From ‘Countdown with Keith Olbermann’:
and from ‘Democracy Now’:
Remember when the employees in a corporation paid taxes to the government ? The latest “innovation,” from the sellouts in the Illinois legislature, is letting the corporations pocket the taxes that would be paid to the state of Illinois. David Cay Johnston explains:
Painful as it feels to have a lot of hard-earned income taken from your paycheck for taxes, a new Illinois law does something Americans may find surprising. It lets some employers pocket taxes for 10 years.
You read that right — in Illinois the state income taxes withheld from your paycheck may be kept by your employer under a law that took effect in May. Continental Corporation (CONG.DE), the big German tire maker; Motorola Mobility (MMI.N), the cell phone maker; and Navistar (NAV.N), the maker of diesel trucks for industry and the military, are in on the deal. State officials say a fourth company is negotiating a similar arrangement.
Chrysler and Mitsubishi arranged deals with the state in the depths of the Great Recession in 2009; Ford got one in 2007, since revised to let it keep half of its Illinois workers’ state income taxes.
Instead of paying for police, teachers, roads and other state and local services that grease the wheels of commerce, Illinois workers at these companies will subsidize their employers with the state income taxes they pay.
The deal to let employers keep half or all of their workers’ state income taxes represents a dramatic expansion of a little-known trend in the law: diverting taxes from public purposes to private gain.
Throughout the United States, big box retailers like Wal-Mart (WMT.N), Lowe’s (LOW.N) and Cabela’s (CAB.N), and in some cases entire shopping malls, often negotiate deals to keep sales taxes that customers pay at the cash register, using the money to finance construction of their stores. This gives them a huge advantage over retailers without such subsidies, while reducing revenue to local governments, which in turn creates pressure for higher taxes.
The fourth company David Cay Johnston mentions must be Sears. From Friday’s Chicago Sun-Times article on the latest tax-cut for the CME Group (Chicago Mercantile Exchange and Chicago Board of Trade corporate parent) and Sears:
Under the terms of the tax-cut plan being considered, $100 million of that windfall would go toward Chicago-based CME Group over a two-year period.
The corporate parent of the Chicago Mercantile Exchange and Chicago Board of Trade has threatened to move out of state because of this year’s jump in corporate income taxes that Quinn approved. CME Friday declined to comment.
Another chunk of the windfall would fund a $15 million state EDGE tax credit for Sears, which would enable the company to pocket half of what its existing employees pay in state income taxes and all of the income taxes paid by new workers. Like CME Group, Hoffman Estates-based Sears has threatened to pull up stakes without some form of tax relief.
And how would the State of Illinois pay for that tax-break to CME and Sears? How about taking the money out of Medicaid funds? Maybe eliminating meal-assistance programs? Maybe closing some clinics for the mentally ill?
While the Occupy movement targets the 1 Percent, we want to introduce you to the elite among the gang of superrich: the war profiteers. War industry CEOs make tens of millions of dollars a year, putting them in the top 0.01 percent of income earners in the U.S., and they use their corporations’ massive lobbying dollars to keep their job-killing gravy train rolling. We’ve got to stop them.
And another video from the same site. Leon Panetta and Boing are worried military spending cuts will cripple the U.S. industrial base and hollow the national defense offense force:
Remember last spring budget deal? Remember how Barack Obama pulled a fast-one on John Boehner and didn’t really cut anything? Well, Scott Lilly at the Center for American Progress says there are 370,000 reasons that the cuts weren’t harmless:
… Indeed, the magnitude of the job cuts in the budget legislation adopted last spring—as demonstrated by the committee’s listing of 250 spending cuts—is so great that it is difficult to keep track of the human dimension. For that reason, I have focused on three program areas which were singled out by this Congress for particularly deep reductions:
- Federal support for local law enforcement
- Environmental cleanup of nuclear weapons production facilities
- The Federal Buildings Fund of the General Services Administration
Estimates of the number of jobs directly lost by these cuts run upwards to 60,000. The jobs losses that are a direct result of those actions will have a secondary impact on a wide array of businesses ranging from automobile producers to local restaurants and dry cleaning establishments, causing the disappearance of a significant number of additional jobs.
Similar stories could be told about many other budget cuts made in this bill—cuts that resulted in further job losses—but that would require many more pages and exhaust the patience of most readers. All of the various 250 program reductions in the FY 2011 continuing resolution probably eliminated more 370,000 jobs. The three areas selected for discussion in this paper are in my judgment neither the worst cuts made by the committee from a policy standpoint nor the best. But without a doubt they demonstrate the consequences of slashing government spending in a weak economy.
Download this report (pdf)
Read this report in your web browser (Scribd)
This article speaks for itself, from the NY Times:
Some on Wall Street viewed the protesters with disdain, and a degree of caution, as hundreds marched through the financial district on Friday. Others say they feel their pain, but are befuddled about what they are supposed to do to ease it. A few even feel personally attacked, and say the Occupy Wall Street protesters who have been in Zuccotti Park for weeks are just bitter about their own economic fate and looking for an easy target. If anything, they say, people should show some gratitude.
“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services. This is just disgruntled people.”
He added that he was disappointed that members of Congress from New York, especially Senator Charles E. Schumer and Senator Kirsten Gillibrand, had not come out swinging for an industry that donates heavily to their campaigns. “They need to understand who their constituency is,” he said.
and this bit:
John Paulson, the hedge fund titan who made billions in the financial crisis by betting against the subprime mortgage market, has been the exception. His Upper East Side home was picketed by demonstrators earlier this week, but Mr. Paulson offered a full-throated defense of the Street, even going so far as to defend the tiny sliver of top earners attacked by the Occupy Wall Street protesters — whose signs refer to themselves as “the other 99 percent.”
“The top 1 percent of New Yorkers pay over 40 percent of all income taxes, providing huge benefits to everyone in our city and state,” he said in a statement. “Paulson & Company and its employees have paid hundreds of millions in New York City and New York State taxes in recent years and have created over 100 high-paying jobs in New York City since its formation.”
Mr. Paulson’s point is moot: wealth is impossible without taxpayer funded infrastructure and paying 12-15% on a billion earned is not enough to keep the wealth engine going. At the same time, no human being can spend more than $50 million a year, tops, without some kind of psychological problem. Above some number, the needs of society at large to provide health care (45,000 Americans a year die needlessly because they can’t afford it), clean water, a solid public education (so everyone has the same chance for development), and all the rest, at some point the needs of society trump Mr. Paulson’s apparent need for every last dollar.
It’s another example, perhaps, of well-educated people who are incompetent. They’re good to great at pushing money around, maybe, if you don’t count what happened in 2008. Oh, they’re great at taxpayer bailouts, especially when Wall Street wives are allowed to get in on the gravy train. That’s true.
But they’re incompetent when it comes to the big picture: no mention that 80% of income gains from 1980 to 2005 went to the top 1%, no mention from 1945 to 1980 all income groups doubled their income while 1980 to 2008 all but the top 1% saw income gains above 50% (and the top 1% had income gains from 240% to 400%). No mention of the many ways wages have been suppressed for three decades. No mention that these greed heads exist in any society larger than themselves. That’s incompetence.
Maybe it is time for a revolution. Sadly, and completely needlessly.
But I do love the unnamed money manager (the Times, practicing excellent journalistic skills again!) calling out New York’s two Senators for not kissing Wall Street’s ring. And notice the Times can’t bother to note Paulson (“the hedge fund titan,” an uncritical suckup phrase) was Treasury Secretary who screamed for and got taxpayer bailouts of Wall Street, presumably working for Wall Street all the while paid by taxpayers, presumably knowing about alternatives to bailouts that historically have yielded better results, for example, letting banks fail then nationalizing them and bringing in new management then selling the banks off in 5-10 years.
That’s de-luxe journalism right there. Shame on their editor. Then again, maybe the Times editor lives in the same building as Mr. Paulson, who knows? Comic is from the Times, too, their sense of humor apparently being better than their journalism in this case.
From the NY Times:
The Internet banking services that have been sold to customers as conveniences, like online bill paying, serve as powerful tethers that keep them from jumping to another institution.
Tedd Speck, a 49-year-old market researcher in Kent, Conn., was furious about Bank of America’s planned $5 monthly fee for debit card use.
But he is staying put after being overwhelmed by the inconvenience of moving dozens of online bill paying arrangements to another bank.
“I’m really annoyed,” he said, “but someone at Bank of America made that calculation and they made it right.”
Former bankers and market researchers say that it’s no accident. The steady expansion of online bill paying, they say, has emboldened Bank of America, as well as rivals like Wells Fargo, JPMorgan Chase and SunTrust, to turn to new fees on customer accounts as other sources of revenue dry up. The fees have caused an uproar among consumers and drawn sharp criticism from politicians, including President Obama.
“The technology locks you in and they’re keenly aware of it,” said Robert Smith, who was chief executive of Security Pacific when it was bought by Bank of America in 1992. “It’s very hard for consumers to just ditch that.”
For years, banks have openly sought to attach as many loans and services as they can to a customer, like credit cards, mortgages and mobile phone banking.
What they haven’t mentioned are marketing studies like the one commissioned by Fiserv, which develops online bill paying systems, showing that using the Internet to pay bills, do automatic deductions and send electronic checks reduced customer turnover for banks by up to 95 percent in some cases.
With 44 million households having used the Internet to pay a bill in the past 30 days — up from 32 million five years ago and projected to reach 55 million by 2016 — it’s a shift that has major ramifications for competition.
There’s even evidence that fewer consumers are switching banks, with 7 percent of them estimated to be moving their primary account to a different institution in 2011, down from 12 percent last year, according to surveys by Javelin Strategy and Research.
For the young ‘uns out there, back in the day, when new technology like TV and radio came along, the government stepped in on behalf of all Americans to ensure the technology was not used in a way that benefitted a few at expense of the many. That’s how we got radio and TV licenses, the Fairness Doctrine, restrictions on who could own how many media outlets in a market, and other policies. And that’s why the few have spent the last three decades dismantling these policies that benefit us all.
In this case, clearly the government should and must step in to ensure online bill paying is portable. There is zero technical reason the companies that manage the bill paying flow cannot work in a way that lets us change our account information, and banks, once and have all our bill payments continue. Zero. As in none. Banks are allowed to hold us hostage because politicians are either in bed with them OR too clueless to realize what is possible.
The article also mentions National Bank Transfer Day, a great idea but we’ll see how it works out.
Corporate America is once again demanding a “one time” tax holiday: be allowed to bring vast sums of profits, more than $1.4 trillion, stashed in tax heavens abroad, places like Luxemburg, Ireland and the Cayman islands, to the United States and pay significantly lower taxes on those profits. And in order to push this the meme ‘tax holidays create jobs’ is thrown around. Of course, once again, the reality is very different from the narrative. Not only tax holidays do not create jobs are but they eliminate them. In the Tax Holiday of 2004 the top 58 “profit repatriators” cheated the U.S. out of an estimated $64 billion (not $64 Million but $64 Billion) and laid off nearly 600,000 American workers. The total amount of tax that wasn’t paid was $92 Billion. Tax rates of 35% were reduced to just over 5%. This time the thieves have spent more than $50 million to get their “one time” tax holiday and will not pay more than $78 billion in taxes. But greedy teachers making $60,000 a year are destroying America. The Institute of Public Studies studied the subject and produced a report (full report in pdf):
There is a dangerous myth at the center of the jobs debate that rages across our country: Corporate tax cuts create jobs.
With 25 million Americans looking for fulltime work, and nearly one in six Americans relying on federal food assistance, some of America’s most flush corporations are demanding a “one-time” corporate tax holiday on their more than $1.4 trillion in profits now sitting offshore.
Bringing this enormous cash stash back home, some of the corporations argue, will stimulate the economy more cost-effectively than President Barack Obama’s more direct approach to job creation. “Repatriation,” the argument continues, will free up billions upon billions of dollars that are “trapped” overseas by excessive federal tax rates.
Do corporate advocates for repatriating overseas profits have a legitimate case? Not anymore. The federal government has already gone the “tax holiday” route — in 2004 — with disastrous results.
Congressional advocates for that 2004 “onetime” holiday made the same arguments that repatriators are making today. They promised that the tax holiday would create jobs. In fact, they even named their holiday legislation the “American Job Creation Act of 2004.” But their holiday didn’t just fail to create the promised jobs. Their holiday enriched corporations that actually destroyed jobs in the months right after they received their tax windfall.One government study looking at the first two years after the repatriation windfall found that 12 of the top recipients laid off more than 67,000 American workers. These firms collectively brought back home more than $100 billion, nearly a third of the total amount repatriated by all firms that took advantage of the tax holiday. Collectively, these early job killers pocketed an estimated $32 billion in savings from taxes they otherwise would have had to pay.
A review of U.S. employment data filed with the Securities and Exchange Committee found that 13 firms profiled in this report cut their U.S. workforces by 60,701 jobs in the two years following the 2004 tax holiday (2004-2006). The 13 companies are YUM Brands, General Electric, International Paper, Eastman Kodak, Kraft, Honeywell, Intel, Eli Lilly, Starwood Hotels, Praxair, Lexmark International, Hasbro and Boston Scientific.
But this wave of job destruction soon after the 2004 tax holiday went into effect, reported fairly widely at the time, does not tell the entire story. Dozens of major U.S. corporations that benefited lavishly from the 2004 tax holiday, not just the early job destroyers, have downsized significantly in the years since. Their story deserves telling — but certainly not repeating with the passage of still another “one-time” corporate tax holiday.
Found some more interesting coverage of the Occupy Wall Street protests, in case you’ve not seen these stories.
First, from the NY Daily News, some great context for NYPD arresting 1,000 people and counting so far, in Denis Hamill’s piece, Different rules for Occupy Wall Street marchers & that makes me mad as hell:
I thought of [Paddy] Chayefsky when MAD-AS-HELL young people filled the streets of the Middle East in the Arab Spring, toppling scummy leaders, as we in the west cheered. The same way we cheered when brave young people filled Tiananmen Square. The way we saluted the East Germans breaching the Berlin Wall.
But when a swelling tide of harmless MAD-AS-HELLERS calling themselves Occupy Wall Street overtakes Zuccotti Park to inveigh against the swindlers, fat cats and “banksters” of Wall Street we arrest them.
Pundits mock them for not having leaders, a united message, a political platform. Maybe that’s because it was egghead economists with grand plans and crooked politicians with self-serving platforms that got us where we are today. Forgive these angry young people if they don’t follow the beat of the same broken drum.
They’re just MAD-AS-HELL.
Misunderstanding their scattered frustrations is one thing. But did we really have to pen them like flounder in orange nets and bus them to Rikers because they dared to march across the Brooklyn Bridge?
Excuse me, when I was a young reporter in the mid-1970s I remember cops marching across the Brooklyn Bridge to protests Mayor Abe Beame laying off cops and other municipal workers.
On Sept. 16, 1991, I covered a mob of 10,000 furious city cops storming across the Brooklyn Bridge to City Hall to protest the establishment of a police monitor. Some of those cops stomped across parked cars, jumped police barricades, assaulted journalists, and mobbed the steps of City Hall chanting, “Take the Hall, Take the Hall,” some referring to Mayor David Dinkins as “a men’s room attendant.”
Mayoral candidate Rudy Giuliani addressed them like a firebrand, using the word “bull—-,” to describe Dinkins policies.
But I didn’t see cops rounded up in orange nets like the catch of the day. Didn’t see 700 of them bussed off to Rikers in cuffs.
In 2001 cops again marched across the Brooklyn Bridge to protest against Mayor Giuliani who’d used the NYPD cops, the best in the world, to mark his place in history by cutting crime in half and then stiffed them on a pay raise.
Funny, I don’t remember the NYPD locking up police protesters that day either.
I don’t think they should have. As a child of the ’60s I’m all for anyone marching and protesting to be heard.
But why the hell is NYPD brass so afraid of these nonviolent, MAD-AS-HELL Occupy Wall Streeters?
This is terrific context people should highlight early and often with these protests: there is a huge double standard at work here. The police, who are part of the 99% being oppressed by the status quo, were only too eager to do what they’re locking people up for today. The police should be held accountable. Read the rest of this entry »
Here’s the YouTube page.
Bill Maher’s monologue is both brilliant and hysterical. He lays out facts in an easy to understand way that is not terribly polite. And his idea for a reality show along the lines of Secret Millionaire, called Shine My Shoes Fuckface, is hysterical and right on. We’re inundated by propaganda that supports economic oppression, no other way to describe these shows.
FWIW, on one point Maher raises, this idea that wealth trickles down, that rich people can (and do) make the world better by sharing their wealth every time they see a poor person struggle is both bunk and at least as old as the 1740s. I happened to finish reading Smollett’s The Adventures of Roderick Random today and an otherwise great book is ruined by precisely this dynamic: Random goes through all kinds of hell in his life but it’s all patched up when his dad shows up with money. Then Random gets to shower largesse to all his friends. This dynamic is in dozens of other novels from the 1700s and 1800s that I’ve read in the past few years. It’s complete bunk. The sooner we get over this idea that concentrated wealth benefits everyone, the better off we’ll all be. There’s a reason government provides help better than rich people or religious groups: they can spread the cost across more people while ensuring minimum standards of response for all who need help. Plus government is far more accountable compared to individuals and private groups.
But watch the video. It’s amusing and worth it.
Have you noticed the Occupy Wall Street protests have suddenly gone mainstream? Maybe there is some hidden 14 day or 15 day or 18 day trigger that only the media knows about before they’ll cover protests that challenge their view of the world.
More seriously, here is a quick round up of what I’ve seen that people may want to discuss. Feel free to add yours in comments or posts.
First, a silly meme from MSNBC, Wall Street rallies could be left’s Tea Party:
Born on the streets of New York, growing protests aimed at the heart of capitalism have sparked hope among liberals that they’re witnessing the birth of a movement to counter the conservative Tea Party.
The pieces are all there: ordinary citizens banding together for a cause; signs and protests announcing their grievances. Could the nation be witnessing the creation of a new political uprising?
The “Occupy Wall Street” demonstrations started last month in New York and have since spread across the country, born out of anger toward the financial community’s success during a time of prolonged economic hardship.
Liberals are optimistic that those protests will translate into the kind of lasting political movement achieved over the last two years by the Tea Party, which helped reshape the trajectory of American politics, particularly within the Republican Party.
Yeah I saw the Koch brothers on the street the other day, passing out wads of money to the protestors, didn’t you? And there’s an astroturf organization with some clever Orwellian name that organizes these protests, right? This meme seems a great fit for Fox where I also heard at least one talking head saying this with a straight face. However, getting Bernie Sanders to say Obama should co-opt these protests is bizarre and out of touch with what is happening with the protests and in the country. Obama is part of the problem. Read the rest of this entry »
Can you tell I’m annoyed Andrew Cuomo has high favorable ratings as he rabidly pursues Republican policies to cosset the extremely wealthy and torment everyone else? To bring you up to speed, Cuomo told a public employees union to vote to cut their future pay and pay more in health care premiums or else he would fire 3,500 of them. Well they voted their interests and voted no. Now Cuomo is firing them. He calls it layoffs but it is removing people from good, presumably living wage, jobs out of spite.
The best part, according to David Cay Johnston, a real reporter formerly of the New York Times, there’s plenty of money available if only NY politicians would go after it, Ignoring Tax Cheats:
Each year New York State lets real estate investors evade at least $200 million of taxes. In peak years the figure likely rises to $700 million, if known tax cheating in another state is any indication. Some of the investors who cheat New York State also cheat New York City out of at least $40 million annually.
Back in the 1990s Jerry Curnutt figured out how to finger such cheats when he was the top partnership specialist at the Internal Revenue Service. Curnutt’s computer sifted through tax returns until he learned how to separate thieves from honest taxpayers. The tax-evasion estimates of $200 million and $40 million are his.
Six New York state tax auditors took classes Curnutt taught in June 2000 and gave stellar evaluations. California’s top tax auditor praised Curnutt’s course as “effective, relevant and most importantly, appreciated and understood by our auditors.”
Why has nothing been done for more than 11 years to make the cheats in New York pay what the law requires?
New York state and city are strapped for cash, slashing services for the poor, disabled and elderly. With penalties of up to 50 percent plus interest at penalty rates, the state is easily due more than $5 billion from years still open to collection, I calculate. (my emphasis)
Every state has similar issues, but New York matters most as the epicenter of highly leveraged real estate investment pools.
Curnutt found that real estate investment partnerships with depreciated properties often misreport gains when they sell. That such cheating is widespread screams about tax law enforcement looking the other way when those at the top steal. In contrast, New York State has a well-deserved reputation for going after people whose mistakes cost the state as little as three dollars.
Johnston even calls out the specific NY politicians who could easily call in some (or all) of this tax money by threatening to investigate, by publicizing the issue. Andrew Cuomo is at the top of the list. So is the Lieutenant Governor, Bob Duffy, a former street cop, and state Attorney General Eric T. Schneiderman. Only Schneiderman might do something but it’s a test for him: he’s supposedly hot after banks who cheated homeowners but maybe not so much with rich people who fund campaigns?
Bottomline, firing 3,500 workers is a needless exercise for Cuomo. He could get the savings by asking for a tax amnesty. Or enforce the law and go after these wealthy politically connected tax cheats. It’s bad enough that Cuomo refuses to make extremely wealthy New Yorkers pay anything extra as he cuts desperately needed jobs and funding for the middle class and the poor. The tell, for me, is that Rupert Murdoch’s Post apparently is a huge fan of Cuomo and his policies. Presumably you have to be a Republican win that “honor.”
As with the Amazon sweat shops in eastern Pennsylvania, I also wonder where the unions are on this issue? You’d think they’d be touting Johnston’s findings as push back. You’d think they would define Mr. Cuomo as a Republican (which he is, at the policy level) and drive up his negatives. Instead I only hear crickets (actually, literally, it’s night and the windows are open). At what point do unions realize this is a cage death match with Republicans like Cuomo and they have to fight back or lose everything? Politesse has gotten them nowhere, except harassed and now fired.
International experts with the task of compiling a crucial review of Greece’s fiscal progress ran into trouble before they could even start the job as public-sector workers protesting against wage cuts, layoffs and higher taxes locked them out of office buildings.
Inspectors from the European Union, International Monetary Fund and European Central Bank were greeted on Thursday with banners deploring the “barbaric measures” the so-called “troika” has meted out in exchange for propping up the moribund Greek economy. At the finance ministry – the hub of talks between the debt-stricken country and creditors – protesters shouted “take your bailout and leave” and prevented auditors from entering the building.
“We are sending a loud message to the government and the European Union that we have reached our limits, that it is the workers in our country and especially workers in the public domain who have carried the burden [of cost-cutting policies],” said Costas Tsikrikas, president of Adedy, the union of civil servants.
Following the socialist government’s announcement of a new wave of austerity measures last week, the total drop in purchasing power for public-sector employees would exceed 50%, he added.
It was an embarrassing start to discussions that had been suspended in a row over missed budget targets earlier this month. The monitors’ review is critical to Greece receiving the further aid needed if it is to avert bankruptcy.
The government, in a step that highlighted lenders’ distrust of Greece over a year after it secured €110bn (£95bn) in rescue funds, had been required to outline new deficit cuts in a letter to the EU and IMF before the inspectors agreed to return. The written assurance is believed to have contained a promise that the country would push ahead with privatisations.
But the surprise sit-ins, which began with civil servants declaring that they had taken over six ministries at 7am, meant that Evangelos Venizelos, the finance minister, was forced to hold the talks on the 2012 budget elsewhere.”The measures being pursued by the government are totally counter-productive. It is obvious to everyone that they have failed … all they have achieved is the impoverishment of Greeks,” said a member of Adedy’s executive board. “These occupations are symbolic but what is not is our determination to overturn policies that have driven us into deadlock. In the last two years 300,000 small and medium-sized businesses have closed and by December we estimate there will be one and a half million unemployed. That’s one person per family.”
Unions, including Adedy, which represents more than 800,000 civil servants have vowed to step up resistance to the measures. A general strike and other protests have been planned for October.
Did you catch the “socialist government” characterization? If the Greek government was truly socialist this surrender to the IMF/EU wouldn’t be happening. This is a hardcore capitalist government.
PS. If purchasing power goes down by 50%, what do you think will happen to the economy? Hint: growth won’t begin with a positive sign.