Borosage, who is also co-director of the Campaign for America’s Future, discusses taxes, the Occupy Wall Street movement and the problem with the term “working poor.”
Institute for America’s Future founder Robert Borosage
Tavis: Robert Borosage is the founder and president of the Institute for America’s Future, who served as an advisor to the campaign of Jesse Jackson back in 1988. He’s also a contributor for Politico.com and focused his latest piece on the various GOP tax plans. He joins us tonight from Washington. Robert, good to have you on this program, sir.
Robert Borosage: My pleasure.
Tavis: I want to go right to that Politico piece that you wrote on October 24th and put a particular line up on the screen, and I quote: “Taxing the working poor is at best an ineffective distraction from the fundamental challenge the country faces.
Our problem isn’t that working people get too much from government and pay too little, it’s that income inequalities have now reached extremes destructive to both our economy and our democracy,” close quote.
I want to come to that as a starting place, Robert, in part because there are a number of words, a number of terms, I absolutely hate, and I know what you’re getting at here. But I want to start with language. Why is it that we use terms like “jobless recovery” and “working poor”? If you work, you ought not to be poor.
So how much of what’s wrong with our discourse about the poor starts with the language that we use when talking about poor people?
Borosage: Well, I think it’s important for people to understand that we have a significant number of jobs in this country that pay very little, have no benefits, have no security and really make it almost impossible for a wage-earner to lift their family out of poverty. Those are the working poor.
Tavis: I wonder, though, whether or not because that phrase — again, working poor and jobless recovery — because those phrases just roll off our lips with ease these days, I wonder whether or not it becomes a rather self-fulfilling prophecy.
Again, if you work in this country you ought not to be poor, and the fact that part of our American political lexicon uses phrases like working poor — and I’m not casting aspersion on you. I’m just trying to get at what it is in our culture that allows us to even accept those kinds of terms and those kinds of definitions in the debate.
Borosage: Well, I agree with your premise that no one who works full-time should be poor. They ought to be able to support a family and to lift them out of the state of poverty just by the virtue of their work, and a system that doesn’t allow that is deeply flawed.
I do think, however, that spreading poverty is one of the grotesque realities of this current moment, and too many people in Washington don’t even use the term, “poverty.” The poor have sort of been ruled off the table. Everybody talks about the middle class —
Borosage: — and a sinking middle class, which is also true. I think it’s important that we not lose sight of the fact that we’re also — not only is the middle class sinking, but poverty is spreading.
Tavis: If the new poor are, to your point now, the former middle class, maybe that conversation is about to turn in this presidential campaign season, maybe not. You tell me.
Borosage: Well, I do think that the movement, occupation Wall Street, has posed this question to America in the sense of saying there’s 1 percent that have been capturing all of the rewards of growth in this society for more than a decade while the rest of the 99 percent have been sinking and poverty is spreading.
I think they have, with their demonstration on Wall Street, forced campaigns across the political spectrum to now start to deal with this question in a way that they were ignoring before.
So if you look at the Republican tax plans, which is how we started, these are all plans that are basically reverse Robin Hood plans. They are designed to take from the poor in terms of cuts in social services and give to the rich in terms of deep cuts in their taxes, at a time when we have the most extreme inequality we’ve seen in concentrated wealth since before the Great Depression.
Tavis: How are any of these plans, Robert, different from what’s happening in Washington even as we speak?
Borosage: Well, they’re worse. Take Rick Perry’s plan that he just put out. Perry says about Washington that America is being crushed under a burden of deficits and debt, and then the first thing he does in his tax plan is he eliminates taxes on wealth.
He eliminates the estate tax, which applies only to multimillion-dollar estates, he eliminates taxes on capital gains, interest and dividends for the wealthy. So if you’re Warren Buffett and you were worried that you were paying a lower tax rate than your secretary because you have all of your money coming from investments from wealth, under Perry’s plan your tax rate’s headed towards zero.
In order to pay for these extraordinary tax cuts on the top end, about $5 trillion worth over five years, he has to cut the size of government by a quarter, by his own figures, and that means deep cuts in Social Security, dismantling Medicare, turning Medicaid over to the states and cutting the grants significantly. Deep cuts in the basic promises we make to working Americans about their retirement.
Tavis: Since you’ve deconstructed Rick Perry’s plan, top line for me Mitt Romney’s plan, as you see it.
Borosage: Romney’s plan is in the same mode, but not as bad. That is he eliminates the estate tax, which will help people like him and his heirs. He eliminates capital gains tax cuts, but only for people under $200,000. He reduces the corporate tax rate and he reduces the top-end tax rate, and he says he wants a flatter tax that applies to more people.
What that means is he wants more and more of low-income people to pay a higher income tax. So his tax reforms are regressive, they’re just not as extreme as Perry’s.
Tavis: As has been said, if you take Herman Cain’s 999 plan, turn it upside-down, you get triple sixes and the devil is always in the details. How bad are the details?
Borosage: Well, his is the worst. Cain applies a 9 percent income tax to everyone, so that people who now are in the lower part of the income spectrum and don’t pay income taxes will now have to pay 9 percent income taxes, and then he adds on top of that a 9 percent national sales tax on top of state and local sales taxes.
Those are the most difficult taxes for the low-income people and middle-income people, because they spend more of their income on necessities. So you’ll be paying an extra 9 percent for every bottle of milk, an extra 9 percent for every item of food. If you’re a low-income worker, the Cain plan does really the worst damage to you in terms of your economic situation.
Tavis: There was a front page story on “The New York Times” the other day that I haven’t seen a whole lot of conversation about; left column, as I recall. But it was fascinating for me, and I think it connects nicely to this conversation so I want to get your take, Robert, on what you make of it.
So “The New York Times” broke this story some days ago that relative to fundraising on Wall Street specifically, Mr. Romney is out-raising President Obama four or five times. I don’t know what the numbers are today, but just a few days ago when the story broke Romney was up four or five times in fundraising over President Obama with regard to getting money from Wall Street.
What do you make of what those numbers mean relative to this debate about the poor, about Wall Street making ever more money, about them sitting on a trillion dollars they will not reinvest in the economy.
What do you make of the numbers now that indicate that if Romney is the nominee he’s going to swamp the president in raising money from Wall Street when the president hasn’t been the meanest guy to these Wall Street barons in the first place?
Borosage: Well, there’s no question that a lot of Wall Street donors are looking for Republican candidates, conservative candidates, who’s the best bet to take on President Obama. The actual article in the “Times,” however, was misleading, because Obama has raised a ton of money for the DNC from Wall Street, and the total from his campaign and what he’s raised through the DNC is probably as much or greater than what Romney’s raised to date.
But Romney’s not the nominee yet. Once he’s the nominee, if he is, or whomever the Republican nominee is, there’s no question that a lot of Wall Street money is going to flow that way.
But the real thing is what Senator Durbin said some months ago in the middle of the finance reform debate, which is basically these banks buy into both parties. They own the joint, as Durbin put it, and our problem as a society is we’ve now allowed, through financial deregulation and concentration, a kind of financialization of our economy that now is having really disastrous effects on our ability to manufacture here, our ability to sustain a middle class, our ability to ensure that the strength of the democracy, which is a broad middle class, is sustained, and that is now not happening.
The wealth is being concentrated, and income, at the top end. The levels are far more extreme, I think, than people realize. The top 1 percent in America now makes as much income every year as the bottom 60 percent of Americans — as the majority of Americans make — and they hold as much wealth as 90 percent of Americans.
When you have that kind of concentration of income and wealth the economy doesn’t work very well. Corporations go without customers and the people on the top end have excess cash and wealth that they use in speculative, casino-like gambling, and that’s very destabilizing, as we discovered two years ago when Wall Street blew up the economy.
Tavis: My time, Robert, is up, unfortunately. I would take it even a step further. It’s not just that our economy is challenged by those kinds of numbers. I think ultimately, democracy, as we know it. Now, some might call that hyperbolic; I think not. I think democracy, as we know it.
A democracy can’t sustain itself long-term with the kind of numbers you’ve just laid out, so it’s not just an economic bind that we find ourselves in. I think democracy, quite frankly, is at stake. But I digress on that issue.
Robert Borosage, good to have you on the program. Thanks for sharing your insights.
Borosage: My pleasure.
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