Tuesday, February 11, 2014

The Corporate Rape of America

If you rob a bank, you get 20 years. If the bank robs you, the CEO gets $20 million. --- Two banks neck-deep in mortgage and foreclosure fraud, JP Morgan and Goldman Sachs, announced 2013 CEO paydays at $20-million.

IBM Uses Dutch Tax Haven to Boost Profits as Sales Slide --- An offshore tax haven strategy saved IBM $1.84 billion off its projected 2013 tax bill. IBM uses a hefty chunk of the dollars that parking profits offshore saves the company to buy back shares of IBM stock off the open market. The buybacks, explains Bloomberg, “increase earnings per share — even when revenue is falling.” .

This is one way the CEOs make so much money with their stock option grants. And those capital gains are taxed at a lower rate (23.8%) than corporate taxes are (35%).

Apple bought $14 billion of its own shares after reporting earnings last month, bringing its repurchases to more than $40 billion in the past year.

Wealthy Americans (aka "the job creators", aka the top 1%), who already pay so little in taxes because of a very low capital gains tax rate, still dodges taxes...and the I.R.S. is making it worse.

The I.R.S. says $450 billion in taxes are evaded in any year, but yet, the I.R.S. has been screwing the whistleblowers out of their fees.

When was one greedy guy was nabbed for dodging taxes (thanks to a whistleblower), he pleaded guilty to conspiring to defraud the United States government of taxes and was only given five years probation and a $100 penalty.

Revenue from tax-enforcement actions have fallen 13 percent since 2010. One whistle-blower claimed one bank helped six American corporations evade more than $1 billion in taxes. But after the budget sequestration last March, the I.R.S. announced that it would cut whistle-blower awards by 8.7 percent, even though awards are paid out of proceeds collected by the I.R.S. from the tax dodgers, not from money already appropriated.

A former McKinsey consulting partner, Douglas Smith, said that we could deny federal contracts to companies whose CEOs make over 20 times their lowest-paid workers.

The CEO (with a net worth of $400 million) of AOL (owner of the Huffington Post) was getting slammed for screwing his employees by eliminating their 401ks and blaming it on two sick babies and ObamaCare --- and even the Huffington Post carried a story about this. The bad publicity might have helped, because Business Insider says the CEO will restore the 401ks.

Jay Rockefeller at a hearing: "Industry does everything they can and gets away with it almost all the time, whether it’s the coal industry...or water or whatever. They will cut corners, and they will get away with it." One billionaire claims the 1% works harder than the 99%.

From a new report, Inequality, the Great Recession, and Slow Recovery: If the bottom 95 percent income share had been frozen at 74 percent in 1989, America's bottom 95 percent would have cumulatively earned $5.8 trillion dollars more from 1989 through 2007” — and not sunk into the deep debt that ushered in the Great Recession.

The more America’s corporations pay their executives, Texas congressman Lloyd Doggett noted last week, the less they pay in taxes. Doggett has just introduced legislation, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act, that would end this appalling state of affairs.

His legislation, a companion to an identical bill that Rhode Island’s Jack Reed and Connecticut’s Richard Blumenthal have before the Senate, would plug the loophole that lets companies deduct off their taxes the multiple millions they pay out to execs in so-called “performance pay.”

Between 2007 and 2010, calculates the Economic Policy Institute, this loophole saved U.S. corporations $30 billion. Says Doggett: “Why should working Americans subsidize those making nearly 300 times the average worker?”

Bangladesh is the poster child for the global apparel industry. It is the world’s second-largest exporter of clothing after China. Its factories employ four million workers, supplying retail giants like Benetton, Walmart, J.C. Penney and H&M. About 90 percent of these workers are women, and they earn wages that are among the lowest in the developing world.

American companies have committed to completing inspections at more than 700 factories offshore to assess their compliance with the new standard by the middle of this year...a special board appointed by the Bangladesh government called for a 77 percent increase in the minimum wage – to about $68 a month – to take effect this year. Even with the increase, the wages paid to garment workers in Bangladesh will remain among the lowest in the world.

Bangladesh, however, is just one link in the global supply chain. As a result of globalization, almost every item bought by consumers in developed countries is produced at least in part by low-wage workers in developing countries...many of them work in conditions that violate acceptable standards in the United States and other developed countries.

The maze of subcontractors and sub-subcontractors in global supply chains makes it easy for multinational buyers to keep a legal and reputational distance from unsavory local realities. Local governments, eager for business, often abet the cover-ups. And corruption is a recurrent problem that can mislead even the most sophisticated global companies.

President Obama seeks congressional support for fast-track approval for the Trans-Pacific Partnership, a trade agreement that includes many developing countries with low wages and poor working conditions.

American billionaires, such as Warren Buffett (or the ultra-wealthy major shareholders of big banks, private equity firms and hedge funds), shouldn't be allowed to own the majority of shares in a "holding company" like Berkshire Hathaway, and then buy another major corporation like Apple or Nike, and then set up another shell corporation in China or Vietnam, that owns manufacturing companies with factories in Cambodia or Taiwan, that makes shoes or iPhones, and then imports them into the U.S. to sell here, and then keeps the profits untaxed in offshore banks in the Cook Islands or Switzerland. This will only make the U.S. labor force participation rate decline further (as it's projected to do going into 2022), and starve the U.S. government for much needed revenues that will be needed to pay for food stamps to feed all those that were made unemployed by offshoring all those jobs on the first place.

If the job creators had not hoarded (and hid in offshore tax havens) all their profits, and had instead, not offshored our jobs and paid us better wages, we would have a thriving middle-class and a lot less poverty today.

The secret list of the one-on-one meetings between VIP donors and the Koch brothers and their operatives, offering a revealing look into their mighty political machine.

Carl Berg
Ronnie Cameron
Charles Chandler
John Childs
Steve Clark
Jamie Coulter
Bob and Steve Fettig
Paul Foster
George Gibbs
Richard and Leslie Gilliam
Ken Griffin
John Griffin
Dick Haworth
Jerry Hayden
George Jenkins
Richard "Ric" Kayne
Dan Kirby
Fred Klipsch
Frank Kozel
Francis "Franc" Lee
Robert "Bob" Luddy
Hugh Maclellan
Kent McCarthy
Andrew Miller
Cecil O'Brate
Verl Purdy
Tom Rastin
George Records
Robert Rowling
Ted Saunders
John Schnatter
Tom Smith
Jaime Snider
Tina and Craig Snider
Dian Stai
Jim Stephenson
Jim Von Ehr
Debra Waller
Lew Ward
Dick Weiss
Dean Williams
Karen Wright

Americans today have become distinctly less likely to marry someone outside their income bracket. “The rich marry rich and get richer,” notes Andrea Garcia-Vargas, “the poor marry poor and get poorer.”

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