Tag Archives: taxes

Unauthorized Immigrants Paid $100 Billion Into Social Security Over Last Decade

Unauthorized Immigrants Paid $100 Billion Into Social Security Over Last Decade

By Roy Germano

August 4, 2014 | 1:50 pm

“Unauthorized workers are paying an estimated $13 billion a year in social security taxes and only getting around $1 billion back, according to a senior government statistician.

Stephen Goss, the chief actuary of the Social Security Administration (SSA), told VICE News that an estimated 7 million people are currently working in the US illegally. Of those, he estimates that about 3.1 million are using fake or expired social security numbers, yet also paying automatic payroll taxes. Goss believes that these workers pay an annual net contribution of $12 billion to the Social Security Trust Fund.

The SSA estimates that unauthorized workers have paid a whopping $100 billion into the fund over the past decade. Yet as these people are in the US illegally, it is unlikely that they will be able to benefit from their contributions later in life.

In the latest episode of Immigrant America, VICE News documented how most US dairy farms depend on the labor of unauthorized workers, as they simply can’t find enough Americans and don’t have a way of hiring foreign workers legally

Farmers claim that they’re following the law the best they can under the circumstances. Michael, a farm owner who asked for his last name to be withheld, argued that his unauthorized employees don’t get a free ride. He told VICE News that they pay taxes and are hired in accordance with the government’s I-9 requirement.

Unauthorized workers usually demonstrate their employment eligibility with fake IDs and fake social security numbers. Once hired, these “questionably documented” workers, as Michael calls them, end up on the payroll and have taxes automatically taken out of their checks, like any other employee. That money then goes to the federal treasury to fund programs like Social Security and Medicare.

You can read more about the SSA estimates of the unauthorized population’s contributions to the trust fund here.”

Leave a comment

Filed under Spotlights

An Idiot’s Guide to Inequality

An Idiot’s Guide to Inequality

JULY 23, 2014

Nicholas Kristof

“We may now have a new “most unread best seller of all time.”

Data from Amazon Kindles suggests that that honor may go to Thomas Piketty’s “Capital in the Twenty-First Century,” which reached No. 1 on the best-seller list this year. Jordan Ellenberg, a professor of mathematics at the University of Wisconsin, Madison, wrote in The Wall Street Journal that Piketty’s book seems to eclipse its rivals in losing readers: All five of the passages that readers on Kindle have highlighted most are in the first 26 pages of a tome that runs 685 pages.

The rush to purchase Piketty’s book suggested that Americans must have wanted to understand inequality. The apparent rush to put it down suggests that, well, we’re human.

So let me satisfy this demand with my own “Idiot’s Guide to Inequality.” Here are five points:

First, economic inequality has worsened significantly in the United States and some other countries. The richest 1 percent in the United States now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own half of all wealth.

The situation might be tolerable if a rising tide were lifting all boats. But it’s lifting mostly the yachts. In 2010, 93 percent of the additional income created in America went to the top 1 percent.

Second, inequality in America is destabilizing. Some inequality is essential to create incentives, but we seem to have reached the point where inequality actually becomes an impediment to economic growth.

Certainly, the nation grew more quickly in periods when we were more equal, including in the golden decades after World War II when growth was strong and inequality actually diminished. Likewise, a major research paperfrom the International Monetary Fund in April found that more equitable societies tend to enjoy more rapid economic growth.

Indeed, even Lloyd Blankfein, the chief executive of Goldman Sachs, warns that “too much … has gone to too few” and that inequality in America is now “very destabilizing.”

Inequality causes problems by creating fissures in societies, leaving those at the bottom feeling marginalized or disenfranchised. That has been a classic problem in “banana republic” countries in Latin America, and the United States now has a Gini coefficient (a standard measure of inequality) approaching some traditionally poor and dysfunctional Latin countries.

Third, disparities reflect not just the invisible hand of the market but also manipulation of markets. Joseph Stiglitz, the Nobel Prize-winning economist, wrote a terrific book two years ago, “The Price of Inequality,” which is a shorter and easier read than Piketty’s book. In it, he notes: “Much of America’s inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others.”

For example, financiers are wealthy partly because they’re highly educated and hardworking — and also because they’ve successfully lobbied for the carried interest tax loophole that lets their pay be taxed at much lower rates than other people’s.

Likewise, if you’re a pharmaceutical executive, one way to create profits is to generate new products. Another is to lobby Congress to bar the government’s Medicare program from bargaining for drug prices. That amounts to a $50 billion annual gift to pharmaceutical companies.

Fourth, inequality doesn’t necessarily even benefit the rich as much as we think. At some point, extra incomes don’t go to sate desires but to attempt to buy status through “positional goods” — like the hottest car on the block.

The problem is that there can only be one hottest car on the block. So the lawyer who buys a Porsche is foiled by the C.E.O. who buys a Ferrari, who in turn is foiled by the hedge fund manager who buys a Lamborghini. This arms race leaves these desires unsated; there’s still only one at the top of the heap.

Fifth, progressives probably talk too much about “inequality” and not enough about “opportunity.” Some voters are turned off by tirades about inequality because they say it connotes envy of the rich; there is more consensus on bringing everyone to the same starting line.

Unfortunately, equal opportunity is now a mirage. Indeed, researchers find that there is less economic mobility in America than in class-conscious Europe.

We know some of the tools, including job incentives and better schools, that can reduce this opportunity gap. But the United States is one of the few advanced countries that spends less educating the average poor child than the average rich one. As an escalator of mobility, the American education system is broken.

There’s still a great deal we don’t understand about inequality. But whether or not you read Piketty, there’s one overwhelming lesson you should be aware of: Inequality and lack of opportunity today constitute a national infirmity and vulnerability — and there are policy tools that can make a difference.”

1 Comment

Filed under Spotlights

“I viewed my bad investment as yet another moral failure.”

“I viewed my bad investment as yet another moral failure.”

That’s the problem with the GOP and conservatives and anyone who views “bad circumstances” as “moral failures.” This article perfectly outlines the poor logical reasoning behind many right-leaning and/or conservative outlooks. It just doesn’t make sense.

More often than not, by pushing for the viewpoints that the GOP advocates for, you are hurting yourself as well as others. He says it himself: “Yet I blamed all of my considerable problems on the government, the only institution that was actively working to alleviate my suffering. I railed against government spending (i.e., raising my own salary). At the same time, the earned income tax credit was the only way I could balance my budget at the end of the year… I felt my own poverty was a moral failure. To support my feelings of inadequacy, every move I made only pushed me deeper into poverty.”

By pushing against the minimum wage raise, for example, you are hurting your own prospects as well as the prospects of others. If wages were raised, money would be pumped into the economy making life better for EVERYONE. Just look at the states that have raised the minimum wage this year, they’re seeing higher employment growth than the states that didn’t.

I was poor, but a GOP die-hard: How I finally left the politics of shame

BY 

“I was a 20-year-old college dropout with no more than $100 in the bank the day my son was born in 1994.  I’d been in the Coast Guard just over six months. Joining the service was my solution to a lot of problems, not the least of which was being married to a pregnant, 19-year-old fellow dropout.  We were poor, and my overwhelming response to poverty was a profound shame that drove me into the arms of the people least willing to help — conservatives.

Just before our first baby arrived, my wife and I walked into the social services office near the base where I was stationed in rural North Carolina. “You qualify for WIC and food stamps,” the middle-aged woman said.  I don’t know whether she disapproved of us or if all social services workers in the South oozed an understated unpleasantness.  We took the Women, Infants, Children vouchers for free peanut butter, cheese and baby formula and got into the food stamp line.

Looking around, I saw no other young servicemen.  Coming from the white working class, I’d always been taught that food stamps were for the “others” — failures, drug addicts or immigrants, maybe — not for real Americans like me.  I could not bear the stigma, so we walked out before our number was called.

Even though we didn’t take the food stamps, we lived in the warm embrace of the federal government with subsidized housing and utilities, courtesy of Uncle Sam.  Yet I blamed all of my considerable problems on the government, the only institution that was actively working to alleviate my suffering. I railed against government spending (i.e., raising my own salary).  At the same time, the earned income tax credit was the only way I could balance my budget at the end of the year.

I felt my own poverty was a moral failure.  To support my feelings of inadequacy, every move I made only pushed me deeper into poverty.  I bought a car and got screwed on the financing.  The credit I could get, I overused and was overpriced to start with.  My wife couldn’t get or keep a job, and we could not afford reliable day care in any case.  I was naive, broke and uneducated but still felt entitled to a middle-class existence.

If you had taken WIC and the EITC away from me, my son would still have eaten, but my life would have been much more miserable.  Without government help, I would have had to borrow money from my family more often.  I borrowed money from my parents less than a handful of times, but I remember every single instance with a burning shame.  To ask for money was to admit defeat, to be a de facto loser.

To make up for my own failures, I voted to give rich people tax cuts, because somewhere deep inside, I knew they were better than me.  They earned it.  My support for conservative politics was atonement for the original sin of being white trash.

In my second tour of duty, I grew in rank and my circumstances improved.  I voted for George W. Bush.  I sent his campaign money, even though I had little to spare. During the Bush v. Gore recount, I grabbed a sign and walked the streets of San Francisco to protest, carrying my toddler on my shoulders.  I got emotional, thinking of “freedom.”

Sometime after he took office, I watched Bush speak at an event.  He talked of tax cuts.  “It’s the people’s money,” he said.  By then I was making even better money, but I didn’t care about tax cuts for myself.  I was still paying little if any income tax, but I believed in “fairness.” The “death tax” (aka the estate tax) was unfair and rich people paid more taxes so they should get more of a tax break.  I ignored my own personal struggles when I made political decisions.

By the financial meltdown of 2008, I was out of the military and living in Reno, Nevada —  a state hard hit by the downturn.  I voted libertarian that election year, even though the utter failure of the free market was obvious.  The financial crisis proved that rich people are no better than me, and in fact, are often inferior to average people.  They crash companies, loot pensions and destroy banks, and when they hit a snag, they scream to be rescued by government largess.  By contrast, I continued to pay my oversize mortgage for years, even as my home lost more than half its value.  I viewed my bad investment as yet another moral failure.  When it comes to voting and investing, rich people make calculated decisions, while regular people make “emotional” and “moral” ones.  Despite growing self-awareness, I pushed away reality for another election cycle.

In 2010, I couldn’t support my own Tea Party candidate for Senate because Sharron Angle was an obvious lunatic.  I instead sent money to the Rand Paul campaign.  Immediately the Tea Party-led Congress pushed drastic cuts in government spending that prolonged the economic pain.  The jobs crisis in my own city was exacerbated by the needless gutting of government employment.  The people who crashed the economy — bankers and business people — screamed about government spending and exploited Tea Party outrage to get their own taxes lowered.  Just months after the Tea Party victory, I realized my mistake, but I could only watch as the people I supported inflicted massive, unnecessary pain on the economy through government shutdowns, spending cuts and gleeful cruelty.

I finally “got it.”  In 2012, I shunned my self-destructive voting habits and supported Obama. I only wished there were a major party more liberal than the Democrats for whom I could vote.  Even as I saw the folly of my own lifelong voting record, many of my friends and family moved further into the Tea Party embrace, even as conservative policies made their lives worse.

I have a close friend on permanent disability.  He votes reliably for the most extreme conservative in every election.  Although he’s a Nevadan, he lives just across the border in California, because that progressive state provides better social safety nets for its disabled. He always votes for the person most likely to slash the program he depends on daily for his own survival.  It’s like clinging to the end of a thin rope and voting for the rope-cutting razor party.

The people who most support the Republicans and the Tea Party carry a secret burden.  Many know that they are one medical emergency or broken down car away from ruin, and they blame the government.  They vote against their own interests, often hurting themselves in concrete ways, in a vain attempt to deal with their own, misguided shame about being poor.  They believe “freedom” is the answer, even though they live a form of wage indenture in a rigged system.

I didn’t become a liberal until I was nearly 40. By the time I came around, I was an educated professional, married to another professional.  We’re “making it,” whatever that means these days.  I gladly pay taxes now, but this attitude is also rooted in self-interest.  I have relatives who are poor, and without government services, I might have to support them.  We can all go back to living in clans, like cavemen, or we can build institutions and programs that help people who need it.  It seems like a great bargain to me.

I’m angry at my younger self, not for being poor, but for supporting politicians who would have kept me poor if they were able.  Despite my personal attempts to destroy the safety net, those benefits helped me.  I earned a bachelor’s degree for free courtesy of a federal program, and after my military service I used the GI Bill to get two graduate degrees, all while making ends meet with the earned income tax credit.  The GI Bill not only helped me, it also created much of the American middle class after World War II.  Conservatives often crow about “supporting the military,” but imagine how much better America would be if the government used just 10 percent of the military budget to pay for universal higher education, rather than saddling 20-year-olds with mortgage-like debt.

Government often fails because the moneyed interests don’t want it to succeed.  They hate government and most especially activist government (aka government that does something useful).  Their hatred for government is really disdain for Americans, except as consumers or underpaid labor.

Sadly, it took me years — decades — to see the illogic of supporting people who disdain me.  But I’m a super-slow learner.  I wish I could take the poorest, struggling conservatives and shake them.  I would scream that their circumstances or failures or joblessness are not all their fault.  They should wise up and vote themselves a break.  Rich people vote their self-interest in every single election.  Why don’t poor people?”

Leave a comment

Filed under Spotlights

No, President Obama Did Not Break the Middle East

It’s so important to put into perspective what Obama has done during his presidency. Many people criticize him for not doing what he promised during his campaigns, but it’s important to note the context within which he’s working.

Congress is at an all time historical low for passing bills, they block everything the president wants to do (even shutting down the government in the process). Obama first came into office right at the beginning of the Great Recession and during a war between Israel and the Gaza-based Hamas in the Middle East.

Gun restrictions had been slowly loosened over the course of the past couple decades thanks to NRA-like lobbying. Inflation since the 70s and productivity since the 80s have been increasing without match, thereby plummeting their correlation to minimum wage. Meanwhile, corporations are finding more and more loopholes so that they can continue to increase their profit margins while simultaneously not allowing the profits to “trickle down” (instead all the excess profit is going into off-shore, non-taxed accts).

Manufacturing jobs have been gradually outsourced to other countries over the past couple decades, effectively slashing the averagely-skilled, middle-class workforce in the US. And the oil and rubber lobbyists have pretty much monopolized the entire energy economy in the US, making it near impossible to move beyond our out-dated, limited-resource-based energy systems.

Leave a comment

June 23, 2014 · 4:38 pm

Yes, summer job paid tuition back in ’81, but then we got cheap

By Danny Westneat

Seattle Times staff columnist

Originally published June 22, 2013 at 7:28 PM | Page modified June 24, 2013 at 11:15 AM

“People tell me you used to be able to work one job, the entire summer, and cover your entire education. I’m not sure how long ago that was — I have a hard time believing it. — Stephan Yhann, 21, current UW student

Put down your smartphones, kids, and gather around Uncle Danny. I’m here to tell you a little something about these yarns from the days of yore, these tales so tall and preposterous.

What’s most amazing about them is: They’re true! You really could work a summer job and pay for your education.

I saw it myself. And I’m only 48 years old!

OK, I say “only,” as if 48 isn’t all that old. Which, let’s be blunt, it is. But it’s not like I’m reaching back to the 1930s here. Just the ’80s. Depressing, maybe, but hardly the Depression.

Yet in the early 1980s, when I was about to head off to college, I worked jobs at Kentucky Fried Chicken and later at a rubber-parts factory, where I got paid $3 and $6 an hour. With no skills whatever, I made $120 to $240 a week.

Sounds like beer money only. But here’s the part that will really freak out you kids today: a year of tuition and fees at the University of Washington in, say, 1981, was $687. It was similar for other public colleges around the nation.

That’s not a misprint. There’s no missing digit. Even a crappy job like slinging chicken at KFC could pay for that year’s UW tuition, and most of next year’s, too.

Today? At $10 an hour you’d have to work 1,250 hours to cover the UW’s $12,500 tuition (more, once you take out taxes). In a 12-week summer, that’s more than 100 hours a week.

What really made me feel ancient is that the 1981 UW student guide shows the Med school charged only $1,029 a year back then. Today: $28,040!

Now, I didn’t go to the UW. But I’m going down Husky memory lane because last week The Seattle Times featured a crop of harried UW students looking rueful and broke. The story said skeptical state legislators often say how “they worked their way through college. And then they ask: Why don’t students do that today?”

Of all our delusions, we old farts cling to this bootstrap one the most. We worked our way up on sweat and chicken grease, we say. Can’t this generation? What’s wrong with them?

What’s wrong is that after we got ours, we cut it off for them.

The reason a summer at KFC could pay for a year of UW med school in 1981 isn’t that we were so hardworking and industrious. It’s that taxpayers back then picked up 90 percent of the tab. We weren’t Horatio Algers. We were socialists.

Today, the public picks up only 30 percent of UW tuition, and dropping.

How we milked the public university system in this state and then starved it will go down as the great badge of shame of my generation and the one before mine, the baby boomers. Affordable college made us. Once made, we wouldn’t pay even a two-cent per can soda-pop tax to give that same gift to anybody else.

So, kids, the unbelievable tales of yore are true. Except the part about rugged individualism — that is baloney. Due to the allure of this myth, however, you’ll get no help from us. You’re on your own.

You can have a lecture on the virtues of hard work, though. No charge.

Danny Westneat’s column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com”

Leave a comment

July 11, 2013 · 3:30 pm