Even as the Securities and Exchange Commission has stepped up its investigations of Wall Street in the last few years, our government (via the S.E.C.) has been giving favorable treatment to the biggest banks who were engaged in outright fraud, even though they were repeat offenders.
HuffPo: "The S.E.C. has filed some civil fraud cases -- not many, and not big. Thus far, every single one has been settled with a minor fine, with neither individuals nor banks required to admit guilt. Criminal prosecutions of banks? Zero."
The S.E.C. allows the banks to settle without admitting or denying the charges, even as they had simultaneously settled a case with the Justice Department’s antitrust division admitting the very same conduct. The S.E.C.’s corporation finance director, Meredith B. Cross, reasoned it's "to protect investors, not to punish a company.
But the CEOs and other executive officers of these big Wall Street firms are usually investors themselves, paid with stock-options* as compensation for "performance", and usually makes up the biggest bulk of their personal income, compared to their base-salary wages.
In the end, the CEOs can commit fraud to boost their company's profits to increase the value of their stock shares, get a slap on the wrist with a small fine (that's shared by all the other stockholders), pay themselves multi-million dollar bonuses and stock-options, and then be rewarded for their deliberate deceptions by paying a less effective tax rate on their personal incomes, than do most honest and hard-working middle-class wage earners.
It all makes perfect sense. This is why financial firms and businesses incorporate to begin with, to avoid personal responsibly for their bad actions and get amnesty under "limited liability" provisions that protect their personal assets from civil lawsuits through their corporate charters. And that's why it's also so difficult to put corporate executives in jail. But if corporations were "people", how can a corporation do time in prison for fraud?
These CEOs are actually enjoying a lower tax rate for their fraudulent activities - - they're being rewarded for their criminal behavior! (See the video I made to honor these uber-wealthy bankers and CEOs.)
The larger banks and corporations ("real people") get away with this all the time, while unincorporated small business owners and individuals (who aren't "real people") must pay the maximum penalties.
Ordinary income, like paychecks, is taxed at a top rate of 35%; but because of loopholes such as carried interest and capital gains, those CEOs are taxed at only 15%. People in the top 1% like Mitt Romney (and other Wall Street CEOs) are paying a lower tax rate that what a middle-class family with an average income pays in federal income taxes...about 25%.
The fact that our tax code favors assets over wages is one factor behind the rise in income inequality. It’s also one reason our government is starved for revenues while trying to keep up with population growth (we have 100 million more people since 40 years ago). Are these CEOs like Mitt Romney really so concerned about helping the poor, middle-class, and unemployed?
This new report from the Joint Committee on Taxation shows that the favorable treatment of capital gains and dividends will cost our U.S. Treasury about $450 billion between 2011 and 2015. But if you go all the way back just to 2003 when Bush lowered the capital gains tax rate to only 15%, it is well over $2 trillion in lost revenues (not including illegal tax evasion).
As Jared Bernstein, a former economic advisor to the White House points out, "The evidence doesn’t support the view that favoring asset-based income [capital gains derived from stock-options, dividends, expensive art, etc.] raises investment, productivity, or job growth."
And it's not high taxes or government regulation that kills jobs, it's low wages overseas.
But so long as naive, fearful, and misinformed Republican voters keep believing the myth of trickle-down economics, and they keep voting against their own best interests, the bankers (and everyone else in the top 1% like Mitt Romney) will keep laughing all the way to the bank.
* To read more about how these CEOs are rewarded for their fraudulent, deceptive, and criminal behavior (e.g. using other legal tax loopholes, government hand-outs, illegal tax evasion, etc.), see my other posts below.
- Republicans: A riddle, wrapped in a mystery, inside an enigma
- Mitt Romney: Lobbyists, Special Tax Rates & Tax Evasion
- Gift Taxes on the Fabulously Rich
- Should we tax Kim Kardashian and Paris Hilton?
- How the 1% Bilks the 99%
- Investment versus Speculation
- The "SWAG" Economy of the 1%
- Historical Tax Rates on the Rich (1862 to 2011)
- How Apple Screwed the U.S. Middle-Class
- The Second Gilded Age: History Repeats Itself
- Mellon: The Banker Who Rigged the U.S. Tax Code
- The GOP Tax Plan - Ignorance, Insanity, or Greed?
- We have a Revenue Problem, Not A Spending Problem
- 280 Corporations are "Too Big to Tax"
- Trickle-Down Economics: The Cruel 30-Year Hoax
- You Pay Hidden Entitlements for the Rich
- Record Profits + Record Bonuses = Zero Jobs
- Low Wages Kills Jobs, Not High Taxes
- Trade Agreement Passes in Middle of Job Crisis
- Apple Inc. is Rotten to the Core
- America's Race to the Bottom
- Corporations & Banks Now Sit on $3.6 Trillion
- Who will "Live Free or Die" with FREE MARKETS in 2012?
More posts on Mitt Romney:
- Mitt Romney Comes Clean
- Mitt Romney: Lobbyists, Special Tax Rates & Tax Evasion
- Mitt Romney: Low-Income Earners Are "Free-Riders"
- Mitt Romney, the Forbes Fortune 400, and Taxes
- How Mitt Romney & the 1% Evades Taxes
- Mitt Romney - Mister 15% and Platinum Parachutes
- Efficiency expert Mitt Romney: "You're expendable."
- Mitt Romney Knows Envy Better than Anyone
- Mitt Romney Connected to $8.5 billion Ponzi Scheme
- For Mitt Romney, the Joke's on Us
- Mitt Romney was the real-life Gordon Gekko
Other Related Outside Articles:
- "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
- The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
- The Global Super-Rich Stash: Now $25 Trillion
- Historical Tax Rates and Time-line
- Capital gains from Citizens for Tax Justice
- 1977 - 2007 tax rates from U.S. Treasury
- Economic Policy Institute on capital gains taxes
- Capital gains explained from U.S. Internal Revenue Service
- The great corporate tax scam