2012 GOP presidential hopeful and Texas Gov. Rick Perry released a tax plan last week that would institute a 20 percent “flat tax,” while giving taxpayers the option of continuing to use the current tax code and all of its deductions and credits. Perry claims that he will be able to balance the budget while making the tax code simpler and fairer.

We already knew that Perry’s plan is the epitome of complicated and unfair, as it layers a new tax code on top of the old, and makes the new code incredibly advantageous to the wealthy by entirely exempting investment income from any taxation at all. And according to a new analysis by the Tax Policy Center, Perry’s plan would blow a gigantic hole in the deficit, while increasing taxes for those at the lowest end of the income scale.

In fact, compared to a current policy baseline (where tax revenue is already at historic lows), Perry’s plan would cost $570 billion in one single year. That’s more than half a trillion dollars in revenue, or more than 25 percent of the total revenue that will be collected this year.

At the same time, compared to current policy, 40 percent of Americans would pay higher taxes under Perry’s plan (due to many provisions of the current tax code that are set to expire in 2012, which the Perry campaign has not said would be extended). Meanwhile, millionaires would receive an average tax cut under Perry’s plan of nearly $500,000 every year. The richest 0.1 percent of Americans would receive a tax cut of $1.5 million apiece. Meanwhile, a family making $10,000-$20,000 would pay $215 more under Perry’s plan, while a family making $20,000-$30,000 would pay nearly $500 more.

Perry’s plan would, quite literally, cut a Medicare-sized hole in federal revenue (Medicare costs $523 billion in 2010), while asking those at the lowest end of the income scale to pay more in taxes. The plan is almost shocking in the amount of money it would hand out via tax breaks to the rich, which would then necessitate obliterating the social safety net as we know it in order to balance the budget.

Retired Ohio Supreme Court Judge Andy Douglas

In eight days, Ohio voters will go to the polls to decide whether GOP Gov. John Kasich’s deeply unpopular anti-labor law, Senate Bill 5, should remain on the books. Thousands of Ohioans, including right-wing radio host Bill Cunningham, have urged Ohioans to stand behind teachers, police officers, and firefighters and repeal the law by voting no on Issue 2.

Now, former Republican Ohio Supreme Court Justice Andy Douglas is lending his voice to the repeal effort, noting that before the state passed its 1984 collective bargaining law, it led the nation in safety forces work stoppages. Since collective bargaining became the law of the land, however, there have been no work stoppages. “It would be tragic for our communities to return to those dark days,” he said. “That is what Senate Bill 5 — if it becomes law — would do”:

DOUGLAS: In the decade before the enactment of Ohio’s collective bargaining law in 1984, Ohio, for four years, led the nation in safety forces work stoppages. The reason was clear. When a city and its safety forces had a dispute concerning wages, working conditions, and adequate staffing, there was no way to resolve the dispute. That is why we passed the collective bargaining law. The law has worked. There has been no safety forces work stoppages in Ohio since the law was passed. It would be tragic for our communities to return to those dark days. That is what Senate Bill 5 — if it becomes law — would do. To fully protect our citizens and police officers and firefighters, Senate Bill 5 must be rejected.

Watch it:

Douglas added, “I’m a Republican and I’ve been working side by side with independents and Democrats to see that this bad bill does not become law.” He told Ohioans that “Senate Bill 5 must be rejected” to stop “politicians who would turn back the clock on public safety and on those who protect and serve us.”

Speaking today at the University of Michigan’s Ford School of Public Policy, where he was interrupted by 99 Percent Movement protesters, House Majority Leader (R-VA) fielded a question from a student asking why Cantor and the GOP support “reducing or getting rid of Pell Grants,” the federal grants that help low- and middle-income students pay for higher education.

Cantor disputed the claim, saying, “your direct question, allegation, I don’t know is accurate,” before launching into a non-answer about how the real issue is not the grants but the increasing cost of higher education. Watch it:

In fact, since coming to power, the House Republican majority — led by Cantor — has repeatedly set its sights on Pell Grants. Republican lawmakers have not only proposed lowering the maximum Pell amount from $5,500 (which is the level to which the Obama administration raised it) but also limiting eligibility, knocking one million students from the Pell program entirely. Republicans claim “we don’t have the money” to afford the grants, but the same House GOP budget that made cuts to Pell — for which Cantor voted — provides huge tax breaks for the wealthy and corporations that dwarf the cost of preserving the grants.

It’s also worth nothing that it was Cantor himself who, during July budget talks with the White House, proposed a cut “aimed squarely at college students” that would make students stat paying interest on their federal loans right away, instead of deferring until after graduation.

At a time when student loan debt is hitting new heights and joblessness is above 9 percent, Cantor’s response to a student genuinely concerned about financing his higher education is quite telling, especially when the GOP leader claims to agree that “the investment on higher education has an infinite return.”

This guy would have paid no sales tax in New Jersey.

Tonight, Americans all over the country will don capes and masks to celebrate Halloween, hitting the streets to trick-or-treat or heading out to costume parties. For Halloween revelers in New Jersey, the holiday has been just a bit cheaper for the last six years — and therefore more expensive for the government — due to a law removing the state’s sales tax from Halloween costumes:

For the past six years, adults looking to buy a Halloween costume in New Jersey have avoided a 7 percent sales tax because of a law that took effect in October 2005 classifying the outfits as “clothing,” which is tax-exempt.

Michael Froumy, 54, of Brigantine, owner of Fro Me A Party in Egg Harbor Township, said that change has saved shoppers at his party-supply store between $7,000 and $8,000 annually. But he wonders if the state should really be giving a tax break on vampire capes and sexy French maid costumes.

Even before the 2005 law took effect, childrens’ costumes were tax-exempt in New Jersey. Deborah Howlett, president of New Jersey Policy Perspective, said that while it makes sense to exempt food and clothing from sales taxes, “when it gets to the point when they are not taxing Dracula capes, that might be a chance to revisit things.” It is unclear how much the state loses each year in revenue from the tax break.

This is only the latest instance of an unwarranted Jersey tax break coming to light. Just last month, Gov. Chris Christie (R) found himself having to veto a $420,000 tax credit that was awarded to MTV’s Jersey Shore. “As chief executive I am duty-bound to ensure that taxpayers are not footing a $420,000 bill for a project which does nothing more than perpetuate misconceptions about the state and its citizens,” Christie said. Evidently, MTV’s crew will have to hit a local costume shop in order to catch a break on their Garden State taxes.

(HT: Citizens for Tax Justice)

House Education Committee Chairman John Kline (MN)

American college students will hit a milestone this year by having a record $1 trillion in student loan debt. Aware of the burden, President Obama announced a plan to help college students reduce their loan debt by consolidating their loans and lowering the maximum required loan payment from 15 percent of a student’s income to 10 percent. Debt would be forgiven after 20 years, instead of 25. The plan could help millions of students by lowering monthly payments by hundreds of dollars.

Naturally, Republican lawmakers are slamming the plan. Former House Speaker Newt Gingrich called it a “Ponzi scheme.” Rep. Michele Bachmann (MN) called it an “abuse of power” that creates a “moral hazard.”

House Education Committee Chairman John Kline (R-MN), meanwhile, insisted that the plan actually “means more debt for students” because it encourages “more borrowing.” Kline continued his rant this morning on Fox and Friends, calling the executive order “a mistake” that will only “encourage” borrowing that leaves “taxpayers holding the bag”:

KLINE: This is a mistake. It’s very confusing. I’ve talked to a lot of people about what the president proposal is, it’s very difficult to figure out. Some of the changes are going to affect a very small group of students, some of them are going to affect a larger group of students. All of it we’ll encourage more borrowing, I’m afraid, and leave taxpayers holding the bag. [...]

We’ve seen the cost of college go up and up and up. Tuition and fees. The colleges and universities are going to have to face the fact that there is not an endless supply of money coming from state and federal governments. They’re going to have to look at their own operating costs and start to curtail the costs of going to college. We simply can’t keep providing money from the federal government in the form of subsidized or actual loans and Pell grants when we don’t have the money.

Watch it:

Kline noted that the executive order is “technically legal, but it is a stretch for him to do this and it was not the intent of Congress to do this at this time.” But the fact that Republicans don’t wish to address the record amount of student loan debt should not be surprising.

As TP Economy editor Pat Garofalo notes, the GOP “vigorously opposed reforms that stopped billions of federal dollars from going to banks to act as unnecessary middlemen in the federal student loan program.” They called the elimination of corporate welfare a “Washington takeover” of the industry. Pair that with Republcians’ callous cuts to the Pell Grant program and it’s easy to see that, whatever Kline and the GOP intend to do, it has nothing to do with helping students.

When the Occupy Wall Street demonstrations first gained some national prominence, House Majority Leader Eric Cantor (R-VA) derided the protesters as a “mob,” saying, “Believe it or not, some in this town have actually condoned the pitting of Americans against Americans.”

Cantor eventually softened his rhetoric, and even scheduled a talk about income inequality (that he proceeded to cancel when he realized that the public would be allowed to attend). But Cantor has plenty of reasons to bash the protests because, as Roll Call noted today, Cantor’s top contributor this year is Wall Street:

Cantor’s personal political action committee has collected close to $2 million so far this year, placing it well ahead of any other leadership PAC in the House or Senate. In all of his fundraising efforts, top executives at banks, hedge funds and securities and investment firms play a starring role. Securities and investment industry donors have given close to $350,000 to both Cantor’s campaign and his leadership PAC this year, making them his top source of donations, according to the Center for Responsive Politics.

But Cantor has raised millions more than that for a lucrative operation known as the Cantor Victory Fund 2012…Ten major donors, many of them top executives with finance industry firms, have given $50,000 or more this year to the Cantor Victory Fund, which has collected $2.4 million, according to the most recent public disclosures.

Cantor has pushed several policies near and dear to Wall Street’s heart, including protecting tax loopholes for hedge fund managers, while managing to come up with no ideas for addressing income inequality. In fact, he believes we should just depend on the wealthy to bring down inequality through the goodness of their hearts. And so far, Wall Street has certainly shown its appreciation for Cantor’s positions.

Across the country, thousands of people have registered their anger at a political and financial system that rewards the richest 1 percent at the expense of everyone else by joining the 99 Percent Movement. Last week, the Congressional Budget Office added fuel to the fire, releasing a major report showing that average household income for the top 1 percent has nearly tripled since 1979 while income growth for other groups was largely non-existent.

And it’s not just protesters who are concerned, as a new poll shows two-thirds of voters think the middle class is shrinking and 55 percent believe income inequality is a big problem for the country.

In response to the increasing attention on income inequality, many Republicans are trying to show they are committed to addressing the problem. House Majority Leader Eric Cantor (R-VA) recently planned a major speech on the subject, but abruptly canceled when he learned the speech would be open to the public. As Politico noted today, income inequality is “working its way into the discourse of Republicans on Capitol Hill,” even though their policy response has been to push the same old tax cuts they always suggest.

During an interview last week on Capitol Hill, Rep. Peter DeFazio (D-OR) cast doubt on the seriousness of Republican efforts to fight inequality. DeFazio blasted the GOP for signing onto the Americans for Tax Reform (ATR) “Taxpayer Protection Pledge,” as all but six House Republicans have done, effectively binding them to the opinions of ATR leader and extreme anti-tax zealot Grover Norquist:

DEFAZIO: They’re saying, you know, unleashing the job creators, protecting their tax loopholes, you know, and their tax breaks, protecting the Bush tax cuts will somehow solve income inequality. Well, we’ve got ten years of experience now of tax cuts that don’t create jobs and they have exacerbated the income inequality of this country. So, they are chained, they are chained to Grover Norquist and they can’t do anything that he doesn’t like so they can’t deal meaningfully with it. [...]

They can pretend, they can change their rhetoric, they’re very good at that. They’re just really in a position with Grover Norquist over there and Wall Street over there. Where are they gonna go?

Watch it:

– Karl Singer

Presidential candidate and Minnesota Rep. Michele Bachmann (R) joined a chorus of Republicans in opposing President Obama’s proposal to help college students and graduates get out from under crushing student loan debt. She followed former Speaker Newt Gingrich (R) and pizza magnate Herman Cain (R) in announcing her opposition last night at an education forum hosted by News Corporation and the College Board in New York.

Gingrich called the plan a “Ponzi scheme,” while Cain claimed the student loan industry should be managed by the states. Bachmann, however, took a different stand, saying Obama’s plan was an “abuse of power” that would create a “moral hazard” for the nation’s college students:

“I believe it is abuse of power from the executive to impose via an executive order a wholesale change in the student loan,” Bachmann, a Minnesota congresswoman, said during an education forum in New York put on by The College Board and News Corp.

Bachmann said the change creates a “moral hazard” when it comes to student debt.

“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”

The “moral hazard” that would result in not keeping “our financial promises,” however, isn’t based on the actual plan Obama proposed, since it forgives very little debt that students owe, and only then after borrowers have been paying their loans for twenty years. (The old requirement for forgiveness eligibility was 25 years.) Mostly, the plan lowers monthly payments — by hundreds of dollars for many students — by putting a cap on the amount that must be paid back each month.

As for it being an abuse of power, Obama’s executive order doesn’t create a “wholesale change” in student loans, it merely accelerates the implementation of a law passed by Congress last year, putting it into effect in 2012 instead of 2014.

Instead of providing a credible, truthful reason to oppose the plan, Bachmann has chosen to join her Republican colleagues in their continuing effort to make it harder for low- and middle-income Americans to go to college. Student loan debt is expected to top $1 trillion this year and tuition costs are rising across the country, but the GOP’s method of addressing such problems includes cutting billions in funding for Pell Grants and opposing multiple student loan reforms.

Republicans have made quite the show of disparaging the Dodd-Frank financial reform law, calling for its repeal, refusing to provide regulators with the funds to implement it, and blocking nominees for key regulatory positions. Rep. Scott Garrett (R-NJ) took the latest step in that campaign yesterday, introducing a bill that would repeal an important Dodd-Frank safeguard for the financial system.

One of the key factors that led to the housing bubble’s boom and bust was the ability of subprime mortgage lenders to make a loan and then turn around and sell the entire loan to Wall Street. As the Center for Public Integrity wrote, “lenders were selling their loans to Wall Street, so they wouldn’t be left holding the deed in the event of a foreclosure. In a financial version of hot potato, they could make bad loans and just pass them along.” This fueled a dramatic decline in lending standards and gave subprime lenders every incentive to push loans onto people, since the lenders could divorce themselves from all the risk associated with a loan that didn’t pan out.

Dodd-Frank requires that lenders retain at least five percent of their loans, so that they have some “skin in the game.” Republicans on the House Financial Services Committee — following Financial Service Committee Spencer Bachus’ (R-AL) call to “serve the banks” — want to the repeal that requirement:

[Garret's] bill would eliminate a provision of the Dodd-Frank financial reform law that requires financial firms to retain “skin in the game” by holding some of the risk from mortgages they packaged into bonds.

Garrett said he hopes to move his bill through his subcommittee in short order, as the full committee begins to consider other GOP housing bills as they advance to the House floor.

Banks have been quietly trying to nix this portion of the law, after they were unsuccessful in getting it out while Dodd-Frank was being debated. The banking industry said that it was counting on “better outcomes” with Republicans running the House of Representatives. This is just one more way in which that attitude is turning into reality.

Back in September, as the GOP was getting all riled up over the faux Solyndra scandal, House Speaker John Boehner (R-OH) said that “for the federal government to be out there picking one company over another, one type of energy source over another, I think is wrong.” Evidently, though, his attitude toward energy subsidies does not extend to nuclear plants in his home state of Ohio.

As Bloomberg reported today, despite his professed view on energy subsidies, Boehner is backing a $2 billion loan guarantee for an enriching plant run by USEC Inc., saying that failing to provide the guarantee would “betray” Ohio’s workers:

House Speaker John Boehner attacked the Obama administration for financing failed solar-panel maker Solyndra LLC, saying government shouldn’t pick winners and losers. That hasn’t stopped him from demanding that the U.S. make a winner of a nuclear-fuel plant in Ohio, his home state.

Boehner is backing a $2 billion Energy Department loan guarantee sought by USEC Inc. (USU) for its American Centrifuge Plant in Piketon, Ohio, aimed at enriching uranium for commercial nuclear reactors. [...]

“In the midst of the Solyndra controversy that has raised serious questions about the Obama administration’s oversight of taxpayer dollars, hundreds of Southern Ohio workers stand to lose their jobs if the Obama administration reneges on the president’s promise to support an energy project in the small town of Piketon, Ohio,” Boehner wrote. “I urge the administration to not betray the citizens of Ohio.”

Boehner is far from the only Republican using Solyndra to score political points while asking for loan guarantees at the same time. In fact, Republican House members host $11.8 billion in loan guarantees in their districts.

According to Bloomberg, “USEC’s political action committee has given $10,000 to committees supporting Boehner since 2010.” It’s telling that he believes failure to provide a loan guarantee is a betrayal of workers, while pushing budget cuts that cost hundreds of thousands of workers their jobs is responsible governance.

The negative attention garnered by Texas Gov. Rick Perry’s (R) assertion that Social Security is a “Ponzi scheme” and “monstrous lie” to America’s youth apparently wasn’t enough to keep his fellow Republican presidential candidates from making similar claims about other proposed programs. Speaking at an education forum hosted by News Corporation and the College Board in New York last night, former House Speaker Newt Gingrich nodded to Perry while calling President Obama’s proposed plan to help college graduates who are buried under student loan debt a “Ponzi scheme” that will “bankrupt the country,” CNN’s Ashley Killough reports:

Gingrich, however, called for the privatization of the student-loan program, arguing the president’s plan would bankrupt the country “by promising to every young person, ‘You won’t have to pay off your student loan as a student.’”

He said the plan appeals to students now, but by the time they will “have to pay off the national debt” as taxpayers when they’re older, Obama will be long gone.

“It’s a Ponzi scheme even by Gov. Perry’s standards,” Gingrich said, also making a quip referring to Texas Gov. Rick Perry, who’s repeatedly described Social Security as a Ponzi scheme.

Obama’s plan, which would lower monthly repayment costs for millions of college graduates, has been met with resistance from congressional Republicans and presidential candidates alike. Still, Gingrich’s attack is truly bizarre, given that nothing about the plan even remotely resembles a Ponzi scheme. Meanwhile, American student loan debt is expected to surpass $1 trillion this year, a record high that amounts to more than Americans owe in collective credit card debt. The issue has been one of the driving forces behind the 99 Percent Movement, as student debt has piled up due to rising tuition costs at both public and private colleges and universities.

Even in the face of those numbers, the opposition shouldn’t be shocking, as Republicans continue support policies that make it harder for low- and middle-income Americans to attend college. The GOP opposed efforts to reform the federal student loan program, demagoguing changes that ended the practice of letting banks act as unnecessary middlemen in the federal loan process as a “Washington takeover” of the student loan industry. And after including massive cuts to the Pell Grant program in their budget, party leaders now argue that such grants actually make it more expensive to go to college, claims that are demonstrably false.

President Obama’s announcement earlier this week that he would use executive authority to make some changes to the federal student loan program has elicited quite the negative response from the GOP. House Education Committee Chairman John Kline (R-MN) said that the plan to reduce students’ debt “means more debt for students, more debt for taxpayers, and more red ink on the government’s books.” Sen. Mike Enzi (R-WY) responded to the plan by saying “the president should stop campaigning and start working with Congress to get the results that the American people expect,” while the conservative media simply derided the plan as a gambit to “buy votes.”

However, those GOP’ers haven’t gone as far as the party’s presidential candidates, who evidently believe that the federal government should get out of the student aid business entirely. Rep. Ron Paul (R-TX), for instance, said that he’d phase out the federal student loan program entirely. Former pizza magnate Herman Cain, meanwhile, said that he doesn’t believe in any form of federal student aid whatsoever, believing that such aid is better off left to the states:

I believe that if a state wants to help with college education, then they should do that. Secondly, you have people living within communities within states that are willing to help fund those kinds of programs. So I do not believe that it is the responsibility of the federal government to help fund a college education because herein, our resources are limited and I believe that the best solution is the one closest to the problem. The people within the state, the people within the communities, ultimately, I believe, are the ones who have that responsibility. [...] If you want an education, a college education in America, I believe that people can get it if they are determined to get it. They might have to work a little harder. They might have to work a little longer, but the fact that we have so many options for people to get an advanced education in this nation, I think it is one of the big pluses that we have, that we offer our young people, that a lot of other countries do not offer.

Watch it:

Aside from the obvious logistical problems posed by devolving student loans and aid to the states (Would students receive grants from their home state or from the state in which they attend school? What if a student’s parents want or need to move midway through a student’s college years? Would she lose her aid and have to get it from either her or her parents’ new state?), federal student loans and programs like Pell Grants have helped millions of Americans access higher education.

Without federal aid, students would be pushed into riskier, more expensive private student loans, even as student loan debt is en route to eclipsing $1 trillion for the first time. Instead of trying to grapple with ever-rising student debt, the GOP just wants to make it someone else’s problem.