Category Archives: Tax

America’s Rigged Tax Collection System

Charges of rigging fill the air in today’s America. Elections, the economy, college admissions, the list seems endless. Whatever the truth in other cases, our tax collection system is undeniably rigged. It’s been so from the beginning, rigged against the vast majority of workers.

In 1943, under pressure to pay for World War II, Congress passed a law requiring employers to withhold taxes and report the incomes of their employees. The same law implicitly allows self-reporting by huge numbers of largely high-income taxpayers: landlords, self-employed professionals, small businesses, et al.

Tax compliance figures for the two groups differ starkly. The latest estimate from the Internal Revenue Service shows 99% compliance by wage and salary earners. Self-reporters, by contrast, are evading scores of billions in taxes year after year.

Here’s the bottom line from the IRS:

Findings from earlier tax gap analyses that compliance is higher when amounts are subject to information reporting and even higher when also subject to withholding, continue to hold….Misreporting of income amounts subject to substantial information reporting and withholding is 1 percent; of income amounts subject to substantial information reporting but not withholding, it is 7 percent; and of income amounts subject to little or no information reporting, such as nonfarm proprietor income, it is 63 percent.

Self-reporters take several forms, for example, partnerships, S corporations and limited liability companies (LLCs). They self-report via numerous avenues: business income, corporate income, self-employment taxes, credits, and more. If self-reporters have taken any capital gains in the stock market, brokerage firms are now required to report that income to the IRS. It’s the only significant instance of their income getting the same reporting treatment as wages and salaries.

The most recent IRS figures cover the period 2008-2010. Adding up all the under-reported categories, the agency estimated Treasury losses at $387 billion a year. Stunningly, self-reporters paid little more than a third of what they should have. (Really, you say? Go back to that IRS quote, and do the math for yourself.)

Here’s the agency’s summation of what it all means:

A high level of voluntary tax compliance remains critical to help ensure taxpayer faith and fairness in the tax system. Those who don’t pay what they owe ultimately shift the tax burden to those who properly meet their tax obligations. The new tax gap estimate updates long-standing research findings that information reporting and withholding are strongly associated with higher levels of voluntary compliance.

The words may be measured, the volume low—but it’s actually a primal scream with an unmistakable message. The IRS is telling Congress that self-reporting dooms the federal government to losses of about $400 billion a year. It’s also saying that America’s wage and salary workers deserve an unrigged tax collection system—everybody’s income should be reported, not just theirs.

Employers do the reporting for their employees; brokerage firms do it for stock market capital gains; let’s turn to banks to do the job for current self-reporters. Income and expenses are the major information components. Some way, somehow, those components have to be identified, separated, and added up. At year’s end, the totals should be reported to the IRS and to the income recipient. It would be nothing more (and nothing less) than a W-2 for self-reporters: the same as most American workers have been getting for decades.

If current technology isn’t up to the job, then invent technology that is. There’s nothing digital magic can’t do. If you don’t believe it, ask Siri (or better yet, Zora).

The bigger obstacle by far is political. The investment community fought relentlessly against basis reporting of capital gains. Entire other communities will do likewise to resist, demonize and delay any self-reporting reform. Listen to Bruce Bartlett in a 2012 op-ed examining, yes, the tax gap: “People don’t like the intrusion into their privacy — and the diminution of their opportunities for tax evasion — and businesses don’t like the cost or the alienation of their customers.” To which the obvious answer is: what does “liking” have to do with it?

Let’s finish with a billion-dollar idea.

The Treasury could attack that $387 billion-a-year revenue loss by inviting all techies to compete for a $1 billion prize. The goal: develop easy-to-use, non-intrusive software that eliminates the self-reporting shortfall.

The nation could wind up with the bargain of the century. The loss from under-reporting of income amounts to $1.06 billion a day. Prize-winning software could recover that amount by the first coffee break of Day Two.

And in the process, end 75 years of tax unfairness.

•  This article first appeared at www.nydailynews.com.

Tax Reform: Down with the “Stepped-Up Basis”

The term “stepped-up basis” is shorthand for a tax loophole that lines the pockets of the haves while it picks the pockets of the Treasury. According to the Congressional Budget Office, the cost over ten years could reach $644 billion.

Let’s see how the well-off get handed hundreds of billions that should be going toward the good of all Americans.

The basis of an asset (stocks, real estate, fine art, etc.) is its price or fair market value when it’s acquired. Any increase over the basis becomes a capital gain. When holders dispose of assets, they’re taxed on those gains—except when the stepped-up basis steps in, and erases both the gains and the taxes.

It’s automatic: when assets are passed along to an heir, the value at the time of the transfer becomes the heir’s basis. Magically, all the accumulated gains vanish. With no gains, all the taxes vanish too.

The basis loophole is actually one tax inequity on top of another. First, capital gains are taxed at a far lower rate than wages. When this preferential rate isn’t preferential enough, the affluent simply hold on for the zero rate.  (“This is the thrill that pulses through the veins of the well-to-do when they discover there is no longer any limit on their power to accumulate.” The words are Thomas Frank’s, taken from his latest book Rendezvous with Oblivion.

The loophole doesn’t apply to commonly-held retirement accounts such as regular IRAs and 401(k)s. Putting it another way, those hundreds of billions go lopsidedly to the wealthy—people with hugely appreciated assets, separate and apart from retirement savings.

Full disclosure: The stepped-up basis is available to just about everybody. For tax years 2018 through 2025, it’s open to individuals with a net worth up to $11.2 million or couples with a net worth up to $22.4 million.

Anybody who calls for ending a law has to counter the thinking that led to it in the first place. Proponents of the stepped-up basis claim that it’s often not possible to accurately determine the original basis, especially for assets that could date back several decades.  Our digital age has made this rationale more and more tenuous. In the large it simply doesn’t wash anymore.

In addition, Congress could always tailor a repeal to deal with holdings acquired long ago. Lawmakers faced a comparable situation in 2008, when they passed a bill requiring basis reporting for stock market capital gains. In that case they worked out various post-2008 schedules for different types of holdings. While Wall Street investors were always required to report gains honestly, the Internal Revenue Service now gets basis figures that provide a double-check. Over the long term, accurate reporting of capital gains by brokerage firms should approach the 99% level already achieved by employer reporting of workers’ wages and salaries.

Basis prices of other major assets should also be routinely reported. Realtors, for example, should be required to report to the IRS any home or property sale exceeding a specific amount; the same for major art galleries, antiques dealers and jewelers. Exceptions would be allowed; e.g., family heirlooms (provided they stay in the family and aren’t resold for tax-free gains).

The two capital gains tax inequities (the stepped-up basis and lower rates) effectively increase income inequality and perpetuate wealth over generations. For this the Treasury pays dearly: according to the Congressional Budget Office (CBO), these tax breaks are expected to cost a combined $1.984 trillion from 2014 to 2023.

The same CBO report estimated the federal deficit for that decade at $1.932 trillion (excluding interest on the national debt). So if those two tax breaks were ended—just those two—the Treasury could gain enough revenue to pay for all federal programs over that period without running a deficit. (Of course behaviors could also change, lowering the Treasury’s pick-up. Even so, the prospect should warm the hearts of all fiscal conservatives and deficit hawks.)

Eliminating both breaks likely goes a break too far. In that case, Congress should start with the most egregious. It should shut down the stepped-up basis.

Author’s Note: (Hyperlinks (where significant searching required):

1st graph, 2nd hyperlink: Table 1 p. 6/Exclusions from Taxable Income/Capital gains on assets transferred at death

5th graph: Table 2 p. 15/Tax Expenditure/Exclusions from Capital Income/Capital gains on assets transferred at death

7th graph: Scroll down to subhead Inherited IRAs and Retirement Accounts. 1st graph of that subhead

11th graph: Table 1 p. 6/Exclusions from Taxable Income/Capital gains on assets transferred at death ($644 billion) + Preferential Tax Rates on Capital Gains and Dividends ($1,340 billion, or $1.34 trillion)

Last hyperlink: Scroll well down to subhead Fiscal impact of subsidizing wealth inequality.

The Breakdown of the American Two-Party System

Trump’s hyper-nationalist propaganda strikes a cultural chord steeped in the myth that capitalism is the economic bulwark of freedom. Yet reality is not as malleable as myth. In fact, capitalism has led to unsustainable economic and social inequalities as well as the degradation of ecosystems and global warming. Faced with these crises, the U.S. two-party system is politically bankrupt, its instability marked by raw political nerves, belligerence and elected office-holding obsession by Washington’s power brokers.

The Republican Party is in a corner. The party is pleased that Trump has reduced corporate taxes and taxes on wealthy Americans as well as deregulated corporate behavior and weakened environmental protections. While many Republican Party leaders and Wall Street executives may be concerned with Trump’s hyper-nationalist rhetoric and obsession with trade wars, they seem very satisfied with the gains the president has handed to them.

And, now, Republican leaders want to cut social programs to balance the budget that the party’s tax policies helped worsen. But the future of Republicans is bleak. Trump has effectively hijacked the Republican Party and many Republicans are concerned that the Faustian bargain they have struck with the president may ultimately weaken their party. They can only hope that multiple Democratic candidates and raucous Democratic in-fighting will divide them and allow Republicans to keep control of the House and Senate and win the presidency in 2020.

Indeed, the Democratic Party is splitting. As the corporate class and the wealthiest dig in under Trump, the Democrats seem alternately flummoxed and impotent. Since the late 1980s the party has moved rightward and been effectively relegated to a “loyal opposition” role by emerging populist politics. The party’s weakness is obvious: it offers no clear alternative political vision. Democratic leaders speak only in generalities about important issues including health care, minimum wage, regressive taxes, military expenditures and others. Mainstream news reporters and analysts often wonder where the Democratic leadership is in these politically tumultuous times.

The Democratic national platform may specify goals but the party leaders are not willing to speak out about specific political alternatives. They fear alienating independent and fringe voters. They are particularly sensitive to being seen as “tax-and-spend liberals,” as purveyors of “creeping socialism,” as “soft on violent crime,” or as “welcoming immigrants.” As the Democrats did in the 2016 presidential campaign, the Democratic Party hides and waits for Trump to shoot himself in the foot. Its “progressive” leaders, moreover, struggle to get footing in superficial personality politics of Washington.

The time is ripe for a progressive third party to build a following. As the Democratic Party falters in finding its bearings and the Republican Party threatens to weaken social programs, young people are ready to pursue leftist alternatives. They do not fear socialism as many older voters do. The “anti-establishment” 2016 primary vote is a clear indication that the nation is ready for progressive politics. Trump, Cruz and Sanders (generally anti-establishment advocates) won approximately 27,000,000 primary votes while Clinton, Bush, Rubio, and Kasich (generally establishment advocates) won about 22,000,000 primary votes. This statistical comparison is even more compelling because both parties at the national level preferred establishment candidates over populist ones. That is, until Trump outmaneuvered the Republicans. Still, the Democratic Party was so harnessed to Clinton that it defeated its own populist candidate.

Savvy political strategists know that the history of capitalism is peppered with anti-democratic actions. Global capitalism has allowed an international corporate class to acquire tremendous political power across nations. Wealth has been concentrated to unprecedented levels. It is, furthermore, the principal marker indicating who controls the reins of government in any nation.  In the U.S., according to the New York Times, the richest 1 percent now controls more wealth than the bottom 90 percent of Americans.

Yet it is the bottom 90 percent that holds over 70 percent of the private debt and is the most vulnerable to global economic volatility and to the massive storms, tide surges and wildfires accompanying climate change. Public regulation of wealth distribution and the health of ecosystems is the only way to manage these crises. Progressive Americans must get behind a third party with a strong left politic in order to appeal to those who have been most hurt by global capitalism. Only then, can the nation chart a more promising political course.

Crimes of a Monster: Your Tax Dollars at Work

Is ours a government of the people, by the people, for the people, or a kakistocracy rather, for the benefit of knaves at the cost of fools?

— James Russell Lowell, 19th century American poet/critic/editor/diplomat, in a 1876 letter to Joel Benton.

Let us not mince words.

We are living in an age of war profiteers.

We are living in an age of scoundrels, liars, brutes and thugs. Many of them work for the U.S. government.

We are living in an age of monsters.

Ask Donald Trump. He knows all about monsters.

Any government that leaves “mothers and fathers, infants and children, thrashing in pain and gasping for air” is evil and despicable, said President Trump, justifying his blatantly unconstitutional decision (in the absence of congressional approval or a declaration of war) to launch airstrikes against Syria based on dubious allegations that it had carried out chemical weapons attacks on its own people. “They are crimes of a monster.”

If the Syrian government is a monster for killing innocent civilians, including women and children, the U.S. government must be a monster, too.

In Afghanistan, ten civilians were killed—including three children, one an infant in his mother’s arms—when U.S. warplanes targeted a truck in broad daylight on an open road with women and children riding in the exposed truck bed. They had been fleeing airstrikes on their village.

In Syria, at least 80 civilians, including 30 children, were killed when U.S.-led air strikes bombed a school and a packed marketplace.

In Yemen, a U.S. drone bombed a caravan of vehicles on their way to or from a wedding, leaving “scorched vehicles and body parts … scattered on the road.” As investigative journalist Tom Engelhart documents, that 2013 bombing was actually the eighth wedding party (almost 300 civilians dead) wiped out by the U.S. military, totally or in part, since the Afghan War began in 2001. “Keep in mind that, in these years, weddings haven’t been the only rites hit,” notes Engelhart. “US air power has struck gatherings ranging from funerals to a baby-naming ceremony.”

Then there was a Doctors without Borders hospital in Kunduz that had 12 of its medical staff and 10 of its patients, including three children, killed when a U.S. AC-130 gunship fired on it repeatedly. Some of the patients were burned alive in their hospital beds.

Yes, on this point, President Trump is exactly right: these are, indeed, the crimes of a monster.

Unfortunately, this monster—this hundred-headed gorgon that is the U.S. government and its long line of political puppets (Donald Trump and before him Obama, Bush, Clinton, etc.), who dance to the tune of the military industrial complex—is being funded by you and me.

The blood of innocent civilians is on our hands whether we choose to recognize it or not.

It is our tax dollars at work here, after all.

Unfortunately, we have no real say in how the government runs, or how our taxpayer funds are used.

We have no real say, but we’re being forced to pay through the nose, anyhow, for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

The only alternative to paying one’s taxes is jail, and there are few people willing to go to jail for a principle anymore.

Still, while we may not have much choice in the matter of how our taxes are used, we still have a voice and a vote, and it’s time the American people made their voices—and their votes—heard about the way our taxes are used and misused by this government of wolves and thieves and liars.

Consider: we get taxed on how much we earn, taxed on what we eat, taxed on what we buy, taxed on where we go, taxed on what we drive, and taxed on how much is left of our assets when we die.

Indeed, if there is an absolute maxim by which the federal government seems to operate, it is that the American taxpayer always gets ripped off.

This is true whether you’re talking about taxpayers being forced to fund high-priced weaponry that will be used against us, endless wars that do little for our safety or our freedoms, or bloated government agencies such as the National Security Agency with its secret budgets, covert agendas and clandestine activities. Rubbing salt in the wound, even monetary awards in lawsuits against government officials who are found guilty of wrongdoing are paid by the taxpayer.

Not only are American taxpayers forced to “spend more on state, municipal, and federal taxes than the annual financial burdens of food, clothing, and housing combined,” but we’re also being played as easy marks by hustlers bearing the imprimatur of the government.

With every new tax, fine, fee and law adopted by our so-called representatives, the yoke around the neck of the average American seems to tighten just a little bit more.

Everywhere you go, everything you do, and every which way you look, we’re getting swindled, cheated, conned, robbed, raided, pick-pocketed, mugged, deceived, defrauded, double-crossed and fleeced by governmental and corporate shareholders of the American police state out to make a profit at taxpayer expense.

Yet as Ron Paul observed, “The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.”

The overt and costly signs of the despotism exercised by the increasingly authoritarian regime that passes itself off as the United States government are all around us: warrantless surveillance of Americans’ private phone and email conversations by the NSA; SWAT team raids of Americans’ homes; shootings of unarmed citizens by police; harsh punishments meted out to schoolchildren in the name of zero tolerance; drones taking to the skies domestically; endless wars; out-of-control spending; militarized police; roadside strip searches; roving TSA sweeps; privatized prisons with a profit incentive for jailing Americans; fusion centers that collect and disseminate data on Americans’ private transactions; and militarized agencies with stockpiles of ammunition, to name some of the most appalling.

Meanwhile, the three branches of government (Executive, Legislative and Judicial) and the agencies under their command—Defense, Commerce, Education, Homeland Security, Justice, Treasury, etc.—have switched their allegiance to the Corporate State with its unassailable pursuit of profit at all costs and by any means possible.

As a result, we are now ruled by a government consumed with squeezing every last penny out of the population and seemingly unconcerned if essential freedoms are trampled in the process.

As with most things, if you want to know the real motives behind any government program, follow the money trail. When you dig down far enough, you quickly find that those who profit from Americans being surveilled, fined, scanned, searched, probed, tasered, arrested and imprisoned are none other than the police who arrest them, the courts which try them, the prisons which incarcerate them, and the corporations, which manufacture the weapons, equipment and prisons used by the American police state.

It gets worse.

Because the government’s voracious appetite for money, power and control has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, tickets and penalties.

The government’s schemes to swindle, cheat, scam, and generally defraud Americans have run the gamut from wasteful pork barrel legislation, cronyism and graft to asset forfeiture schemes, the modern-day equivalent of highway robbery, astronomical health care “reform,” and costly stimulus packages.

Americans have also been made to pay through the nose for the government’s endless wars, subsidization of foreign nations, military empire, welfare state, roads to nowhere, bloated workforce, secret agencies, fusion centers, private prisons, biometric databases, invasive technologies, arsenal of weapons, and every other budgetary line item that is contributing to the fast-growing wealth of the corporate elite at the expense of those who are barely making ends meet—that is, we the taxpayers.

Those football stadiums that charge exorbitant sums for nosebleed seats? Our taxpayer dollars subsidize them.

Those blockbuster war films? Yep, we were the silent investors on those, too.

Same goes for the military equipment being peddled to local police agencies and the surveillance cameras being “donated” to local governments.

In other words, in the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than indentured servants.

We’re slaves.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

You’re not free if the government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes.

You’re not free if government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing.

And you’re certainly not free if the IRS gets the first cut of your salary to pay for government programs over which you have no say.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

All the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly, wage endless wars that make no one safer but fatten the bank accounts of the defense contractors—with little thought for the plight of its citizens.

Somewhere over the course of the past 240-plus years, democracy has given way to kleptocracy (a government ruled by thieves), and representative government has been rejected in favor of a kakistocracy (a government run by the most unprincipled citizens that panders to the worst vices in our nature: greed, violence, hatred, prejudice and war) ruled by career politicians, corporations and thieves—individuals and entities with little regard for the rights of American citizens.

The American kleptocracy continues to suck the American people down a rabbit hole into a parallel universe in which the Constitution is meaningless, the government is all-powerful, and the citizenry is powerless to defend itself against government agents who steal, spy, lie, plunder, kill, abuse and generally inflict mayhem and sow madness on everyone and everything in their sphere.

This dissolution of that sacred covenant between the citizenry and the government—establishing “we the people” as the masters and the government as the servant—didn’t happen overnight.

It didn’t happen because of one particular incident or one particular president.

It has been a process, one that began long ago and continues in the present day, aided and abetted by politicians who have mastered the polarizing art of how to “divide and conquer.”

By playing on our prejudices about those who differ from us, capitalizing on our fears for our safety, and deepening our distrust of those fellow citizens whose opinions run counter to our own, the powers-that-be have effectively divided us into polarized, warring camps incapable of finding consensus on the one true menace that is an immediate threat to all of our freedoms: the U.S. government.

We are now the subjects of a militarized, corporate empire in which the vast majority of the citizenry work their hands to the bone for the benefit of a privileged few.

Adding injury to the ongoing insult of having our tax dollars misused and our so-called representatives bought and paid for by the moneyed elite, the government then turns around and uses the money we earn with our blood, sweat and tears to target, imprison and entrap us, in the form of militarized police, surveillance cameras, private prisons, license plate readers, drones, and cell phone tracking technology.

All of those nefarious government deeds that you read about in the paper every day: those are your tax dollars at work. It’s your money that allows for government agents to spy on your emails, your phone calls, your text messages, and your movements. It’s your money that allows out-of-control police officers to burst into innocent people’s homes, or probe and strip search motorists on the side of the road, or shoot an unarmed person. And it’s your money that leads to innocent Americans across the country being prosecuted for innocuous activities such as raising chickens at home, growing vegetable gardens, and trying to live off the grid.

Just remember the next time you see a news story that makes your blood boil, whether it’s a child being kicked out of school for shooting an imaginary arrow, or a homeowner being threatened with fines for building a pond in his backyard, remember that it is your tax dollars that are paying for these injustices.

So what are you going to do about it?

There was a time in our history when our forebears said “enough is enough” and stopped paying their taxes to what they considered an illegitimate government. They stood their ground and refused to support a system that was slowly choking out any attempts at self-governance, and which refused to be held accountable for its crimes against the people. Their resistance sowed the seeds for the revolution that would follow.

Unfortunately, as I make clear in my book Battlefield America: The War on the American People, in the 200-plus years since we established our own government, we’ve let bankers, turncoats and number-crunching bureaucrats muddy the waters and pilfer the accounts to such an extent that we’re back where we started.

Once again, we’ve got a despotic regime with an imperial ruler doing as they please.

Once again, we’ve got a judicial system insisting we have no rights under a government which demands that the people march in lockstep with its dictates.

And once again, we’ve got to decide whether we’ll keep marching or break stride and make a turn toward freedom.

But what if we didn’t just pull out our pocketbooks and pony up to the federal government’s outrageous demands for more money?

What if we didn’t just dutifully line up to drop our hard-earned dollars into the collection bucket, no questions asked about how it will be spent?

What if, instead of quietly sending in our checks, hoping vainly for some meager return, we did a little calculating of our own and started deducting from our taxes those programs that we refuse to support?

If we don’t have the right to decide what happens to our hard-earned cash, then we don’t have very many rights at all.

If the government can just take from you what they want, when they want, and then use it however they want, you can’t claim to be anything more than a serf in a land they think of as theirs.

This was the case in the colonial era, and it’s the case once again.

Two Minutes to Doomsday

Not since 1953, when the U.S. and the Soviets exploded thermonuclear bombs, has the world been such a powder keg!

Only recently, the Bulletin of the Atomic Scientists moved the Doomsday Clock forward 30 seconds. It now registers two minutes to midnight. Verily, it’s lights out when the clock strikes 12:00 midnight. Ka-boom, it’s over!

What’s going on?

Hitherto, in the aftermath of the Cold War, the clock was set all the way back to 17 minutes to midnight. Thereafter, it wasn’t until 1998, when India and Pakistan staged back-to-back nuclear weapon testing, that the famous timepiece moved forward into single digits once again. It’s important to note that resetting the clock is not a frivolous undertaking. A group of distinguished scientists make that decision.

Here’s the rationale for the move closer to the dreaded midnight hour: Upon the election of Trump, the Science and Security Board for the Bulletin of the Atomic Scientists reset the Doomsday Clock to 2 ½ minutes to midnight. That was based upon extraordinarily provocative nasty destabilizing verbiage from the president himself. Indeed, he is commander in chief, ahem.

Thereafter, following the self-crowning glory of Trump’s inauguration, which was an absolute bust, especially as worldwide protests in the streets vastly outnumbered the inauguration, global risks have measurably increased with leaders Trump and Kim exchanging simplistic infantile barbs at every opportunity.

Not only, it’s also a fact that global risks have compounded via U.S.-Russian relations, featuring more conflict than cooperation, as the two Super Powers crank up tensions: (1) continuing NATO military exercises along borders, (2) undermining the Intermediate-Range Nuclear Forces Treaty, (3) upgrading nuclear arsenals, and (4) eschewing arms-control negotiations. Truly, America is in conflict within all categories that ricochet into holocaust.

On a Global basis, tensions have increased over the South China Sea. Pakistan and India continue building larger nuclear weapon arsenals. And, in the Middle East, the U.S. is driving a stake into the heart of the Iranian nuclear deal.  Meanwhile, and increasingly so, cyber threats risk outages of infrastructure power grids and water sources.

Exasperating this perilous world scenario, there is the real threat of fundamental breakdown in the international order because of U.S. behavior, torpedoing trustworthiness amongst nations whilst also undermining, and, in fact, ridiculing, a very sober Paris 2015 climate accord.  In point of fact, U. S. leadership has turned deceptive and unreliable to predict or discern between sincerity and mere rhetoric, inter-meshed within goofy twitter messages. Confusion and conflicting policy statements confront allies with despair.

Further endangering the world community, it is all too evident that the Trump administration is true grit for neoliberal spirits. In fact, it is speculated that if the Science and Security Board for the Bulletin of the Atomic Scientists computed risks of holocaust based upon the tenets behind rampant neoliberal capitalism, the clock would be reset to one minute before midnight. Indeed, especially under Trump, and especially with a big tax cut combined with rejection of any effort whatsoever to tame global warming. The biosphere is at a heighten level of risk under Trump.

The case can be made that the planet is at peak risk because of neoliberal socio-politico-economic policies that are equal in weight to the threat of nuclear holocaust. Neoliberal capitalism runs roughshod over the social contract and ignores ecological responsibility. For certain, there is no profit to be found in social contracts or ecological caretaking.

As a result, after 35 years of hardcore neoliberalism, the ecosystem is exhausted, frayed, and starting to collapse. Indeed, neoliberal principles of privatization of public assets, rugged individualism, and free-market dicta scrunch every class below the one percent whilst tossing aside ecological concerns into the gutter. Similar to a hefty steamroller, neoliberal ascendency literally flattens the social contract and tosses aside care for the biosphere.

The brand spanking new tax cut leveled at propping up corporations and the super rich exposes $1.5T in new governmental debt. Ipso facto, government must be cut to the bone to satisfy Republican dogma. Hence, the middling classes will be screwed, as the poor get decimated. Socially conscious and ecologically beneficial government will be, and is already, ripped apart. The checks and balances that keep the ecosystem humming, like the EPA, are systematically ravaged via executive order whilst giving the finger to the Paris 2015 climate accord.

This ongoing massive unraveling of guardianship for the ecosystem is smack dab in the crosshairs of a mean-spirited Ayn Rand-type conspiracy, taking full control over America. Rule via decadence is taking America back to late 19th century socio-politico-economic principles, “when men will be men.” As it happens, Trump is turning loose the most boorish elements of the transnational elite.

Meanwhile, the planet simmers with overheating symptoms, and emits an orang-ish glow because of massive chemical saturation, threatening civilization down to its core. The biosphere can ill afford the world’s largest economy rejecting remedial efforts. If the Science and Security Board for the Bulletin of the Atomic Scientists gave equal weight to ecosystem debasement as it does nuclear threats, the Atomic Clock would bust a spring.

Alas, because of excessive levels of CO2 emitted by humans with resultant global warming, which the Trump group exacerbates, the planet is weak in the knees, especially where people don’t see it, as for example,  (1) The all-important Atlantic ocean conveyor belt circulation pattern, aka: Thermohaline, has already started to slow down way ahead of schedule because of global warming, (2) Oceans have lost 40% of plankton production over the past 50 years, threatening loss of one of the major sources of oxygen for the planet, (3) In 2017, the Gulf of Mexico’s Dead Zone, where oxygen is so weak that fish die, is the largest ever at 8,800 square miles, (4) Kelp Forests in the ocean, the equivalent of terrestrial Rain Forest, are being wiped out from Tasmania to California, (5) Greenland experienced total surface melt for the first time in scientific history, (6) The massive Arctic meltdown threatens runaway global warming (“RGW”) as methane hydrates are exposed, bringing in its wake burn-out agriculture, (7) Irreversible Antarctica ice sheet collapse has commenced.

But still, overshadowing all threats to civilization, positive climate feedbacks are starting to influence the global warming process, meaning the planet itself is on autopilot, emitting one molecule of CO2 via hands-free positive feedbacks for every two molecules of CO2 emitted by human activity.1 This one fact alone is reason enough to move the Doomsday Clock much, much, much closer to midnight.

Postscript:  “There are growing signs that the Pentagon and the CIA are pressing ahead with preparations for a preemptive war against North Korea, including the use of nuclear weapons. There have been multiple reports in the American corporate media of behind-the-scenes discussions between the US military and intelligence apparatus and the Trump administration of the feasibility of a so-called “bloody nose” attack, involving US air strikes on North Korean nuclear facilities, with the expectation—however ill-founded—that they would not provoke a full-scale war.2

  1. Scripps Institution of Oceanography.
  2. Alex Lockie, news editor, Business Insider: “US Stealth Bombers in Guam Appear to be Readying for a Tactical Nuclear Strike on North Korea,” Defend Democracy Press, January 28, 2018.

Preparing For The Coming Transformation

The year 2017 has been another active year for people fighting on a wide range of fronts. The Trump administration has brought many issues that have existed for years out into the open where they are more difficult to deny – racism, colonialism, imperialism, capitalism and patriarchy and the crises they create. More people are activated and greater connections between the fronts of struggle are creating a movement of movements. These are positive developments, bright spots in difficult times. They are the seeds of transformative change that we can nurture and grow if we act with intention.

The crises we face have been building for decades. They are reaching a point of extremism that will create an even greater response by people. What that response is, where it goes and what it accomplishes are up to all of us to determine.

The overreach by the plutocrats in power may bring a boomerang effect, energizing the population to take action and demand the changes we desire and need. We may reach a moment, a turning point, when the movements for economic, racial and environmental justice, as well as peace, can win significant changes, beyond the comfort zones of those in power. The boomerang will only occur if we educate and organize for it, and its size will also depend on us.

We have no illusions that this work will be easy. Those in power will do all that they can to derail, misdirect and suppress our efforts. Our tasks are to resist their tactics and maintain our focus on our end goals. This requires understanding how social movements succeed and being clear in our demands for transformative change.

We see several key areas where people are energized to work for changes that are opportunities to expand the current movement of movements into a powerful force that will overcome the stranglehold by the corporate duopoly parties. This is the first of two articles to help prepare us for the work ahead. In the second article, we will describe these key issues in greater depth and what we need to do to create the transformative moment we need.

The Long Development of this Transformative Era

The era of transformation has been developing over many decades. If we view it through presidential administrations, a frame of reference used commonly in the United States, we see that both major parties represent the interests of the wealthy and corporations, not the majority of the population, and that they effectively divide and weaken popular movements.

After Bill Clinton’s administration loosened regulations on finance, setting the stage for the 2008 crash, brought in trade agreements like NAFTA and weakened the social safety net, and George W. Bush’s administration expanded military aggression around the world and the domestic security state, as well as further enriching the wealthy, people were hungry for change. Barack Obama effectively built his ‘hope and change’ campaign around this desire, vaguely but eloquently promising what people wanted. His words allowed people to imagine that a transformation was coming.

Obama raised expectations, but he did not fulfill them. His cabinet was made up of Wall Streeters from Citigroup. He continued and expanded foreign wars, the wealth divide grew and tens of millions went without healthcare even after his private insurance-based Affordable Care Act became law. The frustration that had been building during the Clinton-Bush years burst onto the scene with Occupy, Fight for $15, Black Lives Matter, debt resistance, immigration reform, Idle No More and other fronts of struggle.

After Occupy, the media told us the people’s struggle went away, but, as we show in the daily movement news reporting on Popular Resistance, all of those struggles expanded. The corporate media’s failure to cover the national mass protest movement does not change reality — the resistance movements continue, are growing and are impacting popular opinion and policies.

Where We Are and What We Must Do

In 2013, we wrote a two part series describing the status of the movement and what the movement must do. In the December 2013 article, “Closer than We Think” we described the eight stages of social movements, an analysis by long-time civil rights and anti-nuclear activist, Bill Moyer. The movement had gone through the “Take-Off”, Stage Four of the social movement when encampments covered the country, seemingly overnight, and brought the issues of the wealth divide, racist policing, climate change, student debt and other issues to the forefront. The meme of the 99% against the 1% illustrated the conflict between people power and the power holders. We passed through Stage Five, “the Landing,” where the encampments disappeared and people asked, “What happened? Did we accomplish anything?”

Our second article in January 2014 focused on the tasks of the movement and explained that we were now in Stage Six, the final stage before victory. This is a long-term phase that could last years where the goal is to build broad national consensus of 70% to 90% support among the public for the goals of the movement and to mobilize people as effective change agents.

During this phase, the contradictions in the system become more obvious to people. For example, as the United States and world experience the harsh realities of climate change in massive storms, widespread fires, droughts and famine, the government’s response is inadequate. When Obama was president his administration was an anchor on the world, weakening international climate and trade agreements. His secretary of state, Hillary Clinton, used her influence to promote fracking. The Trump administration has gone further, denying climate change, erasing words and phrases that describe it from government reports, silencing scientists and undermining the inadequate steps made to confront climate change that were put in place in the Obama era.

The inadequate response to the climate crisis is one example of many multiple crisis situations that exist in which the government does not respond, responds inadequately or even takes actions that make these crises worse. In some cases, the power holders go too far, as we see in the recently passed tax bill, designed to protect the donor class, and in abusive police practices as the racism and violence of our society are exposed. The overreaction in the end helps build the national consensus we need to achieve our objectives.

The contradictions arise because there are obvious solutions to each crisis we face, but those in power refuse to put them in place. National consensus for these solutions grows during this phase, and the failures of the money-dominated political system become more obvious.

As a result, a transformative moment is building now. It can be seen in the 2016 presidential campaigns where people showed frustration with both corporate parties. Electoral challenges inside the parties showed populist anger based on hundreds of millions of people struggling every day to survive in an unfair economy. Donald Trump built his campaign around economic insecurity from the right and Senator Bernie Sanders did the same from the left. Now, Trump is betraying conservative populists with economic and healthcare policies that add to their insecurity and with the wealthiest cabinet in US history serving the interests of Wall Street, the self-interest of elected officials and adding to the distrust of the DC duopoly. The realization of Trump’s betrayal is only beginning to show itself in the lives of those who supported him.

The Democrats have been struggling to come to grips with how they lost to Donald Trump. A large part of the party is in denial, blaming their failures on the fiction of Russiagate — claiming the Russians were responsible for their loss rather than a widely-disliked candidate who represented Wall Street and war for her entire career. The Democrats continue their internal divide: the divide between Wall Street donors who want the party to serve their interests and voters who want the party to represent their interests. Invariably the Democrats will be unable to turn their backs on their donors and will nominate a fake change agent who will spout popular progressive rhetoric and dash those hopes when in office.

It is critical for us to step out of the limitations of two and four year election cycles and recognize that social transformation does not arise by electing the perceived least evil. Social transformation occurs through a people-powered movement of movements that arises over decades of struggle and shifts the political reality so that the power holders must respond.

Issues Driving the Backlash 

There will be a backlash. It will look to the Democrats like a backlash against Trump’s extremism, but it will be broader. It will be a backlash against the extremism of the corporate duopoly. Their bi-partisan policies always put the wealthy and big business interests first. The boomerang will be built on the conflict between the necessities of the people and the planet vs. the greed of the wealthy.

There are a number of fundamental issues that are priorities for large majorities of the population, around which people are mobilizing and where national consensus is developing. They have the potential to connect our movements into a powerful force.

One of our tasks is to develop clear demands so that we cannot be side-tracked by false or partial solutions. If these fundamental issues are addressed through bold and transformative solutions, they will shift the political culture and our political system in a significant way towards the people-powered future we need. They will create change at the root causes of the crises we face.

These transformative issues include economic inequality, lack of access to health care, ensuring Internet freedom and a people’s media, confronting climate change and environmental disasters, ending US Empire and militarism at home, and addressing domestic human rights abuses, whether it is exploitation of workers, mass incarceration, racism or disrespect for Indigenous sovereignty. Throughout all of these issues there is a thread of racial injustice so our struggles must not just solidify around class issues, but must also solidify around the necessity of ending systemic racism.

We will address these issues and next steps in greater depth in the first newsletter of the new year. We wish all of you a peaceful week and hope you are able to spend time with loved ones. We are committed to being with you through the struggle and to doing all we can to stop the machine and create a new world.

Making the Golden Years Golden for All Americans

Congress created individual retirement accounts (IRAs) in 1974. Four years later it added 401(k)s. A third variety, Roth IRAs, won approval in 1997. Together the accounts dominate America’s private retirement system.

Today we’re a hugely unequal society. Updating our private system could reduce inequality, and help make the golden years golden for all Americans.

Let’s begin with the millions of workers we’re not even giving a chance:

The 1974 bill aimed to provide a workplace retirement plan for all private-sector employees not otherwise covered. Forty-three years later over 70 million workers, mostly low- to middle-income, still lack a workplace option.

They deserve at least two. One would be a broad stock market index fund like the S&P 500. For savers who put safety first, the other would be a bond fund holding only Treasury debt. Enrollment would be automatic with an opt-out provision. Pre-tax contributions would be made via payroll deductions. Gains would accrue tax-free, taxes payable on withdrawal (the same as all current accounts except Roths).

States could set up accounts on their own (as Oregon already has), but Congress could do the job in a single stroke. Both 2008 presidential candidates, Senator John McCain (R-NV) and Barack Obama, endorsed a federal Automatic IRA plan. Obama later included the idea in a budget outline, but it never went any farther.

It should have. Well into the 21st century, private retirement accounts should be a worker’s right: they should come with the job, period.

Now let’s add more luster to the golden years with smarter retirement account rules.

Congress should lower the age for required minimum distributions (RMDs) from the current 70 1/2 to 65. That would dovetail with the Medicare eligibility age and with common sense and the common good. An aging population is putting Medicare and Social Security in a fiscal bind. Revenues from the new rule should be dedicated equally to the two programs.

Taxable required distributions aren’t a penalty; they’re a payback to the Treasury for decades of pre-tax contributions and tax-free growth. It would help all seniors if the payback started sooner. (No, RMDs won’t exhaust retiree savings. It takes voluntary withdrawals far larger than the required minimums to do that.)

Moving on to fairness, it’s important to remember that tax breaks redistribute income. Those who get them count on other taxpayers to make up the revenue shortfall (or else there’s simply less to go around). Retirement breaks flow lopsidedly to the well-off. Putting it all together, there’s a strong case for the GOP idea of a sharply lower cap on annual 401(k) contributions.

Would anyone lose any sleep if the current $18,000 maximum were cut to $10,000, to $7,500? It’s one thing to help workers who need help. It’s another to over-subsidize the retirement savings of the haves, and lose current tax revenues in the bargain.

Lastly, we should wind down a fiscal deception.

Congress should remove Roth IRAs, Roth 401(k)s and Roth rollovers (conversions of other accounts into Roths) from the retirement mix. Existing Roths should follow the rules that govern all other plans: required distributions, taxable at ordinary income rates. If that can’t happen, at least stop offering Roths and require (tax-free) distributions from current accounts.

Fiscal hawks should cheer the reform, which would guarantee lower federal deficits in future decades. Roth contributions are taxable, so the Treasury takes in more money initially. But the gains are permanently tax-free, leading to multi-billion-dollar losses in the long run (and retirement accounts are primarily about the long run).

Fairness would also get a boost. It’s inequitable to exempt Roths from required distributions and taxes on gains.

Len Burman is a tax expert and former director of the nonpartisan Tax Policy Center. In 2006, analyzing the repeal of the $100,000 income limit on Roth conversions, he called it an “especially insidious” fiscal gimmick. Roth accounts, he wrote, are a downstream disaster: “The revenue losses…are exceedingly poorly timed. They reduce federal revenues at the same time that the baby boomers are aging….[The accounts] will place a large and growing portion of the tax base off limits…just when our children and grandchildren will most need tax revenues.”

Roths were a flimflam from the beginning, “a conscious, contemptible manipulation of the budget rules;” so said John Buckley, former chief Democratic counsel to the Committee on Ways and Means. The Treasury would be billions better off without them.

Let’s use our smarts and our hearts. Let’s make retirement accounts the last, golden part of the American Dream.

P.S. In April 2012, the House Committee on Ways and Means held a hearing on tax reform and tax-advantaged retirement accounts. I filed a statement at the hearing recommending that required minimum distributions begin at age 65 instead of 70 1/2. Here’s a link to the statement.

Financial Tyranny: “We the People” Are the New Permanent Underclass in America

When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.

― Frédéric Bastiat, French economist

Americans can no longer afford to get sick and there’s a reason why.

That’s because a growing number of Americans are struggling to stretch their dollars far enough to pay their bills, get out of debt and ensure that if and when an illness arises, it doesn’t bankrupt them.

This is a reality that no amount of partisan political bickering can deny.

Many Americans can no longer afford health insurance, drug costs or hospital bills. They can’t afford to pay rising healthcare premiums, out-of-pocket deductibles and prescription drug bills.

They can’t afford to live, and now they can’t afford to get sick or die, either.

To be clear, my definition of “affordable healthcare” is different from the government’s. To the government, you can “afford” to pay for healthcare if your income falls above the poverty line. That takes no account of rising taxes, the cost of living, the cost to clothe and feed a household, the cost of transportation and communication and education, or any of the other line items that add up to a life worth living.

As Helaine Olen points out in The Atlantic:

Just because a person is insured, it doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills. The point of insurance is to protect patients’ finances from the costs of everything from hospitalizations to prescription drugs, but out-of-pocket spending for people even with employer-provided health insurance has increased by more than 50 percent since 2010.

For too many Americans, achieving any kind of quality of life has become a choice between putting food on the table and paying one’s bills or health care coverage.

It’s a gamble any way you look at it, and the medical community is not helping.

Healthcare costs are rising, driven by a medical, insurance and pharmaceutical industry that is getting rich off the sick and dying.

Indeed, Americans currently pay $3.4 trillion a year for medical care.  We spent more than $10,000 per person on health care in 2016. Those attempting to shop for health insurance coverage right now are understandably experiencing sticker shock with premiums set to rise 34% in 2018. It’s estimated that costs may rise as high as $15,000 by 2023.

As Bloomberg reports:

Rising health-care costs are eating up the wage gains won by American workers, who are being asked by their employers to pick up more of the heftier tab… The cost of buying health coverage at work has increased faster than wages and inflation for years, pressuring household budgets.

Appallingly, Americans spend more than any developed country on healthcare and have less to show for it. We don’t live as long, we have higher infant mortality rates, we have fewer hospital and physician visits, and the quality of our healthcare is generally worse. We also pay astronomical amounts for prescription drugs, compared to other countries.

Whether or not you’re insured through an employer, the healthcare marketplace, a government-subsidized program such as Medicare or Medicaid, or have no health coverage whatsoever, it’s still “we the consumers” who have to pay to subsidize the bill whenever anyone gets sick in this country. And that bill is a whopper.

While Obamacare (a.k.a. the Affordable Care Act) may have made health insurance more accessible to greater numbers of individuals, it has failed to make healthcare any more affordable.

Why?

As journalist Laurie Meisler concludes:

One big reason U.S. health care costs are so high: pharmaceutical spending. The U.S. spends more per capita on prescription medicines and over-the-counter products than any other country.

One investigative journalist spent seven months analyzing hundreds of bills from hospitals, doctors, drug companies, and medical equipment manufacturers. His findings confirmed what we’ve known all along: health care in America is just another way of making corporations rich at consumer expense.

An examination of an itemized hospital bill (only available upon request) revealed an amazing amount of price gouging. Tylenol, which you can buy for less than $10 for a bottle, was charged to the patient at a rate of $15 per pill, for a total of $345 for a hospital stay. $8 for a plastic bag to hold the patient’s personal items and another $8 for a box of Kleenex. $23 for a single alcohol swab. $53 per pair for non-sterile gloves (adding up to $5,141 for the entire hospital stay). $10 for plastic cup in which to take one’s medicine. $93 for the use of an overhead light during a surgical procedure. $39 each time you want to hold your newborn baby. And $800 for a sterile water IV bag that costs about a dollar to make.

This is clearly not a problem that can be remedied by partisan politics.

The so-called Affordable Care Act pushed through by the Obama administration is proving to be anything but affordable for anyone over the poverty line. And the Trump administration’s “fixes” promise to be no better. Indeed, for too many Americans who live paycheck to paycheck and struggle just to get by, the tax penalty for not having health insurance will actually be cheaper than trying to find affordable coverage that actually pays for care.

This is how the middle classes, who fuel the nation’s economy and fund the government’s programs, get screwed repeatedly.

When almost 60 percent of Americans are so financially strapped that they don’t have even $500 in savings and nothing whatsoever put away for retirement, and yet they are being forced to pay for government programs that do little to enhance their lives, we’re not living the American dream.

We’re living a financial nightmare.

We have no real say in how the government runs, or how our taxpayer funds are used, but that doesn’t prevent the government from fleecing us at every turn and forcing us to pay for endless wars that do more to fund the military industrial complex than protect us, pork barrel projects that produce little to nothing, and a police state that serves only to imprison us within its walls.

We have no real say, but we’re being forced to pay through the nose, anyhow.

George Harrison, who died 16 years ago this month, summed up this outrageous state of affairs in his song Taxman:

If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman, yeah, I’m the taxman

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.

In other words, in the eyes of the government, “we the people, the voters, the consumers, and the taxpayers” are little more than indentured servants and sources of revenue.

If you have no choice, no voice, and no real options when it comes to the government’s claims on your property and your money, you’re not free.

Consider: The government can seize your home and your car (which you’ve bought and paid for) over nonpayment of taxes. Government agents can freeze and seize your bank accounts and other valuables if they merely “suspect” wrongdoing. And the IRS insists on getting the first cut of your salary to pay for government programs over which you have no say.

It wasn’t always this way, of course.

Early Americans went to war over the inalienable rights described by philosopher John Locke as the natural rights of life, liberty and property.

It didn’t take long, however—a hundred years, in fact—before the American government was laying claim to the citizenry’s property by levying taxes to pay for the Civil War. As the New York Times reports, “Widespread resistance led to its repeal in 1872.”

Determined to claim some of the citizenry’s wealth for its own uses, the government reinstituted the income tax in 1894. Charles Pollock challenged the tax as unconstitutional, and the U.S. Supreme Court ruled in his favor. Pollock’s victory was relatively short-lived. Members of Congress—united in their determination to tax the American people’s income—worked together to adopt a constitutional amendment to overrule the Pollock decision.

On the eve of World War I, in 1913, Congress instituted a permanent income tax by way of the 16th Amendment to the Constitution and the Revenue Act of 1913. Under the Revenue Act, individuals with income exceeding $3,000 could be taxed starting at 1% up to 7% for incomes exceeding $500,000.

It’s all gone downhill from there.

Unsurprisingly, the government has used its tax powers to advance its own imperialistic agendas and the courts have repeatedly upheld the government’s power to penalize or jail those who refused to pay their taxes.

Irwin A. Schiff was one of the nation’s most vocal tax protesters. He spent a good portion of his life arguing that the income tax was unconstitutional. He paid the price for his resistance, too: Schiff served three separate prison terms (more than 10 years in all) over his refusal to pay taxes. He died at the age of 87 serving a 14-year prison term. As constitutional activist Robert L. Schulz noted in Schiff’s obituary, “In a society where there is so much fear of government, and in particular of the I.R.S., [Schiff] was probably the most influential educator regarding the illegal and unconstitutional operation and enforcement of the Internal Revenue Code. It’s very hard to speak to power, but he did, and he paid a very heavy price.”

It’s still hard to speak to power, and those who do are still paying a very heavy price.

All the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little thought for the plight of its citizens.

The national debt is $20 trillion and growing. The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that debt annually. And the top two foreign countries who “own” our debt are China and Japan.

To top it all off, all of those wars the U.S. is so eager to fight abroad are being waged with borrowed funds. As The Atlantic reports:

For 15 years now, the United States has been putting these wars on a credit card… U.S. leaders are essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.

If Americans managed their personal finances the way the government mismanages the nation’s finances, we’d all be in debtors’ prison by now.

Still, the government remains unrepentant, unfazed and undeterred in its money grabs.

While we’re struggling to get by, and making tough decisions about how to spend what little money actually makes it into our pockets after the federal, state and local governments take their share (this doesn’t include the stealth taxes imposed through tolls, fines and other fiscal penalties), the police state is spending our hard-earned tax dollars to further entrench its powers and entrap its citizens.

For instance, American taxpayers have been forced to shell out $5.6 trillion since 9/11 for the military industrial complex’s costly, endless so-called “war on terrorism.” That translates to roughly $23,000 per taxpayer to wage wars abroad, occupy foreign countries, provide financial aid to foreign allies, and fill the pockets of defense contractors and grease the hands of corrupt foreign dignitaries.

Mind you, that staggering $6 trillion is only a portion of what the Pentagon spends on America’s military empire.

That price tag keeps growing, too.

The 16-year war in Afghanistan, which now stands as the longest and one of the most expensive wars in U.S. history, is about to get even longer and more costly, thanks to President Trump’s promise to send more troops over.

In this way, the military industrial complex will get even richer, and the American taxpayer will be forced to shell out even more funds for programs that do little to enhance our lives, ensure our happiness and well-being, or secure our freedoms.

As Dwight D. Eisenhower warned in a 1953 speech:

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. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a 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. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

This is still no way of life.

Yet it’s not just the government’s endless wars that are bleeding us dry.

We’re also being forced to shell out money for surveillance systems to track our movements, money to further militarize our already militarized police, money to allow the government to raid our homes and bank accounts, money to fund schools where our kids learn nothing about freedom and everything about how to comply, and on and on.

Are you getting the picture yet?

The government isn’t taking our money to make our lives better. Just take a look at the nation’s failing infrastructure, and you’ll see how little is being spent on programs that advance the common good.

We’re being robbed blind so the governmental elite can get richer.

This is nothing less than financial tyranny.

“We the people” have become the new, permanent underclass in America.

It’s tempting to say that there’s little we can do about it, except that’s not quite accurate.

There are a few things we can do (demand transparency, reject cronyism and graft, insist on fair pricing and honest accounting methods, call a halt to incentive-driven government programs that prioritize profits over people), but it will require that “we the people” stop playing politics and stand united against the politicians and corporate interests who have turned our government and economy into a pay-to-play exercise in fascism.

We’ve become so invested in identity politics that label us based on our political leanings that we’ve lost sight of the one label that unites us: we’re all Americans.

As I make clear in my book Battlefield America: The War on the American People, the powers-that-be want to pit us against one another. They want us to adopt an “us versus them” mindset that keeps us powerless and divided. Trust me, the only “us versus them” that matters anymore is “we the people” against the police state.

We’re all in the same boat, folks, and there’s only one real life preserver: that’s the Constitution and the Bill of Rights.

The Constitution starts with those three powerful words: “We the people.”

The message is this: there is power in our numbers.

That remains our greatest strength in the face of a governmental elite that continues to ride roughshod over the populace. It remains our greatest defense against a government that has claimed for itself unlimited power over the purse (taxpayer funds) and the sword (military might). As Patrick Henry declared in the last speech before his death, “United we stand, divided we fall. Let us not split into factions … or … exhaust [our strength] in civil commotions and intestine wars.”

This holds true whether you’re talking about health care, war spending, or the American police state.

The First Nine Months of Donald Trump’s Presidency

For the past nine months, we have seen widespread attacks on the common good. The latest assault is the Republicans’ proposed tax reform, a huge transfer of wealth to the richest one-tenth of one percent. This legislation would also greatly increase the national debt, supposedly a major red line for Republicans. In addition, President Trump continues to: 1) slow action on climate change; 2) support fossil fuels; and 3) weaken the protections of clean air, water and soil. Trump and the Republicans have repeatedly tried to repeal the Affordable Care Act. The repeal would have eliminated coverage for millions while increasing costs for millions more. Trump now is using an executive order to withhold subsidy payments, harming more Americans. White supremacists, especially males, believe they have support from the White House. They are pleased by Trump’s continuation of the ongoing large-scale deportation of Hispanic immigrants and by his repeated attempts to keep Muslims out.

The U.S. spending on the military was already out of control, and the Pentagon cannot account for over $6.5 trillion. Despite the already unnecessarily huge military budget and astonishing unaccountability, Trump proposed a large increase and Congress raised that amount even more.

These items give a hint of the scope of the disaster we are experiencing. Given these and other issues that deserve much more media attention, I find it hard to reconcile the focus that some media still place on the questionable allegations of Russian hacking of the Democratic National Committee’s emails. I wonder what has happened to journalistic standards when the mainstream media repeatedly has treated allegations as facts.

U.S. intelligence agencies and others have searched for proof of this Russian hacking for well over a year. An early January 2017 intelligence report was touted as proof, but it provided no solid evidence, only an assessment, i.e., a best guess, in support of the allegation. Moreover, the report was presented as being done by 17 U.S. intelligence agencies, but was actually performed by handpicked analysts from three agencies — the CIA, FBI and NSA. The Office of the Director of National Intelligence was also involved. Remember the George W. Bush administration used bogus sources and cherry-picked intelligence to support the claim that Iraq had weapons of mass destruction. Unfortunately the media a vital role in promoting this disinformation.

There have been numerous other highly suspect claims of Russian activity, for example, an alleged threat to the power grid that was quickly knocked down, an attempt to hack voting systems in 21 states, and the use of Facebook and other social media to influence the election and to create disharmony.

Why is this unsubstantiated hacking allegation still being pushed? I doubt that it is really driven by concern about protecting our political system from outside influence. For example, Israel and its supporters have exercised undue influence on our system for decades with little concern expressed. In addition, given that outside interference is terrible, why aren’t we outraged over the history of U.S. interference in elections of and collusion in coups against many other nations? This history includes the blatant collusion by the Clinton administration in Russia in 1996. People elsewhere see this hypocrisy.

If we are serious, a few of the many steps we can take to improve the integrity of our elections are: 1) ensuring that all citizens are allowed to vote; 2) using paper ballots; 3) providing public funding of campaigns; and 4) having a nonpartisan group run the Presidential debates.

I think there are two more probable reasons why the inept Democratic Party leadership, much of the U.S. establishment, and much of the mainstream media have for still promoting this allegation. One refers mainly to domestic considerations and the other focuses on the foreign arena. The contention of the hacking of the DNC swiftly became the basis of a claim of collusion between Trump and Russia. The charge distracted attention from the DNC’s efforts to undermine the Bernie Sanders’ campaign. After Hillary Clinton lost the election, the Democratic Party leadership continued to focus attention on its unproven claim of Russian hacking. This focus diverted attention from the Democratic Party’s need to reform itself into a party representing everyone, not just the wealthy. Perhaps some also view the collusion allegation as a way of building support for impeaching Trump.

Regarding the foreign policy area, the allegation of Russian hacking fits nicely into an ongoing PR campaign to convince Americans that Russia is our enemy. Russia, under President Vladimir Putin, has dared challenge worldwide U.S. supremacy. In addition to economic sanctions, a military response to this challenge is possible and the U.S. public must be prepared to accept and support it.

If there were no Russian hack of these emails, those creating and benefiting from this allegation while knowingly increasing the risk of a nuclear conflict, are beyond the pale.

Wealth over work, $28,684 to $1

On September 27th, media reports outlined the tax plan hammered out in secret by the GOP’s so-called Big Six. The morning of the 28th, the writer Stephen King tweeted his scorn: “Same old same old. The fat man’s busy dancing while the poor man pays the band.”

The poor man doesn’t really pay the band, but there’s plenty of reason to second King’s emotion.

The proposals reaffirm the Republican obsession with shoving more money into the pockets of people whose pockets are already bulging. The haves, and only the haves, would reap billions by repealing the alternative minimum tax and the estate tax. More would go in the same direction by taxing the income of pass-through businesses at 25 percent.

Worst of all, the proposals make not even a gesture toward eliminating the biggest single contributor to income inequality in America: lower taxes on income from wealth than income from work. Income made sitting by the side of the pool (capital gains and dividends) gets taxed at a lower rate than income from wages. For taxpayers in the top bracket, the preferential rate amounts to a break of roughly 40 percent (23.8 percent on investment income vs. the top marginal rate of 39.6 percent on ordinary income). The tax break for the everyday well-off is even greater, 15 percent vs. 28 percent, a savings of over 46 percent.

Candidate Trump promised a big gesture, ending the carried interest loophole that lets hedge fund managers mislabel their income as capital gains.  They’re “getting away with murder,” he said. They are, and the crime pays big-time.

It’s true, of course, that the rich hand over by far the biggest share of individual income taxes in America. It’s also true that an ever-greater portion of their income flows from wealth rather than work. That means a major tax break on ever-more billions: driving up the net incomes of the super-rich and the merely rich, driving up inequality, pushing effective tax rates on the upper reaches so low that Warren Buffett says his office workers pay at a higher effective rate than he does.

It also means that work is taxed more than it should be, or that wealth is taxed too little, or both. Steven M. Rosenthal, a senior fellow at the Tax Policy Center, frames the issue starkly: “We’re taxing the rich much too lightly because we tax capital so much less than labor.”

Trump is a golden example of who strikes gold under the GOP plan. Bloomberg News denounced “The Trump Tax Reform’s Pass-Through Boondoggle,” calling it “a great deal for the Donald Trumps…of the world.” Leaked pages from the president’s old tax returns show that he paid an alternative minimum tax of $31 million in 2005—a tax he now wants to repeal. The Trump family, of course, would benefit “yugely” if the estate tax gets the ax.

Tax expert and author David Cay Johnston founded a news service to focus on “what the President and Congress DO, not what they SAY.” In an article on that website, Johnston showed what happens (and what presidents and Congresses knew would happen) when tax policy favors wealth over work. He used IRS data to compare “the very highest income Americans in 1961 and 2013 with the vast majority, the 90%.”

His calculations may surprise taxpayers of all incomes:  in real terms, adjusting for inflation, effective rates have dropped sharply over those 52 years. The 90% paid an average 9.6 cents out of every dollar in 1961, but only 7.6 cents in 2013. The 400 richest paid 22.9 cents in 2013 compared to 42.4 cents in 1961.

“That’s a rate cut of 19.5 cents per dollar,” Johnston wrote, “that’s almost 10 times as large a tax-rate cut applied to a lot more dollars.” It lifted the 2013 tax savings for the super-rich to an average of $51.6 million.

The gusher came after-tax.  Comparing 2013 to 1961, the income of the top 400 rose on average by $195.4 million. For the 90%, the average rise was $6,812. “Now here comes the…ratio that may take your breath away. For each dollar of increased after-tax income enjoyed by the vast majority in 2013, the top 400 enjoyed $28,684 more. That’s $28,684 to $1.” (The ratio was even greater with Social Security taxes factored in.)

Trump’s proposed tax cuts are now masquerading as GDP growth hormones. Modest cuts, if any, are being touted as a middle-class bonanza. The real bonanza will stream even more to wealth, not work.

$28,684 to $1. And the GOP wants more.