U.S. Rep. Jan Schakowsky of Evanston today called for eliminating tax breaks for capital gains and dividends and ending a variety of corporate tax benefits.

Schakowsky, who’s one of 18 members of a bipartisan fiscal commission appointed by the president, said she disagrees with proposals made last week by the commission’s co-chairs.

U.S. Rep. Jan Schakowsky of Evanston today called for eliminating tax breaks for capital gains and dividends and ending a variety of corporate tax benefits.

Schakowsky, who’s one of 18 members of a bipartisan fiscal commission appointed by the president, said she disagrees with proposals made last week by the commission’s co-chairs.

Their plan, she said, would hurt lower and middle income Americans in several ways, including by reducing Social Security benefits.

Schakowsky instead proposes increasing social security taxes to fund benefits at current levels and possibly increase some benefits in the future.

She proposes increasing revenue by $151 billion, mostly through higher taxes on corporations and their executives, saving $132 billion by eliminating tax breaks that mainly benefit corporations and making $111 billion in cuts to defense spending.

Related document

Schakowsky Deficit Reduction Plan

Related story

Debt Commission Seeks Social Security Cuts and Higher Taxes (NY Times)

Bill Smith is the editor and publisher of Evanston Now.

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26 Comments

  1. Why I voted for Jan

    It’s nice to know that everyone on that commission isn’t going along with Bowles and Simpson.

    After Bowles and Simpson , it was pretty clear that the whole point of the commission was to provide "bipartisan"  (i.e., conservative Democrats and reactionary Republicans)  cover for a plan to shift the tax burden to the poor and cut Social Security, so that those making the most income could enjoy even lower tax rates.    I am glad that Jan isn’t going along with it.

    1. Why I did not vote for Jan

       The liberal PC progressives may be overjoyed at Jan’s "sock the rich" — especially corporations.

      However if you wonder why the jobs are disappearing it is because U.S. corporate tax rates are among the highest. Since we are in a global economy and U.S. corporations compete worldwide they set up companies where they do business — at much lower tax rates.

      Next time you get a pink slip, thank her.

      Unless you are a public employee with unsustainable benefits.

      1. Read before you speak

        karl marx: Wrong.

        The U.S. corporate income and related tax rates are only among the highest assuming you consider being in the top 20 to be high. According to the respected body that watches those staticstics United States taxes on income, profits, and capital gains — normalized as a percentage of the GDP — falls in the list at #11. But more telling is that the U.S. "corporate" tax is only 0.7% of GDP higher than the global average. So that pink slip you talk about has nothing to do wiith the tax rates!

        Source: OECD Table O.2 available here.

        1. If you look at table II.1,

          If you look at table II.1, you’ll see that, in 2010, US Corporate income tax rates are second only to Japan’s.  In 2011, after Japan reduces their rate, we will be the highest.  If you’d like to explain to me how having the highest corporate tax in the developed world is pro-growth, I’d be happy to listen.

        2. Anecdotes are not data

            RR

          % of GDP is meaningless, it is actual costs. Taxes are costs. Among other "details" many countries rescind VATs for export. US taxes are not rescinded. I spent 7 years as an expert witness in a dumping suit that ultimately cost the US 400,000 jobs because of our tax policies.

          Why would US companies set up foreign entities if there was not a cost advantage? Taxes are a cost, even in the EU.

          1. not data

            I spent 7 years as an expert witness in a dumping suit that ultimately cost the US 400,000 jobs because of our tax policies.

             

            Thanks for the interesting anecdote, Karl.

  2. Loaded headline’s much?

    That’s not exactly a neutral headline.  Could easily say that the other plan "socks" the poor and old.

    1. Headline fits the facts

      Hi Amber,

      Yes you could say the other plan "socks" the poor and old … and we might well have said that, assuming anybody local to Evanston had been involved in the plan, making it a plausible subject for a story on Evanston Now. You may notice that, because it lacked a local angle, we did not do any story about that plan.

      Here are some quotes from Rep. Schakowsky in her news release about her plan today:

      “Lower and middle class Americans did not cause the deficit.

       “Just ten years ago the federal budget was generating a surplus as far as the eye could see.  That surplus was turned into a deficit due to massive tax cuts – mainly to wealthy Americans; two wars paid for by borrowed money; and a major recession caused by the recklessness of the big Wall Street banks.

       “Over the last decade the incomes of middle class Americans have actually shrunk, while those of the wealthiest two percent of the population have exploded.

      “The middle class did not benefit from the Republican economic policies that led to the current deficit – they were the victims – they should not be called upon to pick up the tab."

      Given the substance of her plan, and the tone of those quotes, I think the headline clearly fits the facts of the story. And perhaps socking the rich is exactly what many of her constituents want to do.

      — Bill

      1. Ridiculously biased headline

        You point to Schakowsky’s "tone" in justifying your loaded headline. I would point out that Schackowsky is a politician who has been elected by her constituents to represent and articulate a particular point of view. You are, presumably, a journalist, expected to present the news in a objective manner.

        1. Objective truth

           Hi Ginny,

          The objective truth is that Schakowsky’s plan targets corporations and the rich to pay most of the cost of eliminating the deficit.

          Depending on your political philosophy and level of outrage about recent economic events, you may conclude that her approach is the right or the wrong way to go.

          The headline is dramatic, but it is not biased. It expresses no opinion about the merits of the approach. It doesn’t say "Outrageous Schakowsky plan crucifies the rich" nor does it say "Schakowsky would give rich the taxing they deserve."

          But to pretend that the plan does not target the rich is to live in a fantasy world — or to be a political propagandist trying to conceal reality.

          — Bill

           

          1. You are wrong

            Bill,

            An objective headline would  be "Schakowsky presents her deficit plan" or "Schakowsky disagrees with deficit commission’s co-chairs." While the objective truth is that Schakowsky’s plan targets corporations and higher income taxpayers, the fact is that your headline was biased. You can argue that it was not biased, but by saying it is "dramatic" means that you are trying to convey your take on the plan. In doing so, you are reporting the facts in a manner that you see fit, instead of trying to present them as they are.

            No one is trying to pretend that the plan doesn’t target the rich or to conceal reality. Everyone is just calling you out on a biased headline and seemingly biased reporting. This isn’t the first time that this site has presented a story in a biased manner.

            In Evanston, we actually expect "fair and balanced" reporting. As a journalist, we expect you to be fair and balanced. Just present the facts. We can figure it out for ourselves whether it is "dramatic" or not. My advice? Stick to the facts. Your VERY educated readership would thank you for it.

            Best regards,

            Brian Miller

          2. Boring!

            Hi Brian,

            Your first suggested headline is boring in the extreme. Your second one is only marginally better.

            People want to know what the key difference is between her plan and the previous one. That’s what a headline should try to focus on.

            If, as you say, the objective truth is that the plan targets corporations and the rich — that’s what the headline should convey. That’s what makes the plan different.

            Its absurd for you to argue in favor of obscuring that — unless you want to conceal the nature of the proposal.

            — Bill

      2. saying someone “socks the rich”

        …(or "soaks the rich", arguably a more common idiom) is usually dog-whistle for calling someone a socialist or some variant thereof. It’s a nonsensical charge in the context of the proposal, whose first "key element" is economic stimulus, and whose primary income-tax impact on ordinary income is to restore marginal rates by only a few percentage points, nowhere near where they were under those notorious sock-it-to-the-rich presidents, Eisenhower and Nixon.

        The characterization also confuses wealth with income; although they tend to correlate, they aren’t the same. The rich would remain rich under Schakowsky’s proposal and most similar ones. It is not a property tax. However the rich will not get richer as quickly.  Schakowsky’s release merely says, "Sustained, long-term economic growth requires that we end the trend of concentrating more and more wealth in the hands of the rich and less and less in the hands of a middle class that can then afford to buy the products and services that will sustain economic growth" (emphasis added).

        Unless one sees concentration of wealth as the best plan for growing a healthy economy, that is true, and the Schakowsky proposal takes some steps toward that. But it would not stop that process. If someone who already has a net worth of $1 billion makes $5 million, they would only pay a top marginal rate of 39.6% (and they would pay the same rates as everybody else on the first $250,000 or so). They would still add over $3 million to their fortune in a year that they grossed $5M. Anyone would call that getting richer, not getting "socked."

        In truth, the economic policies of the last 30 years have socked, knocked, and shocked the middle class. That’s something we could use more headlines about.

  3. Schakowsky is poison

    It is an abomination that Schakowsky is on this debt commission in the first place (she was appointed by Obama).

    Schakowsky is on record saying she wants to drive private health insurance companies right out of business (5 of the top 10 Illinois corporations are health insurance companies). She led a union-backed effort to take away the non-profit status of Evanston’s St. Francis Hospital in a strong-armed tactic to get the hospital system to unionize.

    And now Schakowsky is playing class warfare by proposing higher taxes on corporations at the same time ending some tax breaks. 

    Well golly gee Schakowsky, that’s a real economy booster.

    Has anyone ever been hired by a poor person?

    Schakowsky is poison and the only way to stop her kind from further damaging our fragile economy is to send her a message – vote out any Democrat even on the local level. That means all Evanston City Council incumbents.

    1. FYI to Anonymous Al: Everyone

      FYI to Anonymous Al: Everyone on the commission was appointed by Obama. He is the president, it was his idea, and he appointed Democrats and Republicans, liberals and conservatives.

      And thank you Jan, for standing up for progressive values and fighting to make sure that corporations pay their fair share. 

    2. Al is engaging in personal attacks, not addressing the issue

      Republicans (and I think it’s a fair assumption that Anonymous Al is a Republican) always bring irrelevant facts and personal attacks into an argument. That’s why Anonymous Al’s point is ridiculous.

      Instead of proposing a solution to the deficit problem, Al engages in a personal attack on Schakowsky. Al, what does Shakowsky’s history with health insurance companies and St. Francis have anything to do with the debt commission? The article was about her plan to address the deficit, not her history.

      You made one point that was somewhat valid, that Schakowsky was playing "class warfare by proposing higher taxes on croporations at the same time ending tax breaks." However, even that point is extremely incorrect. A corporation is not a person. Although legally they have some protections like people, a corporation is not a member of a class. Thus, increasing taxes on a corporation is not class warfare.

      Instead of using typical Republican catch phrases like "class warfare," why don’t you actually make a valid point. If you beleive that Jan’s taxes on corporations will decrease the number of jobs created by those corporations, then say it. Just stop with the baseless personal attacks. It’s ridiculous.

      1. These are facts not personal attacks

        Hey Brian,

        You apparently are unaware of what a personal attack is. Let me explain.

        personal attack – when elected Democrat politicians publicly called people at townhall meetings last year as "Nazis, terrorists, mobsters, racists, anti-American astroturf teabaggers."

        Relevant facts – Schakowsky is anti-business and pro-union based on her actions as an elected Democrat politician, i.e. her attempt to help the unions take away St. Francis Hospital’s non-profit status because the hospital refused to unionize and in her own words, put private healthcare companies out of business.

        These facts are relevant for someone who sits on an 18-member debt commission and whose vote would help decide whether the commission can come up with a solution to solve our immense debt that some economist say can take us over the cliff and put us into the worst depression ever.

        Look around town and you will see that many businesses are owned and operated by small business owners who would be tremendously hurt if the Bush tax cuts are not extended – taxes would DOUBLE for many of these business owners. How do you think that helps our economy? And the Obama administration has already granted exemptions to more than 100 organizations, many of which are unions, from particpating in Obamacare.

        For the rest of American businesses,charities and local governments, they will be required to file a separate Internal Revenue Service Form 1099 listing every purchase of goods or services worth $600 or more. Another jobs killer that Shakowsky wholeheartedly supports.

        Schakowsky’s progressive philosophy is to tax the business owners and the wealthy and spend and tax our way back into prosperity. She claims the middle class folks didn’t get us into this recession – she’s half right – government policies did – primarily the loosening of lending regulations that allowed the proliferation of EZ no down mortgage loans in which Alan Greenspan in 2006 warned Democrats Barney Frank and Chris Dodd overseing Fanne Mae and Freddie Mac that lending regulations needed to be tightened or the house of cards could fall.  When the real estate market began it’s decline, people who put little to no skin in the game walked from their homes, causing a snowball effect, and breaking the back of many banks and financial institutions.

        The cards fell and now we have a problem. The solution to the debt problem – enact Paul Ryan’s plan – even Greenspan agrees with it as most economists do.

        BTW-it amazes me how many people get bent out of shape with the word "sock."  It tells me they read the story with a closed mind and biased intent.

  4. There’s no sock..

    I don’t see how this plan "socks the rich". It ends a variety of extra tax breaks "rich" individuals and corporations have been given over the past decade. Bill, the story is accurate, but your title is biased. The plan roughly does this:

    • Reduces defense spending (110.7 billion in annual savings)
    • Taxes Capital Gains and dividends as ordinary income (88.1 billion)
    • Passes cap and trade (52 billion)
    • Passes a robust public option (10 billion)
    • Reduces agricultural subsidies (7.5 billion)

    Those seems like sensible changes to me.

  5. Good start Jan!

    It is about time that they remove the cap on paying Social Security taxes.  That alone will should go a long way towards continuing the S.Security benefits that everyone has worked for during their working lifetime.  And, it isn’t that much.  You still need to save additional money to cover all of those medical bills that aren’t covered by Medicare!

    Yes – on to more savings by eliminating the farm subsidies!  Those are ridiculous and have been ridiculous for years!  Time to eliminate those.

    And to Anonymus Al.

    Your comment about ‘have you ever been hired by a poor person’ is absurd.  The rich keep getting richer and just keeping it for themselves.  The economic gap in our country continues to widen and is being reported in news stories around the globe.  There was an interesting article in the NY Times last month on income inequality that you might benefit from reading, but you are probably too busy watching Fox News to read much.   I welcome the ‘class warfare’.  It is about time!  How Republicans continue to convince some of the lower and middle class to vote for things that would minimize their benefits (access to health insurance and reductions in S. Security and Medicare) and provide more government interventions not less (think TSA! ), continues to amaze me.    Class warfare?  I say bring in on!  The economy got into this mess with the Republicans starting an unnecessary war in Iraq, foolishly removing the normal checks and balances on mortgages, etc. and giving tax breaks that we couldn’t afford then and we can’t afford now.  Don’t give the Rupublicans back the keys – they don’t know how to drive!

    Keep up the good work Jan!  You are on the right track.

  6. Headline was not “loaded” or “biased”

    The headline was putting forth what Jan Schakowsky’s position is – not what Evanston Now’s position is.  The headline serves it’s purpose for a quick summary of the point of the article.  Bill’s reporting is spot on, whether you agree politically or not with Jan Schakowsky’s view is still up to the individual.

  7. Schakowsky is no friend of the middle class

    It is laughable to read some statements here that claim Schakowsky supports people in the lower-middle class.

    Shakowsky and Democrat Alice Rivkin, who both sit on the debt commission, want to raise the national sales tax to 6.5 percent. Last I checked, working folks pay sales taxes.

    Yes, Schakowsky’s fellow Democrat brethren really wanted to help the middle and lower class folks so they raised the county sales tax almost 10 percent – the highest sales tax in the nation. And the Dems such as Shakowsky’s handpicked politician, Demcorat Robyn Gabel, want to raise the state income tax.

    Anyone get their property tax bills yet? Once again, for the fourth consecutive year in a Recession where property values have been declining, property taxes keep going up. In case Schakowsky hadn’t noticed – lower and middle class folks are hurting and they don’t like paying more taxes.

    And if that don’t make you see red, consider that Schakowsky voted for the $1 trillion stimulus bill that sent $2.5 million "to install high-tech geothermal heat pumps at a union office in Countryside," the same union that was the largest contributor to Schakowsky’s campaign.

    Progressive values is an oxymoron.

     

  8. “Sock” is a biased word

    Bill,  You can argue this any way you wish, but given your choice to use the word "sock," your headline is biased.  Really, all you can say is, "Yes, it is."

    1. Not so

       Hi JEK,

      Who declared you the god of language?

      Dictionary definition of sock as a transitive verb: "to hit, strike or apply forcefully."

      There is no suggestion of unfairness or unreasonableness or inappropriateness in that definition — no judgment about the moral character of the action at all.

      Would it have made you happy if I’d said the plan would "target" the rich?

      If you deny that the plan "targets" the rich, you are not in touch with reality.

      If you want to quibble about the difference between "sock" and "target" … well, go ahead and quibble.

      — Bill

  9. Tilting at windmills

    Regardless of how anyone wishes to view your headline, it certainly worked. This thread is growing. Well done, Bill. 🙂

    Oh, and I think your headline is the truth. Jan and her fellow ideologues desire to sock it to the rich (which, in their minds, is anyone making six figures) with no regard for the consequences. Jobs go overseas? Blame the "rich". The economy is getting worse? Blame the "rich". It’s tilting at windmills, in my opinion. Not to mention childish, paranoid and delusional.  I’m glad that this kind of thinking is in the minority in DC.

  10. what really happens when you sock the rich

     
              Last week, Congresswoman Schakowsky attended the Veterans Day ceremony in Downtown Evanston which as a veteran, I attended. She arrived late which delayed the start of the ceremony and left shortly after her speech which was given directly from note cards. Congresswoman Schakowsky rarely lifted her eyes to look in to the audience of Veterans and maybe that had something to do with her plan to cut 100 Billion dollars from the Military in her Deficit Reduction Plan. Her speech was a laundry list of entitlements for Veterans but as the WWII Vet sitting next me said “sounds great, but how does she plan to pay for it?” Borrowing from the Chinese doesn’t appeal to many of us Veterans.
     
                Then came Representative Gabel who I would have run against had the GOP kept me on the ticket this past election cycle (I had no chance of winning, but I could have started a conversation). Ms. Gabel echoed some of Congresswoman Schakowsky’s remarks and showed some true emotion in her speech. I don’t envy Representative Gabel with what she is up against as the only thing that will save Illinois now is a bail out from the Federal Government. Given the outcome of the last election and the momentum of the TEA Party, I don’t see a bail out happening anytime soon.
     
                Then came County Commissioner Larry Suffredin who gave a wonderful speech from the heart. Commissioner Suffredin is another elected official I don’t envy as the shenanigans that has plagued Cook County continues. Besides not repealing the Stroger sales tax increase as promised, the new County Board President has plans to raise even more taxes which will drive even more companies out of Cook County most of which end up overseas. On top of that, I received my property tax bill that is just a few dollars short of $10,000 (for the year) on a house worth less then $300,000. This is even after an appeal to now County Assessor Berrios who by many accounts is one of the most corrupt machine politicians in Illinois.
     
                Then came former Evanston Mayor Morton who I have always adored and she gave a wonderful speech to the Veterans. I couldn’t help but think what Evanston would be like today if the city council hadn’t undermined her during her tenure. Mayor Morton was always pro-business and pro-Northwestern (for business purposes) and the current financial collapse of Evanston is a direct result of her being undermined by a group of arrogant lawyers who sat on the city council back in her day. If the city of Evanston ever exercised the practice of transparency and released all the closed door meeting minutes relating to the Downtown Redevelopment Projects, citizens of Evanston would know what I am talking about. Unfortunately as I have painfully learned, nobody really cares.
     
     What many citizens don’t understand is that when you sock the rich (or whatever you want to call it), it still comes down on the middle class. The majority of commercial property owners in Evanston are rich and when their taxes get raised, they just pass it on to the tenants. Even if I wanted to reopen Ofischl Sports in Evanston, the rent, taxes, regulations, and all the other burdens our Government puts on small businesses makes it impossible (not to mention frivolous lawsuits). Owning Ofischl Sports in Downtown Evanston for 14 years was the greatest experience of my life, but I have had to come to the realization those days are over as owning a ‘brick and mortar’ business in Evanston has become unsustainable for businesses like mine – unless you get a kickback.
     
    Thank goodness for the internet.                   
  11. Competitive taxes

    Higher corporate tax rates usually leads to deeper job loss and decreases in tax revenue, and that effect will be compounded with the cuurent and increasing "global" marketplace.  

    Current strong economic growth in places like Singapore, Indonesia, China, are partly tied to their corporate tax rates of around 18% to 26% compared to US rates of basically 40%. Explain how increasing cost on companies will draw greater investment and jobs in America.

    Capital isn’t invested without analyis and there is a reason why certain countries are attracting investment and jobs.  I believe one of the biggest reasons our economy is slow to grow right now is simply because of proposals like Jan’s.

    This recession was deeper than normal, but the economic cycle of downturns always creates new opportunities and they are out there right now, globally and locally.    

    Unfortunately, corporations,large and small, aren’t adding payroll or seeking to invest capital right now simply because of the uncertainty over taxes and expenditures generated by govt. on every level.  Local, State and especially National. 

    Simple fact is the delay is no help to middle or lower income America and certainly is not speeding along the recovery and economic growth.

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