http://wsws.org/articles/2011/mar2011/pers-m07.shtmlRepublican and Democratic governors in state after state claim they have no choice but to impose drastic cuts on the wages, health benefits and pensions of public employees, as well as slashing funding for education, health care and other vital social services. The states face intractable budget shortfalls, the argument goes. They have to cut because “there is no money.”
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Let us consider, starting with the low-hanging fruit, where the money could be found to wipe out the deficits of all 50 states combined, which this year come to a projected $130 billion.
* The extension of the Bush tax cuts for the wealthy, enacted by a Democratic-controlled Congress in December with the approval of the Obama administration, pumps $700 billion over the next ten years into the pockets of the rich. Reclaiming two years of that tax windfall would eliminate all the state budget deficits combined.
* Total compensation at Wall Street banks and securities firms last year hit a record $135 billion, according to an analysis by the Wall Street Journal, on all-time-high revenue of $417 billion. The recipients of the Wall Street bailout could bail out the states out of their own pockets.
* The 400 richest individuals in the United States dispose of a staggering $1.37 trillion in assets, an average of nearly $3.5 billion apiece. A levy of 10 percent on the resources of these billionaires would also erase the deficits of all 50 states.
* Combined profits for all American corporations rocketed upwards in 2010, hitting an annual rate of $1.66 trillion in the third quarter. A tax of eight percent on those profits—the same percentage as the cut Walker seeks to impose on schoolteachers and park rangers—would eliminate all state deficits.
* US corporations are currently sitting on $2 trillion in cash, refusing to hire workers despite collecting tax cuts that are supposed to be incentives to do so. A levy of 10 percent on that idle cash would provide enough money to eliminate not only the deficits of the states, but the deficits of all cities and local governments too, as well as preserving the jobs of hundreds of thousands of public employees.
* Hedge funds assets rose to $1.92 trillion in 2010, the highest ever, up from $1.18 trillion at the beginning of the year. Given a standard earnings formula of 2 percent of total assets plus 20 percent of the increase, hedge fund bosses stood to collect roughly $186 billion in personal income. An 80 percent tax on that income—less than the percentage rate on multimillionaires levied under the Eisenhower administration—would produce more than enough revenue to put all 50 states in the black. (It should be pointed out that the top hedge fund manager, John Paulson, had a personal net profit of more than $5 billion in 2010, while more than a dozen hedge fund bosses had personal incomes above $2 billion and many more took in over $1 billion).
Contrary to the claims of the politicians and the media, it is not difficult to find the money to close the state and local budget gaps, with enough left over to begin a massive social rebuilding program. Implementing just some of the above proposals would generate sufficient funds, for example, to provide jobs in the next two months for 5 million Americans.
More at the link --
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