the Medicare Part D prescription drug legislation signed into law under President George W. Bush, Medicare is prohibited from negotiating with the pharmaceutical industry to lower drug prices for seniors.  This is wrong.  Requiring Medicare to negotiate for lower drug prices could save the federal government and seniors over $15 billion a year.

11) If we enacted a robust public option or a Medicare-for-all health insurance program, we would be able to save more than $68 billion over the next decade and provide affordable health insurance coverage for millions of Americans.

12) As almost everyone knows, China is manipulating its currency, giving it an unfair trade advantage over the United States and destroying decent paying manufacturing jobs in the process.  If we imposed a currency manipulation fee on China and other low wage countries, the Economic Policy Institute has estimated that we could raise $500 billion over 10 years and create 1 million jobs in the process.

13) Just about everyone agrees that there is waste, fraud, and abuse in every agency of the federal government.  Rooting out this waste, fraud, and abuse could save about $200 billion over the next 10 years.