The progressive agenda for 2016
President Obama released the White House budget plan for 2015 this week, and even thought it is widely considered ‘Dead on Arrival’ in Washington-speak, he has set the predicate for the 2016 presidential election. It is encouraging that the progressive wing of the Democratic Party, represented by figures like Elizabeth Warren and Bernie Sanders (who caucuses with the Democrats), have a lead role in shaping the direction of the policy. The dismal 2014 midterm election results may have finally prompted a rethinking of the Democratic Party strategy away from the exhausted ‘centrist’ (read corporate) DLC (Democratic Leadership Council) mind-set that has held sway since the Clinton Administration in the 90s. As Bill Clinton used to say back in the day, “that dog won’t hunt.” There is broad popular support for progressive policies that focus on increasing opportunities and resources for working class and middle class families to achieve economic stability.
The President’s budget proposal includes a mandatory 14 percent tax on the $2 trillion in corporate profits now stashed abroad in elaborate tax-avoidance shell companies, and lax financial enforcement in selected foreign host countries. The summary of the White House plan states that the reforms will “make critical new investments in our roads, bridges, transit systems and freight networks as part of a $478 billion, six-year surface transportation reauthorization”.
The plan has both a carrot and a stick to encourage compliance. The sticks are a one-time repatriation, at the 14 percent tax rate, on offshore profits of American corporations, and a new 19 percent minimum tax on global profits going forward, in order to circumvent the multitude of clever tax avoidance strategies cooked up by legions of highly-paid corporate tax law attorneys over the years. The big carrot is the reduction of the top corporate tax rate from 35 percent to 28 percent. The tax reform will also include proposals aimed at curbing the practice of “inversion” which is the creation of nominal overseas headquarters in order to escape paying U.S. taxes.
Contrary to the self-serving ‘job-creator’ mythology, the very wealthy spend a major part of their uncollected fair share tax revenues overseas on risky, high yield speculations in BRIC investments (Brazil, Russia, India, and China), or skimming from the Wall Street money machine through elaborate fee-based financial trading in exotic financial instruments like derivatives and volatile commodities markets, to skim off the 20 percent of GDP that now goes to the bloated financial services sector, rather than into socially useful investments that build up our communities. The cumulative effect of these strategies has been to hollow out the U.S. manufacturing sector, costing millions of middle class jobs, and starving the public sector of the resources to rebuild our physical and digital infrastructure in order to remain globally competitive.
The progressive agenda for 2016 is to address these systemic policy failures in order to create an economy with more broadly shared prosperity, so that we can reap the social benefits of stable family structures and cohesive communities.
The Democratic Party could not improve on the Bernie Sanders economic reform plan (below) as their platform for 2016. They will ensure Democratic control of at least the Senate and the Presidency if they have the intellectual courage to strike out on this bold new path. One advantage of having a smart presidential front-runner like Hillary Clinton, who has a keen sense of which way the political winds are trending, is that she will adopt this program if her team thinks it is the road to victory. Opportunism can be translated into opportunity.
Sanders’ 12-point economic program
1) Invest in our crumbling infrastructure with a major program to create jobs by rebuilding roads, bridges, water systems, waste water plants, airports, railroads and schools.
2) Transform energy systems away from fossil fuels to create jobs while beginning to reverse global warming and make the planet habitable for future generations.
3) Develop new economic models to support workers in the United States instead of giving tax breaks to corporations which ship jobs to low-wage countries overseas.
4) Make it easier for workers to join unions and bargain for higher wages and benefits.
5) Raise the federal minimum wage from $7.25 an hour so no one who works 40 hours a week will live in poverty.
6) Provide equal pay for women workers who now make 78 percent of what male counterparts make.
7) Reform trade policies that have shuttered more than 60,000 factories and cost more than 4.9 million decent-paying manufacturing jobs.
8) Make college affordable and provide affordable child care to restore America’s competitive edge compared to other nations.
9) Break up big banks. The six largest banks now have assets equivalent to 61 percent of our gross domestic product, over $9.8 trillion. They underwrite more than half the mortgages in the country and issue more than two-thirds of all credit cards.
10) Join the rest of the industrialized world with a Medicare-for-all health care system that provides better care at less cost.
11) Expand Social Security, Medicare, Medicaid and nutrition programs.
12) Reform the tax code based on wage earners’ ability to pay and eliminate loopholes that let profitable corporations stash profits overseas and pay no U.S. federal income taxes.
