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The basic premise behind the various conservative tax plans advancing at the General Assembly is the same old trickledown economic argument we’ve heard for decades: If we tax rich people and profitable corportations less, they’ll hire more workers and everything will be be hunky dory.

The only problem with this theory, of course, is that it’s a fantasy. For the latest confirmation of this hard truth, check out this report from the Economic Policy Institute which shows that CEO pay continues to skyrocket.

And also, check out the following remarkable graph based on the report from Too Much, an online newsletter from the good folks at Inequality.org:

CEO pay

The bottom line: You simply can’t give rich people and large corporations enough. No matter how much government slashes their taxes, inequality only gets worse.

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NC Policy Watch follower Betsy Caudle Lowman of Boone recently sent us the following essay — we hope you will enjoy it.

U.S. declines into “de-MOCK-racy”
By Betsy Caudle Lowman

Each year The Economist, a conservative British news magazine, rates the nations of the world on the degree to which they operate according to democratic principles. This year, Norway replaced Sweden at the top of the heap. The United States is not included in the highest category, which includes Norway, Sweden, Denmark, Finland, Canada, Australia, Germany, France, and Britain. Should this surprise anyone?  Americans love to believe they have government “of the people, by the people, and for the people,” but this has never been less true than at present.  Read More

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Art Pope 3This time, it’s from the editors of the online site Too Much — a  project of the Program on Inequality and the Common Good of the Washington, D.C.-based Institute for Policy Studies,

Not surprisingly, the subject is State Budget Director, Art Pope. Today, Pope is featured in the “Greed at a glance section” of the Too Much newsletter.

“Sometimes you just have to do the job yourself. Art Pope, a billionaire who owes his fortune to a discount store network his daddy built, certainly thinks so. Pope has spent over $40 million in recent years gerrymandering North Carolina, and the state this winter sports for the first time in over a century a GOP governor, a conservative state Supreme Court majority, and a GOP-dominated state legislature all at the same time. But Pope isn’t resting. He had himself appointed state budget director. Last week his budget priorities made national headlines. In North Carolina, a state with America’s fifth-highest jobless rate, lawmakers have now slashed maximum weekly unemployment benefits from $535 to $350, cut the number of benefit weeks allowed, and denied 39 percent of the state’s 438,000 jobless special federal aid . . .

NC Budget and Tax Center

Advocates of a state tax overhaul are doing their level best to distract attention from the central truth that the plan would raise taxes on North Carolinians earning less than $51,000 a year and hand a significant tax cut to the top 20 percent.

The authors of a Civitas Institute report—which advocates abolishing the state personal income tax and replacing most of the lost revenue with a higher sales tax on a wider variety of goods and services—acknowledge that low- and middle-income households would pay more since they spend more of their income on products subject to sales taxes than wealthier households do. But they claim that this concern is overblown. They use several arguments to justify the tax shift, none of which stand up to scrutiny.

One of their central assertions is that some low-income people get government benefits, which apparently means that people living in poverty can afford to pay for a tax cut for the rich. We doubt most people in North Carolina agree. The proponents of a higher sales tax greatly exaggerate the government benefits most poor people in North Carolina actually receive. To bolster their case, they cite services available to families in Pennsylvania and appear to assume that every household eligible gets all of the services. But this is simply not the case in North Carolina. The vast majority of poor people do not receive all the services they are eligible for, in part because there are not enough funds to allow that. Read More

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change in povertyA new Working Poor Families Project report finds for a fifth consecutive year the number of low-income working families has risen in the U.S., with nearly a third of all working families unable to earn enough to meet their basic needs.

New data show that 10.4 million U.S. working families were low-income in 2011, up from 10.2 million in 2010.

In North Carolina, 36% of the state’s working families were living below 200% of the federal poverty level in 2011 – struggling to cover housing costs, utilities, and child care.

The report notes that children growing up in low-income families have worse health and educational outcomes, and fewer opportunities for upward mobility.working poor

Nationwide, the total number of people that make-up low-income working families stands at 47.5 million. That is roughly equivalent to the total number of residents in California, Oregon, and Washington combined.

The report calls on federal and state policymakers to take actions that strengthen both job growth and job quality, and increase access to educational opportunities.

To read the full report, click here.