If We’re Headed Toward Greece, Republicans are Driving Us There
When Sen. Lindsey Graham told reporters on Tuesday that Mitt Romney's foreign investment accounts don't trouble him because "it's really American to avoid paying taxes," he must not have realized that he was calling his party's nominee-to-be a liar.
"As long as it was legal, I'm OK with it," said the South Carolina Republican. "I don't blame anybody for using the tax code to their advantage. ... It's a game we play. Every American tries to find the way to get the most deductions they can. I see nothing wrong with playing the game because we set it up to be a game."
Graham assumes — no doubt correctly — that Romney sent his money offshore to avoid taxes. But the Republican candidate and his flacks have repeatedly insisted that the Romneys' admittedly minimal tax bill was not reduced at all by their remarkable maze of holdings in Switzerland, the Cayman Islands and Bermuda. It is "the very same" as if he had kept those millions of dollars in the United States, or so they claim.
But Graham clearly doesn't buy that alibi. In fact, nobody does. And eventually Romney may be forced to realize complete information about his investments that may yet indicate the extent to which he and his family have escaped taxation.
Meanwhile, what Graham unwittingly evoked with his clumsy endorsement of tax avoidance is the specter of Greece — a nation whose fiscal drama incites endless Republican prattle about the need for austerity. Warnings that as a nation we are on "the road to Greece" have become a favorite Republican cliche, regurgitated by every politician who wants to be considered for vice president as well as by the presidential candidate himself.
"You call that forward?" Romney said mockingly of an Obama campaign slogan last month. "That's forward over a cliff, that's forward on the way to Greece."
What Graham, Romney and all the other Republican politicians and pundits consistently fail to mention — or perhaps don't know — is that the central Greek problem isn't overspending per se.
The central problem is the Greek government's failure to collect what taxpayers (especially wealthy taxpayers) actually owe under the law.
That's because over the years so many Greeks have adopted an attitude toward taxes resembling that of Romney and Graham. Indeed, Greece has developed a culture of tax evasion, with wealthy citizens sending their money out of the country and poorer citizens bribing officials or conducting their business off the books. The amount of tax owed but not paid in Greece is estimated at roughly a third of total receipts — or enough to cover the nation's deficits and begin to restore its credit.
Sociologists who have studied the Greek tax situation say that rampant evasion by the rich has trickled down to infect the rest of society, ruining the "tax morale" of wage-earners and small business owners. As James Surowiecki explained in The New Yorker, people here and elsewhere don't pay taxes simply because they fear prosecution; they pay because they are "social taxpayers" who "feel a responsibility to contribute to the common good." But that sense of shared obligation gradually dissipates when taxpayers suspect that many others, especially the rich, are not participating fairly and fully.
Despite growing debt and deficits, we are not on the road to Greece. With investors around the world rushing to purchase U.S.Treasury bonds and driving rates to historic lows, this country is far from the plight of the homeland of democracy. For now, it is safe to ignore right-wing rhetoric that shrieks the fiscal sky is falling.
But if such troubles lie ahead, the real cause will not be spending on income security, health care, infrastructure, education or any of the other programs that have made America a great nation. If we are driven toward national bankruptcy someday, the likeliest cause will be our failure to raise and enforce taxes on those who can afford to pay — because we, too, have encouraged a culture of evasion rather than responsibility.
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22 comments on "If We’re Headed Toward Greece, Republicans are Driving Us There"
July 23, 2012 3:03pm
Democrats are fair minded wussies.
July 18, 2012 3:01pm
Amazing how the mainstream media, and even Current TV, have failed or refused to connect these dots. I realized when I first heard about Greece's tax collection problems that all the lawyers out there hawking offshore tax-avoidance schemes (such as the ones that appear at Real Estate seminars headlined by Donald Trump) are pushing the US towards the "Greek Problem". And the Republicans are gleefully cheering this on.
July 14, 2012 1:44pm
with the econ as weak as it is raising taxes now will have same effect as 1938 increase which killed dead the recovery that started in 1937
July 14, 2012 4:06pm
You've got it backwards. On May 11, 1938, Congress adopted the Revenue Act of 1938. To purportedly "stimulate" the economy, the Act "reduced" corporate income taxes. Roosevelt refused to sign it, but it became law on May 27, 1938. The recovery was actually going fairly well until this critical juncture. It would take WWll and massive "government" spending to officially end the depression. Those ignorant of history are doomed to repeat it...as we've seen rather conclusively since the election of Ronald Reagan.
July 14, 2012 9:22am
Mitt Romney should release the same number of tax returns his father did. Why not?
July 23, 2012 2:38pm
Simply because if he does he will be arrested for committing a felony. He cheated on his taxes and is not willing to and can't avoid us finding out if he submits them.
He retroactively retired from Bain at the same time as he hid the money offshore. He obviously did not do it right, so now he stonewalls. ( Remember Nixon? )
July 13, 2012 9:24pm
Maybe we can sort this out just a little. First a few key points, some of which were made earlier. No, the GOP has no interest in reducing the debt or the deficit. It is only an issue when they are not in power. Once they gain the power, they proceed to spend with reckless abandon. Tax cuts to their friends, defense contracts for weapons we don't need and the military dosn't want. Unprovoked and unnecesary wars that go on and on. And then comes the really serious issue, spending cuts. Republicans believe that cutting government spending will solve all our problems. Yup, all we need to do is cut spending to the bone and the nations economic problems will be history. So let us return to the world of reality. The business of government, at all levels, is about a third of our total economy. Because government is a service business, most of it's expenditures are for labor. In modern times, governments have gone to contracting for certain services with private firms. In many cases this proves to be less costly and in other cases, not so much. But in all cases it involves the employment of a great many citizens. Now working citizens tend to spend their earnings on all sorts of stuff. Groceries, fuel, clothing, housing, and fun stuff too. The more they spend on these things, the more other citizens, in the private sector, have work to produce those goods and services which government jobs provided the spending power needed. There is also the needs of government to purchase goods such as office products, transportation equipment, etc., etc.. Consider this little side bar: The State of California purchases more than 20,000 cases of toilet seat covers each year for use in state public restrooms. Somebody had to make those covers, distribute them and finally, I'm sorry to say, clean up after the folks who used them. Who says that government dosn't create jobs?
So what happens when we reduce government spending? Well, we cut government jobs. In the last 4 years we have lost more than 660,000 government jobs throughout the country. Futhermore, if government employment had simply kept pace with population growth we are actually short about 1.1 million government jobs. That would translate into about 2.3 million private sector jobs created. This according to the CBO. who actually do know what they are talking about. Would it make sense to reduce government spending in some areas? Of course. But we whould have to be careful about where and how much. But what about the deficit? Mr. Cheney said that deficits don't matter, but that's not really true. Remember, he was in power at the time. We have some history to look at in this regard. First, consider the massive debt built up between 1940 and 1945. The nation was at war and the government was the major consumer. As there was little to buy on the civilian market during that time, the money supply quadrupled during the 4 years of the war. Following the end of hostillities, the 12 million service personnel came home, started families, bought homes and had babies. The economy boomed for the next 30 years. The federal debt shrank to managable levels. That is until the excess was burned off and a more normal market returned. Than someone decided that "government is the problem". It sounded sensable that we would be better off if citizens kept more of their earnings and government did less. I think you get my drift. Then we take a look at the Clinton years. Congress forced the administration to contain it's spending while permitting the largest tax increase in generations. Result: 23 million added jobs, low unemployment and a government surplus projected decades into the future. Then came the small government, cut spending, cut taxes crowd and presto, gone was the surplus. Gone was the job creation engine and gone was the social safety net.
Conclusion: Taxes don't kill jobs, job killers kill jobs. An expanding economy not only creates jobs, it creates wealth. Wealth that can enrich citizens at all levels of society as well as enrich government coffers to produce the resources that will be needed in the future to satisfy the commitments we've made to ourselves. This is not rocket science. It's not fancy math, it's simple logic with history as it's proof. Go figure.
July 23, 2012 2:44pm
Paul Klugman could not have said it better.
July 13, 2012 3:32pm
It is quite easy to compare taxes, debts, and the economic health of a nation by looking at historic taxes and the economic state of the nation.
You'll see that taxes were much higher than they are today, and deficits were much worse, after WWII. With taxes on the wealthiest Americans nearing 95%, somehow they economic elites managed to still amass a pile of money while the US taxed itself out of debt. If we had the same method today as we did after WWII, we'd have long ago failed as a nation economically. After WWII, the wealthiest paid up to 94% over 50% until 1982.
Moreover, Federal tax rates on the top 0.01 wealthiest have declined from about 70% in 1960 to about 35% in 2005, while tax rates for the middle class have remained constant over the same period.
Source: http://elsa.berkeley.edu/~saez/piketty-saezJEP07taxprog.pdf
So I will respectfully disagree--vehemently--with any tax opinion and how it affects the debt and wealth of the United States until one can support his or her opinion with hard facts showing how it is that higher taxes on the wealthiest Americans does more harm to the United States than good--history is not on your side.
July 13, 2012 2:15pm
As usual, the rich and powerful, and their apologists, have a rationale for their madness--at the expense of the 'rest of us.' I still believe in the Common Good and the rich will sorely miss civility and civil order when things fall apart. All of us here who see through the media-circus of our current news and politics need to be rattling the doors of the Senate and the Congress, writing letter after letter, and prepare to rise up when that critical point of no return occurs. It may already be too late.
July 23, 2012 2:48pm
THAT'S WHY we must have the right to bare arms and have guns too!
July 13, 2012 12:50pm
I can understand how the average citizen might take the “shrieking that the sky is falling” as just another ploy by the chronic liars who make up our political class. To people who are ignorant of the gigantic annual deficits and national debt run up by Washington and, more importantly, ignorant of the present value of future government obligations, it is reasonable to understand how they might doubt the Republican rhetoric. But for someone who follows the issues, as apparently Mr. Conason does, it is inexcusable not to understand that the boy crying wolf is correct this time—the wolf really is at the door.
Two very sober academics, Laurence Kotlikoff and Scott Burns, earlier this year released a book entitled The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy. In it they estimate the difference between the present value of federal government expenditures indefinitely into the future and the present value of federal tax receipts indefinitely into the future at $211 trillion dollars. That is, this is the actual deficit between promises made and cash resources to fund those promises.
It is unfortunate the Republicans have been talking about fiscal responsibility for so long and not acting accordingly in either house of congress or that white house down the street. They are as responsible for the fiscal disaster that is heading down the tracks as are the Democrats. But make no mistake, they are accurate in predicting this disaster.
Both parties are responsible for “becoming Greece”. And raising taxes on anyone or everyone is not going to cure this $211 trillion gap. The only way to cure it is to reduce expenses. This is what Greece failed to do. Yes, people should pay their taxes, but the only way you can get people to be “responsible, social taxpayers” is by having a relatively low tax rate and, more importantly, by spending citizen’s money responsibly. Not by spending it like Greece or the U.S.
Mr. Conason should either admit that his calculator is broken or admit that he doesn’t have the mathematical skills to comprehend this problem. To further the ridiculous notion that the sky won’t be falling is the surest way to ensure that it does. The federal government’s spending problem will become a true crisis, and to convince people who don’t have the ability to grasp this concept that there is nothing to worry about is the most irresponsible thing anyone can do. We should expect this from politicians seeking to buy votes to get re-elected, but not from activists of any stripe.
Free Market Underdog
July 23, 2012 2:57pm
You are full of Specht, Joe. We do not have anywhere to cut spending at the personal level. The rich are hiding their wealth while making more than ever on LIBOR cheating. The Banks have trillions stockpiled and are not sharing it. The corporations are raping the environment while making record profits.
The roads are crubbling. The weather is unstable and getting worse every year.
The country is becoming Greece / Italy / Spain / Ireland ... because the money is NOT flowing. Police and Fire in Scranton are being paid minimum wage. That is totally unheard of in history. With Liberty and Justice for All.
July 13, 2012 4:58pm
There is now, nor has there ever been, a "free market." This a chimerical delusion that has been propagated to the advantage of avaricious capitalists for generations. The republicans are NOT concerned about the goddamned deficit. They're concerned about WHO gets the money. The pentagon has LOST over 1.2 TRILLION dollars in the last 20 years. Hey, no worries, lets cut "entitlements" to old people and kids. Reagan, the patron saint of totally discredited "trickle down" ideology, tripled the national debt. Were the "free marketers" throwing a fit? Hell no, because THEY were on the receiving end of the NEW definition of government entitlements, namely "corporate welfare." And who the fuck is talking about "RAISING TAXES?" How about EVERYBODY pays what he/ she /it paid "before" paying for the upkeep of your country became an anathema/religion founded on a oligarchic brainwashing.
July 13, 2012 1:41pm
This isn't solely about Republicans. Clinton and Bush raped the country in succession for almost two decades, deregulating, allowing lobbyists to control Congress and have almost unlimited access to the White House (even renting bedrooms to the filthy rich for campaign donations)...the so called welfare reform did virtually nothing to stop doctor medicaid and medicare fraud, while destroying our nation's safety net and social contract with people facing hard times.
In additions, both Presidents allowed our nation's small businesses to decline dramatically, leaving Main Street empty and blaming it wrongly on Walmart when sending jobs overseas and dramatic real estate hikes pounded ordinary families even before this depression aka recession aka inflationary mess.
People truly do not generally wish to avoid paying taxes unless they are global oligarchs who have no national loyalty, or unless, as most of us including myself do see, we are paying far more out than we are getting in reciprocal benefits even when we need them.
SHAME SHAME on CONGRESS, both sides of the aisle. SHAME SHAME on the MEDIA for focusing on stupid stuff and purveying only group think political correctness.
IMO, if we end up like the Greeks it will be because of these three reasons:
1) We have a vice based criminal enterprise alternative economy that cannot be sustained without enslaving people literally and to addictions; such an economy does not,like virtue, make happiness for the citizenry
2) We have not a strong manufacturing and agricultural base and more and real estate has screwd the pooch
3) We have a damaged national infrastructure that cannot survive any true social catastrophes like the Great Depression, a cyber assault, or other major societal challenge.
July 13, 2012 12:12pm
Flip-flop Romney's gospel, same as the Paul Ryan budget: “save” the nation reducing or eliminating Medicare, Social Security, COLAS, food stamps, school breakfast, Dept of Education, the Post Office, student aid, the SEC, the banking commission, the EPA, and hundred others. Use the savings to reduce the deficits and the Debt? NO: To give big tax breaks to the Romney-likes and corporations. Not enough that he’s made extra $100 million with Bush’s tax cuts the last 12 years. He’ll increase the Debt by tens of trillions and the great deficits will continue. His math makes no sense. He’ll take the 99% and the nation to the cleaners.
July 23, 2012 3:00pm
to Greece
July 13, 2012 11:50am
Senator Graham sounds like one patriotic sonofabitch. He consistently votes to send young men and women to serve in hostile foreign lands, with the distinct possibility of being killed, having legs or arms or both blown off, coming back with traumatic head injuries, enduring PTSD for years, maybe the rest of their lives, facing limited job opportunities and reduced health care, and then extols the virtues of finding any way possible, legally, of course, to avoid paying the taxes the country needs to survive. Whale shit is NOT, the lowest thing on the ocean floor.
July 13, 2012 11:26am
Maybe the way to ensure economic fairness is not by taxation. Progressive taxation has never worked and it may be silly to think it ever could. Them with the gold makes the rules.
Perhaps a better way would be to eliminate taxation altogether and simply cap personal wealth and power with a yearly binding referendum. Let all the people decide how much money-power each citizen and corporation-person should be able to keep without causing harm to the rest of us. Let any excess wealth be given away to whomever the person or corporation decides to give it to until the recipient maxes out their wealth/power cap.
The cap should be placed high enough to keep the profit motive and prevent capital flight, but low enough to prevent extreme concentration of wealth and power. Rich people would realize the "profit" in bettering lives, environment and living standards of all the people directly instead of by obscure corporate market controls that consistently cause more harm than good.
We could all then pay for our infrastructure directly and collectively by local, state, national or international referenda, without depending on politicians and bribery to decide for us.
July 23, 2012 3:02pm
Commie/Socialism at its best!
July 13, 2012 10:34am
It is really sad the 1% aren't happy being filthy rich, they want to destroy country and countrymen to get more. The republicans will do all they can to enable them in their greed. It is all in the open, why aren't we doing something about it?
July 23, 2012 3:14pm
Democrats are fair minded wussies. It took them 75 years to get health care reform.
They/we need to go on the offensive and bash the Republican Right-Wing Nut Jobs at every turn; on every forun; on the beaches; in the sky; in cyberspace.
Tax the rich ( politely ask them for contributions for the greater Good ). Hire teachers, firefighters and police back at fair living wages ( and tax them too ).
Tax the SHIT out of corporations with outsourced jobs until they bring them back.
First two years of college free to all with the payback of two years of community service. Plant trees everywhere. ( Hug the trees and tax the trees to lower the deficit. ) Ban the Republican Filibuster ( Democrat Filibuster is OK, but tax it to decrease the deficit. ) Throw LIBOR bankers in Jail and tax them to decrease the deficit. ( yuo see what I did there? ) 80" LED TV in every living room and Tax it to lower the deficit. We are at war. Spend a few bucks to win the war, but Tax it to lower the deficit!