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David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In a terrific column for Tax.com, Pulitzer-Prize winner David Cay Johnston breaks down new government data and puts USA Today’s whole “lowest tax bills since 1950″ revelation into dollars and cents we can all understand:

In 1979 federal taxes for the median-income household totaled $6,100, but in 2007 taxes slipped to $6,000. That $100 decline, measured in 2007 dollars, understates what a bargain taxes have become. Back in 1979 federal taxes equaled 18.7 percent of comprehensive household income. By 2007 incomes had grown 28 percent in real terms, so the tax burden not only dropped in absolute dollars, it also fell as a share of median comprehensive income to 14.4 percent. So over 28 years median income has risen in real terms by $9,100 while federal taxes have fallen by $100.

As Johnston points out, this is not something you hear very much about from journalists — or as he puts it, “those who play journalists on television talk shows.” And you certainly don’t hear it from congressional Republicans or rank-and-file conservatives, who continue to bewail allegedly high taxes as our biggest problem, despite the real emergency of cash-strapped communities now slashing police forces, tear up roads and even outsource entire municipal workforces. (more…)

David Cay Johnston

 By David Cay Johnston
Pulitzer Prize winning investigative journalist

Atop the front page of the  Sept. 23 New York Times  is a color photo of Georgia homes flooded up to their rafters, an image that illustrates how when it comes to insurance our Congress applies two standards, separate and unequal, one for property and a lesser one for people.

Unlike people without health insurance, homeowners have access to public option flood insurance. 

Even those who fail to take personal responsibility to buy insurance to protect their property can get benefits, thanks in good part to politicians who are leading opponents of public option healthcare.

Consider the example of  Trent Lott of Mississippi, who was that state’s senior senator when Hurricane Katrina hit in 2005, flooding his home looking out on the Gulf. Lott had not exercised personal responsibility by taking out flood insurance even though it was available from the federal government at low cost. He did have private insurance, but his insurer refused to pay much of the claim, saying it was not wind damage (which was covered by the policy), but water damage (which was excluded).
    
Weeks later Lott introduced Senate Bill 1936, which would have authorized retroactive flood insurance. The idea came from Representative Gene Taylor, a Democrat who represented the Mississippi Gulf Coast, which should remind us that when there is voter demand for reform, and campaign contributions are not the driving force, the parties have worked together.    

Lott’s bill would have let flood victims pay 10 years of flood insurance premiums after-the-fact plus a 5 percent late payment penalty. Since this storm was rated a once in 500 years occurrence, even 10 years of premiums would not come close to covering the real costs, meaning a taxpayer subsidy was built into the Lott bill.

Instead of being laughed at by his fellow Republicans for promoting socialism, the concept of retroactive relief was warmly embraced, although not the idea for retroactive insurance. Instead the government went with handouts.

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