Right Wing Loves Its Loopholes
by Karl Stark | February 22, 2013
Next Friday, federal budget cuts known as “sequestration” are scheduled to take effect, forcing nearly $85 billion in drastic, immediate budget cuts to government programs. Of course, these cuts could easily have been avoided. In fact, they were designed to be so unfathomable that Congress would take balanced action on deficit reduction.
But like a good Hitchcock movie, Congress is full of surprises. Budget hawks who have spent the last two years clamoring about the need for deficit reduction are finally seeing the real effect of those cuts: massive job losses, more than a million of them. Instead of working to prevent these deep cuts by passing deficit reduction measures that share the burden equally, some in Congress are more dedicated to protecting outrageous tax loopholes for the wealthy and corporations than they are to protect jobs.
With an economy that is still staggering along, what could be more important than preventing job losses? Let’s take a look at the right’s favorite loopholes:
Deferring Overseas Income
Multinational corporations don’t have to pay U.S. income taxes on profits they earn overseas until they transfer those earnings back to the United States. In effect, these companies just keep their profits outside America in overseas tax havens, allowing them to avoid paying taxes indefinitely. These companies can even transfer domestic profits to these havens and avoid paying taxes even on income that’s earned here in America.
A staggering 83 percent of top 100 publicly traded companies had tax-haven units in 2009, according to the GAO, including General Electric, Google, and Pfizer, costing the federal government an estimated (PDF) $100 billion each year.
Deducting Punitive Damages
When corporations have to pay punitive damages due to litigation from destructive or sometimes illegal activity, they can write these damages off as an “ordinary and necessary” business expense (PDF). When Exxon was hit with $1.1 billion in punitive damages resulting from the Alaska oil spill settlement, the actual cost to the oil company was $524 million after taxes.
Deducting Corporate Jets and Yachts
Corporations can deduct some of the costs for their private jets, and at a better rate than even commercial airline companies are able to. Yacht owners get similar perks.
Lower Tax Rates for Wall St. Bankers
For decades the federal government has taxed income earned through investments much lower than the income working families earn through regular wages. This allows Wall Street bankers, who earn all of their income through investments, to pay tax rates that are often 20% lower than the average middle class family. Mitt Romney, for example paid a tax rate of 14% on more than $13.7 million of income in 2011.
Take action on this issue today, by signing a petition that tells lawmakers it’s time to stop the giveaways and protect the programs that working people rely on.
Attacks on Workers’ Rights Continue in Indiana
by Clyde Weiss | February 22, 2013
It’s political payback time in Indiana. Corporate-backed legislators, long at war with the state’s public school employees, are taking another shot at them by attempting to undermine their union strength.
On Tuesday, a Republican-controlled House education committee voted along party lines for a bill making it illegal for a school employer to honor an employee’s voluntary request to have their union dues deducted from his or her paycheck. In effect, the measure, introduced by Rep. Jeff Thompson (R-Lizton) would require that an employee write a dues check directly to the union – a burden that is unnecessary, unfair and meant to weaken union solidarity.
The Star Press, in an editorial opposing the legislation, concluded the bill “only serves to punish teachers.”
Last night, the bill was revised so that it applies only to voluntarily payroll deductions that employees make to their unions for political purposes, and which will now affect only certified employees (teachers). While this rewrite sidesteps a fight over union dues deductions, it is still an effort to silence the voices of employees, acting through their unions to improve education in Indiana.
This campaign against workers’ rights is nothing more than a continuation of blatant right-wing attacks on public- and private-sector unions. Last year, Indiana passed a so-called right-to-work (for less) law that prohibited collecting union dues at private companies. In 2011, the state’s lawmakers restricted teachers’ collective bargaining rights.
Thompson’s bill, as originally proposed and later amended, “is another example of a never-ending effort by Republicans to do away with nearly every single worker’s right in Indiana that was created and supported by both Republicans and Democrats over a century,” says David Warrick, executive director of Indiana AFSCME Council 62, which represents approximately 1,600 school district employees who would be affected by the legislation.
Warrick, who is also an AFSCME International vice president, adds, “This is a classic case of simple bullying by Republicans who were elected to improve education for the children of Indiana. Instead, they’ve decided to punish teachers, school workers and our unions. Not one penny will be saved for education by outlawing the voluntary collection of union dues from these workers.”
“This is about politics, not public policy,” says the Indiana State AFL-CIO, which is urging members to call their legislators to stop the bill’s progress through the Legislature.
American Workers Headed for Retirement Insecurity
by Joye Barksdale | February 21, 2013
For years, ultra-conservative politicians have been peddling the lie that 401(k)-type defined contribution retirement plans provide as much security as traditional pensions. Meanwhile, AFSCME working members and retirees argue that these politicians are imperiling the future of millions of seniors.
A recent front-page Washington Post article, “Fiscal trouble ahead for most future retirees,” provides more evidence of what AFSCME has known for a long time: Defined-contribution plans are one reason the security retirement of many future retirees is in jeopardy.
“For the first time since the New Deal,” the article says, “a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents.”
A U.S. Senate report says our nation faces a retirement savings deficit of more than $6 trillion – about $57,000 per household. Other studies indicate that more than half of Americans 30 and older won’t be prepared for retirement. That’s partially because those with 401(k) plans will end up dipping into their savings for a variety of purposes – from health care expenses to college tuition.
“This is the first time that Americans are going to be relatively worse off than their parents or grandparents in old age,” said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research, in the article.
The Great Recession played a major role in undercutting retirement security, and destroying 40 percent of Americans’ personal wealth. On top of that, many employers have shifted from defined-benefit plans to defined-contribution plans. But rather than seeking ways to increase retirement security, many politicians are focused solely on the nation’s long-term debt and are willing to sacrifice Social Security and Medicare to fix it.
That’s why AFSCME members across the country – from New York to California – have been fighting attacks on retirement security. As U.S. Sen. Tom Harkin (D-IA) said in a recent hearing on the issue, “We need to do more to help American families cope with this looming crisis.”
AFL-CIO Launches @Work
February 20, 2013
This week the AFL-CIO is launching @Work, a brand-new online hub that features union members from all over the country. You can see it now at www.aflcio.org/atWork.
The new @Work section on the AFL-CIO website highlights the amazing work union members are doing all over the United States in seven featured categories: Action, People, Community, Innovation, Quality, Training and Collaboration.
Check out the new @Work site and share with your friends who might not know the valuable contributions union members make in our communities each and every day.
Kansas Lawmakers Seek to Undermine Union Strength
by Clyde Weiss | February 19, 2013
The Kansas House of Representatives recently approved a bill that would take away the right of public service workers to have voluntary contributions to their unions – for political activity –deducted from their paychecks.
They did it at the urging of the Kansas Chamber of Commerce, whose chief lobbyist left no doubt what motivates this outright assault on workers.
“I need this bill passed so we can get rid of public sector unions,” Chamber of Commerce Senior Director of Legislative Affairs Eric Stafford stated at a hearing on the measure.
State Rep. John Wilson, a Democrat who voted against the bill, called it a “thinly veiled political attack” on union members.
Stafford later apologized for his remarks, insisting he misspoke. But members of Kansas Organization of State Employees (KOSE) AFT/AFSCME Local 300 knew otherwise. They understand that this bill (HB 2023) is part of a greed-driven effort to undermine the rights of public service workers through their political activism and collective bargaining power.
Currently, public service workers can contribute to their union’s political action committee (PAC) by check, bank draft or automatic payroll deduction. This is not dues money. It is a voluntary donation. Lawmakers, acting at the behest of the Chamber, hope to weaken the voice of workers in the political arena by eliminating the payroll deduction option, since they can’t cut off the other options.
This attack goes hand-in-hand with the Chamber’s other attack on public service workers – a bill (HB 2123) that is laughably titled the “Public Employee Freedom Act.” It is anything but. KOSE calls it a “union killer.”
The bill eliminates all payroll deductions for public employees. While it does not prohibit collective bargaining, it allows any employee to negotiate for themselves, or union members may have the union bargain for them. Only union members would be covered by an agreement between the employer and the union.
There is still time to stop both of these measures. While the Republican-led House approved the paycheck deception bill, 68-58, the state Senate has yet to take it up. We urge the senators to carefully consider the blunt admission of the Chamber of Commerce lobbyist and end this mean-spirited attack on workers’ rights.
The unfortunately mislabeled “Freedom Act” should be swiftly rejected as well. The freedom to join a union, to bargain collectively, and to voluntarily support a union’s political program, all are essential to the growth of a strong and vital middle class.
The Kansas Chamber of Commerce is pushing the right-wing agenda to destroy workers’ rights, but AFSCME members are fighting to preserve them wherever they are under attack.
In Kansas, KOSE members contacted their representatives to oppose HB 2023. That may have helped to persuade one lawmaker to switch his vote on final passage. Rep. Ken Corbet (R-Topeka) voted against the measure after first supporting it. He explained, “We heard from our constituents in the district and voted accordingly.”
Remembering Gloria Johnson
by Kate Childs Graham | February 14, 2013
The labor movement has lost another giant. This week, just months after we lost Coalition of Labor Union Women (CLUW) leader Joyce Miller, we learn of the passing of Gloria Johnson, a founding member and former president of CLUW.
Johnson served as CLUW’s president from 1993 to 2004, and its treasurer for 17 years prior. At CLUW, she was a strong voice for women’s equality in the workplace and she fought tirelessly for women to have equal access to economic opportunities.
Johnson also served as AFL-CIO vice president, making her the second African-American woman to hold this position. She served on the President’s Commission of the Celebration of Women in American history under Pres. Bill Clinton. She also was the recipient of many significant awards, including the Eugene Debs Award in Labor, the National Black Caucus of State Legislators Labor Leader “Nation Builders” Award, and the National Committee on Pay Equity’s Winn Newman Award.
AFSCME Pres. Lee Saunders said, “Gloria will be missed by all who have fought for women’s rights, for civil rights and for workers’ rights. She laid the foundation, and it is our job to continue to work for Gloria’s vision of equal rights in the workplace and in every place.”
New Hampshire Rejects Right-to-Work (for Less)
by Pablo Ros | February 14, 2013
Working families in New Hampshire scored a major victory this week when legislators voted down a right-to-work-for-less bill that was a recipe for lowering wages and workplace standards.
The Democratic-controlled House killed it with a 212 to 141 vote, preventing New Hampshire from becoming the 25th right-to-work-for-less state in the nation and the first in the Northeast.
So-called “right-to-work” laws weaken labor unions and their ability to bargain collectively on behalf of workers by interfering with a union’s ability to charge membership dues. They have been promoted across the country by the American Legislative Exchange Council (ALEC), part of an extreme corporate agenda that seeks to thwart workers’ rights for the benefit of corporate interests.
Such laws have been proven to drive down wages for all workers, union or non-union, by an average of $1,500 a year.
Will Price, a corrections officer with the Hillsborough County Department of Corrections and a member of AFSCME Local 3657 in New Hampshire, said he followed this latest effort to undermine the rights of workers from the moment it was introduced as a draft bill and was “truly disgusted by the whole thing.”
He said the bill, had it become law, could have greatly harmed his local’s ability to collect dues from its members, especially since it’s made up of 21 chapters – two corrections facilities and 19 police departments – that are “scattered throughout the state.”
Price said he’s confident that any future efforts to bring back a similar measure will be defeated.
“I have no doubt that it’s going to come back someday,” he said. “But I have a positive attitude that we’ll be able to do the right thing for ourselves.”
This was the second time in two years that New Hampshire workers faced a similar attack from right-wing, corporate-backed politicians. In 2011, then-Gov. John Lynch vetoed a right-to-work-for-less bill that had been passed by the Republican-led Legislature.
AFSCME will continue to oppose any efforts anywhere to undermine the rights of workers.
AFSCME Members Take their Message to the Hill
by Kate Childs Graham | February 14, 2013
On the heels of a State of the Union address by Pres. Barack Obama that focused on rebuilding the middle class and growing the economy, AFSCME members from across the country went to Capitol Hill Wednesday and lobbied their legislators to do just that.
At more than 75 meetings with members of the Senate and the House of Representatives, they discussed several major issues: building an economy that works for all, protecting vital public services and passing comprehensive immigration reform. The visits were part of AFSCME’s 2013 Legislative Conference.
A large group of AFSCME members from New York gathered in a private room in the Capitol Visitors’ Center for a meeting with Sen. Charles Schumer (N.Y.). Some hurried in from meetings with their representatives.
Patty Kaufman, a member of CSEA Local 1000, had just returned from a meeting with Rep. Paul Tonko (N.Y.-20) along with six of her sisters and brothers from CSEA and District Council 37.
“The meeting went very well,” Kaufman said, “He is very supportive of our issues – Medicare and Social Security as well as immigration reform. He doesn’t want families to be separated.”
Schumer stressed his commitment to economic growth. On preserving programs like Medicaid, Medicare and Social Security, Schumer said, “Instead of cutting these programs with a meat axe, we need to close the loopholes for all these fat cat corporations and individuals.”
Several members asked about immigration reform. Senator Schumer said he is optimistic that comprehensive immigration reform will pass this year. “We are going to fight on immigration,” he said, adding his gratitude for AFSCME’s leadership on the issue.
Eddie Rodriguez, AFSCME international vice president and president of DC 37, brought up privatization. He said, “We have to make sure we don’t lose jobs in public sector. When they create jobs in the private sector, we are losing them in the public sector. They are contracting out our jobs. That’s not job creation.”
Senator Schumer replied definitively, “I am against privatization.”
Before he was whisked away for another meeting, Senator Schumer talked a bit about the crucial role of unions and public workers, “We have this beautiful lady in our harbor, the Statue of Liberty. She is holding a torch. Whether you came here or your parents or your grandparents or your great grandparents came here, they came for that torch. That torch is the American Dream…The fight against unions is going to make the American Dream more and more remote. We have to fight for you, because you represent that statue. “
G.L. Tyler, political director for DC 1707, reflected on the meeting. “The senator listened to the issues. He has proven himself to be an advocate for working families.”
Tea Party Favorite Sets His Sights on Our Rights
by Erick Sanchez and Chris Fleming | February 13, 2013
Sen. Rand Paul (R- Ky.), who last night delivered the tea party’s response to Pres. Barack Obama’s State of the Union address, recently introduced an egregious piece of legislation aimed directly at the heart of the middle class: the “National Right to Work Act.”
Senate Bill 204 values corporate interests ahead of working families by promoting a damaging union-busting scheme known as “right-to-work.” Such legislation severely undermines the rights of workers and their ability to bargain for fair wages, modest benefits, and safe staffing levels, and it silences the rights of workers with their employer.
Instead of working towards creating jobs and expanding access to vital services like Medicare and Social Security, Paul’s Senate Bill 204 puts the middle class in his crosshairs.
So-called right-to-work laws are part of a partisan agenda, backed by big-money, right-wing political donors, to reduce the wages and benefits of hardworking teachers, firefighters, police officers, and other public employees who perform vital services in our communities. These laws reduce all workers’ paychecks – not just union members’ – by an average $1,500 per year.
If passed, Paul’s legislation, would provide, as Rev. Dr. Martin Luther King, Jr., once said, “no rights and no work.”
We are currently fighting back against “right-to-work-for-less” efforts in Michigan and a number of other states. Learn more about AFSCME’s fight for workers’ rights.
UPDATED: AFSCME Members Gather to Watch State of the Union
by Kate Childs Graham | February 12, 2013
Play AFSCME’s State of the Union bingoJust a few short weeks ago, we heard Pres. Barack Obama set out a vision for this country in his second Inaugural Address. He reminded us that “preserving our individual freedoms ultimately requires collective action.” He lifted up our shared belief in protecting Medicare, Medicaid and Social Security. And he touted equality and economic opportunity for all – gay or straight, immigrant or not. President Obama’s inaugural words echoed AFSCME’s own priorities and values.
As the President gives his State of the Union address tonight, we will again hear these priorities, these values.
Members from across the country are gathered in Washington, DC, and will watch the President’s address as part of AFSCME’s 2013 Legislative Conference. Check back here – or our Facebook page and Twitter feed – for live reactions from AFSCME members.
Also, play AFSCME’s State of the Union bingo in the comfort of your own home. Check off the words we think he’ll say as you hear them. Get five in a row, and you win!
UPDATE: 8:30 p.m. ET – AFSCME members are starting to gather for the President’s address. Barbara Pardo, 61, president of AFSCME Retiree Chapter 18 in New Mexico is full of “anticipation, or more like hope.”
“I’d like the President to address the disparity in taxation. The middle class is paying more than the top two percent, and it’s not fair that we shoulder that burden,” Pardo said.
She continued, “He should stand his ground on Medicare and Social Security. Those social safety networks have made us the country we are.”
UPDATE: 9:25 p.m. ET – President Obama began with a challenge, “It is our generation’s task, then, to reignite the true engine of America’s economic growth – a rising, thriving middle class.”
Grace Baltich, president of AFSCME Council 65 in Minnesota, said, “This gives me hope for the future. It gives me hope that my family and my daughter and her family will be able to have a decent lifestyle. It gives me hope that our members will be make ends meet every day.”
UPDATE: 9:35 p.m. ET – When President Obama said, "A growing economy that creates good, middle-class jobs – that must be the North Star that guides our efforts," AFSCME members stood to applaud.
UPDATE: 9:48 p.m. ET – President Obama said, “After all, why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks? How is that fair? How does that promote growth?”
“It’s not an investment in our future to cut education. Education made our country great,” Jason Stinnett of AFSCME DC 36 in California responded.
Stinnett went on, “Medicare affects our most vulnerable population – seniors on fixed incomes. How does cutting Medicare help society? The truth is it doesn’t. It’s not fair to give the wealthy tax breaks.”
UPDATE: 9:55 p.m. ET – President Obama said, “That is why we need to build new ladders of opportunity into the middle class for all who are willing to climb them.”
“There are very few jobs that allow people access to the middle class. The chance to get a decent job is gone. The rungs have been pulled up. And it is hard for people to get into the middle class,” said Salvatore Luciano, International Vice President and Executive Director of AFSCME Council 4 in Connecticut.
“The solution is to invest in our young people,” Luciano added.
UPDATE: 10:10 p.m. ET – When President Obama mentioned Newtown, Conn. and Hurricane Sandy, the crowd of AFSCME members grew silent. Two AFSCME members who are Newtown police officers are guests of the White House at the speech tonight.
UPDATE: 10:20 p.m. ET – In a statement following the President’s address, AFSCME Pres. Lee Saunders said, “AFSCME stands ready to fight for what President Obama laid out tonight, to fight to rebuild and expand the middle class, and to fight for the right for all Americans to achieve the American Dream.
