The tax the 1% don’t mind paying: the political tax

In the last presidential election cycle, over $5 billion was spent on political campaigns. This cycle with the newly allowed superPACs, it could be double that. The mass media will never point out how ludicrous this all is directly, because it’s keeping them alive. If there is one reason to move the elections to July 4 instead of the first Tuesday in November it’s because it’s becoming near impossible for anyone other than politicians to buy media space until after the election and it makes it harder for real businesses that depend on fourth quarter sales to survive to advertise.

The billions don’t come from a majority of voters, a majority of the money comes from the 1%. It’s a voluntary tax on the wealthy who think that buying, I mean donating to, politicians is a better investment than just paying slightly more in income tax and putting this whole system of auctions/elections out of business.

It’s not just the direct political donations either, it’s the entire “lobbying industry” that costs them as well. From the NYT we read how the super rich from other countries come in and buy up politicians as well- despite laws against foreigners donating directly to campaigns:

In the summer of 2009, a Malaysian billionaire took an unexpected interest in a small town in the Catskill Mountains in New York. With little notice, he bought a stake in a racetrack casino where the owners had struggled for more than a decade to develop a gambling complex

It was the first move in a brash attempt by KT Lim, chairman of one of the world’s largest gambling conglomerates, to muscle his way into the potentially lucrative American market. But Mr. Lim’s company, Genting Berhad, did not go it alone.

First, Genting hired a lobbyist named John L. Cordo, who was once on the staff of the Republican majority in the New York Senate. Then, with the company rapidly expanding, it amassed a who’s who of influential lobbyists.

Now, as Genting pursues multibillion-dollar projects in New York City at Aqueduct Racetrack and in Miami, its lobbying offers a primer on how a well-heeled newcomer can make up for its lack of experience and connections in the United States.

Because casino gambling is highly regulated, the industry has long drawn swarms of lobbyists promising to help navigate state capitols….

Christian Goode, a senior Genting executive on the New York and Miami projects, said in an interview that Genting had hired so many lobbyists in those locations because it wanted to participate in the political process “like any other company.”

Mr. Goode declined to discuss the lobbyists’ specific roles. “We are a large multinational company with lots of exposure,” he said. “Things come up from time to time. We just want to make sure we’re properly represented.”…

“Being a relatively unknown Asian company has not been an impediment for Genting in New York or Florida,” said Grant Govertsen, a principal of the Union Gaming Group, a research firm. “More than anything else these days, money talks.”

Gambling critics said Genting’s ability to spend so lavishly on lobbying suggested how much the company stood to gain.

“They intend to soak so much money out of our community that spending millions on local and state government isn’t much more than a rounding error,” said Dan Gelber, a former federal prosecutor in Miami and the chairman of the No Casinos group in South Florida.

via Genting Berhad Muscles Into American Gambling in New York City and Miami – NYTimes.com.

In another article in the NYT today, the one tool that can level the playing field in politics, the Internet, is being debated as well. The activists that call themselves “Anonymous” have launched “Operation Hiroshima” to attack those who want to pass SOPA (Stop Online Piracy Act) by posting private data and  smearing those who support it.

The technology industry, including giants like Google and Yahoo, and advocates for Internet freedom say the bills would censor the Internet, stifle free speech and give the government too much power to regulate and shut down web sites in the United States. Both sides have spent millions on lobbying in Washington. But at the grass-roots level, the issue has galvanized Internet activists, who lack lobbying power but have promoted the cause among the online community.

“You take our speech, you take our Internet, you take our Bill of Rights, you take our Constitution, we fight back,” said a monotone voice on a YouTube video posted by Anonymous before the Operation Hiroshima document drop.

Lawmakers and their aides have also been targets. A photograph of a 25-year-old aide for the House Judiciary Committee was superimposed into pornography by a group related to Anonymous, according to another aide who was briefed on security threats to lawmakers and their staffs. “Why can’t they just hire a lobbyist like everyone else?” this aide said.

via Fighting Antipiracy Measure, Activist Group Posts Personal Information of Media Executives – NYTimes.com.

And the articles on money buying politicians and influence just keeps coming- with Newt Gingrich even calling off the dogs of a “SuperPAC” that is smearing Mitt Romney:

Misleading and exaggerated claims in a film portraying Mitt Romney as a heartless job killer led Newt Gingrich to ask on Friday that the group behind it change or withdraw it, even though Mr. Gingrich is the intended beneficiary of the film….

But the group running the video, the pro-Gingrich “super PAC” Winning Our Future, made no move to alter the work….

By calling for the ads to come down or undergo changes, Mr. Gingrich was potentially getting to have his cake and eat it too, reaping the benefits of attacks that have been nationally branded as false while publicly distancing himself. Yet he also faced the risks of being associated with an attack by a group that has a former close aide, Rick Tyler, as a senior adviser….

But in questioning the advertisements’ accuracy on Friday, Mr. Gingrich was providing an early test of the benefits and risks to political candidates like him who, with little of their own financing, are being sustained by super PACS, which can use unlimited resources to help candidates and attack their opponents as long as the campaigns do not coordinate with them.

So far, these groups are running nearly as many advertisements per day as the candidates themselves, according to an analysis by Kantar Media/CMAG, which reports that they are spending far more than the actual campaigns because they do not get the same discounted rates from stations that candidates get. Winning Our Future is heavily in the mix, having received a $5 million commitment from the casino magnate Sheldon Adelson.

via Gingrich Calls for Withdrawal of Ad Against Romney and Bain – NYTimes.com.

Do you get the feeling that it’s not our election anymore? Most of the people I know can’t afford to make $2,500 donations to multiple candidates or hire a lobbyist to try to get their tax burden reduced. Many of the people I know dread the return to $4 a gallon gas, put off going to the doctor because even if they do have insurance, the hassle of the multiple bills coming from three different places overwhelms them.

When we elect a person, we don’t even expect them to be able to work without the support of lobbyists. It seems the entire region believes that somehow we need to pay for the Dayton Development Coalition to tell our elected representatives how to save our collected communities. We’ve got the best politicians money can buy, but their price tag is beyond the average voter’s pay scale.

If we really want to cut taxes on the wealthy, the first one that needs to go is the political tax. Let’s take the money out of politics and just pay the bill to send all voters a printed guide with equal space for every candidate and issue. Give the voter time to study it, research further online and vote by mail (like Oregon does). Let’s implement “Instant runoff voting” so that we skip the long primary season and never ever have to vote against someone, or vote for the lesser of two evils again. Why should anyone ever feel their vote is wasted?

Watch this video from www.rootstrikers.org

Striking The Root of Wall Street Corruption from Sean McDaniel on Vimeo.

The new fairness doctrine as proposed by Congressional Candidate David Esrati

I believe the first thing we need to do if we want to have the representation we deserve, is change the way we elect Congress. We have to change our auctions for office into elections.

There are two parts to leveling the playing field and balancing the power of the Congress with the power of the people.

The first is to take the money out of politics- entirely.

Rootstrikers, are looking to get to the root of the problem- by introducing a new way to finance political campaigns. Their leader is academic superstar Lawrence Lessig who has a new book out: Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It

1. Provide that public elections are publicly funded;

2. Limit, and make transparent, independent political expenditures, and;

3. Reaffirm that when the Declaration of Independence spoke of entities “endowed by their Creator with certain unalienable Rights,” it was speaking of natural persons only.

via Rootstrikers – Fighting the corrupting influence of money in politics.

One of the proposals is to allow unlimited donations, but they have to be routed through the Federal Elections Commission so that candidates have no indication of who supported their positions.

Another brilliant solution is the so called “Patriot dollars:”

The best solution we have heard of is called the “patriot dollars” plan, put forth by Yale law professors Bruce Ackerman and Ian Ayres. Basically, it eliminates all hard contributions to candidates. Period. Instead, each voter is given a $50 ATM card so that he or she can literally vote with their dollars and contribute their $50, in part or in whole, to their choice of federal candidates. Simple enough. Let’s do the math. We spend about $5 billion to $6 billion collectively on all federal elections. If the approximately 131 million who voted in November also had voted with $50 worth of patriot bucks, the donations would have equaled — surprise — $6.5 billion! That money would cover presidential, Senate and congressional races.

via ‘Patriot dollars’ to reform politics – latimes.com.

Both of these solutions would transform our current system that creates a culture of congressional corruption- where our representatives spend at least half their time either begging for money- or spending it campaigning.

Republic, Lost from Daniel Jones on Vimeo.

Once we’ve solved the influence-peddling conundrum, we need to look at bringing some sanity back to our economic ecosystem. There is wealth and there is greed. Having a nation with a small number of people who control most of the wealth creates a system that is unsustainable. This isn’t a new phenomena, Justice Brandeis talked about this at the turn of the last century- his thoughts have been revisited with another solution (and it also mentions the problems of bought elections):

Over the last three decades, income inequality has again soared to the sort of levels that alarmed Brandeis. In 1980, the wealthiest 1 percent of Americans made 9.1 percent of our nation’s pre-tax income; by 2006 that share had risen to 18.8 percent — slightly higher than when Brandeis joined the Supreme Court in 1916.

Congress might have countered this increased concentration but, instead, tax changes have exacerbated the trend: in after-tax dollars, our wealthiest 1 percent over this same period went from receiving 7.7 percent to 16.3 percent of our nation’s income.

What we call the Brandeis Ratio — the ratio of the average income of the nation’s richest 1 percent to the median household income — has skyrocketed since Ronald Reagan took office. In 1980 the average 1-percenter made 12.5 times the median income, but in 2006 the latest year for which data is available the average income of our richest 1 percent was a whopping 36 times greater than that of the median household.

Brandeis understood that at some point the concentration of economic power could undermine the democratic requisite of dispersed political power. This concern looms large in today’s America, where billionaires are allowed to spend unlimited amounts of money on their own campaigns or expressly advocating the election of others.

We believe that we have reached the Brandeis tipping point. It would be bad for our democracy if 1-percenters started making 40 or 50 times as much as the median American.

Enough is enough. Congress should reform our tax law to put the brakes on further inequality. Specifically, we propose an automatic extra tax on the income of the top 1 percent of earners — a tax that would limit the after-tax incomes of this club to 36 times the median household income.

Importantly, our Brandeis tax does not target excessive income per se; it only caps inequality. Billionaires could double their current income without the tax kicking in — as long as the median income also doubles. The sky is the limit for the rich as long as the “rising tide lifts all boats.” Indeed, the tax gives job creators an extra reason to make sure that corporate wealth does in fact trickle down.

Here’s how the tax would work. Once a year, the Internal Revenue Service would calculate the Brandeis ratio of the previous year. If the average 1-percenter made more than 36 times the income of the median American household, then the I.R.S. would create a new tax bracket for the highest 1 percent of income and calculate a marginal income tax rate for that bracket sufficient to reduce the after-tax Brandeis ratio to 36.

This new tax, if triggered, would apply only to income in excess of the poorest 1-percenter — currently about $330,000 per year. Our Brandeis tax is conservative in that it doesn’t attempt to reverse the gains of the wealthy in the last 30 years. It is not a “claw back” tax. It merely assures that things don’t get worse.

via Don’t Tax the Rich. Tax Inequality Itself. – NYTimes.com.

While any combination of the above ideas would be game changing, the real issue that needs to be addressed first and foremost is how to create living wage jobs in this country and get people back to work.

It’s not going to happen by lowering interest rates, government spending or by crony capitalism/corporate welfare, nor is a “payroll tax reduction” going to solve any long-term systemic problems.

What we need to look at is linking the ability to gain wealth directly to how many jobs you create in this country. It’s time to stop rewarding corporate raiders like Mitt Romney and the Wizards of Wall Street who think that owning a stock for less than 12 seconds is “investing.”

There are two ways to do this: one is to limit all compensation in publicly traded companies to a ratio of highest to lowest paid employees and or payroll. A formula would be put in place that requires at least 51% of your payroll be spent in America for you to have patent protection and other rights, and that the top compensation be directly tied to total payroll and a ratio. The more people you employ, and the higher their average wage- the more you can take home. No more billion dollar plus salaries for creating new financial junk paper- the only financial paper that would count is your payroll report.

The second option is that the Federal Government, the largest purchaser of goods and services no longer does business with any company that breaks the ratio. Things would change very quickly.

The costs of inequality and poverty will destroy our country. When people can’t find meaningful honest work, survival mechanisms kick in and crime kicks in as civility walks out.

Without approaching our problems in a new way with new thinking as outlined above, democracy as we used to believe in it, is doomed if not already dead. It’s why I’m running for Congress in OH-10, and hope that you will support me.