Black People : How the Tax cuts for the Rich will effect the African American community

Ankhur

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Dr. Maya RockeymooreCo-editor of Strengthening Communities: Social Insurance in a Diverse America

Posted: December 13, 2010 09:30 AM

What People of Color Should Know About Tax Cut and Deficit Reduction Proposals


A lot has been said about the proposed tax giveaway to the wealthiest Americans and the austerity measures recommended by President Obama's deficit commission. However, an analysis of the impact that both proposals would have on black and brown Americans has been missing from the conversation.

U.S. Census Bureau projections show that the nation is expected to become majority-minority by the year 2042. And, although Census figures indicate that people of color will comprise about 42 percent of the elderly population by 2050, they are likely to become a majority of older adults by the year 2070.

What has not been made clear to date is that the nation's changing demographics means that today's children of color will predominantly be on the hook for paying for the profligate spending and poorly designed policies of the past 12 years. And that proposals to rein in the deficit by cutting social programs, particularly Social Security, would be put into place just as these children reach maturity. This generational cost shift should be of serious concern to Latinos and African, Asian, and Native Americans for they have benefitted least from the expenditures that caused the deficits and their children are not well positioned to shoulder their costs in the future.

Federal Reserve data from 2007 shows that for every dollar owned by the average white family, the average Latino family owns 12 cents and the average African-American family owns only ten cents. Given the disproportionate impact of the recession on black and Latino families, this racial wealth disparity is expected to widen in the future, thus further undercutting the economic security of children of the recession generation.

Since our nation's leaders have decided to shift the costs of today's fiscal decisions to our children, then we owe it to our children to evaluate the various tax proposals in terms of the value they bring to the economy and to families in communities hardest hit by the recession. Experts agree that tax breaks for the wealthiest individuals and estates do nothing to create jobs or otherwise stimulate the economy. So, it should be clear that these tax giveaways are not only highly inefficient they are a boondoggle for the rich at the expense of those with modest means.

Furthermore, as has been explained by others, the package's payroll tax "holiday" provision is a booby trap for all middle and working class Americans but especially for people of color. This proposal to offer Americans a two percent reduction in their payroll taxes for the next two years is seemingly innocuous until you understand that the payroll tax is the only source of dedicated revenue for Social Security. Therefore, a "holiday" from paying this tax would undercut the program's finances while strengthening the arguments of critics who cite Social Security's long-term financial challenges as a reason for cutting or eliminating the program. Any weakening of Social Security would devastate communities of color who are heavily reliant on Social Security's retirement, disability, and survivor's benefits.
We must also be wary of the deficit reduction commission's proposal to "fix" Social Security in part by increasing the early and regular retirement ages for this proposal also has the effect of shifting the cost burden onto people of color in a way that should be considered discriminatory in its scope and application. The Government Accountability Office issued a report that underscores how raising the early retirement age would create financial hardships for people, particularly African Americans and Hispanics, who cannot continue to work due to poor health or physically demanding work.

There are additional negative consequences associated with this approach. As I have argued elsewhere, an increase in the retirement age is a steep benefit cut and it represents a transfer of Social Security wealth from those with shorter life expectancies--a group comprised disproportionately of the lower income, blue collar workers, and people of color--to those with higher life expectancies--a group comprised overwhelmingly of whites, white-collar workers, and wealthier Americans. Ironically, the nation's shifting demographics are not likely to greatly change this equation since children of color are disproportionately affected by the childhood obesity epidemic which, many experts agree, is likely to cause them to live shorter and sicker lives than their parents.

To be sure, advocates for the commission proposals and the tax cuts would say that I have unfairly maligned their proposals. Deficit commission members, for example, may cite their proposed hardship exemption for people who cannot work past the retirement age as proof that they have accommodated the needs of vulnerable populations. If the hardship exemption is anything like qualifying for disability, it would likely discriminate against those without lawyers, the poor and people of color and it would become a way to control program costs instead of providing cover for those most in need. It also fails to address the racial transfer of wealth issue.
Similarly, those in favor of the tax cut package as negotiated by the president and the Senate would point to the provisions for modest income households, such as the unemployment insurance extension, refundable tax credit for the low-income, college affordability credit, and refundable child tax credit as proof that they too have accommodated the vulnerable. However, these important provisions are a relatively smaller part of a total package that is heavily tilted towards helping privileged Americans.


www.huffingtonpost.com
 

Clyde C Coger Jr

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In the Spirit of Sankofa and Peace and Love!

Dr. Maya RockeymooreCo-editor of Strengthening Communities: Social Insurance in a Diverse America

Posted: December 13, 2010 09:30 AM

What People of Color Should Know About Tax Cut and Deficit Reduction Proposals


A lot has been said about the proposed tax giveaway to the wealthiest Americans and the austerity measures recommended by President Obama's deficit commission. However, an analysis of the impact that both proposals would have on black and brown Americans has been missing from the conversation.

U.S. Census Bureau projections show that the nation is expected to become majority-minority by the year 2042. And, although Census figures indicate that people of color will comprise about 42 percent of the elderly population by 2050, they are likely to become a majority of older adults by the year 2070.

What has not been made clear to date is that the nation's changing demographics means that today's children of color will predominantly be on the hook for paying for the profligate spending and poorly designed policies of the past 12 years. And that proposals to rein in the deficit by cutting social programs, particularly Social Security, would be put into place just as these children reach maturity. This generational cost shift should be of serious concern to Latinos and African, Asian, and Native Americans for they have benefitted least from the expenditures that caused the deficits and their children are not well positioned to shoulder their costs in the future.

Federal Reserve data from 2007 shows that for every dollar owned by the average white family, the average Latino family owns 12 cents and the average African-American family owns only ten cents. Given the disproportionate impact of the recession on black and Latino families, this racial wealth disparity is expected to widen in the future, thus further undercutting the economic security of children of the recession generation.

Since our nation's leaders have decided to shift the costs of today's fiscal decisions to our children, then we owe it to our children to evaluate the various tax proposals in terms of the value they bring to the economy and to families in communities hardest hit by the recession. Experts agree that tax breaks for the wealthiest individuals and estates do nothing to create jobs or otherwise stimulate the economy. So, it should be clear that these tax giveaways are not only highly inefficient they are a boondoggle for the rich at the expense of those with modest means.

Furthermore, as has been explained by others, the package's payroll tax "holiday" provision is a booby trap for all middle and working class Americans but especially for people of color. This proposal to offer Americans a two percent reduction in their payroll taxes for the next two years is seemingly innocuous until you understand that the payroll tax is the only source of dedicated revenue for Social Security. Therefore, a "holiday" from paying this tax would undercut the program's finances while strengthening the arguments of critics who cite Social Security's long-term financial challenges as a reason for cutting or eliminating the program. Any weakening of Social Security would devastate communities of color who are heavily reliant on Social Security's retirement, disability, and survivor's benefits.
We must also be wary of the deficit reduction commission's proposal to "fix" Social Security in part by increasing the early and regular retirement ages for this proposal also has the effect of shifting the cost burden onto people of color in a way that should be considered discriminatory in its scope and application. The Government Accountability Office issued a report that underscores how raising the early retirement age would create financial hardships for people, particularly African Americans and Hispanics, who cannot continue to work due to poor health or physically demanding work.

There are additional negative consequences associated with this approach. As I have argued elsewhere, an increase in the retirement age is a steep benefit cut and it represents a transfer of Social Security wealth from those with shorter life expectancies--a group comprised disproportionately of the lower income, blue collar workers, and people of color--to those with higher life expectancies--a group comprised overwhelmingly of whites, white-collar workers, and wealthier Americans. Ironically, the nation's shifting demographics are not likely to greatly change this equation since children of color are disproportionately affected by the childhood obesity epidemic which, many experts agree, is likely to cause them to live shorter and sicker lives than their parents.

To be sure, advocates for the commission proposals and the tax cuts would say that I have unfairly maligned their proposals. Deficit commission members, for example, may cite their proposed hardship exemption for people who cannot work past the retirement age as proof that they have accommodated the needs of vulnerable populations. If the hardship exemption is anything like qualifying for disability, it would likely discriminate against those without lawyers, the poor and people of color and it would become a way to control program costs instead of providing cover for those most in need. It also fails to address the racial transfer of wealth issue.
Similarly, those in favor of the tax cut package as negotiated by the president and the Senate would point to the provisions for modest income households, such as the unemployment insurance extension, refundable tax credit for the low-income, college affordability credit, and refundable child tax credit as proof that they too have accommodated the vulnerable. However, these important provisions are a relatively smaller part of a total package that is heavily tilted towards helping privileged Americans.


www.huffingtonpost.com




Brother, this is done quite often by you, to post a general link to the source of information, but not to the actual story you've cited here at Destee.com. In this manner, you are providing advertisement for the Huffington Post, while readers here at Destee.com must put on a futile search, sometimes we find the story, most times we don't.

One day brother, the Mods and Admins will catch on to what you've been doing now for a period of time. This is not to get you in trouble, but to provide our readers with instant, repeat instant review of source information...smh, and it shows respect for the Rules of Destee.com.

You have dodged a bullet recently, how many lives do you have...smh,

 

Ankhur

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Brother, this is done quite often by you, to post a general link to the source of information, but not to the actual story you've cited here at Destee.com. In this manner, you are providing advertisement for the Huffington Post, while readers here at Destee.com must put on a futile search, sometimes we find the story, most times we don't.

One day brother, the Mods and Admins will catch on to what you've been doing now for a period of time. This is not to get you in trouble, but to provide our readers with instant, repeat instant review of source information...smh, and it shows respect for the Rules of Destee.com.

You have dodged a bullet recently, how many lives do you have...smh,

1 Are you a moderator

2 Do you think that the moderators have not read my statemnt to you that I am on mnstv2, and unable to post direct links

3 Are you aware that this was explained to Destee?

4 So you are saying you do not care about the effect of this bill on the future of the black community?
 

Clyde C Coger Jr

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Ankhur

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Social inequality in America: Tax law will overwhelmingly benefit the wealthy


By Tom Eley

Global Research, December 19, 2010
World Socialist Web Site - 2010-12-18


The claim by President Obama and Congressional Democrats that the new tax law is an economic stimulus that will benefit working class people is a lie. It is a law tailored to benefit the extremely wealthy.

At a cost of $150 billion over the next two years, it maintains George W. Bush’s reduction in the high-end income tax rate―for those taking home over $250,000 for married couples and $200,000 for individuals―at 35 percent.

According to the Center for Tax Justice, the wealthiest one percent of taxpayers will pocket almost $77,000 per year more as a result of the deal. The top 1 percent would take home over 25 percent of the total tax cut; the bottom 60 percent would share less than that, about 20 percent.

Despite White House protestations to the contrary, there is no reason to believe that Democrats will reverse these tax cuts in two years’ time, when Republicans will control the House of Representatives. Over the next ten years, the perpetuation of the high-end income tax rate reduction will cost $700 billion, according to the Congressional Budget Office, far more than was allocated for infrastructure improvements in Obama’s 2009 stimulus package, the American Recovery and Reinvestment Act.

The law also includes a number of measures designed to secure the hereditary prerogative of what is, in all but name, an aristocracy. It increases the size of fortunes exempt from the estate tax to $10 million for couples and $5 million for individuals. For fortunes beyond those thresholds, the law will reduce the tax rate to 35 percent.

The rate was going to reset to 55 percent after this current year’s “holiday” in which the rich could pass on their estates without any taxation. To further sweeten the deal for the rich, the bill includes a measure that will allow multi-million dollar estates settled in 2011 for deaths taking place in 2010 to take advantage of the zero percent tax rate.

The law also allows the $5 million exemption to apply to gifts and “generation-skipping investments,” making it “much easier for wealthy taxpayers to make gifts during life to grandchildren," according to estate attorney Beth Kaufman of Caplin and Drysdale in a comment to the Wall Street Journal.

The package also perpetuates for two years the all-time low tax rate on capital gains and dividends at 15 percent, along with a number of additional tax write-offs for corporations.

In an attempt to provide a degree of political cover for Obama and the Democrats, the bill includes a few measures that ostensibly benefit those outside of the richest one percent of the population.

The law extends tax cuts introduced in the Bush years for middle and lower income Americans. The working population has realized a much smaller share of the overall tax cut, however, and the money withdrawn from the public coffers will be offset by cuts to social spending. For months the Democrats called for maintaining the tax cuts for all households except for the wealthiest, but have now made into law the Republican position.

The law also extends funding for federal long-term unemployment benefits for millions of workers for another 13 months at a cost of $56 billion, about a third of the price of the two-year income tax give-away to the rich. Hundreds of thousands of workers have lost their benefits since the November 30 expiration of extended unemployment benefits. Repeatedly held hostage by the Republican opposition and Democratic indifference over the past year, extended federal benefits will almost certainly expire at the beginning of 2012 with Republican control of the House.

The law also includes a one year Social Security tax cut, by which the payroll tax rate will be reduced from 6.2 percent to 4.2 percent on the first $106,800 of a worker’s wages.

According to an analysis by the Tax Policy Center, 51 million households―a third of the total―will be worse off as a result of the tax package. This is because for those with the greatest need--couples making less than $40,000 or individuals making less than $20,000―the Social Security tax break will not offset the tax break it is replacing, the Making Work Pay credit, resulting in an average household loss of $210 per year for 45 million households.

Another 6 million households will loser their Making Work Pay credit and will receive nothing in compensation through the Obama-Republican plan because they are state or local government employees who do not contribute to Social Security.

Perhaps most significantly, cutting Social Security payroll taxes sets the precedent for further attacks on the federal retirement program. The bill marks the first time in the 75-year history of the program that Congress has intervened to cut the payroll tax rate, and there is a campaign already underway to lengthen the tax “holiday.” This would have the effect of accelerating Social Security’s insolvency. The program is currently not predicted to become insolvent for several decades.



www.globalresearch.ca
 

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