EDITORIAL

Say No to Trade Deal

The Obama administration finally released the text of the proposed Trans-Pacific Partnership, and President Obama’s assurances that the deal protects American workers and consumers and opens new markets in the Pacific Rim has provided little comfort to organized labor, environmentalists, public health advocates and consumer activists.

President Obama views the trade deal among 12 Pacific nations, including the United States, as an important part of his trade legacy. But it was hammered out by industry lobbyists and government bureaucrats behind closed doors over seven years and critics see the TPP as a replay of the North American Free Trade Agreement and the World Trade Organization, which relaxed trade barriers and empowered multinational corporations without putting in place enforceable regulations to protect labor, the environment and local government sovereignty. Instead those deals have resulted in the loss of manufacturing jobs to low-wage countries in the Third World. And progressives are understandably suspicious because the “free trade” deal is practically the only policy initiative of Obama’s that Republicans support, as the Republican Congress in May greased the skids for an up-or-down vote under special rules that do not allow filibusters or amendments.

Wenonah Hauter, executive director of Food & Water Watch. said the TPP is a giveaway to big agribusiness and food companies that want to use trade deals to attack sensible food safety rules, weaken the inspection of imported food and block efforts to strengthen US food safety standards.

“The TPP gives the food industry a powerful new weapon to wield against the nationwide movement to label GMO foods,” said Hauter. “The language in the TPP is more powerful and expansive than other trade deals that have already been used to weaken or eliminate dolphin safe tuna and country of origin labels.”

The National Farmers Union said the deal will fail family farmers and ranchers. “After years of negotiating in secret for an enormous agreement guarded from the public under lock and key, the text of the TPP has at last been made public. Unfortunately, it appears to be as bad for America’s family farmers and ranchers as we had feared,” NFU President Roger Johnson said.

There are several questions about the constitutionality of the pact. Many critics say it should be considered a treaty among nations, which would require approval of two-thirds of the Senate.

Others question the TPP’s authority to bypass US courts and overrule state and local laws in trade disputes. For example, the pact allows foreign investors to bring claims for money damages when governments violate the TPP’s investor protection provisions. The claims are decided by a private arbitration tribunal that operates outside the challenged government’s court system. The tribunal could order the government to compensate corporations for lost “expected profits” and the tribunal’s decision could not be appealed to US courts.

The TPP also creates extreme monopoly rights for global pharmaceutical companies and gives them more power to drive up costs for Medicare and public health programs in all TPP countries, Celeste Drake, trade & globalization policy specialist at the AFL-CIO, wrote at aflcio.org/Blog (Nov. 10). “These rules are far worse for working families than comparable rules in the Peru, Colombia and Panama deals negotiated by then-President George W. Bush. The TPP will raise drug prices for families across the region. That’s regressive—not progressive,” Drake wrote.

The Trans-Pacific Partnership is not a good deal for Main Street America, it’s not good for American workers, or farmers, or ranchers, and it won’t stop the erosion of our middle class. It is a good deal for bankers, financial services and multinational corporations who are constantly scanning the horizons to find cheaper places to manufacture their goods that they can import back to the US to sell at Walmart.

President Obama should have walked away from this deal. None of the three leading Democratic presidential candidates for president support it. We don’t anticipate that many of the 13 Senate Dems who sided with 48 Republicans to “fast-track” consideration of the trade deal in May will advertise their support of the deal when they run for re-election. Democrats as well as Republicans who claim to stand up for working people, the Constitution and American sovereignty should vote it down.

GOP Tax Fraud

Republican presidential candidates who are proposing tax plans that generate revenue much less than 19% of the gross domestic product are perpetrating fraud upon the electorate.

Ben Carson has called for a flat tax of 10 to 15%. Ted Cruz proposes a 10% flat tax for income above $36,000 and a 16% tax for corporations. Ron Paul proposes a 14.5% tax on everything above $50,000. Carly Fiorina proposes a simplified tax plan that would allow three-page tax return but otherwise provides few details. Donald Trump proposes to reduce taxes for individuals, with a 25% top rate, and 15% for corporations. He would make up the lost revenue by taxing multinational corporations. Rick Santorum proposes a 20% flat tax. Marco Rubio, Jeb Bush and John Kasich offer more conventional tax cuts, but all would let the wealthy keep more of their money and increase the national debt.

When Bill Clinton became president in 1993, at the tail end of a recession, US Treasury receipts were 17% of the GDP and the deficit was 4.7% of GDP. After the Democratic Congress increased taxes, with no Republican support and dire predictions that the tax increase would push the economy into a depression, the economy boomed instead. The budget was balanced in fiscal years 1998 through 2000, when federal revenue was 19.2% to 20% of the GDP, and again in 2001, although federal revenue dropped to 18.8%. The US national debt as a percentage of GDP declined from about 64% when Clinton took office to about 54% in 2001 when Clinton handed George W. Bush a budget that was generating a surplus and was on track to pay off the national debt in 10 years.

Instead, Bush pursued Republican voodoo economic policies that gave tax cuts to the rich and deregulated Wall Street. Federal revenue dropped to 15.6% of GDP in 2004 and recovered to 17.9% in 2007 before the economic bubble burst and revenues dropped to 14.6% of GDP in 2009, when Barack Obama took over the economy in free-fall and two wars being fought off the books. By that time, the national debt was more than 80% of GDP.

The debt load topped out at 103.6% of GDP in the first quarter of 2014. That’s near the record debt level of 106% of GDP in 1946. The US grew its way out of debt in the 1950s by investing in the education and occupational training of returning war veterans while industrial unions helped establish the middle class that was the envy of the rest of the world.

Since then, unions have been crippled but taxes on middle-income Americans are near historic lows. A family of four in the middle of the income spectrum, earning $75,845 in 2014, paid 5.34% of their income in federal income taxes (not including Social Security/Medicare payroll taxes), the Tax Policy Center reported. Average income tax rates for median incomes have ranged from 5.64% in 1955 up to 11.79% in 1981, then dropped to 3.54% in 2008, helped by the Earned Income Tax Credit, child tax credit expansion and rebate credit in the Economic Stimulus of 2008, before creeping back up to 5.34%.

So when Republicans tell you that a flat tax of 10 to 15% would cut your taxes, they are lying. Or they are contemplating either slashing military spending, which they won’t do, or slashing Social Security, Medicare and other domestic spending, which they’d like to do but can only do under false pretenses.

A flat tax that does away with exemptions and keeps approximately the same spending levels, including Social Security and Medicare, would have to take about 20% of your income. That flat tax would only be a good deal for the highest income levels. — JMC

From The Progressive Populist, December 1, 2015

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