Wednesday, March 09, 2011

What Public Employee Leaders Could Be Saying (But Aren't)

Public employees and their leaders could publicly recognize the structural and demographic changes in the U.S. economy, and vow to tax the top 1% instead of supporting terribly regressive junk fees and sales tax increases on the working poor and the middle class tax donkeys who pay most of the taxes. The fact that they refuse to acknowledge these realities and refuse to take on the Financial Elites speaks volumes.

Here's what representatives of public-sector unions and public employees could be saying, instead of what they are saying:

There are over 20 million Federal, state and local government employees, and about 106 million private sector workers. We work for you, and for the good of our communities and of the nation. That is a big responsibility.

Back in the stock market bubble of 1995 to 1999, our wages, pensions and benefits were "sweetened," sometimes administratively and sometimes with voter approval. In the years since, what looked at the time like it would be paid by stock market gains rather than additional taxes has been revealed as wishful thinking.

We recognize that the U.S. economy has changed structurally, and it cannot return to 1999. We also recognize that the demographics of the nation have irrevocably changed since 1999, and thus it is wrong to burden future workers with pension and benefit costs which only made sense in an era of stock prices rising 10% or more annually.

In response to the shortfall between what we were granted in 1995-1999 and what the "new normal" recessionary economy can support, state and local governments have aggressively raised the most terribly regressive taxes: junk fees--parking tickets, vehicle license fees, and so on--and sales taxes.

These taxes are paid by everyone, rich and poor alike, and so they are deeply regressive.

Most of the Federal and state income taxes are paid by upper-middle class workers and small business, including sole proprietors and independent contractors. Almost 40% of all workers--those with lower incomes--pay no income tax at all. The top 1%, meanwhile, pay on average about 17% of their income in total taxes--less than half the rate paid by upper-middle class wage earners.

We understand that roughly two-thirds of the nation's households are measurably poorer in income and assets than they were a few short years ago. We understand that gains in productivity have not flowed to the incomes of most private-sector workers, but have instead flowed to the top via corporate profits and bonuses to the top slice of private-sector employees.

We also understand that the American workforce is aging, and that demographics are dictating that we as a nation need to work longer if our retirement plans are to remain solvent.

In recognition of these realities, we in the public sector are voluntarily renouncing all the "sweeteners" which were awarded during the bubble years of 1995-1999, as they have been revealed as unaffordable. Our retirement and benefits will revert to the base year of 1995, before the bubble distorted the system and the economy, and be adjusted for inflation since then as measured by the Consumer Price Index (CPI).

In recognition of the nation's demographic realities, we are moving our retirement age up to those of the Social Security system: 62 for reduced benefits and 67 for full retirement benefits.

We understand that raising "stealth taxes" via junk fees and highly regressive sales taxes places great burdens on households which are already straining to make ends meet.

As a result, we are putting our political weight behind an alternative way to bolster state and local government finances: "make the top 1% pay the same tax rate as the rest of us." If the top 1% paid the same 40% rate as higher-income workers pay, then that would only be equitable.

We will also fight to reverse the regressive increases in sales taxes and junk fees which have been imposed on those least able to afford more taxes.

The super-wealthy--those households with incomes above $1 million annually, and with financial assets above $5 million-- are the most politically powerful group in the nation, and so getting them to pay the same tax rates as we pay will be a difficult battle. They own or control the political class, the tax attorneys, the tax-avoidance scams and the offshore accounts.

But taking more money from households who are struggling to get by with highly regressive taxes and junk fees is simply wrong, just as it is unjust that the super-wealthy avoid paying the same tax rates that ordinary workers pay.

We ask for your support in this campaign to reverse regressive taxes and make the top 1% pay the same tax rate as the rest of us.

What is not being said is this: public employees are dependent on, and benefit from, the State's monopoly to collect taxes and fees via coercion. Private-sector workers cannot rely on a coercive monopoly to extract their wages from others. This is the key difference between the public and private sectors.

To the degree that junk fees and taxes have been raised administratively by a political class that is beholden to the super-wealthy Financial Elites and cartel-State fiefdoms, then the imposition of regressive junk fees and other taxes is taxation without representation, i.e. tyranny.

Public employees benefit from this tyranny, private-sector workers do not. That is a key difference between the two.

Given that the political class only represents cartel-State fiefdoms and Financial Elites, then the only taxes which aren't a form of tyranny are those approved by voters.

While there is always a danger of "the tyranny of the majority" in the ballot box, it is certainly less tyrannical than administratively imposing regressive taxes and exorbitant junk fees on the working poor and the middle class tax donkeys.

The consent of the governed (and thus of the taxed) can be revoked at any time.

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