Bernie Sanders Is Ayn Rand’s Worst Nightmare: He’s Changing How We View Socialism — and Exposing Free Market Parasites

Conservatives have long wielded ‘socialism’ as a pejorative — but Sanders owns it and is transforming politics.

Source: AlterNet

Author: Conor Lynch

Emphasis Mine

Since Senator Bernie Sanders, I-Vt., launched his campaign for president this spring, he has gone from being a fringe candidate of the left to a serious challenger of Hillary Clinton, who has long been considered a shoo-in for the Democratic nomination. When Sanders started gaining traction at the beginning of the summer, most shrugged him off as the new Ralph Nader, or even the Ron Paul of the left, an insurgent who would attract a dedicated but slim following.

Today, these comparisons are looking less accurate, and Sanders is no longer a fringe candidate. Last week, the Sanders campaign released its fundraising results for the third quarter of 2015, and not only did it nearly match Clinton’s third quarter results in cash, but broke the fundraising record in small donations. Indeed, the Sanders campaign has reached one million individual donations faster than both of President Obama’s historic campaigns (in 2008, Obama didn’t reach one million until February).

As one would expect, as Sanders has surged, the American right (and center) have gone from ignoring him to attacking him, and the barbs have been predictable indeed. The most common sound something like this: “Socialism has already been tried and it failed,” “There is no free stuff,” “He wants to steal from the job-creators.” Of course, these are familiar attacks that have long wielded against the Democrats, but with a man who does not shun the “socialist” label, they have become even sharper.

First things first: The word “socialism” has become so freely used by the right that it has all but lost the meaning that it once possessed. Since even before the Cold War, the word socialism has been a pejorative in America. When people on the right say, “Socialism has already been tried,” they are by and large thinking of 20th-century communism in the East, i.e., a totalitarian state with a centrally planned economy. If this were the sole definition of socialism, then these anti-socialists would be entirely correct. When considering 20th century communism, it is clear that centrally planned economies without markets do not work in the long run (and black markets become an inevitable feature). At this point in history, markets are necessary for human innovation and wealth creation. But as the economist (and communist, according to Bill O’Reilly) Robert Reich points out his his new book “Saving Capitalism,” the free market vs. government debate is mostly pointless. In order to have a functioning market, there need to be rules, and for rules of the market there needs to be government; the real debate should be whether those rules are working for everyone or just the wealthiest individuals and corporations.

The point is, “socialism” does not necessarily mean centrally planned economies, as most on the right believe. The original definition of socialism was something like this: the collective ownership of the means of production and distribution. In this sense, worker-owned businesses (i.e. worker co-ops) are very “socialistic,” and Sanders has appropriately put forth a plan to increase worker ownership. The word socialism can also mean “Social Democracy” — this is what best describes Bernie Sanders’s philosophy — which involves a market economy with socialistic programs. The most common example of this sort of economic system can be found in the Scandinavian countries, which have hardly “failed.” Indeed, Scandinavian countries have all been previously ranked among the highest in the world when it comes to “ease of doing business,” “global innovation,” and “prosperity.”

The second-most common claim on the right came from the sagging Rand Paul last month, when he said that “Bernie Sanders is offering you free stuff…but guess what, there is no free lunch.” This kind of assumption is not new, and can be traced back to Ronald Reagan and those infamous “welfare queens,”sad dog-whistle that haunts us to this day. Of course, it’s not about “free stuff,” but fairness. Indeed, when some facts are introduced, this assumption is revealed as a myth that has long been used by the right wing to divide the middle class (particularly along racial lines). Rand Paul seems to be entirely ignorant (willfully, I’m sure) that it is not lazy unemployed people that strain Americas welfare system, but working class people who are not being paid livable wages by corporations. Indeed, this was exactly what was found in a recent study at the University of Berkley California. The Wall Street Journal reports:

“The study found that 56% of federal and state dollars spent between 2009 and 2011 on welfare programs — including Medicaid, food stamps and the Earned Income Tax Creditflowed to working families and individuals with jobs. In some industries, about half the workforce relies on welfare.”

One of the most notorious of these corporations that doesn’t have to pay its workers living wages and is more or less receiving corporate welfare is McDonald’s. Indeed, if we are keeping with these right wing terms, McDonald’s is one enormous welfare queen. It has previously been estimated that fast-food workers, who are on average 29 years old, receive around $7 billion in public assistance, and McDonald’s even has a resource line (McResource) that assists workers in signing up for assistance programs (so it doesn’t have to pay livable wages). This is also true for other massive corporations like Walmart, which is notoriously low-paying and last year made nearly $16 billion in profit. It is always easier to go after the working class poor than massive corporations who make billions in profit and spend millions on lobbying.

Socialism is not about “free stuff,” but cracking down on these corporations that exploit their workers and then rely on the government to make sure they don’t starve. It is not about being lazy and slacking off, but about demanding a fair share and getting paid decently for one’s labor — it is yet another right wing fallacy that people get paid what they’re worth, and that only lazy people are poor. Socialism is about working people, not slackers. It is about fighting capitalist realities like the fact that the top 25 hedge fund managers in America make more money than all of the 157,800 kindergarten teachers combined. Are investors who produce no value really worth that much more than teachers?

Needless to say, the myths and attacks on Sanders and “socialism” will only grow more intense in the months to come. Republican politicians tend to agree with Ayn Rand when it comes to working people, i.e. that they are parasites (although they’d never say such a thing out loud). The Sanders campaign is changing how American people view “socialism,” and hopefully, he is also exposing the GOP as the anti-working class party that it truly is.

Conor Lynch is a writer and journalist living in New York City. His work has appeared on Salon, The Hill, AlterNet, and openDemocracy. Follow him onTwitter.


John Kasich Was Against Poor People Before He Was for Them

The GOP hopeful’s campaign promises sure don’t line up with his Ohio tax policies.

Source: Mother Jones

Author: Hanna Levintova

Emphasis Mine

In the crowded field of GOP presidential hopefuls, Ohio Gov. John Kasich has earned a reputation as a moderate conservative on fiscal issues. He often brings up his empathy for the economic problems facing regular Americans, from burdensome health care costs to ballooning student debt and unemployment. Last year, at a biannual retreat for donors organized by conservative megadonors the Koch brothers, an attendee confronted Kasich about his decision to expand Medicaid in Ohio. “When I get to the pearly gates,” Kasich fired back, “I’m going to have an answer for what I’ve done for the poor.”

When he arrives at those pearly gates, he may have some explaining to do. The tax policies Kasich has championed and implemented since he was elected governor in 2010 left Ohio’s low-income folks worse off than they were decades ago. His economic policies have led to growing inequality in a state that should be in recovery. Median household incomes began falling in 2007 and continued to drop during Kasich’s governorship. They are currently lower than they were in 1984, even though the overall state economy has actually grown healthier.

“The real reason this growth has not translated into gains for the middle and working class is that an increasingly large share of the state’s economic gains has been directed to those at the top,” wrote researchers David Madland and Danielle Corley in a Center for American Progress report published last month.

When Kasich launched his bid for governor in 2009, the state was reeling from the recession, when Ohio lost almost 400,000 jobs. Kasich’s campaign promised to “right the ship,” using leaner budgets to boost employment and helps recovery. His big strategy: phasing out the personal income tax in Ohio, a goal that Kasich highlighted in nearly all of his campaign speeches. He argued that the tax hurt Ohio’s ability to attract businesses and new residents.

“We’ll march over time to destroy that income tax that has sucked the vitality out of this state,” Kasich said when he kicked off his bid for governor. He called getting rid of the income tax “absolutely essential” for the state, “so that we no longer are an obstacle for people to locate here and that we can create a reason for people to stay here.” He did acknowledge, however, that the state’s dire budget situation would make this difficult to do in his first term.

Nonetheless, when Kasich began his first term as governor, he sought to slash a different tax by proposing to eliminate Ohio’s income tax on capital gains, the profits that come from selling off assets like stocks or bonds. Kasich is intimately familiar with the hefty benefits the wealthy glean from this sort of tax, having worked for nearly eight years as an investment banker at Lehmann Brothers. Had he been successful, roughly three-fourths of the cut’s financial gain would have gone to the top 1 percent of Ohio’s earners, while middle-class taxpayers would have gotten an average tax cut of just $2. Kasich abandoned the extreme proposal after learning that the measure might be unconstitutional.

Still, the two-year budget that Kasich ultimately enacted was filled with tax breaks for the rich that would simultaneously hurt middle-class families. The budget either created or tweaked more than a dozen tax breaks for various industries, including energy and agriculture. Policy Matters Ohio, an economic policy research nonprofit, pointed out at the time that the lost government revenue from the budget’s tax cuts, new and old, would amount to about $7 billion a year—a big chunk came from money saved by industry and the wealthy as opposed to low- and middle-income families.

Perhaps the most debilitating cut Kasich introduced in the 2011 budget was the successful repeal of Ohio’s estate tax. This was another tax he vowed to eliminate during his bid for governor, telling audiences repeatedly that the tax was driving out successful Ohioans. He’s often joked that entrepreneurs were “moving to Florida,” which doesn’t have an estate tax.

In fact, when it still existed, the tax took just 6 or 7 percent of estates valued over $338,333—the lowest estate tax rate of any state—and affected only the wealthiest 8 percent of the state’s residents. Nearly all estate tax revenue (80 percent) went to fund local governments. The tax’s repeal meant that local governments statewide lost more than $200 million, leading to cuts in critical services, including public safety workers like police officers and firefighters, city planning, recreation, and emergency response. Cuts like this, says Wendy Patton, a senior project director at Policy Matters Ohio, tend to hit low-income communities harder.

“For example, the city of Toledo closed some pools. What is the impact on the family when the children don’t have a safe place to play for their summer recreation?” Patton says. “This is more important to a family that can’t purchase a pass to a private pool, and depends on public recreation centers. It’s an issue of greater importance when you go down the income scale.”

In the 2013 budget process, Kasich introduced still more tax cuts. His final budget package cut income tax rates by 10 percent and increased the state’s sales tax, moves that tilted the tax system to benefit wealthier families. This is because while income taxes are progressive, meaning different income brackets pay a proportional share, sales taxes are regressive: When the same percentage applies to everyone, it cuts deeper into the overall income of lower earners.

“The move to a higher sales tax and a lower income tax exacerbates inequality,” Patton says. “As the tax structure in Ohio becomes even more regressive, poor people pay a larger share of their income than wealthy people do.”

Kasich often points to his introduction of the 5 percent Earned Income Tax Credit in the state as another example of his compassionate conservatism. A version of this credit—a federal tax break for low-income working families adjusted based on income, marital status, and number of kids—is also implemented at the state level in 26 other states. Kasich has touted Ohio’s EITC, which he introduced in the 2013 budget, as an example of his commitment to helping the working poor.

In fact, the credit did little to help Ohio’s poorest families for two reasons: first, because it is nonrefundable, and then because it was introduced in the context of other tax changes that disproportionately burdened the poor. Both the federal credit and most states’ credits are refundable, which means that those who receive them often receive a greater refund at the end of the year. Not so in Ohio. Kasich’s nonrefundable credit doesn’t increase a family’s tax refund—it can only reduce the taxes already owed. This primarily hurts those who need the credit most: low-earning households that owe little to no taxes. Ohio is also the only state that caps its EITC.

Kasich’s credit was part of a budget that resulted in an overall tax increase for the bottom 40 percent of taxpayers, due to the rise in the sales tax and other tweaks. In 2015, for the third time in his tenure as governor and at the beginning of his second term, he proposed more cuts to income taxes and yet another jump in the sales tax from 5.75 percent to 6.25 percent. Ultimately, the budget compromise implemented an income tax cut (though a smaller one than Kasich had suggested), an additional sales tax for cigarettes, and an increased tax cut for businesses, among other measures.

Once again, the budget brought tax savings for the wealthy, and higher taxes for those who can least afford them. An analysis of the 2015 budget by the Institute of Taxation and Economic Policy found that about half the benefit of the tax cuts, totaling about $1 billion, would go into the pockets of the top 1 percent of Ohioans, while the only group that would see a tax increase was the bottom 20 percent of earners.

In spite of this layering of tax cuts, Kasich the presidential candidate has repeatedly trumpeted his commitment to helping the poor. “If you pick up Psalm 41, you know what the first couple of lines are? You’ll be remembered for what you do for the poor,” Kasich said in a Fox News interview in July. “You can’t allow people to be stuck in the ditch. You’ve got to help them to get out…And that’s what we’re doing in this state.”

But the reality in Ohio isn’t so optimistic. “The tax cuts are shifting the tax system so it is more dependent on lower- and middle-income taxpayers and less dependent on those who are most able to pay,” says Zach Schiller, research director at Policy Matters Ohio. “Wages have not gone up in a meaningful way for the bulk of Ohioans, and we are taking funds needed for municipalities and giving them to people who don’t need it. It’s a shocking set of priorities.”

Hannah Levintova reports and edits in Mother Jones’ DC bureau. For more of her stories, click here


Last law of the ‘fighting’ 112!

                                 Capital Compromise – avoiding the fiscal curb.

The Bush tax cuts permanent on incomes up to $400,000 for individuals, $450,000 for couples.

An extension of unemployment benefits,

Five-year extensions of the

Earned Income Tax Credit,

Child Tax Credit,

American Opportunity Tax Credit.

The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)

The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation.

The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over.

The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class.

Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.

The full package of temporary business tax breaks—benefiting everything from R&D and wind energy to race-car track owners—will be extended for another year.

Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified.

(The bill also includes a nine-month farm bill extension, cleaning up after another House Republican fiasco resulting from its failure to pass a farm bill. This extension would avert what’s been dubbed the “milk cliff,” a reversion in price supports for dairy farmers to a 1948 law that could have resulted in milk prices to consumers more than doubling.

What it doesn’t do, and what will immediately hit millions of wage earners, is extend or replace the payroll tax cut with an equivalent tax break. That means that all wage earners will see an immediate hit in their paychecks, with a two percent payroll tax increase. That’s a two percent tax hike on 98 percent of the nation).