–The CTJ shows why the taxpayer myth is the heart of our problem

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
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The Citizens for Tax Justice, published an article titled, Ten (of Many) Reasons Why We Need Corporate Tax Reform, in which they list ten large coporations that paid no, or almost no, federal taxes 2008-2012.

The article dated April 12th, 2013, by Jason Sattler, related this shocking story:

You may not believe this, but once upon a time even big corporations paid taxes.

Citizens for Tax Justice (CTJ) has a new study of Fortune 500 companies that illuminates how the nation’s largest corporations are able to corrupt our broken tax system to pay nothing — sometimes literally less than nothing — in taxes.

Facebook, for instance, used one simple tax break — writing off executive stock options — to pay no taxes in 2012 and offset its future taxes.

The article lists other companies such as Fed Ex, Pepco, Ryder, Apache and Interpublic, all of which paid zero income taxes in the past five years. Less, than zero, really, because they all have tax credits going forward, so probably will continue to pay zero taxes.

Shocking. But, that’s not the myth. That’s probably real. Here’s the myth:

CTJ cites U.S. senator Carl Levin (D-MI), who estimates that this tax break costs taxpayers between $12 billion and $61 billion a year.

Like every other senator, every representative, the President, the Chairman of the Fed, the Secretary of the Treasury and the Counsel of Economic Advisers, Senator Levin claims that federal tax breaks cost us taxpayers money.

And that Big Lie, that taxpayer myth, is at the heart of the austerity poison we are being force-fed.

You, Mr., Mrs. and Ms. Taxpayer do not pay for federal spending, and tax breaks for your neighbor or General Electric do not cost you one penny. In actual fact, these tax breaks put dollars into your pocket.

Here is how the experts fool you: Your city, county and state governments are what’s called,“monetarily non-sovereign.” They don’t use their own sovereign currency. They use the U.S. dollar.

They can’t arbitrarily create dollars. In fact, they can and often do, run short of dollars. So they need to collect dollars from you, to pay their bills. The collected dollars are called “taxes,” and if your neighbor doesn’t pay taxes, you’ll have to pay more, to make up the difference.

By contrast, the U.S. government is what’s called “Monetarily Sovereign.” It not only uses its own currency, but it arbitrarily creates all the dollars it wants, whenever it wants. The U.S. never can run short of dollars.

That’s why the U.S. government never needs to ask anyone for dollars. It doesn’t need to borrow (though it borrows) and it doesn’t need to tax (though it taxes). Why?

You’ll repeatedly hear and read several platitudes relative to the taxpayer myth. They explain why it persists in the face of overwhelming evidence to the contrary. Here are a few, with their counter comment:

1. Taxpayers pay for federal spending. (Nope. Taxepayers pay for state and local spending, but the federal government creates the dollars it spends. That is the difference between Monetary Sovereignty and monetary non-sovereignty.)

2. We just can’t keep printing money forever.
(Why not?)

3. Everyone says the federal debt and deficit are “unsustainable,” so it must be true.
(“Unsustainable” would mean we’d run out of dollars, which we cannot.)

4. Being in “debt” is bad for me, so it must be bad for the government.
(Debt is no problem for a government that has the unlimited ability to create dollars. But “taxes” are bad for you who doesn’t have this ability.)

5. We have to live within our means.
(We do live within our means. Our “means” is the government’s unlimited ability to create the dollars to pay its debts.)

6. Our grandchildren will have to pay the federal debt.
(Our grandchildren don’t owe the debt, although they do own most of it. Being creditors, not debtors, they receive interest payments on the debt.)

7. I am the government; if the government is in debt, I am in debt.
(You are not the government. You pay taxes; the government collects taxes. You can run short of dollars; the government cannot.)

8. If we print too much money we’ll have inflation, like the Weimar Republic
(The Weimar Republic was forced into hyperinflation by post-WWI reparations, which had to be paid in gold or product — nothing like the U.S. situation. U.S. inflation has not been caused by federal spending, but rather by oil prices. Because the U.S. government is sovereign over the dollar, it can set the value of the dollar at any level it wishes.)

The CTJ continues with its taxpayer myth:

Corporate Tax Reform Should Repeal Tax Loopholes and Restore Overall Corporate Tax Revenues to a More Reasonable Level

The tax breaks that have allowed these companies to be so successful in their tax avoidance are, by and large, perfectly legal, and often have been on the books for decades.

Actually, the tax “breaks” have helped these companies to be successful. Successful companies hire people, pay salaries and are more competitive with foreign companies. Successful companies buy goods and services, helping other companies. Why, in heaven’s name, would we want business to be less successful?

As Congress focuses on strategies for revamping the U.S. corporate income tax, a sensible starting point should be to critically assess the costs of each of these tax breaks, and to take steps to ensure that profitable corporations pay their fair share of the U.S. taxes.

“Assess costs” to whom? Not to you; not to me. If GE doesn’t pay taxes, it doesn’t take one dollar out of our pockets. In fact, GE’s spending on goods, services and payroll puts dollars into our pockets.

The next step is as, if not more, important. The revenues raised from eliminating corporate tax subsidies should not be given right back to corporations in the form of tax-rate reductions, as corporate lobbyists and their allies inside the Washington Beltway preposterously argue.

Apparently, the Citizens for Tax Justice consider business to be the enemy of the economy, so money should be taken from business and given to the govnerment. Talk about “preposterous”!

Instead, as the vast majority of Americans understand, these desperately needed revenues should be used to address our nation’s fiscal problems and to make critically needed public investments in our nation’s future.

In one sentence, the taxpayer myth is repeated five times — perhaps a new world’s record:

“. . . vast majority of Americans understand . . . ” is a version of “everyone says” (#3)

“. . . desperately needed revenues. . . ” is part of “live within our means” (#5)

” . . . should be used . . .” is part of “taxepayers pay for federal spending” (#1)

” . . . our nation’s fiscal problems . . .” probably is part of “Weimar Republic” (#8)

and ” . . . critically needed public investments . . . also is part of “taxepayers pay for federal spending” (#1)

In short, the Citizens for Tax Justice is clueless about the difference between Monetary Sovereignty and monetary non-sovereignty. What they say about taxes applies only to state, county and city taxes (and to euro-nation taxes), but not to federal taxes.

How could a group that claims to “fulfill its mission primarily by producing research on tax issues and analyses of legislative proposals” get it so wrong?

Maybe you should ask them:
Phone: (202)299-1066
Email to CTJ: ctj@ctj.org

Annie Singer, Communications Director
Phone: (202) 299-1066 ext. 27
Email to Anne: anne@ctj.org

Citizens for Tax Justice
1616 P Street NW
Suite 200
Washington, DC 20036
Fax: (202) 299-1065
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Rodger Malcolm Mitchell
Monetary Sovereignty

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

#MONETARY SOVEREIGNTY

–What President Obama learned from Mayor Daley

The Atlantic Wire
Goodbye, New Deal: Obama Proposes Selling the TVA
Philip Bump April 11, 2013

Buried on page 51 of President Obama’s new budget proposal is a short section titled “Reform TVA” — where “reform” is likely to mean “privatize.”

Let me interrupt this narrative to tell you about Chicago, where a large percentage of politicians regularly are sent to jail, and a much larger percentage should be. The latest, but by no means the last, is Jesse Jackson, Jr. and probably his wife.

And surely you’ve heard of the crook Rod Blagojevich, who tried to sell a Senate seat. As you will see, selling or taking what doesn’t belong to you, is a political Chicago tradition.

This post has to do with the 2nd Mayor Daley, the boss crook in a long line of Chicago crooks, and Barack Obama, his student.

To gain repeated reelection (for 21 years!), Daley paid off the local unions by giving them whatever they wanted, and paid off the aldermen, who obediently canvassed their neighborhoods for Daley votes. The ongoing payoffs cost the city’s taxpayers megabucks.

Even with tax rates among the highest in the nation (especially the regressive sales tax), total tax collections could not cover the enormous costs of rampant political bribery.

Daley was afraid to raise taxes even more, so he began to sell Chicago. First he sold the Chicago Skyway, a heavily traveled toll road. This provided instant millions, but of course, deprived Chicago of the road’s future income.

The rich, new owners promptly raised tolls, a hidden tax increase, and a boon to the wealthy class.

Then Daley sold the city’s parking meters. This provided more instant millions, and also deprived Chicago of future income. The rich, new owners promptly raised parking fees, another hidden tax, also a boon to the wealthy class.

Then he wanted to sell Midway airport, the 2nd busiest airport in the Chicago area. (See a pattern here?)

Chicagoan Obama learned this scam, well. The difference is unlike Chicago, the U.S. is Monetarilly Sovereign, so does not need dollars, and federal taxpayers don’t pay for federal spending. So, what’s going on?

The Tennessee Valley Authority provides electricity to some 80,000 square miles of the Southeast. The only two things that differentiate it from any other massive electricity company are that it is owned by the government, and that it has a deeply significant history.

(When it began it) had a number of ambitious goals: managing flooding on the Tennessee River, restore regional farmland and forests, and, most significantly, produce electricity for a largely rural area.

It created an enormous number of construction jobs and projects for the Civilian Conservation Corps during the Great Depression.

It provided a case study in the power of large-scale government investment. In FDR’s words, the project created “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.”

Those are words that could have come from Obama himself. Earlier this month, he called for increased partnerships between the public and private sectors to improve American infrastructure.

(But) Obama’s budget document articulates the argument. “TVA’s anticipated capital needs are likely to quickly exceed the agency’s $30 billion statutory cap on indebtedness,” it reads, later stating that the government will therefore “undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.“

According to Obama logic, the federal government can’t afford “TVA’s anticipated capital needs,” but private industry can. Huh?

As the EPA revises pollution standards to further limit emissions — such as its proposals on mercury and soot proposals — those older facilities increasingly need costly upgrades, or to be replaced entirely. In 2010, the agency indicated it would need to increase that $30 billion cap in order to accommodate those improvements — authority it never received.

It’s not clear that private entities will be eager to assume that burden. Last year, Exelon Energy tried to sell three of its Maryland coal-powered plants which similarly needed upgrades. Exelon ended up selling the facilities at a steep discount.

If the government is able to sell TVA, the dollars paid will leave the private sector and disappear into the government’s black hole. How many millions or billions of dollars will leave the economy is unknown, but every dollar paid is a dollar lost to the private sector, (i.e. taxpayers) and thus, is recessionary.

Further, to sell TVA, government will need to make huge accommodations. Either EPA regulations will be eased (more pollution), and/or the cost to electricity customers will rise (ala the Chicago Skyway and parking meter price-increase fiascos). Money will flow from users to owners.

Presumably, the government will make a hugely generous offer that will benefit billionaire buyers (just as Mayor Daley did) while screwing the electricity-using public (again, just as Mayor Daley did.)

Obama is even worse than Daley, because at least Chicago actually did need the money. The U.S. government doesn’t. But, one thing about Obama: When it comes to serving the rich and screwing the rest, he’s a quick study.

Now, let’s talk about his cutting Social Security and Medicare benefits.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Obama Growth Plan: More deficit. No, wait. Less deficit. Drain your blood to cure your anemia. Trust me.

Up is now down; black is now white; big is now small.

Stimulus 2008: Mr. Obama called on Congress and the Bush administration to pass an economic stimulus package.

He said it was an “urgent priority” to extend unemployment insurance benefits for workers who could not find jobs in the bleak economy. He also said he would give aid to states, create new jobs and move forward with his tax-cut plans for middle-class families.

So, in 2008, “stimulus” and “create new jobs” required more federal deficit spending.

Stimulus 2009: The $787 billion economic stimulus package was approved by Congress in February, 2009. The package was designed to quickly jumpstart economic growth, and save between 900,000-2.3 million jobs. The package allocated funds as follows:
$288 billion in tax cuts.
$224 billion in extended unemployment benefits, education and health care.
$275 billion for job creation using federal contracts, grants and loans.

In 2009, “stimulus” still required more federal deficit spending.

Stimulus 2010: Most of the growth present in the US economy is coming from the money injected into our capitalist system by the Government. This is why so many people are asking if we will get another stimulus check in 2010? So here’s what we know so far: There will be a $250 stimulus check for Social Security (SS)

Yes, in 2010, “stimulus” still required more federal deficit spending.

Stimulus 2011: President Obama unveiled a stimulus plan Thursday night that he says will boost hiring and provide a jolt to the stalled economy if it becomes law.
A mix of $253 billion in tax cuts and $194 billion in new spending, the total bill for the plan is $447 billion.

Consistently in 2011, “stimulus” still required more federal deficit spending

Stimulus 2012: Putting pressure on Congress to approve parts of his latest economic stimulus plan, President Obama urged Americans Saturday to push lawmakers to approve his multibillion-dollar “to-do list” for creating jobs.

“Each of the ideas on this list will help create jobs and build a stronger economy right now,” Mr. Obama said. The president’s list includes an expanded program to help homeowners refinance their mortgages, a proposal to give small businesses tax breaks for hiring more workers, a program that would help veterans find jobs, and an extension of tax credits for clean-energy companies.

All told, the proposals on the president’s list could cost up to $34.7 billion:

In 2012, “stimulus” still required more federal deficit spending.

But wait! Up is now down; black is now white; big is now small:

Stimulus 2013: President Obama unveiled a 10-year budget blueprint Wednesday that calls for nearly $300 billion in new spending on jobs, public works and expanded pre-school education and nearly $800 billion in new taxes, including an extra 94 cents a pack on cigarettes.

But the president’s spending plan would also cut more than $1 trillion from programs across the federal government — for the first time targeting Social Security benefits.

“Our economy is poised for progress, as long as Washington doesn’t get in the way,” Obama said. He said his budget represents “a fiscally responsible blueprint for middle-class jobs and growth.”

The plan reduces the deficit and makes necessary investments “because we can do both,” he said. “We can grow our economy, and shrink our deficits.” He added: “The numbers work. There’s not a lot of smoke and mirrors in here.”

I have a question: How many millions of Americans now wrongly believe we grow the economy by taking money out of the economy, when in the previous five years, they correctly believed growth required adding money into the economy?

And by the way, exactly how do we “grow our economy, and shrink our deficits” at the same time? Smoke and mirrors?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

Epigenetics: How Today’s Austerity Can Degrade Humanity, Forever

Deficit Reduction Causes Poverty
By formula, deficit reduction (a.k.a. “austerity”) impoverishes the economy. The most common measure of the economy is Gross Domestic Product (GDP). The formula for GDP is:

GDP = Federal Spending + Nonfederal Spending – Net Imports

Deficit reduction requires a reduction in Federal Spending (green bar) and/or an increase in taxes, which reduces Nonfederal Spending (blue and red bars). Deficit reduction always impoverishes an economy, a harsh lesson the euro nations have been learning.

America will learn the same lesson, as deficit reduction becomes a reality.

National Center for Children in Poverty (NCCP)
There are more than 72 million children under 18 years old in the United States.

45 percent – 32.4 million – live in low-income families.
22 percent – 16.1 million – live in poor families.

Nearly 16 million children in the United States – 22% of all children – live in families with incomes below the federal poverty level – $23,021 a year for a family of four.

Research shows that, on average, families need an income of about twice that level to cover basic expenses. Using this standard, 45% of children live in low-income families.

Most of these children have parents who work, but low wages and unstable employment leave their families struggling to make ends meet. Poverty can impede children’s ability to learn and can contribute to social, emotional, and behavioral problems.

Poverty also can contribute to poor health and mental health. Risks are greatest for children who experience poverty when they are young and/or experience deep and persistent poverty.

Deficit reduction causes poverty, which in turn, causes poor education, poor housing and poor family environment, poor nourishment, sickness, crime, mental illness and low intelligence. No secret there.

Epigenetics
But what has not been realized is, these effects – the physical sickness, mental illness and low intellegence – can plague many generations into the future, possibly forever..

THIS WEEK
Epigenetics: How our experiences affect our offspring

In a quiet scientific revolution, researchers have come to realize that genes aren’t a fixed, predetermined program simply passed from one generation to the next. <bIInstead, genes can be turned on and off by experiences and environment.

What we eat, how much stress we undergo, and what toxins we’re exposed to can all alter the genetic legacy we pass on to our children and even grandchildren.

And not just grandchildren, but far beyond them:

Science News
From Great Grandma to You
Epigenetic changes reach down through the generations
By Tina Hesman Saey, April 6, 2013

Susan Murphy, a researcher at Duke University, studies links between a mother’s diet and chemical exposures during pregnancy with the child’s later health. She and others have established that what happens (in the womb) can influence a child’s health for life.

Now, animal studies and a smattering of human data suggest such prenatal effects could reach farther down the family tree: The vices, virtues, inadvertent actions and accidental exposures of a pregnant mother may pose health consequences for her grandchildren and great-grandchildren, and perhaps even their offspring.

The resulting health effects are not produced by altering DNA itself. Rather they stem from changes in chemical tags on DNA or its associated proteins, or to actions by RNA, another type of genetic molecule. All of these are exactly the types of changes that scientists have always assumed cannot be inherited. Their very name, epigenetic, literally means “over and above” or “beyond” genetics.

Part of your risk of disease may be determined by what your great-grandparents ate, not just the genes they passed on. One implication is that epigenetic programming becomes permanent and gets passed along to future generations.

Summary

Deficit reduction causes poverty. The adverse consequences of austerity can degrade the human species for many generations, possibly affecting human evolution, forever.

That is the bleak future austerity now may create for our grandchildren and beyond.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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