By Dave Johnson, Speak Out California

It is a popular misconception that taxes add to the squeeze on the middle class.  But it isn’t tax increases that have squeezed the middle class, it’s tax cuts.  It may be hard to believe (after so many years of constant anti-tax rhetoric) but here is why.

The middle class IS squeezed these days.  There are pressures and long hours at work, long commutes, health insurance costs, housing costs, food and gas prices rising, and wages are not keeping up — they haven’t been for a long time.  But it is not a coincidence that the middle-class squeeze began at the same time as the corporate-funded anti-government, tax-cutting fervor.  In fact a good case can be made that many of the reasons the middle class feels squeezed are the result of pressures brought about almost entirely FROM the effects of tax CUTS and cutbacks in government services, regulations and enforcement that went along with the tax cuts.

There are direct and indirect relationships.  One example of a direct relationship is the dramatic rise in the cost of a college education.  Sending kids to college has become extremely expensive.  And this places a very hard squeeze on parents who want their children to get a degree.  But here in California tuition was very, very low before Proposition 13.  Tax cuts directly led to this squeeze on the middle class.  (And remember, most of the property taxes that were cut were on business property.)

Indirect results include rising energy prices from cutbacks in government R&D and subsidies for oil alternatives as well as longer commutes as the government cuts back on transit solutions like buses, trains and roadbuilding or improvements.  Health care costs continue to rise because of government inaction and deregulation — the result of the anti-government sentiment encouraged as part of the the anti-tax campaign.  And insurance costs rise while coverage is reduced or even denied as the government cuts back on regulation and enforcement. (My wife is the one who brings in the health insurance for our family.  Every year she gets a raise, but every year the amount taken out of her check to cover her portion of the health insurance payment goes up by more than her raise, and her take-home pay is lower.  So more squeeze.)

Other areas where the anti-government, anti-tax campaign has increased pressure on the average person is at work.  Anyone that works for a corporation is feeling the extra pressures there.  As government of, by and for the people declines corporate power fills the vacuum.  

And there are so many more areas where we are squeezed by this increasing dominance of corporations in our lives.  As government — the power of We, the People — diminishes, the corporations swoop in to pick us clean.  How many examples of corporate power coming to dominate over people power can you think of?

Click through to Speak Out California

Dave Johnson, Speak Out California

Some years ago the corporate-funded anti-tax, anti-government advocates paid their way to become the dominant voice in our civil discourse.  They said there was a magic, simple formula that would lead to shared prosperity.  All we had to do was cut taxes, and everyone would have more money.

Everyone wants to have more money so this sounded wonderful.  It is always a seductive argument to tell people that you have a magic formula that can make things better for them.  One example is machines that create as much energy as they use — or more.  A common myth is that doctors are conspiring to hide the cure for cancer because it would put them out of business.  Another is that there is a formula that turns water into gasoline — or lead into gold.

“Just cut taxes, and we will all have more money.”  “Taxes take money out of the economy.”  “It’s your money and you should decide how to spend it.”

“But,” some people asked, “where will the money come from to pay for our roads and schools and all the things that have made us so prosperous?”  The seductive response from the tax-cutters was that government is an anonymous, incompetent, inefficient “them” that spends too much money that we could all have in our pockets, and if we just cut out waste everything would be all right.  Just cut the waste.

The thing was, whenever one tried to pin them down on specifics of this waste they would never really explain where all that fat really was that they were going to cut — at least not in quantities sufficient to match their tax cuts.  Don’t worry, put us in power, cut the taxes, and it will all sort itself out.

So eventually we fell for it and cut taxes and put the anti-government people in power.  When we noticed that their tax cuts went mostly for corporations and the very rich, they said don’t worry, the money would trickle down to the rest of us.  So we quieted down and waited for the magic to happen.  When we noticed that the corporations and wealthy were getting richer and richer while we were losing our pensions and health insurance and jobs, they said don’t worry, tax cuts make us richer.  We still didn’t understand that you and I and the regular people of California were not part of their “us” that would get richer.

The fact is the public officials that We, the People had elected had done competent jobs and there just wasn’t really much waste to cut.  Why would there be?  The people that we had elected had been good managers of our money.  Democracy and accountability require open, transparent processes that the corporate anti-government, anti-tax advocates labeled as “inefficient bureaucracy.”  That was the waste they had been talking about – the oversight and transparency of good government!  Our elected officials had put these systems in place and they had made sure there was no waste — it was a myth.  

Our government had been humming along, paving the roads, educating our children and investing in projects that led to modern wonders like the Internet.  And we had been enjoying the resulting prosperity.  California had the best public schools, colleges and universities in the country.  We had the best roads, courts, parks, libraries, health care system, water projects and most innovative and open government and this investment had led to a thriving economic ecosystem.  

So instead of cutting imaginary waste we started cutting out this engine of prosperity.  We cut the schools and the road maintenance and everything else.  The education system started getting worse and the roads and other infrastructure started deteriorating.   California fell from first to near the bottom on many scales.  Companies started leaving the state because of the deteriorating infrastructure and lower education levels.

Then when cutting our own services wasn’t enough we borrowed money to cover those tax cuts and pay for what government was left.  We borrowed and borrowed and borrowed.  We were just like the homeowner who refinanced every year as prices went up it seemed like the gravy train would run forever.

Today the borrowing is catching up with us.  As so many homeowners are learning to their dismay: borrowing means payments.  And borrowing more means larger payments.  In California the payments on our borrowing just happen to be pretty close to the amount of our budget shortfall.  The same is true of the federal government.

Now we approach a day of reckoning for our tax cuts.  The bill has to be paid, and the people who received the big tax cuts are pointing the finger at you and me.  We can continue to cut out government and lay people off.  We can continue to cram more and more children into classrooms with fewer and fewer teachers.  We can have longer and longer lines at the DMV.  We can close parks.  We can have fewer police patrols and fire stations and ambulances and health and safety inspectors.  We can just get poorer and poorer.

Or, we can start to close loopholes like the one that lets wealthy people avoid sales taxes on yachts and private jets while the rest of us pay sales taxes on everything we purchase.  We can start to close loopholes like the one that lets oil companies pump our oil out of the ground without paying us and then sell our oil to us.  We can start to raise taxes on the wealthy and corporations who prosper because of the roads and financial and legal system we built, and whose taxes were cut leading to this mess.  They need to stop simply taking and start paying their fair share.  We can do these things and start to restore the thriving economic ecosystem we once had.

Click through to Speak Out California

Dave Johnson, Speak Out California

Have you ever bought something online, had a problem, and tried to reach the company’s customer support line?  Could you even find a phone number to call?  If there was a phone number to call did you reach a phone tree or a person?  Were you on hold for a long time?  If you ever did reach a human, was the person in the United States or did they at least speak English (or Spanish) clearly enough to be able to help you?

A local store employs people in your town, boosting the local economy.  The local store either owns or pays rent for their space, which means they pay local taxes to support police and fire services and schools, etc.  The local store has people who can help you when you have a problem.

But buying something from your local store usually costs a bit more.  This is because they pay to have actual employees to help you, pay rent, pay to maintain a building, etc.  And, finally, the goods cost a bit more because you have to pay sales taxes when you shop at your local store.

The state of California, in its wisdom, has chosen to provide a huge tax subsidy to anonymous internet businesses, at the expense of your local retailers.  You pay sales taxes locally, but not online.

Shouldn’t it be the other way around?  Shouldn’t the state want to promote local stores, local employment, local police and fire services, local schools and a prosperous local economy?  Shouldn’t the state be promoting a thriving local economic ecosystem?   Instead the state provides a huge competitive advantage to anonymous internet businesses.

With a huge budget deficit, with the Governor calling for 10% across-the-board cuts in your children’s schools, police patrols, fire protection, parks, and all the other things our state government does for us, the state still hands the anonymous internet businesses a huge competitive advantage over our local retailers by letting them no charge sales taxes.

You owe it to yourself and your local community to find out if YOUR Assemblymember or Senator supports a requirement that internet companies charge the same sales taxes as your local businesses charge.

Click through to Speak Out California.

Dave Johnson, Speak Out California

At Speak Out California, we have been writing quite a bit about democracy and about the meaning of the words “We, the People.”  

Decades of conservative/corporate marketing has convinced too many of us to think of ourselves as passive consumers rather than participatory citizens.  This thinking has brought with it numerous negative consequences.  But if we work to restore our understanding that WE are “the government” we can start to see our state and country the way the founders intended.  We can see that we are in control and can make decisions that increase the benefits we receive as citizens.

In a recent post, The Power of the Words “We, the People”, I wrote,

As an experiment, try substituting the words, “We, the People” every time you read or use the word “government.” Or use the word “our” instead of “the” when you say “the government.” Our government, us, we, the people.

Later in that post I wrote,

Conservatives have worked hard to make “government” a bad word. They complain about “big government.” They complain about “government schools.” But what happens when we substitute a form of “We, the People” into their slogans? The whole meaning seems to change.

With that in mind, lets take a look at an opinion column in April 2’s Orange County Register by Howard Jarvis Taxpayers Association President Jon Coupal: California Focus: No tax loopholes merit closing.  The column is your standard conservative anti-government screed, arguing against closing tax loopholes that benefit corporations and the very wealthy to solve the state’s budget problems.  It begins,

In recent weeks, Gov. Schwarzenegger, legislative leaders and the Legislative Analyst’s Office have called for eliminating what they term “tax loopholes” to help close California’s staggering $16 billion budget deficit.

But one person’s loophole is another person’s legitimate advancement of public policy. This is especially true with those tax credits or deductions that are both broad-based – benefiting large segments of society – and which result in a significant societal benefit.

The specific tax loopholes under discussion include one that allows the very rich to avoid paying sales tax on new yachts and private jets, while the rest of us have to pay.  Another lets oil companies pump our oil out of the ground without paying the state, and then sell it back to us.  Another lets sales over the internet go untaxed, giving them a competitive advantage over local businesses that pay rent for a storefront, employ sales clerks, etc.

This discussion of tax loopholes occurs, of course, in opposition to the Governor’s proposal to solve the budget problems by cutting all state programs — the benefits that We, the People receive — by 10% “across-the-board.”  That means cutting schools, police, fire, road maintenance, and everything else our state does.  This, of course, means cutting the DMV staff by another 10%, making the lines more unbearable.  It means cutting courts and prisons and environmental protection and parks and consumer and worker protections.  It means, as we enter a recession, laying off thousands more workers.

But Coupal writes,

Those of us who represent taxpayers must remember our starting point. Specifically, that government is too big, too wasteful and too corrupt to be entrusted with any more money.

What is he saying here?  Keeping in mind that our government is US, he is saying that you and I are corrupt!  he is saying that you and I cannot be trusted!  

Do you see here how our understanding of conservative arguments changes once we restore our understanding of democracy and our own role in our own government?  In that light it certainly is insulting and contemptuous of conservatives to say that government is corrupt and cannot be trusted!

We, the People established this government that Coupal hates so much.  And We, the People vote our representatives in to office to do as we ask.  But it is this We, the People that Coupal and other anti-tax, anti-government advocates say cannot be trusted!  They say there are too many schools for our children, that the lines are not already long enough at the DMV, that we should let prisoners go free, and cause the courts to have even longer backups when We, the People have issues that we need resolved.  WE can not be trusted, they say, so they must impose restrictions on our ability to provide for our common good.  They insist that 2/3 requirements be imposed on our ability to raise the funds we need to accomplish things like paving our roads and caring for our children!

In a recent post, Do Taxes ‘Hurt’? Is Government Bad?, I wrote,

This anti-tax rhetoric results from an anti-government worldview that is pushed by conservatives, in which they portray our government as some kind of enemy of the public.

[. . .] So how can government and taxes be bad if the government is us? Looking at things this way, doesn’t this all mean that taxes are like a savings and investment account where we get back so much more than we put in? And, building on that, since we use the taxes to our mutual benefit aren’t we all better off if there are more taxes rather than less? Doesn’t that just make us all stronger?

Finally, with a huge state deficit, what does Coupal want?  He writes,

…even if some tax credits actually deserve the label of “loophole,” government simply does not need more money.

We have a huge budget deficit, and he thinks We, the People don’t “deserve” any more money.  Think about that.

Click through to Speak Out California.

Dave Johnson, Speak Out California

You hear a lot in the news about big corporate lawsuits.  If you closely followed this week’s business news, for example, you may have read about a jury ruling that Microsoft has to pay Alcatel-Lucent $367.4 million for violating patents.  Imagine the money that must have gone into lawyers, research and experts — even the copying bill must have been enormous.  And these cases take months to hear.

There were also court rulings about the drug Prevacid, another covering dialysis machines, and many, many others.

All of them big-money corporate cases with millions, even billions of dollars at stake.  These big companies have the money to take these cases to court.

But what if you or I need to go to court?  Are we on an equal footing?

A recent issue of The Progressive States Network’s newsletter, Stateside Dispatch, says,

According to Access to Justice: Opening the Courtroom Door [PDF file] by the Brennan Center, federal funding for legal services in real dollars has declined dramatically over the last twenty-five years.  In 2004, federally-funded programs turned away at least one person seeking help for each person served, leading to approximately one million cases per year being turned away due to lack of funding.

In fact, the Brennan Center report states that “most low-income individuals cannot obtain counsel to represent them in civil matters.”  On top of that, government-funded legal aid services are now by-and-large prohibited from helping people when they are harmed by corporations.

What do you do if you are a regular person injured by a product, or denied a job because of your age, or defrauded out of money, or any of things that can happen to people?  It used to be that a law firm might take the case based on a contingency fee, where they receive a percentage of any award resulting from your case.  But more and more these fees are restricted or awards are “capped.” So attorneys cannot afford to take your case.  Even if you can find an attorney willing to take your case “pro bono” there is still the cost of research, depositions, expert witnesses, etc. to consider.

Is this fair?  Is there anything more fundamental to our American concept of democracy than equal justice?  Access to the courthouse is an example of democracy leveling the playing field and providing fairness.  But we no longer have equal access.  And this means we no longer have fairness.

So what can we do about this?  First, we need to restore our own understanding of democracy and our individual stake in its preservation.  We must all recognize that equal justice is a fundamental requirement of a democratic society.  One reason this country was founded was to level the playing field between the rich and the poor.  So we all need to demand equal treatment under the law.  

In California we must demand a rollback of the “tort reform” measures that have taken away equal access to the courts and removed a regular person’s ability to fight back when harmed by a big company.  We must either remove the award “caps” and limits on attorney fees or implement a system of government funding for attorneys who represent regular people.  

Click to continue.

Conservative leader and former Speaker of the U.S. House of Representatives Newt Gingrich writes about the California court ruling that children – even home-schooled children – must be educated by credentialed teachers, saying it is an example of “Judicial Supremacy.”  In his article he quotes a Wall Street Journal editorial calling the ruling a “strange new chapter” in the “annals of judicial imperialism.”  Later in the piece he writes,

The decision represents yet another case of a special interest — in this case, the education unions and bureaucracy — using the courts to get what they can’t get through the popular vote.

This is yet another example of judicial supremacy: Rule by an out-of-control judiciary rather than the will of the people. It joins court rulings such as the removal of “under God” from the Pledge of Allegiance on a long list of usurpations of the freedom and self-determination of the American people.

Lets take a moment to examine what Gingrich is really complaining about here.

Here’s how the American system of law and justice is supposed to work:  We have a Constitution and we have laws that we are all supposed to follow by mutual agreement.  And we have in place a judicial system for interpreting our Constitution and laws, again by mutual agreement.  So when there is a dispute we take that dispute to the courts, and the judges rule according to the Constitution and laws.  And then we agree to follow their rulings.

Newt Gingrich and the conservatives complain that this is “Judicial Supremacy” and “judicial imperialism.”  Wow, this sounds pretty bad!   But look at the meaning of these negative-sounding words.  Isn’t “Judicial Supremacy” really just another way of saying that we agree to follow “rule of law?”   When Gingrich uses language that casts a negative frame on the concept, isn’t he undermining public respect for the rule of law?   Gingrich and other conservatives are happy enough with our American system when it works in their favor but when it rules against their agenda they launch another anti-government screed.

This post is not written in opposition to home or private schooling, but to point out the importance to all of us that we all operate under the same set of agreed-upon rules.   At least in California, another agreed-upon rule is that our children should receive the best possible education.  Article 9 of our California Constitution states that a good education is “essential to the preservation of the rights and liberties of the people.”  The wording at the beginning of Article 9 is as follows:

A general diffusion of knowledge and intelligence being essential to the preservation of the rights and liberties of the people, the Legislature shall encourage by all suitable means the promotion of intellectual, scientific, moral, and agricultural improvement.

To this end Article 9 describes how California will manage a system of free, public schools.  And Article 9 makes it clear that to this end our children deserve qualified, “credentialed” teachers.

Once again, We, the People of California have decided that a good education is “essential to the preservation of the rights and liberties of the people.”  This is what we want.  Just what is it that Gingrich and other conservatives want instead if it doesn’t involve qualified teachers providing education to our state’s children?

Click to continue.

Tuesday’s post began,

In Dubai, people get free housing, free medical care, AND $5,000 per month. The people of Dubai share in the country’s oil wealth.

In Alaska, people not only do not pay state taxes, the state government writes every state resident a check every year. The people of the state of Alaska share in the state’s oil wealth.

But in California the big oil companies get to pump our oil from the ground for free, and then sell it back to us.  Right now these oil companies are reaping the highest profits of any industry ever in history, making a few people immensely wealthy, and are not giving back any of this wealth to We, the People of California!  

Our state’s budget reflects our priorities and our values.  So I wrote that We, the People of California should ask big oil companies to give back some of the immense wealth they are generating for themselves with our oil, so we can fully fund our California schools.  I honestly did not know that Assembly Speaker Fabian Núñez was about to introduce a bill to do just that.  Well, he did, along with a windfall oil profits tax, and this is what happened:

The bill, which required a two-thirds vote to pass, was defeated on the Assembly floor after Republicans refused to vote for the new taxes.

These are choices, and the people of California need to understand that a choice was made yesterday to continue to be the only state that allows oil companies to pump our oil and not pay anything for it.  And instead of asking the rich oil companies to give back a bit they want to cut the school budget by another 10%.

Republicans said the bill was a publicity stunt, saying Democrats know that no taxes can pass as long as there is a rule allowing just a few Republicans to block the will of the vast majority.  They mocked the effort as an “oil drill.”

“I think this truly is a political drill on the eve of the layoff notices that will go out all across the state and on the eve of (the legislative) spring break when we will be at home in our districts talking to our constituents,” Assemblyman Chuck DeVore, R-Irvine, said during the Assembly floor debate that lasted about three hours.

But do the people of California understand this?  Do they realize that just a few votes can allow oil companies to get their oil free, while their children face ever-worsening schools?  We need more “publicity stunts” to help them understand the different values and priorities that are being reflected.  Politics and life are all about our priorities, not just our choices. What is more important to our people: rich oil companies or well-educated kids?

A choice is being made here, priorities and values are being expressed: cut our schools by 10% rather than ask rich oil companies to give back just a bit.  Say it over and over, and then do something about it.  Write to your legislators and demand they ask the wealthiest to start giving back a bit.  

And remember, this is an election year.  This is the time when citizens can do something about it when their legislators are not responding.  This is the time that you can remove legislators who give wealthy oil companies tax breaks while cutting school budgets.  You can volunteer to work in election campaigns, and go from door to door in their districts, letting voters know that their legislator made a choice and voted to cut school budgets while giving tax breaks to oil companies.

Help spread the word!

Dave Johnson, Speak Out California

In Dubai, people get free housing, free medical care, AND $5,000 per month.  The people of Dubai share in the country’s oil wealth.

In Alaska, people not only do not pay state taxes, the state government writes every state resident a check every year.  The people of the state of Alaska share in the state’s oil wealth.

Approx. 12 percent of America’s oil production comes from California.  As I write this oil sells for $108.14 per barrel.  In 2005 the oil companies were pumping oil out of our state at a rate of approx 230 million barrels each year.  Oil company revenues and profits are the highest ever from any companies in the history of the world, ever.  Did I mention “highest” and “ever”?

But the people of our state, in our wisdom, have decided that instead of asking the oil companies to give back a bit, we will instead give them our oil.  Give them.  And then we buy it back to put in our cars, etc.  Yes, we, the people of the state of California have made the choice to give away our oil to greatly enrich a select few. (And this post is not even a discussion of the dozens of other ways that we have made the choice to allow the few wealthiest among us to avoid giving back by paying taxes.)

Today in California we are facing a budget shortfall.  And instead of asking oil companies and others to give back a bit we are on the verge of deciding instead to cut our school budget.  Again.  This time by 10%.  We are on the verge of deciding to cut health care.  Again.  And courts, police, and every other state service by 10%, again, rather than ask oil companies and others to give back from what they take from the state.

The way we solve this budget shortfall is a choice we make.  Our choice.  Our choices reflect our values and priorities.  And we all make these choices whether we think we do or not.  If you don’t vote, you are choosing.  If you vote for someone because you would like to have a beer with him or her, you are choosing.  If you choose to vote for candidates who tell you there is “waste, fraud and abuse” and then after they have been in office for decades, continue to claim there is “waste, fraud and abuse,” you are choosing. If you choose to let your government borrow and borrow, you are choosing.  You will have to pay that back with interest later, of course, but you are choosing.  

And if you choose to let your state give our oil away to wealthy corporations so they can sell it to you and get even wealthier you are choosing to make up that potential tax revenue yourself, through cuts in your children’s education and health care and law enforcement, or maybe through increased taxes in the future, but one way or another you are choosing.  

What are our priorities?  Further tax relief to the wealthiest corporations, or educate our children? Here you are on the verge of choosing to cut your schools by another 10%.  Is that the choice you want to make?

There is something else you can choose to do today.  You can choose to write to your legislators and let them know what your choice really is.  You can choose to talk to your family and friends and explain these choices and ask them to write to their legislators as well.

Click here to find out how to contact your California legislators.  If you so choose.

And give a click to Speak Out California.