Means test is a faulty argument

Published 8:32 am Saturday, December 25, 2010

A “means test” for unemployment compensation? There appears to be no end to the attempts by Republicans to humiliate the poor. Furthermore, Matt Benda (Dec. 17) stated that he was “troubled” by the attempt of Democrats to use unemployment payments as a poverty reduction program. Well what would you call the possibility of 2 million people to be out on the streets the week before Christmas (unless Obama gave in to the the blackmail and millionaires got their tax cuts)?

According to the Center for American Progress, unemployment payments lifted 3.3 million people, including a million children, out of poverty in 2009. Dean Baker of Center of Economic and Policy Research reported, “If benefits aren’t extended, millions will go hungry. According to a new report from Agriculture Department in 2009, about 50 million Americans including 17 million children lived in food-insecure households.  These are facts!

Matt Benda also objected to Star Tribune’s “mistaken argument” that cutting off unemployment benefits would increase unemployment rates. “According to this logic,” Benda complains, “UI benefits ‘ripple’ through the economy.” Undoubtedly, Benda would rather have us believe in the old worn-out promise that making the rich even richer would be of benefit to us all. Their increased wealth upon wealth will one day “trickle” down to us.

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The core of the Republican argument against taxing the wealthy is that it would have a negative effect upon small businesses making more than $250,000 a year. Supposedly, this would limit their ability to hire more employees. But Leon Friedman, professor of Constitutional Law at Hofstra Law School, put an end to that lie. He found that only about 3 percent of them (mostly professional law firms) fall into this category. There are more that 22 million sole proprietor ships filing tax returns each year and their average income way below $100,000.

The Nation (Dec. 13) reported that the top 1 percent of the population now own 35 percent of the total wealth of the nation. The next 4 percent own 27 percent of the total wealth. Thus, the top 5 percent own 62 percent of the total wealth of the country. Yet this rapidly widening gap between the wealthy and everyone else has not tempered the shrill Republican demands for giving the wealthy even more tax breaks. Integrity is not an issue with these politicians.

We need to adopt the same attitude Europe has toward the wealthy, where they have wealth tax — that is, a tax on the total net worth of each household, which must be paid not just at the time of death but annually. If, for example, a Norwegian citizen has a net worth of $5 million, he must pay, in addition to any income tax, 1 percent of $5 million, or $50,000 to the government every year. Wouldn’t this be a more appropriate target than out of work, desperate Americans through a degrading means test? The safety net Benda believes in “strengthening” obviously comes with conditions and holes to fall through.

Mary Milliron

Hollandale