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AFT Update: We Need an Economy That Works for Everyone

(via the American Federation of Teachers)

While many Americans struggle to make it through the economic crisis created by the pandemic, billionaire wealth has soared, according to the Institute for Policy Studies. From about March 18 to now, the wealth held by billionaires has increased by $434 billion. The top five U.S. billionaires—Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison—saw their wealth grow by a total of $75.5 billion, or 19 percent.

Americans for Tax Fairness—a campaign of more than 420 national, state and local organizations that have united in support of a more equitable tax system—identified those tax breaks. AFTF also launched an online petition and letter-writing campaign to demand that Congress repeal $135 billion in tax breaks for millionaires and billionaires that was included in the Coronavirus Aid, Relief and Economic Security Act that was signed into law in March.

“How can lawmakers say there isn’t money for education programs and the raises for teachers and school employees,” asks Texas AFT President Zeph Capo, “when the top billionaires have somehow added to their wealth?” The federal government must step in, he says.

In mid-May, House Democrats passed the Health and Economic Recovery Omnibus Emergency Solutions Act, new stimulus bill, that would provide $3 trillion in relief. The HEROES Act would support families, protect frontline healthcare and other essential workers, and sustain public education, public safety, healthcare and the U.S. Postal Service. Additionally, the HEROES Act fully repeals the “millionaires giveaway” in the CARES Act.

AFT President Randi Weingarten lauded members of the House in a statement saying, “This is a crisis unlike any we’ve ever experienced, and it requires a response unlike any we’ve ever imagined. Thanks to the U.S. House of Representatives for rising to the occasion to meet the needs of the American public as we attempt to recover from the devastation of COVID-19, rebuild and reopen safely. We hope the Senate follows suit.”

The HEROES Act would provide $500 billion to help states, $375 billion in fiscal relief to local governments, and $40 billion to tribal and territorial governments to deal with the effects of the public health emergency. The bill provides stabilization funds for public education, including resources for K-12 and higher education institutions. The comprehensive legislation offers broad supports needed to reopen and restart the American economy.

But Senate Majority Leader Mitch McConnell (R-Ky.) and Republican senators have called the bill “dead on arrival", and suggested that states should go bankrupt.

Some politicians would place the burden of economic recovery on families and communities by starving states of resources for essential public services at a time when people need them the most. At the same time, those lawmakers are making it easier for wealthy hedge funds, private equity firms, law firms and real estate owners to reap economic benefit during the pandemic. Republican Senate leaders included $170 billion in tax breaks for investors, primarily real estate speculators and hedge fund managers in the CARES Act. What’s more, people who earn more than $1 million will receive the lion’s share of the benefit (80 percent) from the stimulus bill.

“It is not understandable that our state and federal governments would have our students bear the burden of this downturn in our economy,” says Nelly Vaquera-Boggs, president of the Pajaro Valley (Calif.) Federation of Teachers. “It seems students are always the collateral damage.”

“We sent a letter to our governor in April advising the governor that we will need nurses in every school, and for using the community schools model in every school to provide services that are essential to preventing a second outbreak and mass school closings in the future,” says Jeff Freitas, president of the California Federation of Teachers. “If we try to reopen without first addressing the safety, health and emotional needs of students, we can’t even begin to think about academic needs.”

Educators agree that meeting those needs must take priority over tax breaks for the rich. And most Americans believe the federal government should support neighborhood public schools and services for people, according to a recent poll by the AFT; the American Federation of State, County and Municipal Employees; and Hart Research Associates. A supermajority of Americans want significant federal funding to help states, cities and towns as they recover from the effects of COVID-19 to be a priority over keeping spending down.

As the country battles this health emergency, voters in states like Ohio and Wisconsin approved ballot measures to help fund public education.

“Milwaukee passed a referendum in April that provides additional investments in public education,” says Kim Kohlhaas, president of AFT-Wisconsin. “More than 400 referendums have been approved by Wisconsin voters to fund public education. Wisconsin voters want investments in public education, and I think that should be a message to our state legislators about what people want.”

A majority of Americans also favor increasing taxes for the highest earners—millionaires and billionaires—to pay for bigger investments in public schools and other services, according to a 2019 Politico/Morning Consult poll. Several states are considering a progressive income tax that would raise taxes for the richest taxpayers and close loopholes that enable corporations to pay less than their fair share.

This November, Illinois voters will decide on a ballot measure to change the state’s flat personal tax rate to allow higher taxes on top earners, including a millionaire’s tax. The Fair Tax amendment would raise $3.4 billion per year, a portion of which would go to fund education. The governor has made the education funding increases in his budget contingent in part on passage of the amendment.

The Fair Tax amendment also would provide funding for public services, says Matt Emigholz, president of the Illinois Federation of Public Employees. The union represents state employees in 110 job titles in 33 state agencies. He says there has been a steady decline over the last 20 years in the number of state employees in all job categories.

"If we don’t get enough federal aid and if Fair Tax doesn’t pass, things are going to get ugly quickly,” Emigholz says. “If it passes, some 97 percent of Illinois taxpayers won’t see a change in their taxes, and some will even see a reduction.” Without passage of the Fair Tax amendment, Emigholz adds, the governor has projected across-the-board cuts of 15 percent to state employees and services.

“We’ve gone through this shared suffering, and maybe as a result we can tap into our shared values,” Texas AFT’s Capo says. “I’m hopeful that, maybe, there’s a new path forward based on what we have learned during this crisis about what’s important.

“Maybe we can take a deeper look into who has been more valuable during this pandemic: the billionaires who have gotten richer, or the nurses who helped patients during this crisis and the educators who continued to serve children and their communities.”

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