Like most Americans, I don’t bring in millions of dollars but I DO pay my taxes - on ALL of my income, at the same rate.  Hedge fund managers, on the other hand, who DO make millions of dollars, are reaping the benefits from a sneaky tax loophole that lowers their tax rate to 15% — much lower than the rate many of us are paying (take a look at the MoveOn.org chart below for an illustration of this inequity).  And now these big wigs on Wall Street are putting their influence and big money behind protecting this “carried interest” loophole - at the same time that we’re fighting to protect the safety net for millions of unemployed workers. 

Here’s how the loophole works (I’m not an economist so bear with me here):  the percentage of a fund’s proceeds that investors pay a manager to manage their money - called the “carried interest” - gets taxed as if it’s capital gains (at a 15 percent rate, instead of 35 percent), even though the money doesn’t belong to the manager.  Consequently, the loophole allows managers at private equity funds, venture capital funds, real estate partnerships, oil and gas partnerships, and even some hedge funds to have a free ride and avoid paying their fair share.  For a more detailed explanation, check out a recent report by Citizens for Tax Justice here.

Ironically, some members of Congress contend that we do not have sufficient funds to finance the “extenders bill” which is up for a vote this week and extends critical programs like unemployment insurance, COBRA, TANF emergency funds, state aid for Medicaid and summer youth programs.  We could raise some serious funds by closing the carried interest loophole and making equity managers pay their fair share.  Given the fiscal state of the country right now, we could certainly put this money to good use. 

After Senator Baucus (D, MT) indicated that the provision would be in the extenders package, Wall Street brought out the big guns:  money and fierce lobbying (not literally big guns).  While we are certainly not as well-funded, we have people-power.  Please contact your Senators and member of Congress and let them know how important it is that the richest Americans need to pay their fair share.  With so many people struggling, shouldn’t millionaire money managers pay their fair share?

The Tea Party has been gathering in city after city, often on government-owned land, to complain about “big government” spending. What was once an attack on a “government takeover of health care” evolved into rallies for anything from flaunting their right to bear arms in public places to their contempt of anything Obama-related.

How do their crowd turn-outs compare to the other side? And by other side, I mean the Americans that believe in chipping in for the greater good… taking care of “thy neighbor” and hoping that one day your neighbor will return the favor if you need it. In recent NJ rallies, the tea party crowd was minuscule in comparison.

The media has leapt all over this [Tea Party] narrative and often ignored the larger, pro-government, pro-public services protests, despite the fact that very often, we have the numbers and they don’t. (In Trenton, a tea party protest last month drew 400 people while our rally drew at least 35,000. So we outnumbered them by an 87-to-one ratio. In Springfield, tea-baggers drew a more impressive 2,000 participants to a rally held at the taxpayer-funded Illinois State Fairgrounds, compared to our side’s 15,000.)

Read the whole story.

I spent this past Saturday in Trenton, NJ at the biggest rally in the state capitol’s history: a gathering of more than 35,000 teachers, firefighters, public sector employees and community activists.  It was an amazing show of grassroots political power and of public outrage over Governor Chris Chistie’s draconian budget cuts that will slash the state’s social safety net to shreds.  His budget cuts place the burden on hardworking public employees and the most vulnerable New Jerseyans: low income seniors and the disabled will have to pay more for their health care, libraries will lose 74% of their funding, and he cuts $1 billion from public education while leaving charter schools untouched.  All this while handing out tax cuts to the wealthy and vetoing a tax on millionaires.  It’s unconscionable, and the people of New Jersey are standing up.  “We’re sending out an SOS today - save our schools, save our students, save our state,” said USAction President William McNary, who emceed the event.

More than 129 organizations came together to organize the rally, vowing to take their energy and outrage well beyond a one-day event. And national organizations like USAction will be there to support them.  Alongside speakers from labor, civil rights and community groups, Phyllis Salowe-Kaye, Executive Director of NJ Citizen Action (an affiliate of USAction) said, “We stand together today, not for ourselves but for us all.”

The final rally cry came from Chris Shelton, vice president of the NJ Communications Workers of America, who borrowed a line from Robin Hood that bears repeating.”Rise and rise again, until lambs become lions,” he shouted again and again, bearing out the consistent theme of the day:  that we all need to stand up and fight for a just and equitable society.

Saturday’s momentous event kicks off a week of action for jobs and tax justice.  Check here for events in your area.

I just got back from Hawaii (lucky me), where budget shortfalls led the state to cut fridays from the school week. Can you imagine going through school with three day weekends? Sounds great to me, but a teacher I spoke with feels that the students are being short-changed.

In New Jersey, proposed cuts are making teachers feel like “they have been sucker-punched.”

New Jerseyans are fighting back. They rallied on May 22 to say they don’t want to short-change their children. The thousands that turned out weren’t there just for education, the overall human needs infrastructure needs help, not cuts.

USAction, affiliates and coalition partners next week will kick off a “National Week of Action,” calling on Congress to take immediate steps to put America back to work, pass responsible tax policies and preserve the safety net during this era of high unemployment and financial distress

The National Week of Action events unofficially begin Saturday, when tens of thousands of people will rally at noon in front of the State House in Trenton, New Jersey to protest proposed budget cuts in education, health and other public services. The rally will be the largest pro-public services event of the year – larger even than the 15,000 people who turned out in Springfield, Illinois last month to chant “Show some guts! Avoid the cuts!” and demand that legislators responsibly address a $12 billion budget deficit.

Alan Charney, USAction policy director:

Americans from all walks of life are organizing and fighting back, cuts in services threaten our schools, our children, our families, our communities. Next week we will be telling legislators not just in Springfield and Trenton but across the country to show some guts and avoid the cuts. We have the resources – we just have to make the right choices.

USAction and hundreds of local, state and national groups are organizing as part of two coalitions that are leading the effort to address the economic crisis. Jobs for America Now, the country’s largest jobs coalition, and Americans for Responsible Taxes, a new coalition to be launched next week, each are leading the call for significant job creation and for an end to the irresponsible tax policies of the past ten years.

Specifically, USAction and Jobs for America Now are supporting the Local Jobs for America Now Act, sponsored by Rep. George Miller, D-CA. This measure almost immediately would create one million jobs. USAction and Jobs for America Now also are supporting extensions to UI/COBRA as well as emergency assistance to the states, including FMAP, and legislation sponsored by Sen. Tom Harkin, D-IA, that would preserve or create hundreds of thousands of teachers’ jobs.

USAction and Americans for Responsible Taxes are supporting letting the Bush tax cuts for the top two tax brackets expire (families making more than $250,000), reinstating a robust estate tax, closing tax loopholes for wealthy individuals and ending subsidies for corporate overseas earnings and oil and gas companies, and permanently extending tax relief for working families. In all, as much as $1.4 trillion in tax dollars are at stake.

Charney said the National Week of Action events will serve as a reminder that Americans support responsible, effective government, despite recent “tea party” protests to the contrary.

In this election year, some people who simply don’t believe in government would have us think that we are overtaxed,” he said. “In fact, our taxes are lower than they have been in almost 60 years.

A recent USA TODAY article, citing Bureau of Economic Analysis data, found that federal, state and local income taxes consumed 9.2 percent of all personal income in 2009, the lowest rate since 1950. That rate is far below the historic average of 12 percent for the last half century. The overall tax burden hit bottom in December 2009 at 8.8 percent before increasing slightly during the first three months of 2010.

David Elliot is the Communications Director at USAction

      While much of America (or at the very least, a sizable segment of teeny-boppers) basked in the glory of this week’s American Idol results, the Senate undertook another important vote.  Last night, the Senate passed their sweeping financial reform bill by a vote of 59 to 39, with all but two Democrats voting in favor (Sens. Cantwell and Feingold) and four Republicans crossing party lines to support the bill (Sens. Grassley, Snowe, Collins and Brown).

       If signed into law, The Wall Street Reform and Consumer Protection Act will strengthen and reform regulation of the nation’s financial system.  It also creates a new federal Consumer Financial Protection Bureau, regulates the derivatives market and makes credit rating agencies more accountable.  The bill sets forth the most far-reaching restrictions on financial institutions since the Great Depression.

       As succinctly stated by Americans for Financial Reform Campaign Manager and USAction Vice President Heather Booth,

The passage of this legislation will be remembered as a historic turning point in our economic history.   It ensures the financial system operates to support needs of working families, promotes business growth and economic mobility rather than the interests of the speculators who view the economy as a huge casino.

       The bill must now be reconciled with the House version that passed last December and the big banks will surely try to weaken or kill it.  To ensure a strong conference report, we must continue to fight the special interests.

       Thank you and congratulations to Americans for Financial Reform (AFR) and to everyone who has worked so tirelessly for this!

Have you ever wondered, “Is my activism actually accomplishing anything?” If so, this is the book for you. When you feel like you’re only shouting into the wind, when you’re tempted to listen to friends who say nothing will ever change, Paul Rogat Loeb has the antidote.

In his new and revised edition of Soul of a Citizen: Living With Conviction in Challenging Times, Paul draws from his lifelong commitment to working for peace, justice and environmental causes to create a toolkit for everyone seeking a meaningful personal engagement with pressing societal issues.

I’ve read it, and I’ve made arrangements for you to get a FREE copy.

I also want to invite you to talk with the author next week. Here’s how: We’ve signed up with the Progressive Book Club, which offers the best in progressive literature at 10-40 percent off list price and also gives money to TrueMajority every time you get a book. When you join the club, you’ll receive Paul’s book for free.

Then on May 25th at 8 p.m. ET, I’ll host an online call-in show with Paul that’s open to all TrueMajority members. Paul has a knack for seamlessly weaving inspiring examples of ordinary people who have made a difference in their communities with lessons for each of us in our daily strivings to make the world better. I think his ideas are really important, and really motivating. 

But don’t take my word for it. This is something we should all hear from the author himself. Just CLICK HERE TO RSVP, and we’ll send you a reminder.

Environmental writer and activist Bill McKibben says,

Soul of a Citizen has been a powerful inspiration to citizens acting for environmental sanity, showing how they can take committed stands, even if they don’t know every last answer. The new edition is even more inspirational.

And Jonathan Kozol raves,

I stayed up half the night reading Soul of a Citizen, finding it a beautiful and morally transcendent work. Paul Loeb is a personal hero of mine who gives decency and generosity a political character, in the humblest of ways. The new edition is magnificent.

 

Even if you choose not to get the book right now, you can still join the online show. We’d love it if you could join us for this evening of inspiring stories about how we really CAN make a difference.

-Matt

Matt Holland

TrueMajority / USAction

As Congress faces another deadline for critical program extensions, families and communities are feeling the devastating effects of the economic downturn:  state and local governments are facing budget crises, teachers are being handed their pink slips and unemployment rates are not expected to dramatically decrease anytime soon.  Legislation providing much-needed assistance, however, is at a crossroads and being stalled in Congress.

This week, the U.S. House of Representatives will consider H.R. 4213:  The American Workers, State, and Business Relief Act of 2010, a comprehensive bill that will extend Federal UI programs and COBRA subsidies until the end of the year, provide aid to state governments through the Medicaid program (FMAP) through the end of the next state fiscal year, and give much-needed resources to the TANF Emergency Fund which has provided crucial support for low-income families and has led to the creation of over 180,000 jobs over the last year and half.  

USAction and our partners in the Jobs for America Now Campaign are encouraging people around the country to call their member of Congress and express the need to vote for these critical extensions. 

 Click here to access the click-to call feature and take action http://www.jobs4americanow.org/finish-the-job/

Ask House members to vote for H.R. 4213 in order to: 

• Extend UI/COBRA Benefits Until The End Of The Year
• Extend State Fiscal Relief (FMAP) For Another Six Months
• Fund The TANF Emergency Fund Through FY 2011

The bill must clear both houses of Congress before the Memorial Day recess, so we must act quickly.  Millions of people are depending on us.

Corporate America has a stranglehold on our democracy, but we are chipping away at the excess, the abuse and the undue influence on our elected officials, our government and each and every one of us.  To fight the lobbyists and make sure the economy and the government works for ‘We the People’, we must build a movement for economic justice by building power.  We have to build power on every block, in every city and in every state, coast to coast.

Last week, USAction affiliate organizers and staff came from all over the country to talk about building power and to attend a ‘train-the-trainer’ on a soon-to-debut economic justice workshop.  USAction affiliates are working in communities hard hit by this great recession.  Families are facing the longest stretches of unemployment Americans have faced since the Great Depression.  Our affiliates are organizing in states and local communities where budget cuts threaten to slash investments in people, worsen the plight of those struggling the most and stifle the nascent economic recovery driven by the American Recovery and Reinvestment Act and other government efforts which have kept us afloat.

Ben Chin, organizer for the Maine People’s Alliance, had the following to say about the training and its importance in movement-building:

You can’t build a movement without having deep analysis of both what’s wrong with our economy and how to fix it. This training gets to the heart of the issues we fight for every day and gives us space to think of more effective strategies to make long-term change.

Chris Scoville, organizer with Citizen Action of New York, described his takeaway from the economic justice training:

This training is a great tool in our struggle against the status quo. An understanding of economics remains elusive to too many, though most have felt the sting of the inhumane practices of the financial behemoths. This training makes understanding and action accessible.

How will USAction partners and affiliates build power with this training?

• Educating activists and developing leaders on a deeper level about the economy, jobs, taxes and the positive role government plays in strengthening our communities.
• Holding elected officials accountable to the demands and needs of Main Street.
• Demanding corporations pay their fair share to help fix the economy.
• Moving regular people from anger and frustration to action in their communities, using that long-term vision to agitate for short-term legislative fights to end wasteful tax loopholes, cuts and subsidies for big corporations and millionaires in order to create millions of jobs and to rebuild a just economy for all.

One of the leaders of the ‘train-the-trainer’, Steve Schnapp of United for a Fair Economy, left the training inspired and with a sense of a coherent vision and an action plan for change:

Getting an opportunity to do this kind of training is wonderful. This addresses two long-range strategic goals - movement building and policy changes that move us towards a more equitable society by shrinking the gap between the super wealthy and everyone else.

Partnering with USAction and bringing organizers from affiliates to be trained in a workshop being developed collaboratively is a great example of how education can be incorporated into organizing campaigns. Popular education methodology builds the capacity of USAction nationally and for partners and affiliates doing grassroots organizing in states around the country.

I can’t think of anything more exciting than this.  A national organization, combining education and organizing, is a capacity building strategy which builds power so together we can make the economy work for all of us instead of the few, giant corporations.

When corporations wield their power – obscene profits gained from the predatory practices and exploitation of workers, consumers and families – we all lose.

• When Wall Street brings down the global economy, destroying untold trillions of American assets and millions more jobs, then wastes no time spending hundreds of millions lobbying to weaken regulation and oversight, as the rest of us struggle to pick up our economy from the mat, there is no shame or accountability.
• When the Bush-era Department of the Interior falls down on the job of regulation, cozies up with Big Oil and Coal and thus weakens the long-term ability of regulatory agencies to protect miners in West Virginia and oil workers in the Gulf of Mexico, workers live in fear, the environment is barely an afterthought and there is no justice.
• When the Chamber of Commerce continues to oppose financial reform and the implementation of the health care law, Big Insurance has another ally in defending the status quo and turning a blind eye to those struggling with costs and trying to raise strong, healthy families, workforces and communities, and there is no sense of responsibility or a common good.

Corporations wield their economic and political power to drive income further away from working Americans and into the pockets of CEOs and lobbyists, only to turn around and keep asking for more.  USAction is organizing people driven power to create an economy that works for all of us.

To close, Field Organizer Robin Stelly of Penn Action brings it all together. Robin highlights the interconnectedness of local and state budget shortfalls, the everyday struggles that have become commonplace in Great Recession America and the need for bold action in D.C. to put America back to work, help states and local governments brave the storm and make sure the wealthiest among us pay their fair share:

In Pennsylvania, we’re facing the twin challenges of a multi-billion dollar budget deficit and a legislature that may not have the courage to find the revenue needed to close gap. We need our state lawmakers to close corporate tax loopholes and to tax smokeless tobacco and natural gas extraction.

But even if our General Assembly does the right thing, Pennsylvania will still need the federal government to step in with bills like the Local Jobs for America Act to create real jobs, close the current budget gap and help build not only a stronger Pennsylvania but also a stronger America.

Last week’s economic justice training will help me make that case to people in Pennsylvania, who know that the system is out of whack but don’t know exactly how and exactly what they can do to help build a fair economy that works for everyone instead of only the top 1%.

Update: Join us at http://www.facebook.com/USAction where we have more photos from the training.  This training was sponsored by USAction Education Fund.