Archive for the ‘Social Justice’ Category

To some Americans, the word “tax” is akin to a “four-letter-word,” and the profanities heard around tax time can prove that public bent.

Though admittedly overly-complex and onerous to file, most people understand the necessity of taxes to pay for the valuable services provided by our government like Social Security, Medicare, education, public safety, roads and the like. But with Congress’s recent game of chicken around the government shutdown and the debt ceiling, as well as the grave impacts of the sequester on needed public services — to keep those services, it’s clear we need to raise revenue somehow.

I’m not sure why there’s an aura of animosity when it comes to taxation since, when one examines public opinion polling, it’s clear that Americans are not against taxes themselves, only unfair taxes. Fair — now that’s a loaded word. While some would argue that fairness means corporations must have a tax rate that maximizes their ability to compete in a global market, most people would say that fair means treating people equally. An example of this idea can be found in the fact that, unlike the average Joe (or Jane), corporations are able to subsidize their tax bills by making use of loopholes that allow them to deduct certain types of pay, like performance-based bonuses for CEOs who make over a million dollars a year. I think you can agree, that’s just not fair.

In addition to making sure that CEOs and corporate entities are paying their fair share in taxes, another important way to bring in needed money to fund the government’s budget and reduce the deficit is to end international tax loopholes that incentivize corporations “sheltering” their profits in tax havens (other countries with lax tax rules) instead of bringing those dollars back to the United States. While you and I are letting fly a few expletives as we bemoan the filing of our annual taxes, huge corporations like GE, Exxon-Mobil and Citigroup that are making billions per year in profit get away scot-free, without paying a single cent in federal income tax. And, of course, armies of industry lobbyists aim to keep it that way.

This inequity is why many welcomed the recent tax proposals released by Senator Max Baucus (D-Mont.), Chairman of the Senate Finance Committee. One of the discussion drafts in his scheme for overhauling the tax code aims to close international tax loopholes along with two other proposals that would reduce fraud and increase simplicity of the tax code. Though these proposed changes would begin to address some of the worst problems with international tax-dodging practices, the proposals themselves have been deemed “revenue-neutral” and are not expressly aimed at funding the government services upon which even multinational corporations depend.

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Barclays should “take its medicine” and pay the $435 million civil penalty to the U.S. Treasury and $34.9 million in unjust profits that federal regulators say it owes to low-income families primarily on the West Coast, whom it harmed through market manipulation for two years, seven organizations said today in a joint statement.

Barclays is one of several banks found by the Federal Energy Regulatory Commission (FERC) to have manipulated energy markets between 2006 and 2008. In July, FERC ordered Barclays to pay a penalty as well as a refund to families in California, Arizona, Oregon and Washington. Barclays has refused to pay.

FERC also imposed fines on JPMorgan Chase and Deutsche Bank as well for manipulating the California energy market; those banks paid their fines.Yesterday, FERC took Barclays to federal district court to force it to pay up. Some of the money owed is to go to help low-income families with energy bills.

“Millions of working families pay their bills on time. Why can’t Barclays?” asked Tyson Slocum, director of Public Citizen’s Energy Program. “Barclays should pay up and not drag this case out as the winter approaches, which is when families will face thin budgets and decisions between food and heat.”

FERC issued an 85-page order on July 16 describing how Barclays engaged in complex “financial swap” transactions by manipulating West Coast power prices for two years. It noted that Barclays’ physical trades weren’t responding to supply/demand fundamentals but rather allowing the bank to profit on artificially high prices from its related financial swap positions.

FERC also released excerpts from messages written by Barclays traders involved in the price-manipulation that reveal full intent and knowledge of the malfeasance. This message from 2006, for example, refers to the California market: “I just started lifting the piss out of the [P]alo [Verde Hub, a key price-point for the state’s electricity market].” The trader commented, “was fun. need to do that more often.”

The manipulation continued for at least another two years, with FERC estimating a market cost to consumers of $139.3 million. Despite costing the market so much, Barclays, worth about $2.4 trillion, has been told only to refund ratepayers $34.9 million, its profits during that time. The refund represents .0015 percent of Barclays’ net assets.

Recognizing the harm to consumers caused by Barclays’ market manipulation, FERC ordered all of the unjust profits to go to the four affected states’ Low Income Home Energy Assistance Programs (LIHEAP), which provides critical assistance for struggling families to help pay utility bills. This critical program has already suffered severe cuts of 36 percent in federal funding since FY 2010.

“There is an urgent need for LIHEAP to help to struggling low-income families pay their energy bills,” said National Consumer Law Center attorney Olivia Wein. “These funds will help the most vulnerable households in California, Arizona, Oregon and Washington, which include low-income elderly and families with small children at a time when the federal LIHEAP program is severely underfunded.”

“Barclays essentially defrauded countless families, and at the end of the day will get to keep much of the profits it made that way,” said Slocum. “If we allow banks like Barclays to simply make fines a cost of doing business, we can expect to continue being gouged by unscrupulous corporations engaging in market manipulation.”

“FERC should not allow unscrupulous energy traders to continue to prey on Californians,” said Mark Toney, executive director of The Utility Reform Network (TURN), California’s nonprofit consumer advocacy organization. “Barclay’s, one of the wealthiest companies in the world, owes California consumers millions of dollars and should return its ill-gotten gains immediately.”

Noting how many bank manipulation schemes have been revealed recently – reflected in recent FERC actions against Barclays, JPMorgan and Deutsche bank – the organizations signing the joint statement argue that FERC should undertake an evidentiary hearing to examine whether or not the organized markets deliver just and reasonable rates.

“There is nothing in these settlements that addresses whether the inherent structure of the markets is adequately protecting consumers,” the letter says.

The letter also calls for the creation of an office of consumer advocate at FERC that would authorize funding for groups that represent household consumers, thereby providing critical assistance for consumers and enhancing the representation of households before FERC.

The joint statement, written by Public Citizen; Americans for Financial Reform; Arizona Community Action; A World Institute for a Sustainable Humanity (AWISH); Citizens’ Utility Board of Oregon; National Consumer Law Center (NCLC), on behalf of its low-income clients;, The Utility Reform Network (TURN), and is available here.

Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum

Applebee’s workers who sued their employer for unpaid wages got good news this week: The U.S. Court of Appeals for the Second Circuit has agreed to hear their case. The appellate court will decide whether a lower court erred in denying class-action status to the workers. That means that their case lives on.

The case, Roach v. T.L. Cannon Corp., has national implications for workers and consumers and is being closely watched in the legal community. Public Citizen is representing the workers.

Public Citizen petitioned the Second Circuit in April, contending that a federal district court in New York was wrong to tell the Applebee’s workers that their lawsuit for unpaid wages could not be heard as a class action. The U.S. District Court for the Northern District of New York denied class certification after incorrectly interpreting the March 27 U.S. Supreme Court ruling in Comcast v. Behrend, we maintain.

The outcome of the New York case has national implications for a wide array of pending class-action cases across the country that are being challenged in the wake of the Comcast decision. If the lower court decision stands, and the workers are not permitted to band together to seek back wages that were illegally withheld by their employer, then wage-and-hour laws and other protections for workers and consumers could become prohibitively difficult to enforce.

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A protester in front of the US Capitol holding a sign that reads "Medicare for all"To celebrate Medicare’s anniversary, I thought I would share my top 10 reasons, out of literally thousands of others, to support a single-payer health care system:

10.  Under single-payer, say goodbye to medical bankruptcies in the United States.

According to Physicians for a National Health Program and U.S. Sen. Elizabeth Warren (D-Mass.), more than 62 percent of the more than 2.2 million personal bankruptcies in the United States are due to medical expenses.

This problem does not just touch those with health insurance.  Many of those who need to file for bankruptcy due to medical costs had health insurance coverage. Single-payer health care would provide health care for all and ensure that no one goes bankrupt due to illness.

This video explains the problem and the solution very well.

9.  If it’s good enough for the royal baby, George Alexander Louis, it’s good enough for the United States.

Here’s my previous blog on this topic.

8.  Single-payer would cover everyone.

I believe health care is a right – not a privilege reserved for the wealthy. Regardless of how much you have in your wallet, you would have access to doctors and hospitals under a single-payer system. In the wealthiest nation in the history of humanity, it is the least we can do.

7.  If members of Congress tried to shut down the government to defund single-payer, they would be defunding health care coverage for themselves and their families.

Unless members of Congress and their families participate directly in a particular health care system, they can hold it hostage for political gain. Case in point: 60 members of Congress recently sent a letter to their leadership requesting that House Speaker John Boehner (R-Ohio) shut down the government if the administration doesn’t “defund” Obamacare. If those representatives and their families received their health care through a single-payer system, they would be less inclined to defund it.

6.  It works well in other countries.

 Dozens of other industrialized countries can’t all be wrong. Their people live longer, their child mortality rate is lower and they have unrestricted access to maternity care. This is an example of where we could learn something from studying how other countries provide health care.

5.  Transitioning to a single-payer system would save billions of dollars.

If the United States was able to move away from its private health insurance system, we could save more than $400 billion a year in administrative costs. Further savings could be obtained by adopting European-style drug pricing and provider payments.

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by Dave Sterrett and Taylor Lincoln

Road Map to Single Payer IllustrationThe pathway to single-payer implementation is a winding one. Public Citizen has taken the opportunity to issue a new report that provides a road map to help navigate the process for states that seek such a system.

Efforts are moving forward in several states (Vermont, New York, California, Pennsylvania, Minnesota, Hawaii, and Colorado) to have a single government payer for health care services instead of a patchwork of private and public health insurers. Such systems (see Canada) have a record of providing comprehensive, universal care at significantly less cost than we pay for the U.S.’s fragmented system that leaves millions of people with no coverage.

But leaders in many of these state governments may be unaware of how to overcome legal obstacles to move toward a single-payer system. Today, Public Citizen released a groundbreaking report that explains the steps that states can take to create a system that would maximize the efficiencies promised by a single-payer system.

Specifically, the report addresses how a state can free itself from the strictures of the Affordable Care Act (ACA) and channel the federal money that would otherwise be spent by the federal government pursuant to the ACA into a unified, state-administered system.

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