Matching Grant Challenge
BruceMatch
We’re slowly making headway in our annual fund drive, but not nearly fast enough to meet our make-or-break goal.  On the bright side, a generous CounterPuncher has stepped forward with a pledge to match every donation of $100 or more. Any of you out there thinking of donating $50 should know that if you donate a further $50, CounterPunch will receive an additional $100. And if you plan to send us $200 or $500 or more, he will give CounterPunch a matching $200 or $500 or more. Don’t miss the chance. Double your clout right now. Please donate.
 unnamed

Yes, these are dire political times. Many who optimistically hoped for real change have spent nearly five years under the cold downpour of political reality. Here at CounterPunch we’ve always aimed to tell it like it is, without illusions or despair. That’s why so many of you have found a refuge at CounterPunch and made us your homepage. You tell us that you love CounterPunch because the quality of the writing you find here in the original articles we offer every day and because we never flinch under fire. We appreciate the support and are prepared for the fierce battles to come.

Unlike other outfits, we don’t hit you up for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it.

CounterPunch’s website is supported almost entirely by subscribers to the print edition of our magazine. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners. We don’t clog our site with deceptive corporate ads.

The continued existence of CounterPunch depends solely on the support and dedication of our readers. We know there are a lot of you. We get thousands of emails from you every day. Our website receives millions of hits and nearly 100,000 readers each day. And we don’t charge you a dime.

Please, use our brand new secure shopping cart to make a tax-deductible donation to CounterPunch today or purchase a subscription our monthly magazine and a gift sub for someone or one of our explosive  books, including the ground-breaking Killing Trayvons. Show a little affection for subversion: consider an automated monthly donation. (We accept checks, credit cards, PayPal and cold-hard cash….)

pp1

or
cp-store

To contribute by phone you can call Becky or Deva toll free at: 1-800-840-3683

Thank you for your support,

Jeffrey, Joshua, Becky, Deva, and Nathaniel

CounterPunch
 PO Box 228, Petrolia, CA 95558

Why Tax Policy is Not at the Root of the US's Economic Problem

Upward Redistribution

by DEAN BAKER

There has been much public discussion of who exactly pays taxes and who gets government benefits ever since Mitt Romney’s now-famous fundraising speech was made public. Almost all of this discussion has focused narrowly on what the government actually takes from people in tax revenue and what it pays out in Social Security, unemployment insurance, and other benefits. This is unfortunate, because tax and transfer policy is the less important way in which the government helps or harms people.

The set of rules the government puts in place that structure the economy redistributes far more income than its tax and transfer policy. Starting with an obvious example, the government has destroyed millions of manufacturing jobs through a trade policy that puts U.S. manufacturing workers in direct competition with low-paid workers in the developing world. This policy has also had the effect of driving down wages in other sectors as the displaced manufacturing workers are forced to compete for jobs in retail or elsewhere in the service sector.

Note that this is not free trade. There are millions of very bright people in India, China, and elsewhere in the developing world who could easily train to U.S. standards for doctors, lawyers and other highly-paid professions. They would be happy to work in the United States for half the prevailing wage in these areas, leading to large gains to consumers and the economy, but we chose not to structure our trade agreements to facilitate trade in this area.

We have also strengthened patent and copyright laws to make the monopolies granted stronger and longer. Currently we spend $300 billion a year on prescription drugs. If drugs were sold in a competitive market, we would save around $270 billion annually. This transfer from consumers to drug companies is about five times as large as the size of the Bush tax cuts to the richest 2 percent.

Labor-management policy is another important area through which the government redistributes income. In the last three decades this policy has been much more friendly to management and hostile to workers. For example, in the Chicago teacher strike, Mayor Rahm Emanuel had gone to court and threatened strike leaders with fines and imprisonment if they did not end their strike.

There are many other areas in which the rules set by the government redistribute income. In the last three decades, the direction of redistribution has been mostly upwards. If we want to have a serious discussion of makers and takers, we have to look at these rules, not just the tax code.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This column originally appeared in Debate Club.