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laststeamtrain Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-19-08 11:29 PM
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"Two Americas" IS Reagan's Legacy
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"Two Americas" IS Reagan's Legacy
by: Paul Rosenberg
Sat Jan 19, 2008 at 14:53:59 PM EST

Yesterday, both Amy Goodman (Democray Now!) and Bill Moyers had David Cay Johnston on to talk about his new book, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill). This is a book about Reagan's real legacy--or one of them, anyway. (9/11, obviously, was another.) And while I would disagree with Obama's characterization that Reagan was really the prime mover involved, he was most definitely the front man, which is why it is impossible for many high-information activists to go quietly with the idea of sweeping it all under the rug.

From Democracy Now!:

<snip>

AMY GOODMAN: Speaking of sports teams, talk about President Bush and where you believe, really, ultimately, he got his wealth.

DAVID CAY JOHNSTON: Well, it isn't a function of belief, Amy. I've got the documents. President Bush, who will go down in history as the great tax cutter, owes almost all of his fortune to a tax increase that was funneled into his pocket. What happened is, an oil man named Eddie Chiles wanted to sell his money-losing Texas Rangers baseball team. They played in a little stadium, smaller than the one we have here in Rochester, New York, and of course couldn't make any money. So George Bush put together a group of very wealthy investors to buy the team. He put up himself $600,000 of borrowed money. The partners then gave him a 10 percent stake as the managing partner. That's a very common arrangement in business. Then they held a special election in January of the year in question to increase the sales tax in the town of Arlington, Texas, by one half-cent. That money was used to build a new baseball stadium. It's an incredibly nice baseball stadium.

Then the power of government to seize land by eminent domain-and I go back to what was talked about in Kenya, the leader there can give you land, he can presumably therefore also take it away-the government used its power of eminent domain to seize land from people, not for a public purpose-not for a military base, for a school, for a highway, for a sewer plant-but because it was coveted by President Bush and his friends, and they were unwilling to go into the market and buy it through market economics. So the government seized this land. People were paid far less than they were owed, and we know that because one family fought back, and a jury, after being out just a matter of minutes, awarded them about six times what they had been offered by the government of Arlington.

The value of this subsidy, according to Ray Hutchison, who is the husband of Senator Kay Bailey Hutchison, is a prominent Republican insider in Texas and is the leading authority on municipal bond finance in Texas, was $202.5 million. The profit that President Bush and his partners made when they sold the team was $164 million. What does that tell you? Every single penny of additional money President Bush got from that investment, his gain, came from the taxpayers. He did not add one cent to the value of that team through his skill as an MBA manager. This gets repeated all over the country.

And then when President Bush filed his tax return, he should have reported that the 10 percent share he had, the one that was given to him as compensation for being general manager, was wage income. And, of course, we tax wages at a higher rate than we do capital income, like capital gains. President Bush therefore shorted the government $3.4 million. Under our system, you sign your tax return subject to audit. If you're not audited and you don't pay the government the right amount, if it's too much, the government keeps it, if it's too little, you short the government, but nothing happens to you.

<more>

http://www.openleft.com/showDiary.do?diaryId=3320
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