TheFreeLunch

Billionaire

Welfare Queens

Welfare for billionaires? Absolutely. IT billionaires want Congress to print millions of green cards, worth hundreds of billions of dollars, for IT firms and universities to "give away" in exchange for labor or tuition. No study has ever shown a shortage of trained Americans ready to work, but the best and brightest are not encouraged by wages that have not increased in the last fifteen years or careers that end at age 35. Millions of US citizens are out of work, yet the IT industry wants to bring in more millions of workers to drive wages even lower. Our "crony capitalists" and their rented best friends in Congress want to socialize the cost of labor by trading green cards for campaign funds.

The people who will benefit most from the immigration bill don't pick tomatoes, they are people like Marc Zuckerberg (Facebook), Bill Gates (Microsoft),Robson Walton (Wal-Mart), Larry Ellison (Oracle), and Warren Buffet (Berkshire Hathaway). Congress has received huge amounts in campaign donations and they need to make those “investments” pay off. The high tech industry wants Congress to continue to socialize their costs of labor, and expand it, making you and your children bear the cost of lost educational advantages, lower wages, and “careers” that last less than ten years. Nobel economist Milton Friedman "There is no doubt that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy." Donors to political campaigns don't just expect to get their money back, they are not paying Congress to get good government, they want much more; "On Monday [20 March], Congressional investigators unveiled a detailed report showing how Apple subsidiaries based in Ireland but spanning other regions had helped the company pay as little as one-twentieth of 1 percent in taxes on billions of dollars in income." saving $7.7 billion on 2011.

The new immigration bill will decide if you pay for driving your own wages down, or if those who benefit from your lower wages pay the price of providing the public benefits new immigrants need. It costs over $200,000 to take two children from Head Start to a high school diploma, and the last thing working families need are more people looking for work. Not only does Congress want many more people looking for work they want you to pay for the public benefits those immigrants need. Socializing their cost of labor, rewarding our worst employers. If they do that, paying lower wage workers with green cards that will cut wages, cost the taxpayer billions. Cheating our children is putting two-thirds of college graduates in debt, and putting them at a disadvantage for their entire lives.

Wall Street, with millions out of work, wants to increase pressure on wages.

Worse than welfare for billionaires is damaging our security; at a time when Chinese hackers have accessed files showing the names of people the US considers may be spying for foreign powers, information that gives spies a chance to destroy incriminating evidence, or leave the country, Congress is taking actions that discourages US citizens from working in the high tech industry, putting our present and future security at risk.

“No new taxes”? Just kidding, Congress plans to raise your taxes: A tax is anything that creates a greater burden on you. It can be,the loss of your job, the loss of the tech industry to India or China, less clean air, more low wage workers needing part of your social security benefits that you paid for over 30 years. A cut in your benefits) is a tax, no matter what they call it, and if you did not have it in (say) 2007, it is a new tax. Congress has been piling taxes on you, but call them something else; your furlough is “deficit reduction”, all taxes on you, but they refuse to tax billionaire hedge fund managers at your tax rate.

Let's look at some of the many ways Congress increases your burden:

1. Using immigration to hold down or cut your wages.
2. Removing the benefit from your paying for higher education (H-1B visas).
3. Paying immigrants with public benefits that you pay more for than Wall Street does.
4. A “wealth tax on 100% of your wealth, but less than 1% of Mark Zuckerberg's
5. Cutting your benefits, but not the taxes you pay; pay the same but get less.
6. Loaning banks trillions at less than 1%, while you pay high credit card rates.
7. A low minimum wage, less than a living wage, that favors hiring illegal immigrants.
8. Telling you, “We can't tax pollution, that would make the cost of electricity go up”.
9. Potemkin Village agencies, IRS, OSHA, EEOC, and the rest that do little or nothing.
10. Rewarding those with billions of income with rates barely higher than payroll taxes.

Some examples (ther are plenty more):

1. Profits v. Wages: Alan Greenspan, “Illegal immigration has contributed significantly to the growth of the U.S. economy in recent years; these immigrants serve as a flexible component of our workforce that can be quickly hired during good times and discharged when the economy slows. The economy would also benefit from increasing the number of skilled legal immigrants allowed into the country.”
Note when Greenspan says “economy” he means profits, not the general good, or even the gross domestic product (GDP), which is raised by consumer spending rather than investment in China. Pro-immigration advocates admit that immigrants drive wages down, but they say it is limited to $1,000 per worker (just 50 cents per hour worked is just unbelievable). The bottom 40% of US workers have family net worth of less than $1,000, so even losing $1,000 each year hurts them. Lowering the bottom wages, increases the need for public benefits, and cuts all wages.

Greenspan does not consider the future costs of illegal aliens (social security, Medicare, family reunification) nor th costs of unemployment.) Cutting the wages of bottom 40% of workers, the poorest, costs them more than $100 billion per year. Lacking illegal aliens, if employers had to pay a living wage ($13.22 in NVA) rather than the minimum wage ($7.25) often paid illegal workers, the average wage of the bottom 40% would rise by about $4, not the $1 estimated by pro-immigration advocates, so illegal immigrants are costing legal workers somewhere between $100 billion and $240 billion each year, money that would be spent in local stores, giving us more bang for he buck (GDP) than would tax cuts for the 1%.

2. lost education benefit: You send child to schools you pay real estate taxes to build and support, and she goes on to get a degree in a STEM subject, perhaps in computer science. Now that young woman can not get a job because Facebook or Wal-Mart as brought in workers on H-1B visas. Of current college graduates, 38% can not get a job needing a college degree. Their investment in higher education is being lost and many can not repay their loans.”Two-thirds of college seniors who graduated in 2011 had student loan debt, with an average of $26,600 per borrower... At least 38 million borrowers at all stages of life hold a total of more than $1 trillion in outstanding education loan debt, including federal and private undergraduate, graduate, and parent loans”. http://projectonstudentdebt.org/ and Student loan debt, by the numbers - The good jobs do not exist, but the loans live on.

3. More public benefits needed: Nearly two-thirds of the illegal immigrants in the United States are low-skill, low-education, and low-income residents who receive significantly more public benefits than they pay in taxes. The economic benefits brought by these immigrants do not outweigh their costs (legal residents are similar, the point is we can't afford more). Making illegal aliens legal means higher taxes or diluted benefits for citizens (economist Paul Krugman suggests taxes will not be raised, benefits for all citizens will be cut).

4. The Real Wealth Tax; Real Estate Taxes: When Edward N. Wolf wrote “Top Heavy, A Sudy of the Increasing Inequality of Wealth in America” proposing a modest tax on wealth, Wall Street howled, “... Wolff's book has been the target of an astonishing barrage of conservative attacks: Multiple op-eds in The Wall Street Journal ("What Wealth Gap?." asked Michael Novak on July 11), hostile book reviews and so on. Why should such a mild-mannered little volume provoke such rage? ...conservatives don't want the public to know too much because they fear it would hurt them politically.” (- Paul Krugman, “The Accidental Theorist” p52 1998). We need not argue how “the top 20 percent of households in the United States [came to] own 85 percent of the marketable wealth”, in order to ague that they should pay the same taxes as the bottom 80 percent pay on what is usually 100% of their wealth: 1.5% real estate taxes. That most people pay on the only thing of real value that they own, their homes. Why should the super rich pay at least the same taxes we pay? Most Americans, as Krugman points out, realize that many in our society have received gains that reflect luck or favors bought from Congress, and not their own efforts.

Congress could make the tax system more equitable by assuring the public that everyone pays the same wealth tax that 80% already pay (even renters pay as part of their rent.) People like Gates and Zuckerberg pay real estate taxes but even Gates $150 million house is less than 1% of his wealth, and he does not pay a wealth tax on stock or stock options, so your tax rate on what you own is likely 100 times higher than theirs.
5. Cutting benefits, but not taxes: Obama recently said he was willing to cut Social Security benefits. It does not take a genius to figure out that if your still have earn 15.3% for payroll taxes, but get fewer benefits, That is an increase in your burden, a tax. If you are laid off to help cut the deficit, that is a tax, if you get sick because Agriculture has laid off people who inspect food, that is a tax. Fewer benefits while you pay the same tax rates, is a tax increase. Why is that Congress can increase they burden on you, but not the burden on guys making $3 million a day. Think I made that number up? That is the average pay of the top 25 hedge fund managers. Their tax rate, 15%, is lower than what you have to earn to cover payroll taxes, 15.3% (you have earn both halves, the one you pay and the half the employer pays). "Phillip Bullock, the head of the company’s tax operations, confirmed that Apple Operations International has not paid U.S. corporate taxes in five years." Don't you wish tax laws were written for you?

6. Loaning banks trillions of dollars at less than 1 percent: Is a tax on you because the banks can “rent” the money out at for credit card debt, or invest it in the stock market, and any money you have in a savings account is earning less than inflation, it is worth less, and that is a tax on you. To help the banks, which already not that happy with. Big banks can borrow money through the Federal Reserve discount window at a rate of about 0.75%.The interest rate on federal subsidized Stafford student loans is set to increase from 3.4% to 6.8% on July 1st. The low rate offered banks like Goldman Sachs are intended to help mismanaged banks that made bad bets in the stock market “get well”. Rather than help you get well, Congress wants to lower your wage.

7. The low Minimum wage: You hear it often enough, “American citizens are unwilling to work hard, and do the dirty jobs.” The part you don't hear is this, “They won't do hard dirty jobs for less than a living wage; they won't work for what I want to pay.” But illegal aliens will, they have no choice and they can't complain if labor laws are broken and can't sue if they are injured by faulty equipment. This clearly rewards our worst employers, those who will not pay a living wage, and it punishes employers who hire US citizens and pay a wage that respects workers. Those illegal workers not only drive wages down, they drive payroll taxes down, and they want a share when they retire. If Congress wanted to the right thing for illegal aliens, they would let them sue our worst employers for discrimination in paying less than a living wage. Instead, Congress is planning rewarding our worst employers by having you take care of their employees when they retire or become disabled, and even take care of their parents.

8. Pollution taxes you: If you get sick from air pollution, and you might, you may find that diseases like cancer are a huge tax. When you get lower cost energy from a supplier that (say) burns coal, the low cost you pay comes tons of mercury being dumped into the air you breathe, on the land where you food is grown, and in water, where it tends to collect in fish. Pollution is a tax and if you add the cost of your electricity to the cost of the pollution, the real cost is as high as solar or wind energy today, and they will be lower in the future. The cost of pollution, to the public, is estimated at $94 billion every year. Coal fired electricity causes 38% as much damage to the economy as it adds value, and yet Congress will not address the issue in a coherent way (see study, “Environmental Accounting for Pollution in the United States Economy”(American Economic Review article) also see, Paul Krugman, "TheParty of Pollution" and Re-election Strategy Is Tied to a Shift on Smog

9. Potemkin Village agencies: The phrase “Potemkin village” comes from Russia, about 1780, “originally used to describe a fake village, built only to impress. The phrase is now used, typically in politics and economics, to describe any construction (literal or figurative) built solely to deceive others into thinking that some situation is better than it really is.” That describes many of our government agencies that have been hollowed out by the industries they are supposed to regulate and a Congress that is owned by business and does not want them to regulate anyway. The the “revolving door' moves business executives from industries to regulators and back. In June 2009 the Obama administration tapped a BP executive to serve as a deputy administrator for the Minerals Management Service (MMS). Interior Secretary Ken Salazar appointed Sylvia V. Baca . Prior to that she had spent eight years at BP. The MMS was responsible for management of BP's Deepwater Horizon well that started spewing into the Gulf of Mexico. Two weeks after BP's Macondo well blew out in the Gulf of Mexico, the federal government's Minerals Management Service finalized a regulation intended to control the undersea pressures that threaten deep water drilling operations. (Washington Post story August 24, 2010) Sadly, this is the way many agencies act, when Congress and the Presidents let industry make the appointments or write the bills.

10. How do hedge fund managers such low tax rates? They buy them. No panel of citizens or economists could find any justification for giving people who manage hedge funds, the top 25 averaging an income of $3 million day (a lottery winner of just one day's income, would pay tax rates twice as high). The people mange other people's investments, and up to half of those investments are actually a tax on the stock market (high frequency trading where “investments” usually last less than one minute, do those people really deserve rates of 20% when your payroll and income tax take a bigger bite out of what you earn? Most people who have looked at say “no”, and here a a very good reason, absent those tax give-aways, your rate could be lower, or the deficit be less.”But because of the financial lobby’s clout, the loophole most likely won’t be closed. If it isn’t, shame on both parties for giving us another reason to distrust our democracy and our capitalist system. While the tax legislation passed on Jan. 1 increased the top individual-income tax rate to 39.6 percent from 35 percent for couples making more than $450,000 and individuals making mo A re than $400,000, it left carried-interest income taxed at just 20 percent. “ (Costly and Unjust Perk for Financier s- NY Times)

How and why Congress plans to get away with increasing taxes on you:

As Joseph Stiglitz has said in Vanity Fair, “the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy.

“Given the power of the top 1 percent, this is the way you would expect the system to work.” "Of the 1%, by the 1%, for the 1%" May 2011

The Congress know that there is no labor shortage in the tech world, that hundreds of thousands of STEM graduates are either unemployed or underemployed, and that the H-1B visa is just a way to drive down wages, even if it also endangers the security of this nation. They also know the pain caused by almost 16 million Americans being out of work, and yet they want to add a million more every year. Why don't they seem to understand?

"It is difficult to get a man to understand something, when his salary [campaign contributions] depends upon his not understanding it!" _ Upton Sinclair

Low wage workers on H-1B visas (or illegal immigrants picking lettuce for less than a living wage) don't just drive down their labor rates, they drive down your wages, and any economist can show you how. Unemployed tech workers don't just go home to live with their parents, they look for work, and since they don't know how hard your job is to do,or they are younger have no children, they offer to do it for less than you are being paid. That is not a joke, that is EXACTLY what happens. When a bright young college graduate offers to do your job for less, your boss, who is not sure your job is really that hard, or exactly what you do, may not hire him/her but they don't need to give you a raise.

As Bob Dole said in a 1982 Wall Street Journal interview, “When those political action committees give money, they expect something in return other than good government. It is making it more difficult to legislate. We may get to a point where, if everybody is buying something with PAC money, we can't get anything done...Poor people don't make campaign contributions. You might get a different result if there were a 'Poor PAC' up here on Capital Hill.” The article was called “Cash Politics”.

Dole said that poor people are not represented by lobbyists, but it is not just the poor that don't have lobbyists, it is the 99% that Stiglitz refers to; the vast majority of Americans are not represented on Capital Hill. (Dole quote p148 “So Damn Much Money” Robert Kaiser 2009)

Carolyn Loachhead, "Green card plan for students stirs worry"
The giant immigration overhaul now moving through the Senate Judiciary Committee would do just that, with the intention of attracting the world's "best and brightest" to U.S. shores



"But like many past changes to immigration law, this one could have unforeseen consequences, critics warned, potentially turning U.S. universities into "green card mills" and providing a large new pipeline to permanent residency for foreign graduate students, at the same time discouraging Americans from entering the very fields where they are claimed to be in short supply.
"What it's going to do is induce universities to start selling green cards through their master's programs," said Ron Hira, an associate professor of public policy at Rochester Institute of Technology in New York. "A master's program could be as short as 12 months. What you actually end up doing, I think, is creating very large flows of people who see a master's as a fairly inexpensive way to basically buy a green card." Ron Hira on Brookings report.
"The bill sets no cap on the number of these potential new green cards. It sets no quality standards for the degrees or for the universities and colleges that would grant them. It bypasses the usual requirements that employers seeking green cards for their workers demonstrate that they have sought U.S. workers first." For more information on science careers and the damage from H-1B, see, http://sciencecareers.sciencemag.org/

Senator Mark Warner at 202-224-2023 - Senator Tim Kaine at (202) 224-4024