Thursday, February 28, 2013

Robert Reich is Right, the GOP is Wrong

Not only were the Republicans directly responsible for crashing the economy that ruined millions of American's lives, but for the past four years they have actively attempted to make things much worse --- but not just to make Obama and the Democrats look bad in an attempt to regain political power (although that's one reason), but also to fulfill their ultimate 30-year plan of "Starving the Beast". We are the "beasts" they want to "starve" --- and since the days of Ronald Reagan, they've been succeeding.

In his latest opinion piece for the Huffington Post, Why Obama Must Meet the Republican Lies Directly, Robert Reich conveys what most people already believe, that the Republicans' talking points (regarding their austerity and trickle-down economic plans) are both dangerous and bald-faced lies.

That's why the majority of Americans, instead of voting for Mitt Romney last November, voted for Obama. But the majority has been held hostage to the will of the "minority of the minority" -- a handful of fanatical anti-government ideological anarchists --- those in the Tea Party, who couldn't win an election fairly on the issues, so instead, now hold gerrymandered seats in the House of Representatives.

Despite a majority of the people's will, 49 individuals have stubbornly refused to cede power to those who had legally and fairly won the 2012 elections...President Obama and the democratically elected Democrats.

And then the Tea Party anarchists had the gall to accuse President Obama of being a dictator and a Socialist. Who's been dictating to who?

Robert Reich: "The first big lie is austerity economics -- the claim that the budget deficit is the nation's biggest economic problem and is responsible for the anemic recovery.
  • Wrong. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession -- which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe.

The second big lie is trickle-down economics -- the claim that we get more jobs and growth if corporations and the rich have more money because they're the job creators, and job growth would be hurt if their taxes were hiked.

  • Wrong. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep economy going."

These two lies -- austerity economics and trickle-down economics -- are being told over and over by Republicans and their mouthpieces on Fox News, yell radio, and the editorial pages of the Wall Street Journal. They are wrong and there are dangerous.

Just as Robert Reich had explained, it's people's purchases that keeps the economy going (the basis for any capitalist economy, as in "supply-and-demand"). Just as the multi-millionaire and investor Nick Hanauer once explained in a speech he gave at TED University:

"Somebody like me makes hundreds or thousands as times much as the median American, but I don't buy hundreds or thousands of times as much stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and shirts a year like most American men. Occasionally we go out to eat with friends."

Wealth disparity is higher now than it's been since the first Gilded Age, and as inequality continues to widen, and income and wealth become ever more concentrated at the top, the rest of us don't have the purchasing power we need to boost the economy. That's why American multi-national corporations are forever seeking "emerging markets" in which to sell their goods and services. And that's the main reason why (since the beginning of the financial collapse and the Great Recession began) the U.S. economic recovery continues to be so anemic for working, under-employed and unemployed Americans.

Just as Mitt Romney had said last year about the current economy, "The rich are doing just fine". Yes they are, it's just everybody else who isn't and has had to make all the "shared sacrifices" --- as in lost jobs, home foreclosures, evictions, reduced home values, poor credit scores, lost savings, lost retirement accounts, etc. (The top 1% has actually profited from our decline.)

Older Americans (such as The Boomers) were especially hard hit. According to a report that was cited by the New York Times, an unemployed worker between the ages of 50 and 61, who had been laid off and remained unemployed for 17 months or longer, only has about a 9 percent chance of ever finding a new job again. That is a very grim statistic.

Many of the older unemployed workers, if they were 62, were forced into taking a reduced early Social Security retirement because they couldn't find jobs, while millions of others were forced to take two and three low-paying jobs just to make ends meet. Many are unaccounted for, or they committed suicide, just to end up as a another government statistic.

And then there are those who can only survive with the help of unemployment benefits, food stamps and Medicaid. These beat-down Americans have been living in fear for the past four years under the constant threats of budget cuts by the Republicans.

But the Tea Party continually insists on blaming the aftermath of our wrecked economy on Obama, who is only trying to pick up the pieces of the failed economic policies from a prior Republican administration.

We know the GOP lies --- we know the truth

  • Eight years of tax breaks for the ultra-rich and two un-funded wars under George W. Bush is what first created the deficit that Obama inherited. We know why since it's grown...no jobs!!!
  • The 56,000 factories that closed and the outsourced jobs during the Bush years escalated the middle-class decline.
  • The stock market crash in 2008 and the housing bubble burst made things that much worse. All these things happened BEFORE Obama was elected. But whenever jobs are created, the GOP always claims that it's in spite of Obama's policies, although the Republicans have never presented any viable jobs bills themselves. Just the opposite, they cut thousands of government jobs.
  • An unfair tax code with low tax rates on capital gains and the $113,700 income cap on Social Security taxes also helps drive, and further widens, the income inequality between rich and poor.
  • Off shore tax havens, unfair tax loopholes and ridiculous tax deductions for the ultra-rich, all contribute to the under-funding of the necessary tax revenues we need to run our government.
  • Yes, we do have "bigger government", but because our population has grown from 200 million people 40 years ago to over 300 million today, it only stands to reason that our government would also be bigger.
  • Massive income tax evasion, because of the GOP's budget cuts to the IRS, also resulted in less tax collections and tax audits (and less prosecutions for tax cheaters). The GOP claims that "if we tax them less, they will cheat less." (???)
  • Over $2 trillion in unrepatriated corporate earnings is stashed abroad as untaxed profits --- this idle cash that's being hoarded overseas needs to be circulated throughout the economy to stimulate growth.
  • The huge CEO salaries instead of fairer wages to their employees ("people who purchase things") also contributes to wealth disparity.
  • Taxpayer bailouts to banks that are still making record profits and executive bonuses -- and the GOP's repeated efforts against reforming the financial industry --- that too is unsustainable and will result in another financial bubble (JPMorgan's CEO Jamie Dimon recently admitted as much.)
  • Tax subsidies to very large and profitable corporations (like those in the oil, tobacco, dairy, and natural gas industries) is about as insane as any other Republican economic policy.
  • Congressional pork, such as defense contracts for programs that the generals didn't ask for and says they don't need, is a HUGE part of defense spending, not just soldiers in the field. "Bridges to Nowhere" are another example of waste, fraud, and abuse in government spending.
  • We do not have enough government resources to investigate healthcare, insurance, and Medicare fraud, which drives up the costs for everyone (members of Congress and their families don't face this concern).
  • H-B1 VISAS and the outsourcing of domestic jobs for cheaper labor overseas, putting millions of Americans out of work or, for those who once had good-paying jobs, were forced to work in much lower-paying jobs at places like Walmart, Staples, Dominos, and McDonalds.
  • Busting labor unions to drive down wages and benefits for American workers, and big businesses spending millions to lobby against worker's rights and their protections (e.g. "Right to Work" laws, etc.) has decimated the middle-class for the past 40 years. Public sector union employees aren't earning "too much", they're earning what everyone else is supposed to be earning in the private sector (the GOP uses them to divide the workers).
  • And stop telling us the "medium income" is $50,000 a year when we all know that $50,000 is the "median household income", because it now takes two wage earners in one household to pay the rent. (We're poor, we ain't stupid!)
  • Campaign finance and elections laws, rigging our democracy against the majority of the people --- (and ideologues in the Supreme Court) is the main reason why we cannot rectify all of the aforementioned above.

The Tea Party --- and the "once-moderate" Republicans who have been co-opted by the anti-government anarchists, and who are mostly concerned about their own jobs (e.g. John Boehner and Mitch McConnell, etc.) --- keep repeating the same old lies --- over and over and over and over again --- thinking we'll eventually believe them.

"If you tell a lie big enough, and keep repeating it, people will eventually come to believe it." ~ Joseph Goebbels

But whenever the Democrats had a chance to rectify many of these wrongs, they also dropped the ball. And many Democrats, being millionaires themselves, also benefited from the current tax code --- the tax code that they helped write --- but then, they have the nerve to go on TV to complain about their own tax loopholes! Un-believable! And that's why the Buffett Rule will never pass.

And now the Democrats are also talking about chained CPI as a "good" way to save money in the government budget. Yeah, right, by screwing the elderly in their monthly Social Security checks. That would only be something that I'd once expect from the Republicans, now we can't trust either political party.

Robert Reich is right, the GOP is wrong --- but the "mainstream" Democrats haven't been much better either. We need many more "Progressive" Democrats in Congress, otherwise, nothing will ever change.

"Meet the new boss, same as the old boss...we don't get fooled again." ~ The Who

Wealth, Wages and Taxes Compared

The combined net worth of the 400 richest Americans last year was $1.7 trillion, up from $1.5 trillion the year before. The average net worth of a Forbes 400 member was a staggering $4.2 billion (the highest ever) in 2012. The Walton family alone is worth over $100 billion. 30 years ago there were only 13 American billionaires. Now we have 424. Like reverse osmosis, the money is being sucked to the top, so there is much less economic activity in the bottom 99%. (Remember, it's people's purchases that drives the economy.)

During the Great Recession in 2009, when the unemployment rate had peaked at 10.2% (when over 15 million Americans were unemployed), only 140.5 million tax returns were filed for that year --- down from 142.5 million the year before in 2008. I personally did not have to file a tax return for 2011, the first time in 35 years. This year, the same thing. I had ZERO income last year too (and most probably ZERO income for this year as well.)

According to the IRS, for that same year in 2009, the top 1 percent of taxpayers had an average Adjusted Gross Income of $960,000 with an average federal income tax rate of 24%. The billionaires on the Forbes Fortune 400 List earn most of their income with "investment income" (capital gains) and paid no Social Security or Medicare taxes on this income.

Individuals with regular incomes over $372,950 (earned as "wages") were subjected to the highest marginal tax rate of 35%, but they also had their Social Security taxes capped on their first $112,000 of earnings. These individuals would usually be CEOs with base salaries AND stock options worth millions of dollars (by contrast, a neurosurgeon, the most educated and highest skilled person in the health care industry, might have an adjusted gross income of $225,390 a year.)

Meanwhile, during that same year, the bottom 50 percent of taxpayers (or Romney's 47%) had an average Adjusted Gross Income of only $15,000 --- and an average federal income tax rate of only 1.9% --- but they also paid Social Security and Medicare taxes on 100% of their earnings. According to the Social Security Administration, 50% of all workers in the U.S. workforce netted $26,966 or less that year and that would account for why 47.6 million Americans now need food stamps for their survival (I am one).

And with the exception of the unemployed, will someone please explain to the Republicans that food stamps are not "entitlements" but are really" wage subsidies", and companies like Walmart benefit the most.

In 1973, as a high school drop-out, I belonged to the Carpenters and Joiners of America and was earning $7.50 an hour as an unskilled welder's helper in a shop making metal doors. Today that would be $36.50 an hour. But according to the Bureau of Labor Statistics, almost 40 years later, as of 2010 skilled welders are only getting a median pay of $17.04 per hour. In 2008 my last wage as a casino bartender in Las Vegas was $16 a hour --- and every dollar I made in tips was taxed (a tip isn't a "gift", it's a "wage"), but people like Kim Kardashian and Paris Hilton can inherit $10 million tax free. WTF!!!!

Meanwhile, paper investments by the top 1% in the stock market have seen their notional values skyrocket since 1973. Just since March 2009, the value of stocks on the Dow Jones has doubled. Most of the earnings have went to the top, while wages remained stagnant as prices (the cost of living) have gone up for most working Americans.

Job Numbers by Presidential Administrations

Since Obama was first elected in 2008 the Republicans' #1 priority was making sure that Obama was a one term president. They failed miserably.

Since 2010 the Tea Party has focused primarily on two things: Repealing ObamaCare® and writing anti-abortion bills. They also failed...many times over. And the only jobs they ever created were their own.

Now it seems that the Republicans' #1 priority is to make sure the already-down-and-out (poor and unemployed) is even more miserable --- and letting the most wealthy among us have whatever it is they want...less regulation, less taxes, less liability...

And just in case you didn't know, Bill Clinton had the best jobs record, George W. Bush had the worst, and his dad didn't do much better. And so far, more jobs were created under Obama (with no thanks to the GOP) than under either Bush --- and in half the time. >>> Source: Wall Street Journal

So Robert Reich was right, and has always been right --- while the GOP is wrong, and has been very wrong for a very long time.

President    Jobs created    Jobs at end of term    Jobs at start of term    Payroll expansion    Jobs created per year in office    Population growth    Percent change in population   
George W. Bush 3.0 million 135.5 million 132.5 million 2.3% (Worst) 375,000 22.0 million 7.7%
Bill Clinton 23.1 million 132.5 million 109.4 million 21.1% (Best) 2,900,000 25.2 million 8.9%
George H.W. Bush 2.5 million 109.4 million 106.9 million 2.3% 625,000 12.5 million 4.8%
Ronald Reagan 16.0 million 106.9 million 90.9 million 17.6% 2,000,000 17.3 million 7%
Jimmy Carter 10.5 million 90.9 million 80.4 million 13.1% 2,600,000 9.8 million 4.3%
Gerald Ford 1.8 million 80.4 million 78.6 million 2.3% 745,000 5.1 million 2.3%
Richard Nixon 9.4 million 78.6 million 69.2 million 13.6% 1,700,000 12.3 million 5.7%
Lyndon Johnson 11.9 million 69.2 million 57.3 million 20.8% 2,300,000 11.3 million 5.6%
John F. Kennedy 3.6 million 57.3 million 53.7 million 6.7% 1,200,000 8.2 million 4.3%
Dwight Eisenhower 3.5 million 53.7 million 50.2 million 7% 438,000 23.3 million 12.8%
Harry Truman 8.4 million 50.2 million 41.8 million 20.1% 1,100,000 N/A N/A

* Also posted at the Daily Kos

Wednesday, February 27, 2013

J.P. Morgan Chase: Fraud, Bonuses, Lawsuits & Record Profits

Feb. 26, 2013 - Wall Street Journal: Wall Street cash bonuses for 2012 are expected to climb 8% from a year earlier, boosted in part by the payment of deferred compensation from prior years. New York securities firms will pay employees $20 billion in cash bonuses, up from $18.5 billion for 2011. The report's findings reflect the improved profitability of banks last year and more bonuses paid by firms in December to avoid higher federal tax rates.

Feb.26, 2013 - Wall Street Journal: J.P. Morgan Chase, the nation's most profitable bank in 2012 and the biggest U.S. lender by assets, is setting plans to eliminate 17,000 jobs by the end of next year and reduce expenses by at least $1 billion annually. For 2012, J.P. Morgan reported net income of $21.3 billion, up 12% from a year ago and a company record.

Feb. 5, 2012 - Huffington Post: J.P. Morgan Chase has a "money room" stored away in Florida, where it moves trillions of dollars every day. According to Business Insider, Chase's CEO Jamie Dimon (pictured above) said at a conference Monday, "J.P. Morgan moves a lot of money for corporations and individuals, and that room, which I took my Board of Directors to, is just very impressive."

Feb. 27, 2013 - Huffington Post: Jamie Dimon of JPMorgan Chase and Lloyd Blankfein of Goldman Sachs have both told us it's imperative that we cut social programs for the elderly and disabled to "save our economy." But the elderly and disabled have paid for those programs - just as they paid to rescue Jamie Dimon and Lloyd Blankfein in the bank bailouts -- and just as they implicitly continue to pay for that rescue today in $83 billion annual "subsidies" to the banks.

Tuesday, February 26, 2013

Anheuser-Busch Dilutes Beer for Profits

By MaryClaire Dale



PHILADELPHIA (Associated Press) -- Beer lovers across the U.S. have filed $5 million class-action lawsuits accusing Anheuser-Busch of watering down its Budweiser, Michelob and other brands.

The suits, filed in Pennsylvania, California and other states, claim consumers have been cheated out of the alcohol content stated on labels. Budweiser and Michelob each boast of being 5 percent alcohol, while some "light" versions are said to be just over 4 percent.

The lawsuits are based on information from former employees at the company's 13 U.S. breweries, some in high-level plant positions, according to lead lawyer Josh Boxer of San Rafael.

"Our information comes from former employees at Anheuser-Busch, who have informed us that as a matter of corporate practice, all of their products mentioned (in the lawsuit) are watered down," Boxer said. "It's a simple cost-saving measure, and it's very significant."

The excess water is added just before bottling and cuts the stated alcohol content by 3 percent to 8 percent, he said.

Anheuser-Busch InBev called the claims "groundless" and said its beers fully comply with labeling laws. "Our beers are in full compliance with all alcohol labeling laws. We proudly adhere to the highest standards in brewing our beers, which have made them the best-selling in the U.S. and the world," Peter Kraemer, vice president of brewing and supply, said in a statement.

The suit involves 10 Anheuser-Busch products: Budweiser, Bud Ice, Bud Light Platinum, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice and Bud Light Lime.

Anheuser-Busch, based in St. Louis, Mo., merged with InBev in 2008 to form the world's largest alcohol producer, headquartered in Belgium. In 2011, the company produced 22 billion gallons of alcoholic beverages, 3 billion of them in the U.S., and reported $22 billion in profits, the lawsuit said.

According to the lawsuit, the company has sophisticated equipment that measures the alcohol content throughout the brewing process and is accurate to within one-hundredth of a percent. But after the merger, the company increasingly chose to dilute its popular brands of beer, the lawsuit alleged.

"Following the merger, AB vigorously accelerated the deceptive practices described below, sacrificing the quality products once produced by Anheuser-Busch in order to reduce costs," said the lead lawsuit, filed Friday in federal court in San Francisco on behalf of consumers in the lower 48 states.

Companion suits are being filed this week in Pennsylvania, New Jersey and elsewhere.

The named Pennsylvania plaintiffs, Thomas and Gerald Greenberg of Ambler, said they buy six cases of the affected Anheuser-Busch products a month. They did not immediately return a message Tuesday, and Boxer would not elaborate on their purchases except to say the consumer-protection suit does not involve retailers or bar owners.

One of the California plaintiffs, Nina Giampaoli of Sonoma County, said she bought a six-pack of Budweiser every week for the past four years.

"I think it's wrong for huge corporations to lie to their loyal customers -- I really feel cheated. No matter what the product is, people should be able to rely on the information companies put on their labels," Giampaoli said in a news release issued by Boxer's law firm.

Bloomberg News first reported Tuesday on the lawsuits.

In a telephone interview with The Associated Press, Boxer said he has evidence to corroborate the former employees' allegations, but stopped short of saying the beers had been independently tested.

"AB (Anheuser-Busch) never intends for the malt beverage to possess the amount of alcohol that is stated on the label. As a result, AB's customers are overcharged for watered-down beer and AB is unjustly enriched by the additional volume it can sell," the lawsuit said.

The Case for Progressive Tax Reform


We need tax reform. Not because of any phony debt crisis, but so we can raise the necessary revenue to reduce staggering inequality and to grow the economy and end the jobs crisis.

Conservatives peddle the fiction that America has a “spending problem” and that there is no need for more tax revenue. The reality is, the current tax code is still rigged for the 1 percent. Even with the Bush tax cuts expiring for billionaires, most are still paying lower tax rates than their secretaries. Profitable multinationals are exploiting loopholes and oversea tax dodges to avoid taxes altogether.

Instead of taxing what we don’t need, like Wall Street gambling, we should tax what we require --- like good jobs. The glaring flaws and gaps in the tax code are easy to spot, if the spotlight is actually put on them.

America’s number one priority is to end the jobs crisis. We need massive public investments, not only to fully recover the 8million jobs lost to the Great Recession (most who are still out of work), but to fix an economic foundation that was already disintegrating before the 2008 crash:

  • an infrastructure that’s crumbling,
  • a social safety net in tatters,
  • an unsustainable dependence on fossil fuels,
  • and a public education system starved of resources --- from preschool to affordable college.

Yes, there is lots of waste, fraud and abuse in the federal budget. Powerful interests rake of billions in unneeded subsidies. Perverted priorities squander too much. But even with that, we still have a revenue problem.

Fortunately, we can solve our revenue problem without kicking the middle class when it’s down or stifling the ability of businesses to create jobs. We can raise much of the revenues we need if we close wasteful loopholes, remove perverse job-killing tax incentives and fill the gaps that have allowed the richest Americans to escape contributing their fair share to America’s future.

Americans for Tax Fairness proposes:

  • Closing tax shelters for the wealthy, which would bring in as much as $167 billion a year.
  • Ending the ability of U.S. corporations to delay paying taxes on foreign profits, which would save $61 billion a year.
  • Terminating destructive corporate tax breaks, including those regarding executive compensation, stock options and fossil fuel production; that would raise $16 billion a year.
  • Taxing Wall Street trading to discourage reckless speculation, which would produce $35 billion a year.
  • Placing a surtax on income above $1 million, which would collect $45 billion a year.

These proposals would begin to close the loopholes in the tax code that serve to benefit the wealthiest American households that do not need the help. In the two years after the crash, a study shows that the multi-millionaires in the top 1 percent saw their average incomes rise11 percent while the average income of everybody else shrank. Stunningly, American inequality is worse today than it was in1774, even when you factor in slavery, according to new research from Harvard and the University of California.

These tax reforms would also help generate jobs here at home. The financial speculation tax would help reduce the Wall Street gambling that helped blow up the economy. Ending incentives for outsourcing would help deter companies from moving jobs abroad.

We don’t need a tax code that fosters staggering inequality. We need a fair tax code so we can rebuild America, put people back to work and make investments vital to America’s future.

We have a jobs crisis. We are failing to make the investments vital to a competitive economy and a vibrant middle class. Our infrastructure is crumbling. Our education system inadequate, with what everyone agrees is vital -- pre-school and college increasingly unaffordable.

We need new spending priorities, and we need tax reform. Our tax code is fundamentally unfair, chock full of wasteful loophole sand perverse job-killing incentives that only benefit the top 1 percent and worsen staggering inequality.

We need to shut down the loopholes and rip-offs in the tax code to strengthen the economy and to raise the necessary revenue to make investments vital to America’s future while helping to put people back to work.

They say: We already raised taxes on the rich. Now it is time to address the real problem: spending.

We say: Since 2011, the president and Congress have locked in more than $2 trillion in deficit reduction, with more than two-thirds of that from spending cuts. We’ve cut deeply enough – in fact, too deep – and more austerity would kill jobs.

The fact is, we have a revenue problem. Many billionaires are paying lower tax rates than their secretaries. Profitable multinationals are exploiting loopholes and oversea tax dodges to avoid taxes altogether. We aren’t raising enough revenue to invest in what we need to grow: jobs, infrastructure, education and homegrown clean energy.

They say: We can’t punish success. It will destroy the incentives for job creators to invest in America’s growth.

We say: We applied that conservative logic during the Bush presidency, slashing taxes on the wealthy and waiting for the jobs to come. They never did. The Wall Street Journal found the Bush record on jobs was the “worst on record.” We didn’t get jobs. We got growing inequality, a declining middle class, and the biggest economic downturn since the Great Depression. It’s time togo back to what works: a fair tax code that funds the investments we need to rebuild America and put people back to work.

They say: 47 percent of Americans don’t pay any federal income tax. We don’t need to further burden the successful. We need everyone to contribute.

We say: Now we know the truth. Conservatives don’t want to cut taxes for everybody. Conservatives only want to cut taxes for the rich and raise them for the poor. In fact, every working American pays taxes – payroll taxes, sales taxes, state and local taxes. Middle-class Americans are paying taxes at a higher rate than billionaires. Small businesses pay at a higher rate than multinationals that hide profits abroad. It’s not the poor who have gamed the tax code; it’s the rich and the powerful. Tax reform starts at the top.

THE FACTS

Even after the fiscal cliff deal, 66 percent of voters say the richest 2 percent should pay higher taxes. Only 9 percent say they should pay less. (Source: Hart Research Associates for Americans for Tax Fairness)

More than three out of four respondents agree that federal budget deficits should be addressed through a combination of tax increases and budget cuts. Only 19 percent agree with the Republican leadership position that the deficit should be reduced by budget cuts alone. (Source: Pew Research Center)

64 percent of voters say that large corporations should pay more in taxes. (Hart Research Associates for Americans for Tax Fairness)

66 percent of voters say revenue from closing loopholes should go toward public investments and deficit reduction. Only 23percent say revenue from closing loopholes to go toward paying for lower tax rates. (Hart Research Associates for Americans for Tax Fairness)

For every dollar in new revenue raised through tax increases since 2011, we’ve cut $2.50 out of federal government programs:$1.5 trillion in spending cuts versus $600 billion in tax increases. (Source: Center for Budget and Policy Priorities)

The top 1 percent of households saw their average federal tax rate fall 17 percent between 1979 and 2009. (Source: Congressional Budget Office)

Corporations are paying a fourth of what they paid 60 years ago as a share of federal revenues. (Source: Americans for Tax Fairness )

Federal taxes as a share of the total economy haven’t been this low since 1950. The last time we had a balanced budget(1998-2001), revenues were 20 percent of gross domestic product; now revenues are just 15.4 percent of GDP. (Ezra Klen, The Washington Post)

Copy-and-Paste Tweets

Since 2009, income of top 1% is up, income of bottom 99% down. End the rigged tax code. Make rich pay fair share
http://goo.gl/vXJRD @ourfuture

Conservatives: Raise taxes on bottom 47%, cut them for rich. Progressives: Raise taxes on top 2%, invest in jobs
http://goo.gl/vXJRD @ourfuture

Get more smart talk on the web at OurFuture.org/SmartTalk
Give them your feedback at smarttalk@ourfuture.org

Other Resources

Monday, February 25, 2013

Coke: The Tax Dodger that Sued a Sovereign Nation

A short excerpt from A Brief History of the Corporation: 1600 to 2100 by Venkat on June 8, 2011

If you thought it was bad enough that Dick Cheney used to work for Halliburton before he took office, imagine if he’d worked there while in office, with legitimate authority to use his government power to favor his corporate employer and make as much money on the side as he wanted, and to call in the Army and Navy to enforce his will.

That picture gives you an idea of the position Robert Clive found himself in back in 1757. He made out like a bandit. That was a full 150 years before the American corporate barons earned the appellation robber.

The first Coca-Cola Company incorporated on March 24, 1888 and the first commercial sale of bottled Coca-Cola took place in early 1891 when the bottling was done in Vicksburg, Mississippi at the Biedenharn Candy Company.

The first outdoor wall advertisement that promoted the Coca-Cola drink was painted on the wall of the Young Brothers Pharmacy in 1894 in Cartersville, Georgia. By then Coke concentrate (Coke syrup) was sold separately at pharmacies in small quantities, as an over-the-counter remedy for nausea or a mildly upset stomach.

Vintage ads like the one pictured below suggested that Coca-Cola claimed some of these curative properties. The "Relieves Fatigue" slogan on this Schenectady New York wall dates back to the early 1900's.

It was during this time when the era of the robber barons was winding down, and in 1909 the People of the United States imposed its first corporate tax of 1% on companies like Coca-Cola.

By 1969, the year that America had first landed a man on the moon, the corporate tax rate on large corporations such as Coke was as high as 52.8%, until eventually by1994, it was lowered to the current rate of 35% --- albeit, with a lot less loopholes than today.

Three years later in 1997 the Coca-Cola Company passed the "one billion a day" mark in sells of bottled Coke --- and it was not until 14 years after that, did the CEO of Coca-Cola falsely claim that his company found it easier to do business in China and Brazil than in the United States because of our antiquated and unfair tax code:

“If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we’re disadvantaged. A Chinese or Swiss company can do whatever its wants with those funds [earned overseas]. [But] when we want to bring them back, we are faced with a very large tax burden.” ~ Mukhtar Kent, CEO Coca-Cola, 2011

Republicans had seized on Kent’s comments, including Virginia Governor Bob McDonnell who had said that he was “staggered” by Kent’s comments and decried that it should be a “wakeup call” to Washington.

But in actuality, Coca-Cola enjoys very low federal taxes, and pays a lower tax rate than most Americans. According to Citizens for Tax Justice, in 2011 the company’s federal tax expense was $470 million, which was only 6.5 percent of the $7.2 billion in pre-tax profits that Coca-Cola reported that year. It's odd that Coke's CEO would complain about taxes when the statutory corporate tax rate hadn't been lower than what Coke paid for over 100 years.

That’s a very low tax rate for Coke, and it certainly does call for reforming the tax code, though not in the way that those such as Coke's CEO wants it "reformed". On top of that, the company actually told Citizens for Tax Justice that they had paid a 38% tax rate --- which is more than the statutory corporate rate of 35%; but Coke would not release any documentation backing up their bogus claim.

Part of the reason that Coca-Cola pays such a low tax rate is that it parks profits in overseas tax havens like the Cayman Islands. The company has saved $500 million in some years by hiding profits there. It's these overseas profits that actually gets to the heart of what Coke's CEO is really after—he mentions that Coca-Cola cannot bring those profits back without a “very large tax burden.”

The repatriation of overseas earnings is a big issue for multinational corporations based in America because, if they want to bring back profits made overseas, they must pay the standard 35% tax rate (minus any other tax loopholes that Congress has since granted them over the last few decades).

In 2004, big business got Congress to approve a repatriation holiday in which overseas profits could be brought back and taxed at a 5.25 percent rate instead of 35 percent. It was sold as a "jobs-creating" measure and implied that companies would bring back a lot of overseas money, which would spur investment and jobs in the U.S. (*cough-cough-clear throat*)

At that time a lot of overseas profits did come back, but unfortunately—yet predictably—the jobs never materialized. The Congressional Research Service later found that “little evidence exists that new investment was spurred.” In fact, a comprehensive study found that 92 percent of the money that was brought back was used to enrich their institutional shareholders (e.g. Bain Capital, Goldman Sachs, etc.) and their company executives.

Moreover, many of the companies that participated in the repatriation ended up laying off workers in the following months and years. On top of that, many of these companies—including Coca-Cola—now have much more money parked overseas than they did before the repatriation holiday. Coca-Cola repatriated $6.1 billion of the $9.8 billion it had in overseas profits in 2004—but as of 2011, the company has $20.8 billion parked overseas, more than triple that amount.

So, what Coke's CEO Muhktar Kent was really saying is, although his highly profitable company’s already-low federal tax rate is abetted by hiding profits overseas, he’d also like to bring back those profits at an outrageously low rate so that his company can get even richer. Otherwise, they’ll keep their money in China, or Brazil, or wherever --- and this will certainly help his shareholders, which is his only true motivation.

Now we're also hearing that Coca-Cola, the world’s largest beverage company, is suing to crush the world’s best recycling program.

Coke claims that they can't afford to pay their fair share of taxes, but when the government of Australia's Northern Territory considered creating a 10-cent refund on recycling plastic bottles, Coca-Cola poured millions of dollars into a misleading campaign to oppose the plan. But after the people Down Under had decided, the plan had passed --- but then Coke sued the government to stop the program. Coca-Cola runs similar campaigns all over the world.

These days Coca-Cola sells nearly 2 billion plastic bottles every day, and there is already a Texas-sized island of un-recycled plastics in the Pacific Ocean.

Coke "says" it supports recycling, and it even has a special website to advertise how much it cares. But all over the world, Coca-Cola opposes public programs that encourage people to recycle plastic bottles. If Coke was really serious about recycling, it needs to start supporting recycling programs, not suing sovereign nations to stop them.

The recycling program Coke is suing over is called a “container deposit scheme,” (a “bottle bill” in the United States), but it shouldn't cost Coca-Cola anything. Instead, consumers pay an extra ten cents for each bottle, which they can get back by recycling the used container. But Coke claims that recycling programs are a " tax" that hurts its sales. So far, Coke's competitor, PepsiCo, hasn't sued a country yet.

In 2003 Coke announced that it would cut staff by about 1,000 people, or 4% of staff. It was Coca-Cola's second major layoff, with the first coming in 2000 when 5,200 people were let go (a typical company doing more with less.)

In 2010 Coca-Cola Enterprises, the biggest bottler of Coca-Cola beverages, said it was going to layoff another 5% of its work force, or about 3,800 jobs. And last year in France workers were set to go on strike claiming that more layoffs were fundamentally unfair while Coke was enjoying growing global profits.

Just last month Coca-Cola Refreshments USA Inc announced that it will close its Sheboygan production facility, leaving 40 employees jobless, according to a letter to the Wisconsin Department of Workforce Development. "You can assume over time that our presence in the United States, in terms of employees, will go down a bit," said chief executive John Brock.

And a few of those unemployed Coke employees might want to supplement their incomes "a bit" by collecting discarded plastic Coke bottles for ten-cent refunds.

Today, and maybe because efforts around the country to impose taxes on high-sugar drinks --- and because of Mayor Michael Bloomberg’s move to restrict the sizes of sodas sold in New York City --- Coke is now spending millions of dollars on a ridiculous P.R. campaign fighting back against the public's growing awareness of obesity, diabetes and tooth decay.

“This is not about changing the products, but about confusing the public,” said Michele R. Simon, a public health lawyer who writes frequently about the food and beverage business and its role in public health issues on her blog Appetite for Profit. “They are downplaying the serious health effects of drinking too much soda and making it sound like balancing soda consumption with exercise is the only issue, when there are plenty of other reasons not to consume too much of these kinds of products.”

Here's the HONEST Coke commercial.

But Coke isn't alone, not as it pertains to dirty tricks, phony PR campaigns, tax avoidance schemes, and overall poor corporate governance, when they are supposed to be our "pillars of the community". This has become the "norm" for the corporate culture --- massive profits at any cost to people, sovereign governments, or to the global environment --- just to enrich a handful of people at the top, such as those who sit on their shared board of directors.

These CEOs sometimes forget that it's governments around the world that ALLOW their corporations to exist and remain in business, and that it's not a Constitution Right. And none of these CEOs were ever endowed with (or ENTITLED to) any inalienable right to receive multi-million dollar annual salaries. It's only a privilege, one that they constantly abuse, by using "limited liability" granted in corporate charters to avoid responsibilities and to put them essentially all above the law.

In 2011, during the aftermath of the Great Recession --- in the middle of massive layoffs, foreclosures, and government cuts ---- Coke's CEO Muhtar Kent did not make any "shared sacrifices". He saw his total compensation rise 17.5% to $29.1 million that year, as did Coke's Chief Financial Officer, Gary Fayard, who saw his total compensation increase 3.1% to $8.5 million.

Over a 5-year period, Muhtar Kent, the current CEO of The Coca Cola Company, made over $40 million. A study by the Institute for Policy Studies reports that John F. Brock, the current CEO of Coca Cola Enterprises, earned $19.1 million in 2011 --- and that his salary alone was more than what Coke had paid in federal income taxes that year --- when Coca Cola’s net revenues saw robust growth in the billions of dollars, while it also had four subsidiaries in tax havens.

These corporate executive officers, such as those at Coke, also pay a low capital gains tax on their stock options in their executive compensation packages (paying 20% or less on their AGI, instead of the top marginal rate of 39.9% as on regular wages). In other words, they all pay a lower tax rate than Warren Buffett's secretary --- but yet, congress REFUSES to change this in the tax code because Coke, as well as all the other larger corporations, lobbies Congress and contributes to their congressional campaigns for favorable tax laws in return.

Yet still these CEOs complain about "high taxes" (and 10-cent refunds on plastic bottles). It seems that it's true: enough is never enough for these people. Their greed is like an addiction: "Wealth is like sea-water; the more we drink, the thirstier we become." ~ Schopenhauer

When will the members of our Congress and state politicians (just as any other country's national and local political leaders) stop caving in to the unreasonable demands of the CEO's of these multi-national corporate conglomerates? When will our elected "representatives" stop giving in to the CEO's approach of using "sticks and carrots" --- using threats of jobs-for-tax breaks, just like they do when holding jobs as hostages for less governmental regulation?

Especially when it's become so blatantly apparent for several decades that these executive corporate officers' ONLY considerations have consistently shown to be ONLY for profits to further enrich themselves.

No matter how little or how great they are taxed, nor how many or how few regulatory laws are passed, nothing will ever keep them from doing everything possible to maximize their profits --- and well over 100 years of history has proved this --- since the days of the Robber Barons. Wars were started for profits, but with the exception of Afghanistan an Iraq, there were also war taxes on excessive profits.

The Campaign to Stop Killer Coke originated to stop the gruesome cycle of violence against union leaders and organizers in Colombia in efforts to crush their union, SINALTRAINAL. Since then, violence, abuse and exploitation leveled against Coke workers and their communities have been uncovered in other countries as well, notably China, El Salvador, Guatemala, India, Mexico and Turkey...where Coke is probably getting better tax breaks.

But now Coke is waging a war on the people and our allies in Australia. It's a good thing these CEOs don't have their own army or navy!

Historical Corporate Tax Rates

Year

(Paid by Major Corporations in U.S.)

%

1909-1913 $5,000 exemption
1
1936-1937 Over $40,000
15
1938-1939 Over $25,000
19
1940 Over $38,565.89
24
1941 Over $38,461.54
31
1942-1945 Over $50,000
40
1946-1949 Over $50,000
38
1950 Over $25,000 (Add Surtax of 19%)
42
1950 Excess Profits Tax
30
1951 Over $25,000 (Add Surtax of 22%)
50.75
1951 Excess Profits Tax
30
1952 Over $25,000 (Add Surtax of 22%)
52
1952 Excess Profits Tax
30
1953-1963 Over $25,000 (Add Surtax of 22%)
52
1964 Over $25,000 (Add Surtax of 28%)
50
1965-1967 Over $25,000 (Add Surtax of 26%)
48
1968-1969 Over $25,000 (Add Surtax of 26%)
52.8
1970 Over $25,000 (Add Surtax of 26%)
49.2
1971-1974 Over $25,000 (Add Surtax of 26%)
48
;1975-1978 Over $50,000 (Add Surtax of 26%)
48
1979-1981 Over $100,000
46
1982 Over $100,000
46
1983-1984 Over $100,000
46
1985-1986 Over $1,405,000
46
1987-1993 Over $335,000
34

1994-Present

Over $18,333,333

35

Other Previous Coke Slogans

1886 - Drink Coca-Cola
1904 - Delicious and Refreshing
1905 - Coca-Cola Revives and Sustains
1906 - The Great National Temperance Beverage
1917 - Three Million a Day
1922 - Thirst Knows No Season
1923 - Enjoy Thirst
1924 - Refresh Yourself
1925 - Six Million a Day
1926 - It Had to Be Good to Get Where It Is
1927 - Pure as Sunlight
1927 - Around the Corner from Everywhere
1929 - The Pause that Refreshes
1932 - Ice Cold Sunshine
1938 - The Best Friend Thirst Ever Had
1939 - Thirst Asks Nothing More
1939 - Whoever You Are, Whatever You Do, Wherever You May Be, When You Think of Refreshment Think of Ice Cold Coca-Cola
1942 - The Only Thing Like Coca-Cola is Coca-Cola Itself
1948 - Where There's Coke There's Hospitality
1949 - Along the Highway to Anywhere
1952 - What You Want is a Coke
1956 - Coca-Cola... Makes Good Things Taste Better
1957 - Sign of Good Taste
1958 - The Cold, Crisp Taste of Coke
1959 - Be Really Refreshed
1963 - Things Go Better with Coke
1969 - It's the Real Thing
1971 - I'd Like to Buy the World a Coke (part of the "It's the Real Thing" campaign)
1975 - Look Up America
1976 - Coke Adds Life
1979 - Have a Coke and a Smile
1982 - Coke Is It!
1985 - We've Got a Taste for You (for both Coca-Cola & Coca-Cola classic)
1985 - America's Real Choice (for both Coca-Cola & Coca-Cola classic)
1986 - Red, White & You (for Coca-Cola classic)
1986 - Catch the Wave (for Coca-Cola)
1987 - When Coca-Cola is a Part of Your Life, You Can't Beat the Feeling
1988 - You Can't Beat the Feeling
1989 - Official Soft Drink of Summer
1990 - You Can't Beat the Real Thing
1993 - Always Coca-Cola
2000 - Coca-Cola. Enjoy
2001 - Life Tastes Good
2003 - Coca-Cola... Real
2005 - Make It Real
2006 - The Coke Side of Life

Saturday, February 23, 2013

Cable TV Giant Tried before Supreme Court

February 23, 2013 - Washington D.C. (AP) Last Friday afternoon a little known, and much less publicized, milestone event took place behind closed doors at the U.S. Supreme Court, while most of America had their attention diverted on the upcoming "sequester" cuts in government spending.

Bud Meyers, a long time advocate for the poor, the elderly, the disabled, the unemployed and the middle-class, had stood before the highest court of the land, to argue a case on behalf of millions of disenfranchised Americans regarding income inequality, political corruption, excessive wealth, corporate greed, tax evasion, healthcare fraud and anti-labor business practices.

This proceeding, and the Chief Justices' ultimate landmark decision on Wage Workers of the United States vs. Cablevision et al Corporate Others is expected to be one the most important cases ever heard by the Supreme Court in over 100 years, not since Standard Oil was broken up in 1911.

TV cameras were not allowed in the court, but Bud Meyers is expected to give an exclusive interview on this historic event to an as-of-yet unnamed major cable news station later this month.

As of this press release, Mister Meyers is on his way home to Las Vegas, Nevada --- where he has lived since 1989.

---- BEGIN TRANSCRIPT -----

"Honorable Justices, members of Congress, and the American people --- thank you all for allowing me to present The People's case. Mr. Chief Justice, may it please the Court:

In August of 2011 CBS published a story reporting that twenty-five of the nation's highest-paid CEOs took home more pay than their companies shelled out in corporate income taxes, even though their companies earned an average of $1.9 billion, according to a study cited by the Institute for Policy Studies.

The IPS noted that 18 of these "hyperactive tax-dodging" corporations operate subsidiaries in offshore tax havens, such as Bermuda, Singapore and Luxembourg. They've also hired aggressive lobbyists to argue for special tax breaks.

There's a building in the Cayman Islands called the Ugland House of Grand Cayman Island. Inside, there is the office of the law firm Maples and Calder, which currently houses 18,000 shell corporations for the benefit of tax shelters. There was legislation regarding these tax havens that was recently introduced to Congress by Senator Bernie Sanders earlier this month.

#16 on the list in the CBS report was my ex-boss, Steve Wynn of the Wynn Resorts casino in Las Vegas. His company paid ZERO in federal income taxes and had 16 subsidiaries in tax havens.

Today I received an email for a petition on behalf of a 44-year-old woman named La'kesia Johnson. She and 21 other co-workers were just illegally fired for trying to unionize with the Communications Workers of America at Cablevision/Optimum. They were locked out last month on January 30th. (Full story here)

La'kesia wrote in her petition," I've worked as a Cablevision/Optimum technician for more than 6 years. A year ago, my co-workers and I voted to form a union, so we could have a voice on the job. The company said they had an 'open door' policy, but when we wanted to talk with them, they told us they were too busy. Later they fired 22 of us, then told us we were permanently replaced. I have two children, Alexis and Rayshawn, one of whom has needed serious medical care, which has left us with a stack of bills."

But La'kesia is lucky, because she doesn't live in North Carolina. Mister Jason Saine had received unemployment benefits for more than a year before he finally landed a job --- as a Republican state legislator in North Carolina. Then after he was seated, he joined with his fellow Republicans in supporting a bill that slashed unemployment insurance. Because of outsourcing and H-B1 VISAS, how are these people expected to survive without jobs?

#22 on the list in the CBS report was the CEO James Dolan, whose family controls Cablevision, and whose federal income tax was a negative $3 million. Jim Dolan is also the executive chairman of Madison Square Garden, whose assets include the NBA's New York Knicks and Radio City Music Hall. Dolan had a 6-year average compensation of $16.43 million a year.

Last year Cablevision was approved for a $37.5 million tax break for staying in Newark New Jersey to save 574 jobs with an average salary of $37,000. But 50% of the American workforce earns $28,000 or less a year. These wages, not even with the proposed $9.00 an hour minimum wage bill, can not sustain this economy. Are American workers' labor now only worth the price of a latte at Starbucks?

Recently another giant cable company, Charter Communications, has just struck a deal to acquire Cablevision's Optimum West holdings in four Western states for $1.6 billion --- in cash. Just who's economy is supposed to be doing bad, theirs or ours?

In 2007 the Dolan family, for $10.6 billion, had once attempted to take Cablevision private, but it's shareholders would not agree to the sale. Cablevision's stock trades under the ticker symbol CVC on the New York Stock Exchange and its current market cap is almost $4 billion. Just who exactly has been making this "shared sacrifice" that the American people have been hearing so much about? (* SEC filings and reports are here)

Also --- I sure hope La'kesia Johnson, the former Cablevision employee who was illegally fired, won't need to rely on ObamaCare® for her daughter's continued medical treatment, because the Pre-Existing Condition Insurance Plan will soon stop taking new applications; and also, because La'kesia is now unemployed, I sure hope Medicaid and TANF and food stamps and unemployment insurance benefits are not also included in the upcoming sequester cuts.

And especially so if she or her daughter ever needs to make a hospital visit.

CNN and Time magazine investigated hospital billing and found a family that was charged hundreds of thousands of dollars. Hospitals are charging us $12 for those little paper pill cups and paying their hospital CEO's over $9 million a year. People who are fully insured, or those on Medicare, have their medical costs negotiated, and even though there is fraud in billing to the government, at least those patients aren't being bilked to death, at least, not like those who are either under-insured or can not afford any health insurance at all.

We now spend 20 percent of our GDP—an estimated $2.8 trillion — on health care every year. And we know the real reasons why, don't we? A special report on why our medical bills are so expensive can be found in a paper I wrote called "Fraud, Greed & Profits Drives Healthcare Costs".

The Center for Public Integrity also wrote an investigative series called “Cracking the Codes”, which found that thousands of medical professionals have steadily billed higher rates for treating seniors on Medicare over the last decade — adding $11 billion or more to their fees. The investigation suggested that Medicare billing errors and abuses are worsening as doctors and hospitals switch to electronic health records. (Read more...)

But just like with tax evasion, and hiring more auditors at the IRS to catch tax cheats, the Republicans had cut the IRS budget (saying that with lower taxes, there will be less tax evasion) --- just as the GOP would rather cut benefits to seniors on Medicare (or raise their premiums), rather than hiring more people to investigate fraud in the healthcare industry. Is that the permanent status quo between Congress and the top 1%?

The CEOs of these hospitals (as well as Big Pharma, the insurance companies, and other related providers in the healthcare industry), besides earning these huge salaries year after year after year --- they are also paying a much lower tax rate than the rest us do in the form of "capital gains taxes" --- by receiving stock options in company stock as a part of their annual compensation packages --- just like those cited in the CBS story, such as Steve Wynn of Wynn Resorts and James Dolan of Cablevision

Just as Senator Elizabeth Warren had said, the whole system is rigged from the top down.

A new study performed by Thomas Hungerford of the non-partisan Congressional Research Service noted that 71% of all capital gains went to those in the top 1% (e.g. James Dolan of Cablevision) --- and notes that historically low capital gains tax rates are by far the largest contributor to America's historically high income inequality. And the top 1% has enjoyed this special tax since 1921. Why are they so special? What makes them feel so ENTITLED to these special tax breaks when 46 million Americans need to rely on food stamps to eat.

What we've been seeing for at least the past two decades, some like myself say, for the past 40 years, is this: these very wealthy and politically connected CEOs have lobbied congress to pay less (or nothing at all) in corporate taxes, while at the same time, denying fair wages, healthcare benefits, and job security to their own employees --- just average hard-working Americans who, through no fault of their own, were being systematically pillaged while trying to care for themselves and their families

Our "captains of industry" and "pillars of the community" were doing this while also enjoying special tax breaks on their own executive salaries, and while the healthcare providers had been ripping off poor, sick and under-insured families --- while also engaging in Medicare and billing fraud.

They were engaged in these nefarious activates, all at the expense of the American taxpayers, who ultimately, in one form or another, have had to make up the difference in their taxes --- because, thanks to Congress, these CEOs and corporations were not legally obligated to pay "fair" taxes themselves --- even while the less wealthy and politically connected Americans have been suffering the most --- and being forced to live with the bulk of any cuts to government spending. It's always those cuts that most affects us the most --- the poor and middle-class.

We need tax revenues, but the Republicans like Senator John Boehner have always been falsely claiming that "We don't have a revenue problem, we have a spending problem" --- and say that "now, in a bad economy, is not a good time to raise taxes". But they always say NEVER is a good time to raise taxes on the very wealthy. And they always claim that "government doesn't create jobs, the private sector does", but government has always been the largest job creator ever since World War II. Walmart and McDonalds are the next largest job creators.

In closing, I'd like to finish with this:

What has the ultra-rich ever sacrificed in the last 100 years? In time of war, they dodge the draft. In time of financial need, they dodge taxes. For too long they have been dodging their moral and patriotic duties to this country, to us, the people of the United States of America. I beg the court for redress.

"You must find them all guilty on all counts --- and they all must be made to pay! Thank you very much your honors. I rest The People's case."

---- END TRANSCRIPT -----

--- media frenzy --- applause --- cheers and whistles --- standing ovation --- pats on back --- handshakes --- camera flashes --- church bells in the distance --- young mothers with babies break into tears --- ticker tape parade upon exiting the courthouse --- the U.S. Marine Corps Band plays Star and Stripes Forever --- TV helicopters overhead --- a small child offers flowers --- a phone call of congratulations to Bud Meyers from President Obama ---

* Note to the Republicans members of Congress who don't realize parody or satire: A full disclaimer is applied to this post, which was posted on behalf of Bud Meyers, and can be found here.

** Also posted at the Daily Kos

It's NEVER a Good Time to Tax the Rich

Weren't "good" economies the reason for lowering taxes in the past? So if the economy is "bad" now, shouldn't we raise them?

As the March 1st deadline approaches for a budget sequester, a new Pew Research survey finds that the majority of Americans don't want spending cuts, but instead, want to increase spending or maintain it at current levels.

Mitt Romney earns most of his money with "carried interest" (averaging about $20 million a year), but according to Roll Call, there's a rumor that some Republican lobbyists might agree to close the carried interest tax loophole in anticipation of the sequester.

In one year alone Mitt Romney had reported paying as little as 13.9 percent in capital gains on $21.7 million he earned as carried interest. Will he soon have to start paying the top marginal rate of 39.9 percent?

Mitt Romney and his money.

The "carried interest" loophole allows investors, whose personal income is generated mainly from "investments" (aka unearned income, such as stocks, bonds, annuities, vested stock options, real estate, rental income, dividends, silver, wine, art, gold, etc.), to pay taxes according to the capital gains tax rate of 20%, which is significantly lower than the top marginal rate of 39.9% on earned income (such as regular hourly wages or managerial salaries).

Some anonymous Republicans are only just now finally admitting that, by eliminating this loophole, its impact on the economy would only be "minimal", and they would consider changing the tax code --- but not because we need the additional revenue --- but because it would "primarily hurt Democratic campaign donors".

Republicans have argued against similar tax increases in the past on the grounds that it would "discourage work and investment and harm economic growth." (Bla, bla, bla...they always have a reason to not tax the rich)

But closing this loophole wouldn't really be a tax increase, it would just be changing the definition of their source of income, then taxing them accordingly --- carried interest would be taxed as regular wages ("unearned income" vs. "earned income").

Waiters are taxed on their tips, why aren't multi-millionaires taxed in the same way on their carried interest? Shouldn't the people with the least get the better tax break? I'm mean, it's not the same as if the rich were buying in bulk and expecting a discount.

But the rumor about eliminating the carried interest loophole is most likely false. A spokesman for Senate Minority Leader Mitch McConnell (the Republican from Kentucky) rejected the premise that Senate Republicans would support eliminating the carried interest loophole. (As we've learned over the past two years, his Tea Party supporters would rather we have NO taxes or government at all.)

Michigan Democrat Senator Carl Levin introduced a bill that only mentions carried interest but suggested it would be a good vehicle for raising additional revenue. However, eliminating the loophole is not included in the Senate Democratic bill to replace this year’s sequester cuts.

Some politicians claim that by taxing carried interest (aka unearned income) as normal wages (aka earned income) might not be as simple as it sounds, and there is vigorous disagreement about which "technique" to use for doing so. (As though it takes a rocket scientist to figure this out. Why not just tax Warren Buffett at the same tax rate as his secretary? Simple.What's so complicated about that?)

Private equity firms (such as Bain Capital), investment banks (such as Goldman Sachs) and hedge funds would be the most affected by eliminating the carried interest tax loophole, and argue (as always) that it would have a negative effect on economic growth at a time when the economic recovery remains "weak".

But the economy is only "weak" for the unemployed and the under-paid workers. The "investor's economy" is doing very well --- record profits, record CEO salaries and record bonuses --- remember?

Over the last four years, the stock indexes have over doubled; the Dow Jones Industrial Average recently hit a 52-week high of 14,058 and is on track to match its all-time historical high of 14,164 --- when almost four years ago on March 9, 2009 it was down to only 6,547.

Mitt Romney had said as much last year when he said the rich were doing "just fine".

Ken Spain, the vice president of public affairs for the Private Equity Growth Capital Council (a lobbyist for vulture capitalists) said, “Last year, private equity firms invested over $140 billion dollars in U.S.-based companies in every state and in every congressional district across the country. A tax hike on business investment would only serve to undermine our economic recovery and disincentivize the kind of entrepreneurial risk taking to start, save and grow businesses."

Bla, bla, bla...the same ole, same ole excuses and threats, "If you tax us more, we won't try to make more money, and we won't hire more people." Bill O'Reilly made a similar threat if Obama raised his taxes, and O'Reilly still hasn't quit his job.

We've been hearing them whine like this for the past 40 years. When WOULD have been a good time to eliminate this carried interest tax loophole? Would it have been back in 2003 when George W. Bush had LOWERED the capital gains tax rate, when the economy was doing "good"?

The rich NEVER think that ANY time is a "good" time to raise their taxes, so let's have them make that "shared sacrifice" now, because the rest of us have sacrificed enough already.

* Capital gains and corporate taxes need major reform. They call it "unearned income", so even they admit that their money isn't earned! Too Much Online | Inequality and Excess