We’re Not Broke A commonsense guide to avoiding the fiscal swindle while making the more equitable, green, and secure Editor: Emily Schwartz Greco Contributors: Sarah Anderson, Phyllis Bennis, John Cavanagh, Chuck Collins, Karen Dolan, Scott Klinger, Miriam Pemberton, and Daphne Wysham

Highway Robbery, an OtherWords cartoon by Khalil Bendib

Institute for Policy Studies (IPS-DC.org)

December 2012 About the Contributors

Sarah Anderson directs the Global Economy project at the Institute for Policy Studies and is the co-author of 19 yearly IPS “Executive Excess” reports.

Phyllis Bennis directs the New Internationalism project at the Institute for Policy Studies and has written widely on the and Afghan wars. Her books include Ending the US War in : A Primer.

John Cavanagh is the director of the Institute for Policy Studies and has co-authored 12 books on the global economy.

Chuck Collins directs the IPS Program on Inequality and the Common Good and is co-editor of www.inequality. org. He is author of the book, 99 to 1: How Wealth Inequality is Wrecking the World and What We Can Do About It.

Karen Dolan coordinates the Economic Hardship Reporting Project at the Institute for Policy Studies.

Emily Schwartz Greco is the managing editor of the OtherWords editorial service at the Institute for Policy Studies.

Scott Klinger, an Institute for Policy Studies associate fellow, has written extensively on corporate tax avoidance and is a CFA charterholder.

Miriam Pemberton is the principal co-author of the Institute for Policy Studies’ yearly Unified Security Budget for the United States report.

Daphne Wysham co-directs the Sustainable Energy and Economy Network at the Institute for Policy Studies, where she also directs a project on new ways to measure economic progress.

The We’re Not Broke team would like to thank Dean Baker, Andrew Fieldhouse, Emily Johanson, Charles Komanoff, Ben Schreiber, and Sanho Tree for their important contributions to this report. Cover art and other illustrations by OtherWords cartoonist Khalil Bendib. Report design by Brian Cruikshank.

This report builds on the Institute’s America“ Is Not Broke” study released in November 2011.

The Institute for Policy Studies (IPS-DC.org) is a community of public scholars and organizers linking peace, justice, and the environment in the U.S. and globally. We work with social movements to promote true democracy and challenge concentrated wealth, corporate influence, and military power.

1112 16th St. NW, Suite 600 | Washington, DC 20036 | Tel: 202 234-9382 | Fax: 202 387-7915

2012 Creative Commons Attribution-No Derivative 3.0 License. Table of Contents

I. Introduction and Summary...... 1

II. Fairly Tax Wall Street, Corporations, and the Rich...... 3

III. Right-Size Military Spending...... 6

IV. Tax Pollution, Drop Environmentally Harmful Subsidies, and

Improve Our Land-Use Policies...... 9

Notes...... 12

Caution, Fiscal Cliff Ahead, an OtherWords cartoon by Khalil Bendib

I. Introduction and Summary

n overhaul of U.S. spending priorities is both need and rebuild our infrastructure while greening the long overdue and necessary to curb deficit economy, strengthening national security, and reduc- A growth. Yet there is no reason to accept the ing the economic inequality that’s eating away at our demands from conservative leaders and corporate lob- democracy. Plenty of smart ways to cut spending and byists for the ill-timed belt-tightening and reductions in increase revenue should be “on the table.” Our report earned benefits like Social Security and Medicare they outlines 20 straightforward and creative options. say are required to remedy the current budgetary crisis. This is the second edition of an Institute for This “fiscal cliff” hysteria could easily trigger a Policy Studies study that debunks the premise that the grand fiscal swindle. But it doesn’t have to — because United States of America is broke. We released the first we’re not broke. The U.S. government can continue to one a year ago, shortly before the supercommittee — a fund and even expand programs that help people in congressional panel tasked with putting our nation on a

Potential new revenues that would make the nation more equitable, green, and secure Total: $881 billion

Tax pollution and Fairly tax Wall Street, cut subsidies for corporations, and dirty energy the rich $225 billion $458 billion

Right-size military spending $198 billion

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sound fiscal path — fizzled into obscurity. ucation, and housing expanded the middle class and served as a foundation for decades This time around, the frenzied “Taxmaggedon” of broadly shared prosperity. debate poses an unprecedented opportunity to harness 2. Right-size the Pentagon to make the our ample but misdirected resources in ways that will United States and the world more secure: make the country more equitable, secure, and green. The Pentagon consumes more than half of We have amassed a list of possible revenue-raisers and U.S. federal discretionary spending. We spending cuts to demonstrate that there are common- have identified a total of $198 billion in sense ways to shrink the deficit and get our country on yearly military budget cuts that can be a more sustainable path. made without hurting our national security largely by ending the war in Afghanistan, Our proposed reforms amount to $881 billion scaling back the sprawling network of over- in potential new revenue and savings per year. These seas U.S. military bases, and scrapping ob- measures would eliminate most of the budget deficit,1 solete and wasteful military programs. leave plenty of resources for jobs and for the nation’s pressing human and environmental needs, and stave off 3. Tax pollution, cut subsidies for dirty those looming across-the-board cuts. We have not as- energy, and improve our land-use poli- sembled an exhaustive list of rational budget-cutting al- cies to create a cleaner environment and ternatives. But we have demonstrated that there are sen- greener economy: If all polluters had to sible ways to achieve a more sustainable budget without pay the full cost of environmentally harm- shredding our already threadbare safety net. Together, ful practices, they would be more motivated these measures would generate more than enough sav- to embrace greener technology and reduce ings to prevent a harmful shift toward austerity. our dependence on unsustainable practices. The Obama administration has promised to Our three broad proposals eliminate fossil fuel subsidies and yet U.S. taxpayers are still spending tens of billions would: of dollars per year on these handouts. We recommend ending this corporate welfare 1. Make the tax code fairer to advance a and introducing new taxes on pollution more equitable society: Levying new taxes that could generate an estimated $225 on Wall Street and corporations while re- billion per year in revenue. storing rates on rich individuals to historic norms could, if rigorously enforced, raise more than $458 billion a year and reduce reckless financial speculation. Between 1935 and the late 1970s, progressive tax rates and investments in infrastructure, ed-

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II. Fairly Tax Wall Street, Corporations, and the Rich By Sarah Anderson, John Cavanagh, Chuck Collins, and Scott Klinger

Proposals Potential annual revenues ($billions) End the Bush-era tax cuts on the top 2 percent of incomes* 83 Tax financial transactions 150 Apply a levy on the largest banks 9 Stop tax haven abuse 100 Close the stock option loophole 2 Levy a progressive estate tax on large fortunes 35 Create additional tax brackets for higher incomes and tax capital 79 gains and dividends as ordinary income Subtotal $458 billion *$250,000 for married couples and $200,000 for unmarried individuals.

End Bush-era tax cuts for the wealthy: $83 billion the medium- and long-term. After three decades of deregulation, this is no longer the case. The cost of Reversing the 2001 and 2003 Bush-era tax trading has been lowered by increased competition cuts for the highest-income households is the first step between brokers and technological advances. This has in any program to reduce deficits and raise revenue. benefited all investors, but lower trading costs have These cuts, which will expire at the end of 2012 unless also opened the door to widespread speculative activ- Congress intervenes, lowered the maximum marginal ity that erodes confidence in the stability of markets. tax rate on “earned” income in the top income bracket High-frequency trading now comprises about 55 per- from 39.6 percent to 35 percent. The Joint Committee cent of equity trades in the United States.3 This is a on Taxation estimates that letting these tax cuts expire threat to the interests of responsible investors. Accord- would generate $829 billion in revenue over 10 years.2 ing to the Center for Economic and Policy Research, a modest federal tax on every transaction that involves Tax financial transactions: $150 billion the buying and selling of stock and other financial products could generate about $150 billion per year, As recently as the 1970s, most stock trades while dampening rapid turnover of stocks and specu- were carried out by people who were investing for

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lation.4 At least 11 European nations are on track to Close the stock option loophole: $2 billion adopt this kind of “Robin Hood” tax, which could soon raise a total of nearly 57 billion euros ($72 billion) per Under current rules, companies can lower their year if enacted throughout the European Union. tax bills by claiming deductions for stock options grant- ed to their top executives that are much higher than the Apply a levy on the largest banks: $9 bil- option value they report in their financial statements. lion This tax incentive encourages corporate boards to hand executives huge stock-option windfalls. The Ending The White House has proposed a levy on the Excess Corporate Deductions for Stock Options Act liabilities of financial firms with more than $50 billion (S. 1375) would limit corporate tax deductions to the in assets. While this is no substitute for taxing financial amount expensed for financial statement (book) pur- transactions, it would help recoup at least a small share poses at the time of the option grant. Closing this loop- of the costs of the crisis and provide a deterrent against hole would add $24.6 billion to federal tax revenues excessive leverage for the largest financial firms.5 over 10 years, or about $2 billion per year.8

Stop tax haven abuse: $100 billion Levy a progressive estate tax on large for- tunes: $35 billion By current statute, corporations are supposed to pay a 35 percent tax on their profits. According to Congress passed a deal at the end of 2010 to Citizens for Tax Justice, the top U.S. corporations ac- reinstate the estate tax at 35 percent. Estates belonging tually paid only 18.5 percent of their profits to Uncle to one person that are $5 million or less are exempted, Sam between 2008 and 2010.6 One of the main ways as are estates belonging to a couple that total up to $10 that large corporations avoid paying their fair share of million. This deal expires at the end of 2012, when es- taxes is by stashing them in overseas tax havens. In do- tate tax rates will revert to 2001 levels, an exemption of ing so, companies like Pfizer and General Electric shift $675,000 for an individual, $1.35 million for a couple their responsibility for paying taxes to responsible local and a top rate of 55 percent. Congress should proactively banks and businesses that operate within our borders. pass a progressive estate tax reform that closes loopholes The Stop Tax Havens Abuse Act (S. 1346 and H.R. and raises substantial revenue from those able to pay. 2669) would close numerous loopholes that facilitate The Responsible Estate Tax Act introduced by Senator tax dodging via tax havens. For example, it would treat Bernie Sanders (I-VT) in 2010 (but not reintroduced in foreign subsidiaries of U.S. corporations whose man- the current Congress) would have established graduated agement and control occur primarily in the United tax rates and includes a 10 percent surtax on the value States as U.S. domestic corporations for tax purposes.7 of an individual’s estate valued at $500 million or more — or $1 billion for a married couple.9

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Create additional tax brackets for people earning $1 million or more per year and eliminate the tax preference for capital gains and dividends: $79 billion

The Fairness in Taxation Act (H.R.1124) would add five additional tax brackets for income over $1 mil- lion. It would also tax income from wealth the same as income from work. Current law subjects most dividend and capital gains income — the investment income that flows overwhelmingly to wealthier Americans — to a 15 percent tax rate. The tax on wage and salary income, by contrast, can run up to 35 percent. This yawning gap is what inspired Warren Buffett to call on Congress to “stop coddling the super-rich” and institute higher rates on income from wealth.10 With carefully structured rate reform, we can end this preferential treatment and at the same time encourage average families to engage in long-term investing.11

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III. Right-Size Military Spending

By Phyllis Bennis, Miriam Pemberton, and Emily Johanson

Proposed reforms Potential annual revenues ($billions) End the U.S. war in Afghanistan 86

Eliminate one-third of the U.S. military bases in Europe and Asia 10

Eliminate military waste and unnecessary weapon systems Drastically reduce the nuclear warhead arsenal as a major step on 20 the path to nuclear abolition Stop R&D and procurement of unnecessary weapons 9 Eliminate two active Air Force wings and two carrier groups that are 8 not needed to address current and probable future threats Achieve savings from eliminating inefficiencies to reduce overall mili- 28 tary spending, rather than increasing other Pentagon expenditures Scale back outsourcing to military contractors by 15 percent 40 End Foreign Military Financing 5

Subtotal $198 billion

End the U.S. war in Afghanistan: $86 bil- lion The war is not making us safer, but continues to put us at greater risk as fury grows in response to The Obama administration has requested $86 U.S.-caused casualties. U.S. officials talk about drawing billion in military spending for the war in Afghanistan down numbers of troops, but young soldiers are still in the 2013 Fiscal Year.12 That includes only those funds dying in higher numbers. Every year, Afghan civilians that are expended specifically for the costs of the war. are dying in higher numbers.13 And the United States For example, soldiers’ regular pay is not included but is escalating and widening the war by using drones il- combat pay is included. The $86 billion also excludes legally in Pakistan, Somalia, Yemen, and beyond.14 It the costs of future medical care for soldiers and veterans should not be a surprise that 64 percent of Americans wounded in the war or the additional interest payments say the war in Afghanistan is not worth fighting.15 on the national debt that will result from higher deficits due to unfunded war spending.

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• Reduce the U.S. nuclear arsenal: $20 bil- Close 1 in 3 of the U.S. military bases in lion Europe and Asia: $10 billion Reducing the nuclear arsenal to no more than The United States maintains roughly 1,000 311 warheads would save $20 billion per year. military bases worldwide.16 As Congress begins to An arsenal of that size would provide more evaluate the usefulness of these bases, it will focus its than enough nuclear deterrence against current reductions first on Europe and then on Asia, where the and likely future threats, according to the fac- bulk of personnel and hardware is located and where ulty of the Air War College and the School of the bases are still connected to long-outdated Cold War Advanced Air and Space Studies.19 missions. We support the closing of U.S. military bases worldwide, but we recognize the most likely political • Drop unnecessary weapons: $9 billion targets for reduction in the near-term will be in Europe Scaling back or stopping the research, develop- and Asia. ment, and procurement of weapons that are not necessary to deter today’s threats would Although the Obama administration plans to generate huge savings. Examples include bal- remove two brigades from Europe (with 3,000-5,000 listic missile defense, the Virginia-Class subma- troops each), we recommend that at least 50,000 troops rine, and the F-35 Joint Strike Fighter.20 be withdrawn from military bases in Europe and Asia. This would eventually save $10 billion per year.17 Base • Achieve savings from reducing inefficien- closures are not without short-term costs, however. Ini- cies: $28 billion tially, the government would need to fund job retraining for demobilized personnel and cleaning up these sites. Inefficiencies in military health care and retire- ment programs waste $15 billion and $13 bil- Eliminate military waste and unneces- lion respectively. Eliminating these inefficien- sary weapon systems cies would save a total of $28 billion.21

The Institute for Policy Studies leads the team Scale back outsourcing: $40 billion that releases a yearly Unified Security Budget for the United States. This report identifies tens of billions in A 15 percent decrease in non-Pentagon na- savings that can be made with no sacrifice in security. tional security federal service contracts would save $3.3 The latest edition, which covers the 2013 Fiscal Year, billion per year and the same decrease on military con- proposes the following cost-saving steps: tracts would save $37.2 billion in 2013, according to estimates from the Project On Government Oversight and Taxpayers for Common Sense.22

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End Foreign Military Financing: $5 bil- lion

The State Department is slated to spend $5 billion in 2013 on grants for foreign governments to buy U.S.-made weapons. This arms trade often fuels conflicts and contributes to human rights and interna- tional law violations,23 including the $3 billion in U.S. military support to that enabled the latest assault on Gaza.24

Scapegoating Social Spending, an OtherWords cartoon by Khalil Bendib

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IV. Tax Pollution, Drop Environmentally Harmful Subsidies, and Improve Our Land- Use Policies By Daphne Wysham, with contributions from Ben Schreiber of Friends of the Earth and Charles Komanoff of the Carbon Tax Center Potential annual Proposed reforms revenues ($billions)

Tax carbon emissions 100 Tax air and water pollution 44 Charge more reasonable user fees for public resources 7 Eliminate fossil fuel, nuclear, and other dirty-energy subsidies 27 Drop subsidies that promote unsustainable agriculture 17 End subsidies for environmentally harmful transportation proj- 30 ects and land and water use

Subtotal $225 billion

Tax Carbon: $100 billion poor and working-class families, such as distributing “dividends” to households or reducing the federal pay- Taxing the carbon content of fossil fuels would roll tax. cut air pollution and greenhouse gas emissions, reduce *Metcalf is now serving as the Deputy Assistant Treasury Secretary U.S. oil dependence, and promote energy innovation. A for Environment and Energy. modest tax on the carbon content of fossil fuels would raise between $75 billion and $100 billion per year, ac- Tax air and water pollution: $44 billion cording to a widely cited 2009 article in the Harvard Environmental Law Review by Professors Gilbert E. By shifting more of the tax burden onto ac- Metcalf of Tufts University and David Weisbach of tivities that cause air and water pollution, we can make the University of Chicago.25* More recent estimates by the economy more productive, enhance our quality the Carbon Tax Center confirm that a tax of just $20 of life, encourage alternative energy technologies, and per ton of carbon dioxide — a level far less than what strengthen national energy security. Over $42 billion many economists believe is the “climate cost” to society could be generated simply by placing a tax on volatile from a ton of emissions — would raise $100 billion a organic compounds, which are released by large indus- year.26 Because poorer households spend a greater share tries — such as chemical plants — as well as small busi- of their disposable income on energy than the wealthy, nesses such as dry cleaners. At least another $2 billion most carbon tax proponents advocate a “progressive” could be generated by taxing pollutants that poison approach to ensure that this kind of levy doesn’t hurt our rivers and oceans, such as nitrogen fertilizers and

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sewage. These figures were calculated by the bipartisan 1872 mining code allowing mining companies access group Get America Working,27 based on data from the to public lands for a mere $5 per acre — could raise an Environmental Protection Agency and the Joint Com- estimated $7 billion per year.28 mittee on Taxation. End fossil fuel, nuclear, and other energy Raise user fees for public resources to subsidies: $27 billion reasonable levels: $7 billion Dirty-energy industries are both highly pol- Taxpayers should be fairly compensated when luting and highly profitable. Yet U.S. taxpayers heavily the private sector profits from our public resources, subsidize oil, gas, and coal companies with $16 billion such as offshore oil drilling and gas production and the per year in tax breaks and financial assistance, according use of radio spectrum licenses. Modest increases in these to the the left-right 2012 Green Scissors report, which payments — which in some cases are still based on an has also identified roughly $8.5 billion in subsidies for

Three Examples of Potential to provide needed care to seniors, low-income people, and people living with disabilities. However, substantial Budget Savings that Should savings are possible in both programs because they Address Related Challenges often overpay insurance companies, drugmakers, and doctors. By Emily Schwartz Greco and Karen Dolan Consider this: Medicare regularly overpays the pri- Regardless of whether we jump off a cliff or just trip over vate insurance companies that provide seniors with a curb in 2013, targeted budget savings could free up “Medicare Advantage” plans.34 These overpayments money that the federal government needs to tackle long- have amounted to more than $280 billion since 1985, neglected priorities. researchers at Physicians for a National Health Program determined. The overpayments, which totaled $34.1 bil- For example, the growth in our already astronomical and lion just this year, must stop. Improving benefits and care industry-driven health care costs threatens the nation’s for seniors and people living with disabilities should be long-term financial stability at every level. Out-of-control the highest priority with these savings. health costs are a major driver of the federal budget’s imbalance as well as a primary cause of bankruptcy for Here’s another straightforward example of a fiscal fix that

millions of U.S. households struck by cancer and other ill- shouldn’t simply be directed into deficit reduction. The

nesses or injuries. With millions of Americans uninsured wealthiest Americans regularly take advantage of or forgoing care because of their underinsurance, this is the mortgage-interest tax deduction to finance their no time to cut Medicare or Medicaid benefits. These two mansions, luxury vacation homes, and yachts.35 This government programs are the most cost-efficient way policy is far more appropriate when it makes or breaks

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the nuclear power industry and another $2.7 billion in End subsidies for environmentally payments for the biofuel industry that could be cut.31 harmful transportation projects and land and water use: $31 billion Drop subsidies that promote unsustain- able agriculture: $17 billion The Green Scissors Report also highlights $21 billion per year in wasteful transportation fund- The vast majority of agricultural subsidies ing that is not helping the nation shift to more energy- flow to corporate mega-farms rather than authentic efficient forms of travel or sensible housing patterns, family farms or efforts to help shift our food system to as well as another $19 billion in harmful land and more environmentally friendly and sustainable prac- water use policies, such as flood insurance that en- tices. The Green Scissors report identifies about $17 courages intensive development in flood plains. billion per year in corporate welfare for agribusinesses that should cease.32

the ability of a middle-class or working-class household clining. A $26 billion settlement the government reached to buy or keep their own home. Why shouldn’t the gov- with the major banks that helped bring about the foreclo- ernment lower the limit on tax-preferred mortgage debt? sure crisis cannot cover the full cost of addressing it.41

If Uncle Sam were to convert the mortgage-interest de- Perhaps the most creative budget-cutting moves are

duction to a refundable tax credit of 15 percent of the underway in Colorado and Washington State, where interest paid on up to $500,000 in mortgage debt, the voters opted this year to de-criminalize marijuana. If their government would save nearly $540 billion over the next ballot initiatives ultimately lead to a legal trade in that rec-

decade. After some phasing in, these savings would reational drug, those states will earn much-needed tax amount to $70 billion per year according to researchers dollars off the sale of a common yet officially banned at the Tax Policy Center, who created a simulation based product.42 And just think of all those millions that the on an alternative budget blueprint drafted by the Eco- government would save if it didn’t arrest, prosecute, and nomic Policy Institute.36 The current limit is $1 million on imprison43 people for either selling or smoking pot. up to two properties and this tax break.37 Again, the best way to use these savings would be to The money saved by ending this luxury tax giveaway remedy related underlying problems. The number of should finance relief for the foreclosed-upon and the treatment slots for the millions of Americans suffering homeless. More than four million Americans have lost from substance-abuse problems is far too low and the their homes since the housing bubble collapsed.38 De- wait-times are far too long.44 spite a lack of news coverage in recent years, there are still nearly 650,000 homeless people in the United States39 and the supply of public housing40 units is de-

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Notes

1. The Congressional Budget Office estimated that the federal 10. Warren Buffet, Stop Coddling the Super-Rich, The New York deficit will amount to $1.1 trillion in 2012 in Choices for Times, August 14, 2011. http://www.nytimes.com/2011/08/15/ Deficit Reduction, November 8, 2012. http://www.cbo.gov/ opinion/stop-coddling-the-super-rich.html?_r=0 publication/43692 11. Congresswoman Schakowsky Proposes Millionaires Tax as 2. Center for Budget and Policy Priorities, Joint Tax Committee: Alternative to Cutting Education, Health and Other Programs, Raising Threshold for Bush Tax Cuts from $250,000 to $1 Citizens for Tax Justice, March 18, 2011. http://www.ctj.org/ Million Would Lose $366 Billion — Nearly Half the Revenue, taxjusticedigest/archive/2011/03/congresswoman_schakowsky_ May 30, 2012. http://www.cbpp.org/files/5-30-12tax.pdf propo.php

3. Jeremy Grant and Telis Demos, Ultra-fast traders braced for 12. Christopher Hellman, Analysis of 2013 Fiscal Year Spending tough curbs in Europe, Financial Times, October 14, 2011. Request. National Priorities Project, February 16, 2012. http:// http://www.ft.com/intl/cms/s/0/c51fce68-f5b1-11e0-be8c- costofwar.com/publications/2012/analysis-fiscal-year-2013- 00144feab49a.html#axzz1di76p6gx pentagon-spending-request/

4. Dean Baker, The Deficit-Reducing Potential of a Financial 13. See fatalities figures at: http://icasualties.org/oef/ Speculation Tax, Center for Economic and Policy Research, January 2011. http://www.cepr.net/documents/publications/ 14. Adam Entous, Siobhan Gorman, and Julian E. Barnes, U.S. fst-2011-01.pdf. Note: This estimate falls in the middle Tightens Drone Rules, The Wall Street Journal, November 4, 2011. of various revenue estimates, which differ significantly, http://online.wsj.com/article/SB10001424052970204621904577 depending on tax rates, the types of financial instruments 013982672973836.html?mod=wsj_share_tweet covered, and assumptions about how traders will respond to the tax. On the higher end, Professor Robert Pollin of the 15. Scott Wilson and Jon Cohen, Post-ABC News Poll Shows Drop University of Massachusetts, Amherst has estimated that a in Republican Support for Afghan War, The Washington Post, U.S. financial transaction tax could generate as much as $350 April 12, 2012. http://www.washingtonpost.com/politics/post- billion per year. (http://www.peri.umass.edu/fileadmin/pdf/ abc-news-poll-shows-drop-in-republican-support-for-afghan- other_publication_types/magazine___journal_articles/Pollin- war/2012/04/11/gIQAfl5oBT_story.html ---Fin_Transaction_Tax_for_New_Labor_Forum_5-1-12. pdf) On the lower end, the Joint Committee on Taxation has 16. Strangely, there’s no agreement on the precise number of overseas estimated that bills introduced in November 2011 by Rep. U.S. military bases. For more on this important yet under Peter DeFazio (D-OR) and Senator Tom Harkin (D-IA) would reported issue, we recommend reading these two articles: Nick generate $353 billion over 10 years. Those bills would apply Turse, Empire of Bases 2.0, TomDispatch, January 9, 2011 http:// a tax rate than that considered by Pollin and Baker (0.03 www.tomdispatch.com/blog/175338/ and David Vine, Too Many percent on each transaction). http://www.defazio.house.gov/ Oversease Bases, Foreign Policy In Focus, February. 25, 2009. index.php?option=com_content&view=article&id=736:memo- http://www.fpif.org/articles/too_many_overseas_bases joint-tax-committee-finds-harkin-defazio-wall-street- trading-and-speculators-tax-generates-more-than-350-billion- 17. Miriam Pemberton and Lawrence Korb. Rebalancing our National &catid=63:2011-news Security: The Benefits of Implementing a Unified Security Budget, the Task Force on a Unified Security Budget. October 5. President Obama Proposes Financial Crisis Responsibility 2012, pp 45-46. http://www.ips-dc.org/reports/unified_security_ Fee to Recoup Every Last Penny for American Taxpayers, The budget_fy2013 White House, January 14, 2010. http://www.whitehouse.gov/ the-press-office/president-obama-proposes-financial-crisis- 18. Ibid, pp 1-3. responsibility-fee-recoup-every-last-penn 19. Ibid, pp 51-52. 6. Robert S. McIntyre, Matthew Gardner, Rebecca J. Wilkins, and Richard Phillips, Corporate Taxpayers & Corporate Tax 20. We have deducted $10 billion related to personnel reductions Dodgers, 2008-2010, Citizens for Tax Justice, November 2011. from the Unified Security Budget so as to avoid double-counting http://ctj.org/corporatetaxdodgers/ the savings proposed here through the reduction in U.S. military bases. 7. Sen. Carl Levin, Summary of the Stop Tax Haven Abuse Act, July 12, 2011. http://levin.senate.gov/newsroom/press/release/ 21. Unified Security Budget report, pp 47-50 summary-of-the-stop-tax-haven-abuse-act-of-2011 22. Spending Even Less, Spending Even Smarter: Recommendations 8. Sen. Carl Levin, Levin-Brown Bill Would End Corporate Stock for National Security Savings, FY 2013 to FY 2022. Project on Option Tax Break, Reduce Deficit by $25 Billion, July 15, Government Oversight and Taxpayers for Common Sense, May 8, 2011. http://www.levin.senate.gov/newsroom/press/release/ 2012. http://www.pogo.org/pogo-files/reports/national-security/ levin-brown-bill-would-end-corporate-stock-option-tax-break- ns-wds-20120508-national-security-defense-savings.html reduce-deficit-by-25-billion 23. State and USAID-FY 2013 Budget, U.S. Department of 9. Figures represent an annualized average of cuts recommended State, February 3, 2012. http://www.state.gov/r/pa/prs/ over a five-year time period in The People’s Budget: A Technical ps/2012/02/183808.htm Analysis by Andrew Fieldhouse, Economic Policy Institute. April 13, 2011. http://www.epi.org/publication/the_peoples_ 24. Congressional Budget Justification, Volume 2, Foreign budget_a_technical_analysis Operations, Fiscal Year 2013, p. 510, U.S. Department of State. http://www.state.gov/documents/organization/185014.pdf.

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25. Gilbert E. Metcalf and David Weisbach, The Design of a Carbon 39. The number of homeless people stood at 636,017 in 2011, Tax, Harvard Environmental Law Review, 33:2 (2009). http:// according to The State of Homelessness in America 2012, www.law.harvard.edu/students/orgs/elr/vol33_2/Metcalf%20 National Alliance to End Homelessness. http://www. Weisbach.pdf endhomelessness.org/library/entry/the-state-of-homelessness-in- america-2012 26. As recently noted by The Washington Post’s editorial board, economists at Resources for the Future estimate that a tax of $25 40. National Low Income Housing Coalition Public Housing fact per ton of CO² would raise $125 billion a year in new revenue. sheet. http://nlihc.org/sites/default/files/Public_Housing_FS.pdf http://www.rff.org/centers/climate_and_electricity_policy/ Documents/carbon-tax-FAQs.pdf http://www.washingtonpost. 41. Foreclosures (2012 Robosigning and Mortgage Servicing com/opinions/the-carbon-tax/2012/11/10/6c576bfa-29f5-11e2- Settlement), The New York Times, April 2012 factsheet. http:// b4e0-346287b7e56c_story.html topics.nytimes.com/top/reference/timestopics/subjects/f/ foreclosures/index.htm 27. Job Creation Tax Options, Get America Working, December 1, 2011. http://www.getamericaworking.org/ 42. The Washington State government, which acknowledges that it’s sites/getamericaworking.org/files/GAW_Tax_Options_ hard to estimate the potential revenue impact from legalizing, Booklet_12-1-11.pdf taxing, and regulating marijuana, says that the measure may generate up to $1.9 billion in new tax revenue over five years. 28. Rep. Jan Schakowsky, Schakowsky Deficit Reduction Plan, Nov http://www.ofm.wa.gov/initiatives/2012/502_fiscal_impact.pdf 16, 2010. http://schakowsky.house.gov/images/stories/1202_ The Colorado Center on Law and Policy estimates that the Schakowsky_Deficit_Reduction_Plan.pdf Colorado measure could save the state up to $120 million per year after 2017. http://www.cclponline.org/postfiles/amendment_64_ 29. Civil Society Institute survey, November 3, 2011. http://www. analysis_final.pdf civilsocietyinstitute.org/media/110311release.cfm 43. A total of 507,000 drug offenders were imprisoned in the United 30. In their forthcoming discussion note, John Talberth and Erin States in 2010, according to the Sentencing Project. http://www. Gray of the Center for Sustainable Economy, estimate that fossil- sentencingproject.org/template/page.cfm?id=128 fuel subsidies now total $19 billion. 44. Client and Program Characteristics Associated with Wait Time to 31. Figures represent an annualized average of recommended cuts Substance Abuse Treatment Entry, The American Journal of Drug in Green Scissors 2012: Cutting Wasteful and Environmentally and Alcohol Abuse, 2012. http://www.uic.edu/depts/vpl/reprints/ Harmful Spending, R Street, Friends of the Earth, and Taxpayers AndrewsAJDAA2012.pdf for Common Sense. http://greenscissors.com/wp-content/ American Psychological Association fact sheet on substance abuse uploads/2012/06/GS2012-v7E.pdf in the United States. http://www.apa.org/science/programs/ conference/2011/substance-fact-sheet.pdf 32. Ibid, p. 10

33. Ibid, p. 12-14.

34. Medicare Advantage plans provide beneficiaries with their Part A and Part B benefits. More than one in four Medicare beneficiaries are enrolled in these plans. Health insurance industry whistleblower Wendell Potter outlined the many pitfalls with this arrangement in this blog post. http://wendellpotter.com/2012/10/ who-wins-with-medicare-advantage-2/

35. The IRS allows taxpayers to take the mortgage-interest deduction on up to two “residences.” Boats that include berths with a designated sleeping space, a toilet, and some kind of cooking arrangement can qualify. The Discover Boating website spells this out quite clearly. http://www.discoverboating.com/buying/ financing/taxdeduct.aspx and the IRS spells out the rules on its website as well http://www.irs.gov/publications/p936/ar02. html#en_US_2011_publink1000229900

36. These estimates are from Economic Policy Institute researcher Andrew Fieldhouse. An earlier version of them may be found in Our Fiscal Security, a joint report produced by Demos, the Economic Policy Institute, and the Century Foundation, November 29, 2010. http://www.ourfiscalsecurity.org/storage/ Blueprint_OFS.pdf

37. Peter Eavis, Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny The New York Times, November 26, 2012. http:// dealbook.nytimes.com/2012/11/26/mortgage-interest-deduction- once-a-sacred-cow-is-seen-as-vulnerable/

38. Lost Ground, 2011: Disparities in Mortgage Lending, Center for Responsible Lending and Foreclosures. http://www. responsiblelending.org/mortgage-lending/research-analysis/Lost- Ground-2011.pdf

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