| BONDS OR TAXES --- WORKING PEOPLE AND THE MIDDLE CLASS GET SCREWED OR DO THE UPPER CRUST PAY THEIR FAIR SHARE --- What will it be? • "The upper crust", a term referring to the wealthy or privileged classes. The term supposedly comes from a Medieval analogy to pie or bread: the upper part of the crust which was less burnt and more flavorful was for the elite members of a household while the workers and servants got the remainder. The term came to be applied to the social elite themselves who ate the most flavorful bread. It is UTMDTF’s position that democracy can only nurtured, sustained, and improved when everyone in society pays their fair share and participates in society through effective, organized action. On the other hand, the elitists in our nation, the “upper crust” rich and powerful (who are the backbone of the conservative movement) work to limit the participation of the public in democracy. When we the working people are not organized then the upper crust use government as a tool to govern us and increase their wealth. They leave burnt toast for the rest of us. When we are organized then we bring them to heel. There is no better illustration of this use of government for the benefit of the rich than the conservative’s promotion of Government Bonds to finance government rather than levying progressive taxes that share the cost of government proportionally among all the taxpayers. Conservatives depend on the average American (you, me and people like us) being badly informed about bonds and how they work. UTMDTF prepared this breakdown on bonds and how we the people get screwed when they are used to finance government. This is important because G.W. Bush and many governors are proposing using bonds to cover deficits instead of raising taxes on corporations and the wealthy. Here is a short definition of bonds from Wikipedia:
coupon) at a later date, termed maturity. A bond is simply a loan in the form of a security with different terminology: The issuer is equivalent to the borrower, the bond holder to the lender, and the coupon to the interest. Bonds enable the issuer to finance long-term investments with external funds.
(The several States of the United States, for example.) Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid). A tax may be defined as a "pecuniary burden laid upon individuals or property to support the government […] a payment exacted by legislative authority."[1] A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government […] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."[1]
the government. • The government pays the bond holder --- the lender --- interest just as in any other loan. The government pays interest on bonds like you or I pay interest on our mortgages, credit cards, and car loans. • Bond purchasers buy the bonds to make a profit from loaning their money to government. They take little or no risk because the government guarantees the repayment of the bonds and the interest. • The government pays the cost of the bond with our taxes. • Taxes are financial charges levied upon us by the government to pay the costs of government. Progressive taxes are levied in such a way that all citizens pay a fair share of the cost of government based on their financial position within society. • When taxes are used to directly pay for government then the cost of interest is avoided and the cost of government is significantly reduced and our governments live within their means. Bonds are a sweet deal organized crime would love: take from the poor, working people and the middle class to give to the rich. Many government projects are now “privatized” and constructed and managed by corporations owned by the same people who buy the bonds so we pay them going both ways. Is it any wonder that there is no money for “health care”, roads, maintenance and improvement of schools, and a life of dignity for retirees? Theoretically regular people like us can buy government bonds; but the truth is that we seldom have the cash to buy them. Instead they are bought in the billion$ by the upper crust (rich and powerful) through their institutions and lately by foreign countries. Here is how we get screwed by government financing through bonds:
through loans/bonds. • The rich and powerful have cut their taxes so that they no longer pay a fair share of life in this society. This loss of tax revenue from the rich makes bonds necessary to make up the difference and the rich get richer by buying the bonds. • The bonds must be paid so politicians raise our taxes and take our money to pay the rich. Notice that taxes are not necessarily called taxes: they can be called tolls, tribute, duties, and so forth and they are not voluntary. In fact “fees” that one pays to government are also a form of tax so when the conservatives want to raise money they often raise the “fees” to be charged for government services. They are well aware that many, if not most, fees are paid almost exclusively by middle and lower income (middle class) peoples: charges for museums, state and national parks, small business permit fees, trash collection fees, fines, parking permits, you name it! • If a fee should be charged to a wealthy person or a wealthy corporation the government often finds a way to give it back to them or just cancel it. For example, if a business is going to establish a new office or plant in this or that city or state quite often the business is given a break on taxes or forgiven normal fees. But, of course, the costs of the government expenses must be paid in some manner and guess what, they are piled on we the people with interest. George W. Bush, Arnold Schwarzenegger and other conservatives have cut the taxes of the rich or refuse to further tax the upper crust and make them pay their fair share. This creates a shortfall in tax collections that results in government deficits: the taxes collected are not sufficient to pay the cost of the government necessary to provide for the common good hence the sale of more bonds and the transfer of more of our taxes to the rich. Think of it as the effect of a pay cut in your household and your use of a credit card to buy groceries putting you further and further behind as the interest charges grow on your credit card bill. The next time you get a ballot information booklet with information on a bond election look at it closely and you can see that the “interest paid on the bond retirement is close to the amount of money borrowed at the sale of the bond.” In other words, just like the sum of your mortgage or your car payments is often close to double the purchase price of the house or car a particular government bond funded project may cost twice as much as the dollar price of the project. Many privatized government projects are carried out by corporations owned by the same upper crust who buy the bonds --- so we pay them going both ways. Bottom line: When conservatives fund government projects through the use of bonds they raise our taxes, give the profits to the rich, and screw the rest of us twice over. If on the other hand all income of the wealthy(salaries, bonuses, perks, interest, capital gains, bond interest, etc), of the corporations, and of business were taxed at the same rates as the wages of working people and the middle class then government would be able to pay for projects at the real purchase price, not spend billions upon billions of dollars in interest, cut the cost of government and provide more essential services (health, education, infrastructure) for the common good. The wealthy should also be required to pay into social security at the same rate as working people on all their wealth --- then social security could provide higher benefits, never run short of funds, and make the lives of retired workers better. CAN WE MAKE THIS HAPPEN? YES, WE CAN BUT WE MUST ORGANIZE SO THAT WE VOTE OUR POWER THROUGH CONCENTRATED ELECTION STRATEGIES THAT PUNISH ELECTED REPRESENTATIVES WHO CATER TO THE RICH ELITES AND INSTEAD ELECT REPRESENTATIVES WHO WILL ACT ON BEHALF OF THE VAST MAJORITY OF THE WORKING MIDDLECLASS AND PEOPLE OF LOWER AND MODEST INCOMES. NEWS FLASH: Here is a quote from the LA Times, 6/1/2008, from an article on the front page of the California section, "Gov.'s plan faces rocky path". The quote is from paragraphs toward the end of the article on page B13. "To get Wall Street to lend the state the $15 billion against a modernized lottery, California would have to pay $23 billion to $30 billion in interest and other borrowing costs over the next 30 years." That is not UTMDTF making the estimate of interest expenses, but the LAT. And you know as well as UTMDFT does that the bond payers will get their money before our schools receive their funding from the lottery, the upper crust always get theirs, first. |
| Bonds or Taxes: Information on how the upper crust steals from our families! |
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UTMDTF doesn't like censorship but it seemed
appropriate to cover the word for a family site.
appropriate to cover the word for a family site.
| Don't mourn, organize and fight for a better nation with freedom, equality and dignity for all people. Vote NO on the hateful Proposition 8 in California! |
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| Unite and Fight for democracy! |
| and break the chains that bind us from realizing our true potential as the leading spirit of America. We the people have built and inspired liberty, we shouldn't let it perish. |
| Unite the many, defeat the few --- fight for democracy! |