American Forum Op-Ed

AMERICAN FORUM

By Susan Shaer

As Supreme Court Justice Oliver Wendell Holmes said, “Taxes are the price we pay for a civilized society.” It costs money to make this country hum. Anyone can see that it would be impossible to have roads crisscrossing the country, federal jails and courts, national parks and monuments, environmental protection that has no boundaries, and a whole raft of other essential services without a nationwide system in which we all have a stake.

Right now, our debt, the deficit and the spectacle of a narrowly averted government shutdown have focused attention on federal spending of tax dollars. To that, I say hooray. I hate looking at my own spending budget, but I know what my priorities are, and what money I have to use, save or borrow against. When we examine our personal finances, we recognize our personal values. Such a magnifying glass aimed at the federal budget will expose priorities of our “civilized” society.

So what are our federal values? We have two sides to the spending budget; one non-discretionary (required spending by law or interest on the debt), and the other discretionary. The discretionary side is where our priorities are displayed full frontal. The current budget allows for 56 percent on the Pentagon, wars and nuclear weapons.

Yes, that’s right. Not to confuse the issue, but that 56 percent does not include veterans’ benefits, or the interest we pay on the debt of past wars, or homeland security. We spend a lot on war, war planning, defense, offense, outdated weapons, overspending on weapons systems cost overruns and more.

It brings to mind the old adage: If all you have is a hammer, everything looks like a nail. If we have the “stuff” to make war, we use it. If we shifted priorities, we could spend more on international development to help countries survive and thrive so they might not be ripe for conflagration. If we had plentiful, well-trained and professional conflict resolution teams, we could rely on them more and boots on the ground less.

Our troops do a masterful job. The outpouring of support for what they have handled in Iraq and Afghanistan, and now in Libya, is appropriate. However, many in Congress are saying it’s time to look at the military budget. The Pentagon does not pass audits. Weapons manufacturers routinely have cost overruns that would not be tolerated anywhere else in the budget. Weapons systems made in various congressional districts are reauthorized even if the Pentagon and the Joint Chiefs don’t want them.

As you look at what you pay in federal income taxes, take a few minutes to think of our country’s values in spending your hard-earned dollars. Last year, in a nonpartisan town meeting effort sponsored by America Speaks in 60 cities across the country, 85 percent of all participants wanted defense spending cut by at least 10 percent, with a majority of participants, 51 percent, supporting a 15 percent cut.

We can have the defense we want and need, plus the security of jobs, health care, education and a clean environment by adjusting our spending priorities to meet our values. It’s time.


Shaer is executive director of the national women’s peace and security organization, WAND, Women’s Action for New Directions.

Copyright (C) 2011 by American Forum. 4/11

AMERICAN FORUM

By Frank Knapp, Jr.

Economic reports show that most job growth in our country this year has come from small- and medium-size businesses. That trend will only accelerate, according to the recently released Small Business Index from the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business.

Nearly 3.8 million new jobs will be created by small businesses with fewer than 100 employees in 2011, says the report. That will be enough alone to lower the U.S. unemployment rate by 2.4 percent. The survey, conducted in January, also found that only 2 percent of small businesses planned to lay off workers.

Major health insurance companies nationwide are reporting dramatic increases in small businesses offering health insurance to employees. This reverses a trend for small businesses dropping insurance because of affordability.

This is not what opponents of health-care reform told us would happen if Congress passed the Affordable Care Act (ACA). They warned us strenuously before the ACA became law March 23 of last year that small businesses would not only stop hiring out of fear of the future but would begin laying off workers because of anticipated new taxes, fees and health-insurance mandates under the ACA. Small businesses also were supposed to start dropping health insurance because the ACA would drive up premiums. These dire predictions continued right up until last year’s November elections.

Fortunately, the gloom and doomers were wrong. Those of us who supported the ACA have tried valiantly to put out more realistic predictions about how the ACA was going to help small businesses. There will not be new taxes, fees or health-insurance mandates for small businesses with 50 or fewer employees (approximately 96 percent of all businesses). However, most of the mainstream media preferred to report on the negative tea-reading.

But now the good news for small business is rolling in and the positive future effect of the now 1-year-old ACA is becoming clear.

More than four million U.S. small businesses with fewer than 25 employees are eligible to receive health-insurance tax credits under the ACA. That’s 87.3 percent of all small businesses in the country that the ACA can help by making health insurance more affordable.

As for the ACA dramatically increasing the cost of health insurance, a senior vice president at Harvard Pilgrim says that the federal law has only increased premiums by 1 percent.

The ACA is helping small-business owners who have been locked out of health insurance because of their own pre-existing condition. Right now, these entrepreneurs are eligible for affordable coverage from new high-risk pools established under the ACA.

This year, the ACA is requiring that at least 80 percent of every premium dollar being paid in small group health insurance plans is actually paying for medical costs -- not marketing, CEO salaries or profit. If not, the policyholder is owed a refund.

These benefits for small business are in place now.

Today, small businesses are paying as much as 18 percent higher premiums than big businesses. This is a result of higher administration costs for small groups. In 2014, this extra cost is eliminated, so small-business employees, along with individuals, will be able to purchase their coverage from the new health insurance exchanges in each state.

A small business with only one employee with a pre-existing condition finds itself priced out of the market or paying highly inflated premiums. In 2014, health insurance companies will no longer be allowed to charge higher rates because of pre-existing conditions.

And because no one will be denied health insurance because of a pre-existing condition, aspiring entrepreneurs will no longer be locked into a job because of health-insurance benefits. As a result, ranks of small businesses should expand.

The one year anniversary of the ACA is truly something small businesses should celebrate for what it has already done. The future will be even better.
-----------------------------------------------------------------------
Knapp is president and CEO of The South Carolina Small Business Chamber of Commerce and serves on the steering committee for the American Sustainable Business Council.
-----------------------------------------------------------------------
Copyright (C) 2011 by American Forum. 3/11

GEORGIA FORUM

By Charles H. Kuck

From the perspective of a lifelong Republican, I am always troubled when the State Legislature starts looking at ways to “fix” a problem by getting the government more involved in the lives of its citizens, rather than less involved. That is absolutely the case with the currently pending legislation on immigration. A detailed review of HB 87 and SB 40 reveals that these bills do not reform illegal immigration nor do they enforce laws related to illegal immigration. What they do is increase taxes on every citizen of Georgia by increasing government regulation, create unfunded mandates for every county, city, town, and village in Georgia, and create new private rights of action against every Georgia polity that will result in hundreds of lawsuits that will drain taxpayer coffers and result in little, if any real change on the issue of illegal immigration.

This type of legislation is popular because it gives the perception that the state is doing something, which the federal government is purportedly not doing—enforcing federal laws on illegal immigration. The problem with this notion is two-fold. First, the federal government is doing more than it has EVER done in enforcing the laws on undocumented immigration. The Obama Administration is spending literally billions of taxpayer dollars building fences, hiring border patrol agents, detaining undocumented immigrants and actually deported 400,000 people last year—a record. Second, these proposals do not create any greater degree of enforcement than already exists under current state and federal law.

By September 30, 2013, everyone arrested in Georgia is going to be run through the Secure Communities program, and if they are unlawfully present in the United States they are being held for ICE (Immigration and Customs Enforcement) to pick up within 48 hours.

Without discussing the deleterious details of this program (DWH—Driving While Hispanic), it has resulted in a record number of cases filling our Immigration Court dockets.

So, if these bills do NOT reform immigration, do NOT effectively increase enforcement, and do NOT make Georgia safer, what will they do? They will increase taxes on Georgians, force cities and municipalities to hire previously unnecessary personnel, and make litigation lawyers smile.

These proposals have as their main thrust a desire to make Georgia like Arizona. The bill is designed to make it so hard to live as an undocumented immigrant in Georgia, that such immigrants will leave the state. If this bill accomplishes its purpose it could result in the departure of more than to one million people from the state, along with their tax dollars, investments, talent, and businesses.

There are also at least two provisions which will never be enforced, and which will be struck down as unconstitutional or preempted before they even go into effect, for the same reasons that similar provisions in the Arizona bill were struck down. Provisions dealing with unconstitutional police stops and non-definitions of reasonable cause beg for a judge to overturn this law. The authorizing of private lawsuits against government agencies looks like a lawyer’s full employment act, and business destroying mandates and penalties best dealt with under federal law will simply shut down businesses and cause greater unemployment.

These proposals are bad public policy and bad for Georgia. If our legislators really want to fix the immigration problem they should all take a day and go to Washington, D.C. and demand that Congress fix our immigration system, rather than trying to put a band-aid on a gaping shotgun wound.
------------------------------------------------------------------------------------
Charles H. Kuck is an adjunct professor of Law at the University of Georgia, and a past national president of the American Immigration Lawyers Association.
------------------------------------------------------------------------------------
Copyright (C) 2011 by Georgia Forum. 2/11

AMERICAN FORUM

By Mitchell Gold

As a business owner who has created hundreds of jobs over the past two decades, I understand economic policies that build sustainable growth. Yet the billions in tax cuts for the wealthy just signed into law compromise our shared future.

The promise of “trickle down” economics has failed. When recent studies suggest that 1 in 3 working families are near poverty, it defies common sense that some elected officials have prioritized giveaways to the wealthy. This greed and excess is what got us into the worst economic recession since the Great Depression. It defies good business and core American values to pass this burden on to increasingly vulnerable working families, and to our children and grandchildren. How much more damage to the middle class can the country endure?

It’s clear that our political leaders need to shift course in order to build a healthy economy. We need to put aside the myths and rationalizations that excuse the unprecedented greed the last decade has witnessed. We need to have a basic sense of decency and focus on policies that benefit us all.

It’s pretty simple: when Main Street consumers are doing better, we all do better. Or, as the South Carolina Small Business Chamber of Commerce recently said, “We need customers, not tax breaks.”

I started my business in the difficult 1989 economy and sustained other recessions. I know that it’s the customers that drive economic prosperity. With millions of Americans out of work, giving tax cuts to the wealthiest few is the wrong strategy. At one time I paid more in taxes, because I was making more. This is appropriate, since a strong economy is built upon creating economic gains for all Americans, not just a privileged few.

It takes positive values to build healthy families and communities. When we built our manufacturing plant in North Carolina, we invested in environmentally sustainable practices, built an industry-leading day care center, a health-conscious café, employee gym and responsible health care for our over 600 employees. These were expenses our competitors were not taking on, but we knew that by making up-front investments in our people we would all benefit over the long term.

As a country we have forgotten our own history. Public investments like the GI Bill, the interstate highway system and university research grants have provided the environment where some of the world’s most innovative entrepreneurs had the opportunity to build businesses. That’s what makes America great, not greed.

We must recommit ourselves to the foundation of healthy and prosperous communities where everyone has an equal opportunity to succeed. The anger that excludes or divides us is not what has made America strong. A healthy economy includes all people and helps build a foundation for public spaces, civil discourse, religious freedom and an environment that sustains creativity, innovation and peace.

We now face urgent economic and environmental challenges that will determine our global competitiveness and quality of life for generations. Patriotism comes from a willingness to share responsibility, to support our shared interests and to invest in creating opportunities for all through education, technology and infrastructure.

Politicians risk too much when they focus on short-term wins at the expense of the real needs and interests of so many Americans who want to work, serve their country and live comfortable lives with their families. We must remember this as we look ahead to comprehensive tax code reform, deficit reduction and smart investments in our common future.

The recent failure of leadership, those who have sided with the wealthy people who fund their re-election campaigns is shameful. They have failed true family values and have not responded quickly to the millions of struggling Americans who have lost their jobs or are just getting by. This threatens our shared prosperity. That’s why I joined hundreds of other business people and tens of thousands of individuals in signing petitions against the high-end tax cuts.

As we enter into this New Year we must commit to a healthy economy, where Main Street Americans have jobs and money to spend. This will take investment, not tax cuts. We must put an end to the greed and excess that got us into this economic crisis. It will require sacrifice from each of us and require historic leadership with integrity. If our political leaders don’t understand that, then it’s time we find some who do.
------------------------------------------------------------------------------------
Gold is co-founder of Mitchell Gold + Bob Williams, a $100 million home-furnishings brand he and business partner Bob Williams started in 1989 with an investment of $60,000. He is a member of Wealth For Common Good and founder of Faith In America.
------------------------------------------------------------------------------------
Copyright (C) 2010 by the American Forum. 1/11

Randy Albelda

MASSACHUSETTS FORUM

By Paul Egerman and Randy Albelda

With unemployment close to 10 percent, Congress needs to focus on creating jobs and strengthening our economy. More than ever, our country cannot afford policies that would waste resources needed for job-creating initiatives in the short run and that would increase deficits in the long run.

That’s exactly what extending hundreds of billions of dollars in tax cuts for our highest-income residents would do.

One of us has built prosperous businesses and the other is a public finance economist. From our different perspectives we have learned the same thing: businesses create jobs when people want, and are able, to buy their products.

Paul Egerman

Tax cuts for the wealthy tend primarily to increase their wealth – not their spending in the economy. To increase spending and create demand in the private sector, government needs to put money into the hands of lower- and middle-income families who are struggling to get by and will spend any new income to keep their families afloat.

That’s why economists have consistently found that tax cuts for high-income people are a far less effective means of creating jobs than are tax cuts for lower- and middle-income families, extended unemployment benefits, and direct investment in services like education, health care, and public safety, which lead to direct hiring and put money into the hands of working people who will spend it in the local economy.

With Congress likely to act in the next weeks on the expiring Bush-era tax cuts, there is widespread support for extending the middle-class tax cuts. The debate will focus on whether to extend tax cuts for the highest-earning two percent of Americans – those with adjusted gross income above $200,000 for single filers and $250,000 for married couples.
There is a strong business and economic case for letting these higher-income tax cuts expire.

The bulk of these poorly targeted tax cuts will go to households with incomes above $1 million – resulting in average annual tax cuts for these households of over $100,000, about twice what the typical American household earns in a year.

Most small businesses aren't owned by people in the top-income brackets -- they don’t make enough taxable income ($250,000 a year) to pay the higher tax rates. Only the top 3 percent of people with business income of any kind, let alone income from what most Americans think of as “small businesses,” would be affected. Moreover, high-income households will benefit from extension of the middle-income rate reductions, because a portion of high-income filers’ total income falls within the tax brackets affected by the middle-class tax cuts.

The $40 billion in revenue next year (and some $90 billion over two years) generated by letting the high-end tax cuts expire could be used for a temporary tax credit to spur small-business job creation, or to provide additional aid to the states, and would do much more to generate economic growth and create jobs. Targeted provisions for working families through the Child Tax Credit and the Earned Income Tax Credit also have helped prop up consumer spending and should be extended.

In the long run, terminating the top-end tax cuts will produce substantial deficit reduction once the economy has recovered. If Congress allows the tax cuts targeted at America’s highest-income households to expire, it would reduce both the deficit and debt over the next decade by $1 trillion, improving the nation’s long-term fiscal outlook.

The US currently is experiencing the effects of the worst economic downturn since the Great Depression; reviving the economy and putting people back to work as soon as possible will place the US in a better position to address our deficits and debt in the years ahead. Cutting taxes for the very wealthy will not help the nation as much as keeping teachers and police officers employed, investing in our schools, transportation systems and other infrastructure, and using our resources to help those who need it most.
-------------------------------------------------------------------------------------------------------
Egerman is a businessman and software entrepreneur, co-founder of eScription, Inc., based in Needham, Massachusetts, and is now a member of U.S. DHHS Health Information Technology (HIT) Policy Committee. Albelda is a Professor of Economics and Senior Research Fellow at the Center for Social Policy at Univ. of Massachusetts Boston.
-------------------------------------------------------------------------------------------------------
Copyright (C) 2010 by Massachusetts Forum. 12/10

AMERICAN FORUM

By Sally Jones

“Cut My Taxes!” Americans have heard this cry for years -- and we’ve heard it shouted angrily in recent months. We hear that we pay too much in taxes, that government makes poor use of our money, and that our prosperity would rise if only taxes would fall.

But in reality our taxes have fallen steadily in recent years. In 2001 and 2003 Congress passed temporary tax cuts which will expire at the end of 2010. We must now decide what good or bad has come of that experiment and what tax law we want for the future.

Most of us recognize that one size doesn’t really fit all -- and this holds true for income tax rates. Maintaining a lower level of taxation for the vast majority of Americans makes sense in today’s hard times. But why should we do the same for the tiny percentage of citizens -- a minority to which I gratefully belong -- whose annual earnings exceed $250,000? The American people borrowed $700 billion to give people like me a tax cut over the last decade. Why should they borrow an additional $700 billion to extend the tax breaks?

Congress should let our tax cuts expire for the sake of the country, especially in this economy. Who would lose by this step toward tax fairness? Only those among us who can afford such a loss. Who would gain? All Americans -- including those few of us who would pay more taxes.

We cannot sustain our nation -- not its defense; not its essential infrastructure such as roads, rails, bridges, dams and communications; not its economic place in the world; not the health and education of its people; not its ability to respond to natural disasters such as earthquake, flood or hurricane; not the protections we expect it to provide against man-made disasters, toxins (domestic and imported), buccaneering corporations or hazardous products -- without securing for our government the funding it must have to accomplish all of these things.

Recognizing our shared responsibility -- in the present instance by payment of taxes -- we might live up to the example of earlier generations who left for us a remarkable system of institutions and infrastructure. By abandoning that responsibility, we would betray both our predecessors and our descendants, and we would gain nothing but a temporary self-indulgence, at a price that will impose itself on present and future generations.

Do we bear any collective responsibility? I think so. Consider the example of the season.

On Thanksgiving Day most of us will gather with family or friends or both. We will sit down to tables crowded with the various dishes that speak to us of this special occasion, and indulge ourselves more than we usually do. However much or little else we feel thankful for on that day, we will heartily thank the one or more cooks who toiled in the kitchen to prepare this dinner for us.

We thank the cooks because we have seen their effort first hand. But how many others have contributed to make our feasts possible -- others whom we never think about or credit? Who taught our cooks their skills or created our recipes? Who grew, harvested, preserved or transported the foods? Who built our ovens, plumbed our kitchens, and made our utensils, dishes and tables?

Those of us with high incomes ought to ask similar questions about the plenty we enjoy daily. We could hardly enjoy our success without assistance we hardly notice: the infrastructure that allows businesses to grow and prosper, the law enforcement that protect patents and copyrights, and the productiveness and purchasing power of publicly-educated fellow citizens. Without national investments – supported by our taxes – no wealth would be sustained in this country and those at the top would not have the extraordinary lives they have today. Let us remember to be grateful.

Let’s make sure those outside of the top two percent of Americans can live and thrive. Unless we foster prosperity for our country and for every citizen, all of us will suffer the consequences of living in a society of the ailing, the untrained and inefficient, and the unruly. Let’s pay the taxes -- those of us who can afford them -- to sustain the America that has offered opportunity since its founding. Unless we restore strength to its economy, institutions, and structures, our country will decline - and everyone’s prospects with it.
--------------------------------------------------------------------------
Jones is a member of a high-income household in Minneapolis who supports Wealth For The Common Good and its goal of promoting shared prosperity and fair taxation.
--------------------------------------------------------------------------
Copyright (C) 2010 by American Forum. 11/10

AMERICAN FORUM

By Frank Knapp

Whether Americans voted for Republicans or Democrats in the mid-term election, one thing is clear: Voters were demanding that Congress focus intensively on job creation on Main Street -- not lobbyists and campaign donors from big business and Wall Street.

Apparently, many in Congress and President Obama, if recent reports are true, either didn't get the message or simply don't care now that the voting is over.

The top legislative priority of the newly "Tea Party-empowered" during the lame duck session is hardly what Tea Party insurgents had in mind. The proposal is to (1) increase the national debt by borrowing $700 billion to $1 trillion over the next 10 years; (2) spend the money on big, non-job producing tax cuts for the wealthiest 2 percent of Americans; (3) use small business as the excuse.

This bad-business proposal is now being pushed in Congress and the media by those advocating extending the Bush-era tax cuts to the top two income brackets. While proponents acknowledge that less than 3 percent of the taxpayers who would receive the tax cuts actually have some business income, they insist that these approximately 900,000 taxpayers are the very successful small business owners who will stop hiring and purchasing if they don't get their tax cut. Wrong, wrong, wrong.

First, almost all real small business owners are middle-class Americans with middle-class incomes. Walk down any Main Street and you won't find small business owners netting over $250,000 a year in profit (dollars remaining after the cost of employee wages and other business expenses are deducted from taxable income).

These middle-income, Main Street small businesses are the ones we really need to help create the new jobs to lift us out of this down economy. There is absolutely no evidence that the wealthiest small business owners create more jobs than those in any other tax brackets. As any small business owner knows, the number of employees does not correlate with profit.

So who are these mysterious high-income "small business" taxpayers in the top two brackets who Congress is considering borrowing hundreds of billions from foreign countries in order to give a tax cut?

Very few of them are what most would consider small business owners. They include partners in large corporate law firms, hedge fund managers, K Street lobbyists, high-powered consultants, Wall Street bond traders and the country's wealthiest
millionaires -- all of whom claim some business income and thus are counted in IRS eyes as small businesses. These aren't "mom and pop" businesses, says Adam Looney, senior fellow at the Brookings Institution.

Not only are the vast majority of these 900,000 "faux" small business taxpayers not involved in job hiring decisions, the tax cut won't even cause them to significantly increase their personal spending to create the demand for new jobs.

The non-partisan Congressional Budget Office (CBO) evaluated 11 policy options in terms of boosting economic growth and creating jobs. It found that "policies that would temporarily increase the after-tax income of people with relatively high income...would have smaller effects because such tax cuts would probably not affect the recipients' spending significantly."

The wealthiest Americans are more likely to save their money from a tax cut rather than spend it, according to Moody's Analytics, Inc.

If we really want to give a tax cut that will create jobs, then we could cut employer payroll taxes on businesses that actually increase their workforce. The CBO estimates this would have six to eight times as much job-creating impact as an income tax cut. The policy the CBO found with the biggest bang for the buck is extending unemployment insurance. It would boost demand by providing income to people most needing to spend it in the local economy.

Alternatively we could create more customers for our small businesses through infrastructure projects, many of them long overdue upkeep or modernization, or keeping teachers and law enforcement officers working rather than laid off. The policy the CBO found with the biggest bang for the buck is extending unemployment insurance -- a direct infusion of money into local economies by people buying for their basic needs.

Increasing the nation's deficit while not saving or creating jobs is just more politics as usual in Washington where those with the most money get rewarded with even more money.

Congress needs to hear this loud and clear. These high-end tax cuts serve K Street lobbyists not Main Street shop owners. Politicians should not use us to justify a very bad business decision.

-----------------------------------------------------------------------
Knapp is President and CEO of the South Carolina Small Business Chamber of Commerce.
-----------------------------------------------------------------------
Copyright (C) 2010 by American Forum. 11/2010

MINNESOTA EDITORIAL FORUM

By Beverly Caruso

There’s heated debate over whether to extend the Bush-era tax cuts for families with incomes over $250,000.We’re hearing the argument that letting the high-end tax cuts expire will hurt business. Yet I’ve seen first-hand how well-designed tax policy is critical for spurring innovation and business development. It plays a very different role than the anti-tax crowd leads us to believe.

CyberOptics, a leading high-tech company in the area of electronic inspection, was founded by my husband, Steve Case, in 1984, and now employs 180 people in Minnesota and around the globe. How this business came about tells a very different story about the role of our tax dollars – and the public investments they support - in job creation. This is an important story to tell if we want to recreate the fertile ground that allows new companies to start up and become successful, sustainable job creators.

Steve was a physicist and entrepreneur, whose education was financed totally by National Science Foundation grants and scholarships. Later, as a young professor he would again gain our government’s support through a Fulbright Scholarship. The scholarship led us to Germany where Steve deepened his scientific knowledge and met executives in Europe who would become major clients of his new business. Steve always said that fellowship year had a profound impact on his creativity, confidence, and skills. As a professor at the University of Minnesota, his partnership with a government contractor made it possible to conceive of and establish CyberOptics.

Every step of the way, programs funded by our tax dollars paved the way for Steve and CyberOptics’ success. The return on our tax dollars through these investments has been high.

While it’s easy to think that companies like Google and Sun Microsystems are the result of one or two people with the intelligence, creativity, and entrepreneurial spirit to take a risk and win big, the truth is more complex.

Like CyberOptics, these businesses rely on the court systems that enforce patent and copyright laws, roads, railroads and bridges that bring raw materials and deliver finished product, as well as the research and development grants to institutions of higher education, the high-quality primary and secondary public schools that educated generations of American students, and the grants and scholarships to those students during college and graduate school.

I would argue that the reason the United States has been so economically successful since the 1940s, is the combination of regulated capital markets and thoughtful, well-funded public institutions and structures. Steve’s story, like the story of so many American entrepreneurs, illuminates the role that public investment and public institutions play in creating the small companies that are the job engines we so desperately need.

Our country’s problems are large and complex, and we must attend to them now and cease putting them off. According to a report by Wealth for the Common Good, between 2001-2008, tax cuts for the wealthy cost the U.S. Treasury $700 billion, directly adding to the national debt. Retaining these tax cuts will likely cost another $700 billion over the next decade.

One thing we can do is to tell Congress to let the Bush-era tax cuts on the wealthy expire this year. The rise in incremental tax rates on people like me would be modest but the $700 billion in savings over 10 years would be a wonderful investment in the next generation. For those who have benefited enormously from our country’s investment, it’s time to share that opportunity with others. Letting tax cuts for the wealthy expire at the end of 2010 is a good and necessary first step.
-------------------------------------------------------------------------------------------------------------
Caruso is a psychotherapist, community volunteer and civic leader in the Twin Cities. Her late husband, Dr. Steven Case, is the founder of CyberOptics, a high tech firm in Minnesota. Dr. Case was killed in a plane crash in June 2009.
-------------------------------------------------------------------------------------------------------------
Copyright © 2010 by Minnesota Editorial Forum. 10/10

AMERICAN FORUM

By Peter Heegaard

Congress should do the responsible thing and let tax cuts for high earners expire at the end of this year.

As someone who has benefited from these tax cuts, I believe we must restore balance to a federal tax system that has been tilted in favor of the wealthiest 5 percent for a generation.

I’ve had a lifelong interest in the vital role of social entrepreneurs, the local heroes who take risks to lead innovative nonprofit organizations to solve problems at the local level.

I’m a big believer in the importance of mentorship, of helping the next generation of business and community leaders find their way.

But I also view efficient government and adequate tax revenue as essential ingredients in a fostering the fertile soil for business development and healthy communities. Just as a healthy farm or garden needs a balance of nutrients, our country needs a balanced and fair tax system.

Yet the overheated anti-tax rhetoric is alarming. There are loud voices that will object to any tax and claim that raising taxes on higher income people will destroy economic growth and punish success. They argue that we don’t need additional revenue, that we can simply reform entitlements, cut spending and root out waste.

We should obviously press for greater government efficiency and accountability. But it is irresponsible to suggest that we can proceed without increasing tax revenue. No gardener or farmer would expect their crops to grow year after year without regular additions of fertilizer.

We have racked up over $13 trillion in national debt, thanks to borrowing to pay for two wars and a decade of tax cuts. Yet, we have long overdue investments in education, reducing our dependence on foreign oil, and public infrastructure, such as roads, bridges, broadband access, and market protections. Where will the money come from?

Generous tax cuts for the wealthy, passed by Congress in 2001 and 2003, are due to expire at the end of this year. Between 2002 and 2009, households with incomes of over $250,000 received more than $700 billion in tax cuts, according to the Center on Budget and Policy Priorities. This was essentially added to our national debt.

The higher income people I know didn’t lobby for these original tax breaks and recognize the need to allow them to expire. If we retain these tax cuts, we’ll add another $700 billion to the debt over the next decade. These are funds better spent in deficit reduction and targeted investments.

The retired business leaders I serve with on community boards are thankful for the opportunities we’ve had to do business and grow wealth in this remarkable nation and free market economic system. None of us exist on an island and no wealth can be created without a society that provides a fertile ground of opportunity for everyone.

In the 30 years after World War II, 1947 to 1977, we taxed ourselves at significantly more progressive tax rates than today. The highest earners paid twice as much of their income in taxes in 1960 as they do today, according to a new study by Wealth for the Common Good. With that money we made investments in public infrastructure, affordable homeownership and expanded education at all levels. These far-sighted leaders supported policies that propelled millions of Americans into the stable middle class.

Today, young people are graduating from college with $100,000 in school debt, as undergraduates. We’re coasting along on previous generations’ investments in water treatment facilities, bridges and other essential infrastructure -- and we’re leaving too many talented young people behind. Our failure to make investments today will undercut prosperity for the next generation.

Congress will be under tremendous pressure to continue providing tax breaks to high income groups. Let’s hope they have the fortitude to let mine expire. The fertility of our economic soil depends on it.
-------------------------------------------------------------------------------------------------------------
Heegaard is retired from banking and a former Managing Principal of Lowry Hill, a subsidiary of Wells Fargo. He is founder of Urban Adventure and author of “Heroes Among Us: Social Entrepreneurs Strengthening Families and Building Community” (Nodin Press).
-------------------------------------------------------------------------------------------------------------
Copyright (C) 2010 by the American Forum. 10/10

AMERICAN FORUM

By Rick Poore

A good friend and fellow businessman once told me, “Give me more customers and I’ll be forced to buy equipment and hire people to meet demand. Give me a tax break without more customers and I’ll just go to Aruba.”

Ending the Bush tax cuts for the wealthiest taxpayers is the right thing to do for small businesses. I’ll say that again: it’s the right move for small business. Let me explain.
I consider myself an example of an average small business owner in Nebraska. I have 30 employees. My business does $2 million plus in annual sales. My personal income as the owner is less than $85,000 a year.

It’s a comfortable living, but ending the Bush-era cuts on the top two brackets won’t come close to impacting me. And it won’t impact the other small business owners I know, either. The top brackets won’t kick in until your taxable income is over $200,000/year for individuals and $250,000/year for couples, and they’ll only apply to the portion of your income above those amounts, not below them. Less than 3 percent of taxpayers reporting any business income (not limited to small business income) earn enough to break into the top two brackets.

But that’s not all. That 3 percent figure includes Wall Street hedge fund managers and K Street lobbyists whose income is reported as business income on their personal tax returns. Not exactly what you’d think of as small businesses, or our nation’s job creators.

Last time I checked, Wall Street types and their K Street friends had driven the economy into a ditch the size of the Grand Canyon and killed over 8 million jobs. Do they really deserve another tax giveaway to reward their efforts?

The idea that ending the Bush cuts for the top brackets will hamper small businesses’ ability to reinvest is a complete red herring. Any true small business that ends up with more than $250,000 net profit flowing through to the owner at the end of the year needs to hire a better accountant and rethink its business plan.

Let’s use me as an example. I gross a lot in sales, sure, but I’m busy reinvesting that money back into my business – buying equipment, promoting my business and hiring more workers. The dollars I reinvest don’t pass through onto my personal tax return so I don’t care if that rate changes a little bit, and neither do the millions of other true small business owners in this country.

Despite all this, some politicians continue to recycle the tired old myth that a small change in the top brackets will hurt business owners’ ability to reinvest in our businesses. There are two possible explanations for this.

First, these politicians have never been close enough to a small business to learn how our taxes actually work. We’ll call that an accidental sin of ignorance. A simple cure is to get out and meet some small business owners in their home states and hear about our day-to-day operations.

Second, some politicians are playing fast and loose with the facts. They know better, but they just don’t care. That’s intellectual dishonesty – a different kind of sin. Not much I can do to help there.

The bottom line is small businesses don’t need another tax giveaway. What we need are policies that restore our customer base by getting people back to work in our communities and putting money in their pockets to spend in our businesses.

Ending the high-end tax cuts would free up close to $40 billion in 2011 and $700 billion over the next 10 years to invest in job creation and rebuild our customer base. That’s what small businesses really need.
-------------------------------------------------------------------------------------------------------------
Poore is owner of Design Wear, Inc., a custom screenprinting business with 30 employees in Lincoln, Nebraska. He serves on the steering committee of the Nebraska Main Street Alliance.
-------------------------------------------------------------------------------------------------------------
Copyright (C) 2010 by American Forum. 10/10

MINNESOTA EDITORIAL FORUM

By Dan McGrath

Given the dire unemployment crisis, it shouldn’t come as a surprise that new Census Bureau data reveal that a record number of people struggled with poverty last year in the United States.

What may be more striking, however, is just how many of the poor were employed. Recently released state and local poverty data reveal that more than half of the Minnesotans who were below the poverty level were employed during 2009. More than 31,000 of our neighbors who worked full-time for the entire year were still officially poor. Too many jobs in our state pay workers poverty wages and are failing to provide a path to economic recovery for Main Street.

The ranks of the working poor are even larger when we look at the number of working Minnesotans who are working fulltime but are making less than twice the poverty line -- a measure many economists use because the official poverty line is based on an outdated 1960’s formula and considered woefully inadequate. Using this yardstick, a shocking one in 10 workers in our state who worked full-time for the entirety of 2009 was still in poverty.

Individuals in our state who have a job and are working hard still cannot escape poverty because wages are painfully low. Most minimum wage earners in our state make the federal minimum of $7.25 an hour or, roughly $15,000 a year for full-time employment. It's no wonder workers can't make ends meet even when they are fortunate enough to have a job.

According to an analysis by the Economic Policy Institute, roughly 50,000 workers earn the minimum wage in Minnesota. An increase in the wage floor would help these individuals directly as well as thousands more low-wage workers who would see their paychecks rise as employers adjust wages to preserve wage scales.

Raising the minimum wage would not only help working families afford basic essentials, it would also give the economy a boost. Consumer spending, which drives 70 percent of the economy, has stagnated. A modest increase in the minimum wage would put money in the hands of people who will purchase goods and services, drive up demand, and spur companies to increase production and hire more workers.

While the refrain to get America back on track has been "jobs, jobs, jobs," what we really need to be calling for are "good jobs, good jobs, good jobs." A recent analysis by the National Employment Law Project finds that the jobs that have been created in the private sector this year have been concentrated in low-wage and mid-wage industries. The jobs in high-wage industries that were lost in the downturn have yet to begin to register net gains.

If this trend continues, more and more of us will be working for less. According to the Bureau of Labor Statistics, seven of the 10 occupations expected to have the most job growth from 2008 to 2018 are low-wage jobs such as food preparation and customer service. If we do not act, a large and growing segment of the population will be rewarded for their work with poverty wages.

But leaders in Minnesota have the capacity to raise wages to help improve incomes and boost the economy. Fourteen states and the District of Columbia have already raised their minimum wages above the federal level. Washington State leads the way with a minimum wage of $8.55 an hour, followed by Oregon at $8.40. Minnesota should join the ranks of these state leaders by raising and indexing our minimum wage in the 2011 legislative session. A job should once again be the best means for hardworking Minnesotans to escape from poverty.
-------------------------------------------------------------------------------
McGrath is executive director of TakeAction Minnesota.
-------------------------------------------------------------------------------
Copyright © 2010 by the Minnesota Editorial Forum. 10/10