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Tax Attorney Destroys Obama Over Continued IRS Targeting Scandal (Video)

By Susan DuclosTax attorney Cleta Mitchell absolutely destroys Obama's lies to the American people when he claimed that bone-headed bureaucrats in some remote office was responsible for the targeting of Tea Party, Patriot and conservative groups by the...

Britain’s “bedroom tax” puts thousands in financial jeopardy

Mark Blackwood and Paul Mitchell  RINF Alternative News More than 200,000 people requested emergency assistance from local councils in the six months after the bedroom tax...

Amtrak: Railroading the Taxpayers

Today is our lucky day, the day each year my wife and I get to be on the receiving end of multiple doses of...

British government took advantage of ‘bedroom tax’ loophole – charging thousands of exempt tenants

A loophole in the Tories’ bedroom tax legislation means the government owes hundreds of pounds to tenants who have paid the hated tax for...

Identity Thieves Increasingly Target Tax Returns

Herb WeisbaumCNBCJanuary 14, 2014 Thieves usually just make up phony income numbers for the tax returns...

4 Reasons Why the Corporate Income Tax Should be Doubled–Not Abolished

U.S. corporations need to pay for...

Michelle Obama’s Vacation Extension May Cost Taxpayers at Least $200K

Edwin Morabreitbart.comJanuary 7, 2013 First Lady Michelle Obama's “birthday gift” of spending extra days under the...

How Google Become One of America’s Biggest Tax Dodgers

Darwin Bond-Graham Yesterday San Francisco's politicians announced that Google, Apple, and other Silicon Valley companies will be charged for the use of the city's bus...

Corporate taxes in America

Raising them should be a national imperative. Corporations should pay their fair share. Not according to Laurence Kotlikoff. He's a right-wing economist. He's a corporatist...

Corporate Taxes in America

Corporate Taxes in America

by Stephen Lendman

Raising them should be a national imperative. Corporations should pay their fair share. Not according to Laurence Kotlikoff.

He's a right-wing economist. He's a corporatist writ large. He claims  abolishing corporate taxes will create jobs.

Doing so requires dropping money on Main Street. Get it in people's pockets directly. Do it by cutting their taxes. 

Guarantee a living wage. Support worker-friendly legislation. Restore their bargaining power with management.

Return money creation power to public hands where it belongs. Initiate government jobs creation programs. 

New Deal ones put millions back to work. Doing so reinvigorated the national spirit.

Unemployment was measurably cut. It dropped from 25% in 1933 to 11% in 1937. Doing the right things work.

In 1961, corporate tax cuts were linked to job creation. Business had to prove they added jobs to qualify.

No longer. Corporate tax cuts and credits are handed out freely. They're not linked to job creation. They're standard practice. More are planned this year.

Under Bush and Obama, corporations get tax cuts for overseas investments. Domestic job reductions accompany them. Offshoring is rewarded.

Multiple Bush tax cuts handed corporations around $3.4 trillion. Doing so was hailed as a way to create jobs.

Post-recession jobs creation during the early 2000s was the weakest on record. It took 46 months to recover those lost.

It'll take over a decade now. The so-called 2007 - 2009 Great Recession continues to take an enormous toll on ordinary Americans. Main Street Great Depression conditions persist unabated.

Low pay/poor or no benefit part-time jobs replaced higher paying, good benefit full-time ones. It's been ongoing for decades. America is in economic decline.

Offshoring millions of jobs exacerbates hard times. According to Paul Craig Roberts, only fools believe doing so is good for America.

Likeminded so-called experts can't see the forest through the trees. US corporations are hoarding cash. Bush and Obama tax cuts added $10 trillion or more to their balance sheets.

Much was shifted to offshore subsidiaries. Doing so avoids US taxes altogether. It's unknown how much corporate wealth sits in tax havens. Perhaps trillions from generous business handouts.

During the height of 2008 crisis conditions, $168 billion stimulus legislation was enacted. About $90 billion went to business and rich elites.

Jobs were lost, not created. From July through December 2008, nearly a million a month disappeared. Doing so matched the 1929-1930 rate.

Obama's February 2009 $787 billion stimulus bill handed corporations nearly $400 billion in tax cuts. Over $225 billion went for business/investor cuts.

Through December 2010, zero jobs were created. Part-time ones replaced higher paying full-time jobs. 

Hundreds of thousands of federal, state and local public workers were laid off. Current unemployment tops 23%. 

Official numbers are fake. They mask the greatest jobs crisis since the Great Depression. Before this one ends, it may be greater.

Bush and Obama benefitted corporations and rich elites hugely. They never had it better. Unprecedented wealth amounts shifted from ordinary people to them.

The great wealth transfer heist continues. America is being thirdworldized in the process. Employment opportunities are dreadful.

It bears repeating. Tax cuts don't create jobs. They could if linked to jobs creation. They haven't been since Kennedy's mandate.

Democrats and Republicans today are polar opposite. Reverse Robin Hoodism is policy. It created the greatest wealth disparity in US history.

Half or more of US households are impoverished or bordering it. Good jobs are disappearing in plain sight. Nearly 50 million Americans need food stamps to eat. 

Hard times are getting harder. Needy households are increasing exponentially. At the same time, corporate profits are higher than ever.

Business taxes are way too low. The top nominal rate is 35%. Obama, Republicans and many Democrats plan cutting it to 28 or 25%.

Senate Finance Committee chairman Max Baucus (D. MT) is retiring this year. He favors lower corporate rates. He helped spearhead Obamacare's enactment.

Doing so wrecked America's healthcare system. It did so to benefit business. The full fallout remains to unfold.

One of many propagated myths is that US corporations pay too much in taxes. "Abolish the Corporate Income Tax," says Kotlikoff. He wants people to believe what's untrue.

"Just ask" Seattle-based Boeing machinist workers, he said. They accepted major contract concessions. They did so for greater "long-term success," Kotlikoff claimed.

False! Contract terms substitute largely worker funded 401ks for company-paid pensions, higher healthcare costs, reduced wage increases, and no strikes.

Heavy pressure was applied. Union bosses claimed 51% of International Association of Machinists approved what no workers want. Others claimed vote rigging.

Kotlikoff said Boeing workers acted in their own best interest. How does cutting their standard of living do so?

"In recent decades, American workers have suffered one body blow after another," he admitted.

"What can (they) do to mitigate their plight," he asked? Eliminate corporate taxes, what else.

"It's not…a giveaway to the rich," he maintains. Corporate taxes are "economically self-defeating." They hurt "workers, not capitalists..."

He claims America "may well have the highest effective marginal corporate income tax rate of any developed country."

As explained above, nominally it's 35%. Bipartisan complicity agreed to cut it to 28 or 25%. Most large corporations pay less than half that amount.

Many pay much less. Some pay nothing. Others get rebates in profitable years. Corporate taxes have been in free fall for decades.

As a percent of GDP and national income, they're half what they were two decades ago. They're going lower. Obama demands it. He's doing so while waging war on ordinary Americans.

He's one-sidedly pro-business. He's anti-labor, anti-populist, anti-fairness. He wants greater austerity than already. He wants America's social contract eliminated. 

He wants corporate giants handed trillions more than already. So does Kotlikoff. He supports the great tax giveaway.

He wants corporate ones entirely eliminated. He claims maintaining them gets business to shift operations abroad.

They do so largely for lower labor costs. They're in countries with no worker protections. They're free to exploit their workforce for greater profits.

Kotlikoff claims eliminating corporate taxes assures a "stunningly large" economic windfall. He's for raising personal income tax rates at the same time.

He wants ordinary people to bear the burden. They do so more than ever now. He claims hitting them when they can least afford it "leads to a short-run inflow of capital."

It'll "rais(e) (America's) capital stock (machines and buildings) by 23 percent, output by 8 percent, and the real wages of unskilled and skilled workers by 12 percent," he maintains.

It bears repeating. Corporate tax cuts don't create jobs. Clear evidence proves it. Throughout the new millennium, profits shifted abroad tax free. 

They remain on business balance sheets. They went for stock buybacks, dividends, high executive salaries and bonuses, as well as other unrelated non-job creation purposes.

Why else would unemployment exceed 23%? Inflation-adjusted wages have been declining for decades. Benefits workers took for granted are disappearing.

So are good full-time jobs. Class war rages. Middle America is disappearing in plain sight. Detroit reflects nationwide decline.

Other troubled cities include major ones. Growing millions are on their own sink or swim. Predatory capitalism is malignant. It's eating its seed corn. It's killing its host.

It's been a stunning failure for decades. It hollowed out America. It harms its most vulnerable. 

It caused the largest municipal bankruptcy in US history. Detroit once symbolized America's industrial might. It's zombie-like today.

Nothing is done to change things. Kotlikoff wants ordinary people hit harder. He claims raising their tax burden lifts all boats. 

He says it does so when coupled with eliminating corporate taxes. He shows a shocking disregard for human welfare.

His formula assures greater crisis conditions. Millions already can't cope. More add to their ranks daily. Raising their taxes will accelerate the process.

How can destroying the well-being of most Americans be beneficial? Kotlikoff apparently believes doing so will save them. He admits that inflation-adjusted wages are "10 percent lower today than (in) 1966."

"This is America's nightmare, not its dream," he explains. "Turning things around requires getting a lot of things right, starting, (he argues) with corporate tax reform."

In 2007, his book titled "The Healthcare Fix" proposed ending Medicare, Medicaid, and employer-provider insurance. 

He wants government-provided vouchers replacing them. He wants their cost maintained at a fixed 10% of GDP. 

Well-off recipients could supplement coverage by buying more on their own. Others would be stuck with bare bones care.

Corporations are Kotlikoff's concern. Ordinary people don't matter. Deepening social inequality is OK. 

Human misery is out of sight and mind. Kotlikoff's formula assures hard times getting harder for growing millions.

America already is unfit to live in. Kotlikoff wants impossible conditions for most people. Imagine if it turns out this way. Imagine the worst of all possible worlds.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. 

His new book is titled "Banker Occupation: Waging Financial War on Humanity."

http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour


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The U.S. Postal Service (USPS) is the nation’s second largest civilian employer after WalMart. Although successfully self-funded throughout its long history, it is currently struggling to stay afloat. This is not, as sometimes asserted, because it has been made obsolete by the Internet. In fact the post office has gotten more business from Internet orders than it has lost to electronic email. What has pushed the USPS into insolvency is an oppressive 2006 congressional mandate that it prefund healthcare for its workers 75 years into the future. No other entity, public or private, has the burden of funding multiple generations of employees who have not yet even been born.

The Carper-Coburn bill (S. 1486) is the subject of congressional hearings this week. It threatens to make the situation worse, by eliminating Saturday mail service and door-to-door delivery and laying off more than 100,000 workers over several years.

The Postal Service Modernization Bills brought by Peter DeFazio and Bernie Sanders, on the other hand, would allow the post office to recapitalize itself by diversifying its range of services to meet unmet public needs.

Needs that the post office might diversify into include (1) funding the rebuilding of our crumbling national infrastructure; (2) servicing the massive market of the “unbanked” and “underbanked” who lack access to basic banking services; and (3) providing a safe place to save our money, in the face of Wall Street’s new “bail in” policies for confiscating depositor funds. All these needs could be met at a stroke by some simple legislation authorizing the post office to revive the banking services it efficiently performed in the past.

Funding Infrastructure Tax-free

In a July 2013 article titled “Delivering A National Infrastructure Bank . . . through the Post Office,” Frederic V. Rolando, president of the National Association of Letter Carriers, addressed the woeful state of US infrastructure. He noted that the idea of forming a national infrastructure bank (NIB) has had bipartisan congressional support over the past six years, with senators from both parties introducing bills for such a bank:

An NIB would provide a means to channel public funds into regional and national projects identified by political and community leaders across the country to keep the economy healthy. It could issue bonds, back public-private partnerships and guarantee long-term, low-interest loans to states and investment groups willing to rebuild our schools, hospitals, airports and energy grids. An NIB with $10 billion in capital could leverage hundreds of billions in investments.

What has blocked these bills is opposition to using tax money for the purpose. But Rolando asks:

[W]hat if we set up the NIB without using taxpayer funds? What if we allowed Americans to open savings accounts in the nation’s post offices and directed those funds into national infrastructure bonds that would earn interest for depositors and fund job-creating projects to replace and modernize our crumbling infrastructure?

A post office bank . . . would not offer commercial loans or mortgages. But it could serve the unbanked and fund infrastructure projects selected by a non-partisan NIB.

The Unbanked and Underbanked: A Massive Untapped Market

The “unbanked” are not a small segment of the population. In a 2011 survey, the unbanked and underbanked included about one in four households.  Without access to conventional financial services, people turn to an expensive alternative banking market of bill-pay, prepaid debit cards, check cashing services, and payday loans.  They pay excessive fees and are susceptible to high-cost predatory lenders.

Globally, postal banks are major contributors to financial inclusion. Catering to this underserved population is a revenue-generator for the post office while saving the underbanked large sums in fees. Worldwide, according to the Universal Postal Union, 1 billion people now use the postal sector for savings and deposit accounts, and more than 1.5 billion take advantage of basic transactional services through the post. According to a Discussion Paper of the United Nations Department of Economic and Social Affairs:

The essential characteristic distinguishing postal financial services from the private banking sector is the obligation and capacity of the postal system to serve the entire spectrum of the national population, unlike conventional private banks which allocate their institutional resources to service the sectors of the population they deem most profitable.

Expanding to include postal financial services has been crucial in many countries to maintaining the profitability of their postal network.  Maintaining post offices in some rural or low-income areas can be a losing proposition, so the postal service often cross-subsidizes with other activities to maintain its universal network.  Public postal banks are profitable because their market is large and their costs are low.  The infrastructure is already built and available, advertising costs are minimal, and government-owned banks do not reward their management with extravagant bonuses or commissions that drain profits away.  Profits return to the government and the people.

Wall Street Is No Longer a Safe Place to Keep Our Money

A postal bank could have appeal not just to the unbanked but to savers generally who are concerned about the safety of their deposits. Traditionally, people have deposited their money in banks for three reasons: safety from theft, the convenience of check writing and bill paying, and to earn some interest. Today, not only do our bank deposits earn virtually no interest, but they are not safe from theft – and the prospective thief is Wall Street itself.

The Financial Stability Board (FSB) in Switzerland has mandated that “systemically important” banks come up with “living wills” stating what they would do in the event of insolvency. The template set out by the FSB is for these too-big-to-fail banks to confiscate their creditors’ funds and convert them to bank equity or stock. Legally, “creditors” include the depositors. In fact depositors compose the largest class of creditors of any bank.

In 2009, President Obama agreed along with other G20 leaders to be bound by the regulations imposed by the FSB, giving them the force of law. This agreement should properly have been a treaty, subject to the approval of two-thirds of the Senate; but the deal was sealed on a handshake, ostensibly to prevent another Lehman-style banking collapse. Thus the next time JPMorganChase or Bank of America finds itself on the wrong side of a massive derivatives bet, it can avoid insolvency by recapitalizing itself with our deposits. Both JPM and BOA hold over $1 trillion in deposits and over $70 trillion in derivatives; and with the repeal of Glass-Steagall, the banks have been able to merge these operations. The FDIC deposit insurance fund has only $32 billion in it to cover losses for the entire country.

For guaranteed safety, we need a network of publicly-owned banks devoted solely to taking deposits and providing check-cashing services – no gambling with deposits allowed. The US Post Office can safely and efficiently provide the infrastructure for such a banking network, as it did from 1911 until 1967. The post office is ubiquitous, with branches in every town and community.

A Proven Model

Postal banking systems are also ubiquitous in other countries, where their long record of safe and profitable public banking has proved the viability of the model. The mother of all postal banks was in Great Britain in the 19th century. The leader today is Japan Post Bank (JPB), now the largest depository bank in the world. Not only is it a convenient place for Japanese citizens to save their money, but the government has succeeded in drawing on JPB’s massive deposit base to fund a major portion of the federal budget. Rather than using its deposits to back commercial loans as most banks do, Japan Post invests them in government securities. That means the government is borrowing from its own bank and its own people rather than from foreign bondholders.

That is the basic idea behind the national postal savings and infrastructure bank. The deposits of the nation’s savers can be invested in government securities that are in turn used for rebuilding the nation. It is a win-win-win, providing a way to save the post office while at the same time protecting our deposits and rebuilding our decaying roads and bridges without dipping into taxes. It is also a way to vote with our feet, moving our money out of an increasingly risky and rapacious Wall Street into a network of publicly-owned banks that serves rather than exploits us.

Another Option: Rescind the Prefunding Requirement

Another alternative for putting the USPS in the black, of course, is simply to rescind the healthcare pre-funding requirement that put it in the red. The mandate to fund healthcare 75 years into the future appears so unreasonable as to raise suspicions that the nation’s largest publicly-owned industry has been intentionally targeted for takedown. Why? Is it because competitors want the business, or because private developers want the valuable postal properties that are being systematically sold off to meet its now-crippled the budget?

In a revealing exposé in the September 18th East Bay Express, Peter Byrne provides evidence that C.B. Richard Ellis (CBRE), the company holding the exclusive contract to negotiate sales for the $85 billion postal real estate portfolio, has sold off 52 postal properties for at least $79 million less than their fair market value. Worse, the buyers included its own business partners and shareholders, including Goldman Sachs. CBRE is chaired by Richard C. Blum, the husband of US Senator Dianne Feinstein, a family Byrne says has a history of accessing public pension funds to make private investments (citing here and here).

The post office has been made to look inefficient and obsolete, as if public enterprises are incapable of generating public revenues; yet the postal service has been both self-funding and profitable for over two centuries. If we refuse to allow our government to make money through public enterprises, we will be destined to bear the burden of supporting government with our taxes, while we watch countries such as China, Korea and Japan, which do allow public industries, enjoy the fruits of that profitable and efficient arrangement.

______________

Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200-plus blog articles are at EllenBrown.com.

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The Age of Austerity: Fighting Cuts and Privatisation — Nottingham Bedroom Tax Campaign!

Austerity in the UK affects the public sector across the board, whether it is the National Health Service, Primary and Secondary Education, Further and Higher Education, disability services, social housing, etc. The fourth event of the series The Age of Austerity about Nottingham anti-cuts campaigns by the local UCU association at Nottingham University on 12 June dealt with the Bedroom Tax. It affects people in social housing, who are deemed to have a spare bedroom. Becky Kent and her mother Karen Wood spoke about the Nottingham Bedroom Tax Campaign, the devastating impact the tax has on people as well as the attempts to resist the attack on some of the most vulnerable members of society.
 

The Bedroom Tax: a human perspective.


Photo by Mwezibou

Karen Wood, who had worked all her life until she became seriously ill, gave a powerful presentation on the human perspective behind the Bedroom Tax. Having already had her benefits cut by one-third due to the austerity agenda, she has now been hit by the Bedroom tax. Being asked to pay an extra £21 per week leaves her with £2.50 per week for groceries, toiletries, etc. The situation she faces is a choice between either paying the tax or continuing with her already very difficult normal life. But it is not only the harsh economic situation she is confronted with, it is the enormous stress resulting from the pressure to move, the general uncertainty about her future, as well as the daily worry whether another letter threatening eviction will be delivered by the post. It is the concerns for her severely ill son, which weigh heavily on her mind. He would have nowhere to go once he is out of hospital, if she had been forced to move out of a home, where she had lived for decades and brought up her three children. Listening to Karen Wood, it became clear why 53 year old Stephanie Bottrill saw no other way out than taking her own life, when hit by the Bedroom Tax (The Mirror). As Karen Wood made also clear, however, she does not see herself as a victim, because victims don’t fight back. She is determined to fight and defeat the tax.

Photo by Alan Denney


Economic nonsense and the attack on social housing: The real purpose behind the Bedroom Tax.

Becky Kent, in turn, made clear that the Bedroom Tax does not make economic sense. As soon as tenants are £100 in arrears with their payments, eviction procedures are started. The overall process of eviction, costing several thousand pounds per person, is, however, much more expensive than the debt by tenants. Moreover, while 5500 homes in Nottingham are affected by the Bedroom Tax, there are hardly any properties available, in which people, who are asked to leave, could move into. Housing them then in private or temporary accommodation would again be much more expensive than what would be saved by avoiding these people’s debts from the tax. Additionally, it should not be forgotten that many tenants have lived in their houses for years and build up a local community network of support. Moving people would not only deprive them of their social environment, it would also require local Councils to provide expensive assistance for tasks, so far carried out by friends and neighbours.

Clearly, taking all these factors together, the Bedroom Tax is not about saving money and reducing public debt. Yet again, as in the case of restructuring in education (see Hands off our Schools!) or privatisation of the NHS (see Broxtowe Save Our NHS), the real purpose is a market-based transformation of society. Social housing has been the target of Conservatives for some time and the current crisis gives them the pretext to undermine it severely.

Photo by Mwezibou


Resisting the Bedroom Tax

The Nottingham Bedroom Tax Campaignfocuses on providing information and support for people affected by the tax. For example, they provide detailed information about the process of eviction, helping people to understand that it is actually not that easy to throw people out. It is important for people to know that the first letter threatening eviction does not imply that they have to leave within the immediate future.

The Bedroom Tax often affects some of the most vulnerable people in society, suffering from disabilities, long-term illnesses, mental health problems or a history of domestic abuse. Many have struggled for such a long time with difficult situations that they have become completely alienated from politics and find it often impossible to resist. The Bedroom Tax Campaign also provides a rallying point for these people to come together, regain confidence and develop collective agency in resistance.

Photo by Joey's Dream Garden
A key aspect of the Campaign’s strategy is to lobby and put pressure on Nottingham City Council, which is dominated by the Labour Party, to declare a no eviction commitment in relation to people, who are in arrears with their payments as a result of the Bedroom Tax. Broxtowe Borough Council has already made such a pledge, although there is only a small Labour majority unlike in Nottingham. Especially prior to the national general elections in 2013, it would be important to put pressure on the Labour Party, Becky Kent argued, to declare its position on the austerity agenda and the local level is the best place to start in relation to the Bedroom Tax. In order to sign a petition to Councillor Jon Collins, Leader of Nottingham City Council, click on the Bedroom Tax Petition. 

The Bedroom Tax is not the Poll Tax, Becky Kent concluded. Because it affects only a small part of society, unlike the Poll Tax back in the 1980s, it is much more difficult to mobilise widely. Support for the Campaign is therefore necessary and spreading information about this attack on vulnerable people remains a task of utmost importance. Ultimately, should it come to evictions in the end, the final moment of resistance will be to put up eviction pickets. Mobilisation for this clearly has to start now.



Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK

Personal website: http://andreasbieler.net

13 June 2013

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Vodafone pays no corporation tax in UK

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Labour donation avoided millions of tax

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Labour donation avoided millions of tax

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Video: IRS ‘Star Trek’ Spoof — Paid by Your Taxes

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Shelter for the Tax Dodgers

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Congressional Report Proves Taxpayers Are Subsidizing Wal-Mart Employees

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Congressional Report Proves Taxpayers Are Subsidizing Wal-Mart Employees

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Amazon and Google chiefs join other corporate tax avoiders at annual Bilderberg confab

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People of Britain say no to bedroom tax

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Offshore wealth reaches $8.5tn despite pressure on tax havens

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Calif. Senate Votes to Drop Boy Scouts' Tax Exempt Status

The California State Senate voted May 29 to drop the Boy Scouts' tax exempt status because of the organization's refusal to allow homosexual scout...

Calif. Senate Votes to Drop Boy Scouts' Tax Exempt Status

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Offshore wealth reaches $8.5tn despite pressure on tax havens

The wealth held abroad in offshore financial jurisdictions has grown by 6.1 percent in the last year despite efforts by governments to curb tax...

National Taxpayers Union Finds Major Spending Shift in 112th Congress

A report from the National Taxpayers Union’s foundation, published on Tuesday, illustrates a massive shift in spending versus cutting that occurred during the 112th...

National Taxpayers Union Finds Major Spending Shift in 112th Congress

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Congressional research: cost of tax breaks $12 trln, benefits mostly rich

As the federal government continues to struggle with its deficit, a new study has found that the top ten US tax deductions, credits and...

British taxpayers to pay ‘millions’ towards secretive Bilderberg meeting security

Rowena MasonThe TelegraphMay 30, 2013 The clandestine meeting of royalty, prime ministers and business chiefs is...

'Richest Americans get most tax savings’

The richest 20 percent of US households will receive more than half of the benefits in the overall savings in tax breaks this year,...

Swiss strike deal with U.S. over tax evasion

AFPMay 29, 2013 Switzerland has accepted a United States demand to settle a dispute over the...

Swiss strike deal with U.S. over tax evasion

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Swiss banks forced to disclose US client names in tax evasion dispute

The Swiss government may have to cave in to US demands and disclose its banks’ client names in a bid to resolve the long-standing...

The Public Pillorying of Apple for Legally Reducing Tax Burden

Last week’s show trial of Apple Computer on Capitol Hill ended up being more of an indictment of the Republican Party than of allegedly...

The Public Pillorying of Apple for Legally Reducing Tax Burden

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The Bilderberg, Google and the G8: New Global Tax Regime Already in the Works

This year’s annual Bilderberg conference is rapidly approaching — where the world’s political and business elite meet in private to discuss their agenda which...

Shell to invest $30bn in Australia, demands better tax regime

Royal Dutch Shell, Europe’s largest oil company, plans to invest $30 billion in Australia over the next five years, CEO Peter Voser has confirmed. ...

Shell to invest $30bn in Australia, demands better tax regime

Royal Dutch Shell, Europe’s largest oil company, plans to invest $30 billion in Australia over the next five years, CEO Peter Voser has confirmed. ...

Britons struggle with council tax cuts

A leading charity has warned that UK families struggle with council tax cuts.A debt advice charity has warned that poor British households could be...

Apple’s tax dodge: the case for public ownership

  24 May 2013 ...

Bloomberg accused of threatening to 'destroy' New York's taxi industry

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Tax-Avoiding Corporations Siphoning Billions from World's Poorest

Some of the world's wealthiest corporations–utilizing secretive tax havens backed by powerful governments–are siphoning billions of dollars of potential revenue from the very same...

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EU wants big companies to reveal national tax bills

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EU agrees to end ‘dangerous’ tax evasion and bank secrecy

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$156bn lost to tax havens enough to end extreme poverty twice over — report

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Russia luxury car tax seen as another step towards social justice

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On the News With Thom Hartmann: Corporations Rake in Record Profits, Yet Pay Half...

In today's On the News segment: After yesterday's landmark challenge to the federal Defense of Marriage Act, the pro-equality crowd is hopeful; corporations rake in record profits and pay half as much in taxes as they did just a few decades ago; the Senate will begin voting on gun-control legislation next month; at least 6.2 million children have at least one unemployed parent; and more.

Thom Hartmann here – on the news…

You need to know this. After yesterday's landmark challenge to the federal Defense of Marriage Act, the pro-equality crowd is hopeful that the Supreme Court will strike down the discriminatory law. During the oral arguments, the majority of the Justices seemed ready to strike down DOMAs key provision, which denies same-sex couples the right to all the federal benefits of marriage. The liberal justices expressed obvious concerns over DOMA's impact on same-sex couples, and the usual swing vote, Justice Anthony Kennedy, seemed to conclude that the law infringed on state's rights to define gay marriage. The Court's most conservative justice, Antonin Scalia, expressed frustration at the President and the Attorney General for refusing to defend the law. The most notable moment of yesterday's arguments came from Chief Justice John Roberts, when he attempted to make the case that the “gay lobby” was too politically powerful to warrant constitutional protection. Roberts suggested that lawmakers are “falling all over themselves” to legalize gay marriage, as if to imply the LGBT community doesn't meet the “heightened scrutiny” requirement to be considered a protected class. But the fact is, more than 30 states in our nation have laws on the books barring same-sex marriage. LGBT families still have a long fight ahead to achieve full equality. The Supreme Court is expected to issue their ruling on DOMA, and Tuesday's Prop 8 case, later this year. Let's hope they strike down both discriminatory laws, and pave the way for same-sex couples to marry in every state in our nation. 

In screwed news... As corporations rake in record profits, they're paying half as much in corporate taxes as they did just a few decades ago. A recent analysis by the Washington Post found that in the 1960's and 1970's, federal taxes of major U.S. corporations represented 25 to 50 percent of worldwide profits. However, today 22 of the 30 companies in Dow Jones Industrial Average are benefiting from effective tax rates that are 10 points lower. Despite the Republican talking point that the United States has the highest corporate tax rate in the world, most of these major corporations utilize off-shore tax havens to stash away huge profits. These corporations use our roads, waterways, electric girds, and environmental resources to generate their historic profits, yet we're letting them get away with paying virtually nothing for that privilege. It's time to end the tax breaks for companies that ship jobs – and profits – overseas.

In the best of the rest of the news...

Next month, the Senate will begin voting on gun-control legislation, and advocates of stricter gun laws are out reminding legislators that it's time for real reform. Today, gun-control groups are staging a “National Day to Demand Action,” which will include more than 140 public events in 29 different states throughout our country. Mayors Against Illegal Guns will also be running a $12 million television ad campaign this week, to target senators in 13 states who have yet to voice their support for new gun control regulations. The Washington Post reports that today, President Obama held a press conference with mothers who support gun restrictions, and yesterday, Vice President Biden took part in a conference call with gun-control activists. On that call, the Vice President said “I think we're on the verge of getting a serious, thorough, universal background check system in place, and it will save lives.” It appears the gun-lobby may finally be losing it's grip on Congress, and we may finally see some real gun-control reform. It's about time.

Even before Republican austerity measures took effect, one out six children in our nation were already impacted by unemployment. According to a new study from First Focus and the Urban Institute, at least 6.2 million children have at least one unemployed parent, and a staggering 12.1 million kids live in homes with a parent who is underemployed. In 2012, the average weekly unemployment benefit was only $299, and the sequester cuts that amount by almost 10%. So, families struggling to survive now find life even more difficult to afford. As The Think Progress Blog points out, the effect of an unemployed parent can have long-term consequences for children. These kids will likely have lower math scores and poor attendance records, and they will be more likely to fall into poverty later in life. Children our are future – and that's more than a cliché. It's the truth. They are the people who will be running our country someday. There are many reasons we need to put a stop to the Republican austerity, and the devastating effect it has on our children should be reason number one. 

And finally… Video game lovers have a new reason to attend minor-league baseball games in Pennsylvania. That's because the men's urinals at the Lehigh Valley IronPigs' Coca-Cola Park will soon feature the world's only, truly hands-free video game. Video screens mounted above the urinals in the park bathrooms challenge players to “steer” along a snowmobile course, and try to hit cartoon penguins along the way. The game is aimed at increasing men's awareness of prostate health, and features messages throughout the game reminding men to get a prostate exam. The new games will be available for use when the IronPigs' season starts next week. The team spokesman, Jon Schaffer, said they bought the restroom entertainment from a UK company, called Captive Media. He said, “They told us with certainty that it's not in any other sports venue in the world.” The games are already in use in bars in the United Kingdom, but the IronPigs will be the first to offer “p-controlled” video games in the U.S. The games will likely be a hit with men in the ball park, and it wouldn't be surprising to see them in more venues before long. Soon, men everywhere will have a new excuse for why they spend extra time in the bathroom.

And that’s the way it is today – Thursday, March 28, 2013. I’m Thom Hartmann – on the news. 

Cyprus Small Part of World of Tax Havens

WASHINGTON - March 26 - JAMES S. HENRY, jhenry at sagharbor.com
Available for a limited number of interviews with major media, Henry is lead researcher for the report “The Price of Offshore Revisited” from the Tax Justice Network. Last year they estimated that total wealth in tax havens was between $21 trillion and $35 trillion dollars. He said today: “Cyprus is in crisis because its banks heavily invested in Greek bonds and Greek bondholders took a hair cut. It’s not because Cyprus is worse than other tax havens as many seem to be claiming. We found that it’s the 20th least transparent tax haven. So today is a good day for bankers in Switzerland, Belgium, Luxembourg, Germany and the UK. Cyprus is in effect a victim of the ‘finance curse’ in that its economy was so dependent on the financial sector.

“There are several aspects to the Russian story that haven’t been fleshed out, including the Russian Gazprom eyeing energy reserves off of Cyprus. Another major aspect of the story that’s been largely overlooked is that whatever happens to the financial sector in Cyprus, it’s still a large corporate haven; they only have a 10 percent corporate tax rate. This tax haven model of ‘development’ needs to be seriously questioned. Tax havens are a major source of economic inequality and global poverty. They prevent local governments from effectively taxing wealthy individuals and corporations.

“In terms of the bigger picture, Cyprus is small; the issue is the state of the economy in Italy, Greece, etc.”

Henry is a regular contributor to The Real News, see his latest interview: “Cyprus Crisis Reveals Shadowy World of Tax and Money Laundering Haven.” He has also written for Forbes, the Wall Street Journal and other publications.

Henry was also just featured in “The Tax Free Tour” — a new in-depth look at global tax havens from Dutch Public TV that, among other things, answers the question: How does Apple only pay 1.9 percent on its overseas profits when the U.S. corporate tax rate is 35 percent? Also, see taxodus.net — an online game about global tax dodging. Henry is former chief economist at the international consultancy firm McKinsey & Co.

Cyprus Crisis Reveals Shadowy World of Tax and Money Laundering Haven

James Henry: Bailout deal includes capital controls and punishing big Russian depositors to pay off European banks -- leaves Cyprus looking for a "new way to make a living." PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. And welcome ...

Cyprus Crisis Reveals Shadowy World of Tax and Money Laundering Haven


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Bio

James S. Henry is a leading economist, attorney and investigative journalist who has written extensively about global issues. James served as Chief Economist at the international consultancy firm McKinsey & Co and as an investigative journalist his work has appeared in numerous publications like Forbes, The Nation, and the The New York Times. He was the lead researcher of the recently released report titled “'The Price of Offshore Revisited.'

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Cyprus, Troika agree to 20% tax on deposits over 100,000 euros at Bank of...

Published time: March 23, 2013 18:31 Cyprus and the Troika have agreed to a 20 per cent tax on deposits over 100,000 euros at the Bank of Cyprus and 4 per cent on deposits held at other banks. MORE DETAILS TO FOLLOW.

Cyprus Passes Parts of Bailout Bill, but Delays Vote on Tax

Nicosia, Cyprus - Lawmakers took steps late Friday to revise a formula for obtaining a bailout of Cyprus’s banks but faced strong signals that the plan would not pass muster with international lenders.

The Parliament put off until later this weekend a vote on a crucial new proposal that would confiscate 22 to 25 percent of uninsured deposits above 100,000 euros through a new tax on account holders in one of the nation’s most troubled banks.

So with a deadline imposed by the European Central Bank looming on Monday, it appeared there was still no immediate path to a lifeline of 10 billion euros, or $13 billion, that Cyprus needs to keep its banks from collapsing.

Cyprus’s so-called troika of lenders — the International Monetary Fund, the European Commission and the European Central Bank — must still approve any plan. President Nicos Anastasiades was scheduled to fly to Brussels on Saturday to meet with European Union leaders, a spokesman said.

Monday is a national holiday in Cyprus, but banks are supposed to reopen on Tuesday for the first time in more than a week. There is widespread fear of a classic bank run.

On Friday, Cypriots jammed into supermarkets after lining up all day Thursday at automated teller machines to withdraw as much cash as possible. Gas stations were taking cash only, and some retailers reported that they would no longer accept credit.

One of the provisions Parliament approved Friday would impose new restrictions on withdrawing cash or moving money out of the country when the banks reopen. These new capital controls would prohibit or restrict check-cashing and bar “premature” account closings or any other transaction the authorities deemed unwarranted.

Lawmakers also voted to restructure the nation’s largest and most troubled bank, Laiki Bank, by splitting off its troubled assets into a so-called bad bank. Accounts with no problem would be transferred to the nation’s largest financial institution, the Bank of Cyprus. Lawmakers also voted to require that any bank on the verge of bankruptcy be split apart in the same way.

By effectively shutting down one of the banks needing support, the government could lower the 5.8-billion-euro sum that international lenders are demanding in exchange for a bailout. The consolidation of Laiki, also known as Cyprus Popular Bank, effectively relieves the government of a large expense of supporting the banking system, which is on the verge of collapsing under a mountain of souring loans to Greek businesses and individuals.

Still to be voted on is the measure to impose a tax of 22 to 25 percent on uninsured deposits at the Bank of Cyprus. That proposal was made after lawmakers rejected a plan earlier in the week to tax insured deposits to help raise the amount needed to secure the bailout. The Parliament appears to be trying to make up the difference in part by shifting the burden to large account holders.

When euro zone finance ministers negotiated the original bailout terms last weekend, Cypriot officials had resisted limiting the tax to large accounts, evidently to avoid damaging the country’s reputation as a haven for wealthy banking clients. Many of the wealthiest citizens of Russia have euro-denominated bank accounts in Cyprus, which is one reason that euro zone finance ministers have taken such a hard line.

The decision to tax uninsured deposits came after Cyprus proposed nationalizing the pension funds of state-owned Cypriot companies.

Lawmakers approved the pension takeover on Friday, but the move was denounced in Germany, whose political and financial influence in the euro zone tends to dictate policy.

  “When you consider that there was massive resistance against involving the savings, then it is not easy to see how tapping the pension funds, which we view as socially a much more drastic step, is a very good idea,” Steffen Seibert, a spokesman for the German chancellor, Angela Merkel, told reporters.

The suggestion of tapping pension funds touches off a visceral response in Germany, where history has proved the dangers of such ideas. German pensions were tapped to finance both world wars, and the idea remains anathema to German leaders today.

“The German reaction to such suggestions quickly becomes emotional,” said Bernd Raffelhüschen, a professor of economics at the Albert-Ludwig University in Freiburg. “But looking at it rationally, it must be said that the German reaction is not stupid.”

Mr. Seibert, the Merkel spokesman, urged Cyprus to return to the bailout plan negotiated last weekend, including the deposit tax on ordinary investors, even though Parliament roundly rejected that measure on Tuesday.

The Cypriot government has ordered banks to keep A.T.M.’s filled with cash so long as the banks themselves remain closed. But that has been of little help to the thousands of international companies that bank in Cyprus, which cannot transfer money in and out of those accounts to conduct business.

The European authorities said Friday that members of the troika were focused mainly on the laws being drafted by the Cypriots to deal with failing banks and restrict flows of money out of the country.

“The law on bank resolution that is adopted needs to be a law applicable in a generic fashion, so not a law that would be applicable in only one particular case,” Simon O’Connor, a spokesman for Olli Rehn, the European commissioner for economic and monetary affairs, said at a news conference in Brussels.

Those comments seemed to suggest that troika officials want the Cypriots to be ready to shut down troubled lenders in addition to Laiki Bank, like the Bank of Cyprus, with the option of imposing significant losses on large depositors.

Other officials gave assurances Friday that Cyprus could impose capital controls, like strict curbs on daily withdrawals and withdrawals of savings deposits, without violating European Union rules that are meant to foster flows of capital between member states.

“It’s a unilateral decision by the member state and it does not require prior approval from the commission,” Chantal Hughes, a spokeswoman for Michel Barnier, the European commissioner for financial services, said at the same news conference. A country like Cyprus “can impose those restrictions as long as the criteria laid out in the treaties are met,” she said.

But she underlined that imposing capital controls was “not meant to be a never-ending situation” and that reaching an overall deal was vital.

On Friday, Greece also struck a deal to have one of its biggest lenders, Piraeus Bank, take over the Greek-based units of Cyprus’s three main banks. That move was meant to relieve Cyprus of the cost of supporting those units, while ensuring that Greek savers in those banks would be insulated from whatever new bailout terms might be struck.

A delegation of Cypriot officials led by the finance minister, Michalis Sarris, remained in Moscow until Friday morning to press the case for additional aid, but there were no reports of progress, and the officials stayed out of sight.

The Russian prime minister, Dmitri A. Medvedev, said on Friday at a joint news conference in Moscow with José Manuel Barroso, the president of the European Commission, that his country was not walking away from Cyprus.

Instead, Mr. Medvedev said, Russia will wait until a broader bailout deal is done before extending additional help.

“Regarding our participation in this process, we haven’t shut the doors,” Mr. Medvedev said. “Of course we’ve got our own economic interests at stake.”

Additional efforts to help Cyprus will come “only after a final settlement scheme” involving the European Union, he said.

The situation in Cyprus “is very dramatic and should be addressed as soon as possible,” Mr. Medvedev added.

Contributing reporting were Melissa Eddy in Berlin, James Kanter in Brussels, David M. Herszenhorn in Moscow, Niki Kitsantonis in Athens and Andreas Riris in Nicosia.

Outrageous: David Cay Johnston Explains How Big Corporations Withhold Your Taxes and Then Pocket...

And other tails of legal corporate robbery.

Photo Credit: Shutterstock.com

March 22, 2013  |  

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Nobody has done more to expose the infinite ways in which the American economy is rigged to benefit those at the top than Pulitzer Prize-winning journalist David Cay Johnston. His rigorously researched books – Perfectly Legal, Free Lunch and now his latest, The Fine Print, are not recommended for people with egalitarian views and high blood pressure – they're every bit as maddening to contemplate as they are informative.

Lat week, AlterNet caught up with Johnson by phone. Below is a lightly edited transcript of our discussion.

Joshua Holland: David, for years you’ve reported how those who can afford the right accountants game this labyrinthian and opaque tax-code of ours. How surreal has it been for you to observe the amount of political conflict we've faced over the past few years over returning the top marginal rates to the same rate that they were during the Clinton era -- taking them from 35 percent to 39 percent?

David Cay Johnston: I am actually heartened, Josh. I think that we’re starting to see the end of those Chicago School economic theories – by the way, I went to the Chicago School 40 years ago, but I did not drink the Kool Aid.

The reality is people are now, finally -- and I can claim some of the credit for this through my books and my reporting -- people are looking around and saying, 'Wait a minute! Starting back in 1980, I was promised that I was going to have a better life. We’d all prosper. Yet all the gains are going to the top.'

Let me give you a stunning number I reported the other day. From 1966 – when Lyndon Johnson was president -- to 2011, 45 years later, the bottom 90 percent of Americans’ average income, as reported on tax returns, went up by a stunning $59 -- almost no change at all. If you measure that $59 increase for the vast majority of Americans as one inch, then on the same scale, the incomes of those in the top ten percent went up by 168 feet. The top one percent, 888 feet. The plutocrats -- the Mitt Romney crowd, the top one percent of the top one percent? Their incomes rose by almost five miles relative to that one inch.

JH: That is remarkable. We are talking about an economy that simply doesn’t work for 90% of working-people in this country.

DCJ: My latest book, The Fine Print , looks at this in a different way. The first two books – Perfectly Legal is about taxes, Free Lunch is about all the subsidies we give to rich people. The Fine Print is about all these laws the mainstream media has either not reported on, or reported on in the most superficial and disconnected ways, that are designed to destroy market competition and replace it with monopolies, oligopolies, duopolies -- with rules that allow the biggest companies to raise prices and reduce services.

There are 6 million corporations in America, but 2,600 of them, a tiny number out of 6 million, own 80 percent of the business assets in America.

JH: One of the things that, I think, really will jump out to readers as they dig into The Fine Print is the way that you looked into all these little nickel-and-dime charges that corporations levy on us constantly, often thanks to deregulation. We tend to take them for granted, because when you look at your phone bill – and you talk a lot about telecoms in the book – 35 cents here and a 60-cent charge there, they don’t seem so pressing, but they really add up. What’s going on with that?

Jubilee USA Releases Statement on Levin-McCain-Whitehouse Budget Amendment 430 that would End Offshore Tax...

WASHINGTON - March 22 - Yesterday, Senator Carl Levin (D-MI), Senator John McCain (R-AZ) and Senator Sheldon Whitehouse (D-RI) introduced Amendment 430 to the Budget Resolution. This Amendment would end offshore tax abuses by large corporations. Executive Director Eric LeCompte of Jubilee USA Network, an interfaith organization that promotes solutions to poverty, releases the following statement on the amendment:

“Senators Levin, McCain and Whitehouse recognize that its not fair that some of the most profitable corporations use offshore tax loopholes to avoid paying taxes. As people of faith, we believe our budget is a moral document that must end corporate tax avoidance that takes from the poor and shifts the tax burden onto everyday Americans.

“When we address corporate tax avoidance in the US, it sends a strong message to the entire world that this kind of behavior is unacceptable. This is behavior that makes dodgy business practices the status quo and perpetuates the cycle of poverty around the globe.”

Jubilee USA Network is an alliance of more than 80 religious denominations and faith communities, human rights, environmental, labor, and community groups working for the definitive cancellation of crushing debts to fight poverty and injustice in Asia, Africa, and Latin America.

Jubilee USA Releases Statement on Levin-McCain-Whitehouse Budget Amendment 430 that would End Offshore Tax...

WASHINGTON - March 22 - Yesterday, Senator Carl Levin (D-MI), Senator John McCain (R-AZ) and Senator Sheldon Whitehouse (D-RI) introduced Amendment 430 to the Budget Resolution. This Amendment would end offshore tax abuses by large corporations. Executive Director Eric LeCompte of Jubilee USA Network, an interfaith organization that promotes solutions to poverty, releases the following statement on the amendment:

“Senators Levin, McCain and Whitehouse recognize that its not fair that some of the most profitable corporations use offshore tax loopholes to avoid paying taxes. As people of faith, we believe our budget is a moral document that must end corporate tax avoidance that takes from the poor and shifts the tax burden onto everyday Americans.

“When we address corporate tax avoidance in the US, it sends a strong message to the entire world that this kind of behavior is unacceptable. This is behavior that makes dodgy business practices the status quo and perpetuates the cycle of poverty around the globe.”

Jubilee USA Network is an alliance of more than 80 religious denominations and faith communities, human rights, environmental, labor, and community groups working for the definitive cancellation of crushing debts to fight poverty and injustice in Asia, Africa, and Latin America.

UK tax rises likely after 2015 election

Tax rises of up to £9 billion could be imposed on British households and businesses after the next general election in 2015, a leading economic forecaster has warned.

According to the Institute for Fiscal Studies (IFS), British Chancellor George Osborne’s fourth budget, presented this week, had paved the way for bigger tax increases after 2015 general election.

"That is after an election and it is much more possible that a future government will prefer to increase taxes instead,” said Rowena Crawford of the IFS.

This comes as he estimated tax rises, equal to 2 percent in the basic rate of income tax, could drag more British people into poverty.

In his speech at the House of Commons on Budget Day, Osborne said Britain’s economy will grow less this year and the next as the country is bracing itself for drastic austerity cuts.

The Chancellor warned the country’s growth would halve this year to 0.6 percent from the 1.2 percent.

Earlier in February, credit ratings agency Moody’s downgraded the British government’s bond rating from the top AAA to AA1 due to Britain’s rising debt and slowing growth.

There are speculations that Britain could face its second credit downgrade as a result of the country’s sluggish recovery.

MOS/HE

Budget Debate includes Corporate Offshore Loopholes and Tax Avoidance

WASHINGTON - March 21 - As the Budget Resolution debate begins, 100 diverse organizations, including The Presbyterian Church USA, Jubilee USA Network and various Catholic Religious Orders, expressed support to end corporate offshore tax loopholes in a...

Panama becomes tax haven for German uber rich – report

Published time: March 21, 2013 14:18
Panama City (Reuters / Henry Romero)

Germany’s super rich are stashing their cash as far afield as Panama in search of an offshore tax haven, newspaper Suddeutsche Zeitung has uncovered. A number of high profile names have emerged from the report, including Porsche and Jacobs.

The German publication obtained data dug up by British hacker Dan O'Huiginn, who published information from national records on various German multi-millionaires with Panamanian companies under their names on his blog.

The Porsche and Piech families, owners of the billion-dollar car brands Volkswagen and Porsche were found to have several companies in Panama registered under their names, founded between 2005 and 2007.

Contacted for comment by the German publication, a representative of the Porsche family stated that the companies were inactive and categorically denied claims of tax evasion. In addition, Germany’s richest woman Silvia Quandt claimed to have no knowledge of an investment under her name in Panama.

Panama has a longstanding reputation as a tax haven, given that over 50 per cent of international investments are not taxed in the Caribbean country, tax expert Markus Meinzer said.

Meinzer told the publication that he could see no viable reason why a German citizen would have an offshore company in Panama other than to take advantage of the lucrative tax regime. However, he signaled that the investment of such capital in Panama could have a significant negative effect on the country’s economy.

Panama’s economy has been going from strength to strength recently, despite the worsening financial crisis in the US and Europe. Panama’s GDP grew by over 10 per cent last year and is slated to expand by a further 8.5 per cent this year, according to government estimates.

However, the country’s economic boom has been dogged by widespread reports of corruption among government officials.

“Panama’s geographic location makes it very attractive for international mafia organizations,” said Jose de Gracia from Interpol to Panamanian publication Critica. He went on to say that mafia organizations flocked to the Central American nation because of its highly lucrative illicit drugs trade.

16 Giant Corporations That Have Basically Stopped Paying Taxes — While Also Cutting Jobs!

It's a golden age for corporate profits. So why don't our biggest corporations pay more taxes?

March 18, 2013  |  

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The brackets are set for the big dance — the dance around tax responsibility. Most of the teams are in the bottom bracket. In this league, the lowest score wins.

Outside the stadium our nation's kids and seniors and low-income mothers may be dealing with  food and housing cuts, but on the corporate playing floor new low-tax records are being set again this year. Just as this is a golden age for sports, this is also, as noted by the  New York Times, "a golden age for corporate profits."

Corporations have simply stopped paying their taxes, perhaps using the 2008 recession as an excuse to plead hardship, but then never restoring their tax obligations when business got better. The facts are indisputable. For over 20 years, from 1987 to 2008, corporations paid an average of 22.5% in federal taxes. Since the recession, this has  dropped to 10% -- even though their profits have doubled in less than ten years.

Pay Up Now just completed a compilation of corporate tax payments over the past five years, using  SEC data as reported by the companies themselves. The firms chosen are top-earners who have filed 10-K reports through 2012. Their US Tax figures represent the five-year total of "current" payments.

The 64 corporate teams paid just over  8% in taxes over the five-year period.

The Slink Sixteen

General Electric: The  worst tax record over five years, with $81 billion in profits and a $3 billion refund.

Boeing: In addition to receiving a refund despite $21.5 billion in profits, the company ranked high in  job cutting, underfunded pensions, and contractor misconduct.

Exxon Mobil: Made by far the largest profits in the group, but paid less than 1% in U.S. taxes, and yet received  oil subsidies along with their tax breaks. Unabashedly reports a 2012  "theoretical tax" of over $27 billion, almost 90% of its total income tax expense. The company was also near the top in  contractor misconduct.

Verizon: Second worst tax record, with a refund despite $48 billion in profits.

Kraft Foods: Received a refund from the public despite $13.5 billion in profits. Also a leading  job-cutter.

Citigroup: One of the five big banks who are estimated to get a  bailout/refund from the American public amounting to three cents from every tax dollar.

Dow Chemical: Received a refund despite almost $10 billion in profits.

IBM: Paid less than 3% in taxes while ranking as one of the leading  job cutters, and near the top in  contractor misconduct.

Chevron: In addition to a meager 4.3% tax rate and a share of oil subsidies, the company has been the main beneficiary of  tax-exempt government bonds.

FedEx: The company paid less than 5% in federal taxes while relying on the  publicly-funded Post Office to deliver thirty percent of its ground packages.

Honeywell: Less than 6% in taxes, a leading  job cutter, near the top in instances of  contractor misconduct, and run by the "Fix the Debt" CEO with the  largest pension fund.

An 8% tax rate, a leader in  job cuts and underfunded pensions, and in the top 20 of  contractor misconduct instances.

Notable for an 8.4% tax rate,  job cuts, offshore holdings, and the top U.S. spot on the  contractor misconduct dollar list.

Apple: Where to begin? Avoiding  federal taxes, avoiding  state taxes, hiding overseas earnings, engaging in  intellectual property schemes, using the  "Double Irish" to transfer profits from Europe to Bermuda, and  underpaying its store workers despite conducting most of its product and research development in the United States.

Pfizer: One of the leaders in stockpiling  untaxed profits overseas, and right behind Merck in  contractor misconduct dollars.

Google: A master at the  "Double Irish" revenue shift to Bermuda tax havens, while using tax loopholes to bring a lot of the money  back to the U.S. without paying taxes on it.  Recognized as one of the  world's biggest tax avoiders.

Microsoft: Named as one of the biggest  offshore hoarders while using tax strategies to bring much of their untaxed money back to the U.S., where it also  avoids state taxes.

German Commerzbank Suggests Wealth Tax In Italy Next

While some argue that Cyprus was "one of the biggest money-washing machines for Russian criminals," and others that Cyprus ex-Pat community and energy resources brough deposits (not to say their high deposit interest rates), it seems the European Unio...

If Corporations Don’t Pay Taxes, Why Should You?

Go offshore young man and avoid paying taxes. Plunder at will in those foreign lands, and if you get in trouble, Uncle Sam will come rushing to your assistance, diplomatically, financially and militarily, even if you have managed to avoid paying for those government services. Just pretend you’re a multinational corporation.

That’s the honest instruction for business success provided by 60 of the largest U.S. corporations that, according to a Wall Street Journal analysis, “parked a total of $166 billion offshore last year” shielding more than 40 percent of their profits from U.S. taxes. They all do it, including Microsoft, GE and pharmaceutical giant Abbott Laboratories. Many, like GE, are so good at it that they have avoided taxes altogether in some recent years. 

But they all still expect Uncle Sam to come to their aid with military firepower in case the natives abroad get restless and nationalize their company’s assets. We still have a blockade against Cuba because Fidel Castro more than a half century ago dared seize an American-owned telephone company. During that same period, we have consistently intervened to maintain the lock of U.S. corporations on the world’s resources, continuing to the present task of making Iraq and Libya safe for our oil companies. 

America’s multinational corporations still need the Navy to protect shipping lanes and the Commerce Department to safeguard U.S. copyrights. They also expect the Federal Reserve and Treasury Department to intervene to provide bailouts and cheap money when the corporate financial swindlers get into trouble, like GE, which almost went aground when its GE Capital financial wing got caught in the great banking meltdown. 

They want a huge U.S. government to finance scientific breakthroughs, educate the future workforce, sustain the infrastructure and provide for law and order on the home front, but they just don’t feel they should have to pay for a system of governance, even though it primarily serves their corporate interests. The U.S. government exists primarily to make the world safe for multinational corporations, but those firms feel no obligation to pay for that protection in return.

Think of that perfectly legal and widespread racket when you go to pay your taxes in the next weeks, and consider that you have to make up the gap left by the big boys’ antics. Also, when you contemplate the painful cuts coming because of the sequester that undoubtedly will further destabilize the economy, remember that, as the Wall Street Journal estimated, the tax savings of just 19 of those companies would more than cover the $85 billion in spending reductions triggered by the congressional budget impasse.

The most skilled at this con game are the health care and technology companies, which, as a Senate investigation last year revealed, have become quite expert at shifting marketing rights and patents offshore to low-tax countries. Microsoft boosted its foreign holdings by $16 billion last year, and by the end of the company’s fiscal year on June 30, 2012, had $60.8 billion stashed internationally. Through creative accounting, Microsoft was able to claim that only 7 percent of its pretax profit last year was domestically generated.

Oracle increased its foreign holdings by one-third, including new subsidiaries in low-tax Ireland, and thereby was able to add a cool $272 million to the company’s bottom line by avoiding U.S. taxes. Abbott estimates that it saved $1.6 billion in U.S. taxes through its operations in more than a dozen countries. By moving $8.1 billion of its profits overseas, Abbott was able to claim a pretax loss on its U.S. operations. Johnson & Johnson, another health industry giant, has almost all of its cash—$14.8 billion out of $14.9 billion—abroad, yet still claims to be a U.S. company. 

One of the longtime leaders in offshore tax avoidance has been that once-American-as-apple-pie company GE, which in a more innocent time hired Ronald Reagan to advertise its wares. Now GE has nearly two-thirds of its jobs abroad, avoided U.S. taxes in the previous two years and has $108 billion stashed overseas.

Two years ago, President Obama appointed GE CEO Jeffrey Immelt to chair his Jobs Council, despite the fact that Immelt had cut his company’s U.S. workforce by a fifth. GE’s expertise is no longer in appliance manufacturing, a division Immelt has tried to shed, but rather in financial manipulation. 

GE Capital was a leader in the financial scams that still haunt the U.S. economy, and Immelt has been most effective in lobbying Washington politicians to rig the tax laws to benefit his and other multinational corporations. He has created some jobs, but unfortunately, they are abroad, along with his company’s untaxed profits. 

For all these multinational corporations, the love of profit trumps loyalty to country.

© 2013 TruthDig.com

Robert Scheer

Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

Lib Dems Avoid Red Faces Over Mansion Tax

The Liberal Democrats have averted a potential Commons embarrassment and announced they will not vote with Labour in favour of a mansion tax.

Business Secretary Vince Cable - who earlier held open the prospect of a revolt - said a solution had been found to sidestep the opposition's "cynical games".

lib dems

There had been speculation that Vince Cable would vote with the Opposition over the Mansion Tax

The coalition parties will instead vote for an amendment on Tuesday which recognises the deep differences between them on the proposals for a levy on £2 million-plus properties.

"This amendment allows Liberal Democrats in Parliament to back our long-held policy of the mansion tax. We created it and will continue to champion it," Cable said.

"The amendment also makes it clear that although we are in coalition with the Conservatives, we have different views on the desirability of a mansion tax.

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"The Liberal Democrats will not however support a Labour motion designed exclusively to play cynical party political games."

Labour leader Ed Miliband recently adopted the mansion tax - a long-cherished Lib Dem policy - and challenged deputy prime minister Nick Clegg's party to break ranks.

Faced with a damaging Commons split, the coalition parties instead devised a compromise amendment that will allow them to remain together in the voting lobbies.

Vince Cable 'Expected To Support Government' On Mansion Tax, Says Downing Street

It specifically sets out that "the part of the coalition led by the deputy prime minister" advocates a mansion tax while "the party of the coalition led by the prime minister does not".

Shadow Treasury minister Chris Leslie said: "It would be astonishing if the Liberal Democrats failed to back a straightforward motion supporting their long-held policy of a mansion tax on properties over £2 million.

"The Liberal Democrats have a simple choice: either they back the policy they set out in their manifesto and which Nick Clegg made the centerpiece of the Eastleigh by-election campaign or they don't.

"No amount of wriggling or contortion can get them out of that simple choice.

"After supporting a Tory tax cut for millionaires, a failing economic plan, a VAT rise and a trebling of tuition fees, this is yet another example of why we should judge the Lib Dems on what they do, not what they say."

Labour says it would use the proceeds of a mansion tax to fund the reintroduction of a 10p lower income tax rate.

But its motion did not make that link, to make it easier for the Lib Dems - who prefer the raising of thresholds to help low earners - to back it.

Cable had on several occasions declined to rule out voting with Labour if its motion fully reflected the policy he devised and has personally championed.

The Tories are firmly opposed.

"Parties should be judged on what they deliver on fairer taxes, rather than what they say about them," Cable said.

"In government, Labour rubbished the Liberal Democrat policy of a mansion tax. In opposition, they have simply copied it exactly in an attempt to fill in their blank piece of paper where original policies should be."

It’s A Trap! Labour Hope To Split Coalition With Mansion Tax Vote

The Labour Party has set a trap for the Lib Dems, they know it and may be willing to fall in.

Next week the House of Commons will vote on whether there should be a 'Mansion Tax' - a levy placed on homes worth over £2m designed to bring "fairness" to the tax system. It is a signature Lib Dem policy that the deputy prime minister has thus far been unable to convince George Osborne to include in his Budgets.

Always keen to cause mischief by exposing splits in the coalition, Ed Miliband and Ed Balls decided to borrow the policy and then use an Opposition Day debate in the Commons to put it to a, purely symbolic, vote on Tuesday. The scamps.

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Chris Leslie MP, Labour's shadow financial secretary to the Treasury, said the vote was "a chance for the Liberal Democrats to finally vote for something that was in their manifesto".

The full text of the motion is:

“That this House believes that a mansion tax on properties worth over £2million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system and calls on the Government to bring forward proposals at the earliest opportunity”.

The vote is win-win for Labour. Should the Lib Dems decide to make a stand and support the motion, which after all was their policy in the first place, Miliband can claim to have split the coalition on a hugely symbolic issue.

But if the junior coalition partner decides to stick with the Tories and vote down the motion, it allows Labour to attack them for abandoning their principles.

It is not a problem lost on the Lib Dem leadership. Tim Farron, the party president, said in an interview with The House magazine on Thursday he had yet to make up his mind. "They’ve [Labour] been opportunistic, they’ve been mischievous. That doesn’t mean we shouldn’t consider it as an opportunity," he said.

Business secretary Vince Cable, who has vocally advocated for a Mansion Tax both inside cabinet and in public, has said he would not rule out voting with Labour.

And ahead of the Eastleigh by-election, Nick Clegg said David Cameron was "stuck in the past" in his opposition to a Mansion Tax.

In preparation for the Tuesday's Commons debate Balls will no doubt have a stack of Lib Dem quotes backing the tax piled high on his desk.

Of couse there is another problem for the Lib Dems. If they vote in favour of a symbolic motion calling for a Mansion Tax but fail to secure its actual introduction in the Budget - which Cameron has ruled out - Labour can easily ask what the point is of the Lib Dems being in government.

Also on HuffPost:

It’s Time to Tax Financial Transactions

On Friday at midnight, the sequester kicked in, triggering $85 billion in deep, dumb budget cuts that sent “nonessential personnel”— such as air traffic controllers — packing.

Not to worry, though: Wall Street’s day was pretty much like any other. Billions of dollars in profits were made off of trillions of dollars in financial transactions. And the vast majority of those transactions were conducted tax-free.

Moral of the story: What else is new?

Crash the economy? Free pass. Prevent planes from crashing? Pink slip.

We don’t need a team of policymakers to tell us this isn’t good policy, or that it needs changing. But on Thursday, we heard policymakers propose exactly that: a change.

Sens. Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.), along with Rep. Pete DeFazio (D-Ore.), unveiled a bill that would place a light tax on all financial transactions — three pennies on every $100 traded.

The good news is that it’s a tax so small it could be mistaken for a rounding error. It’s so small, Wall Street could easily afford it and the average E-Trade investor would barely notice it. If this were a tax on coffee, it would cost you $1 for every 800 cups you bought at Starbucks.

But there’s even better news. This insignificant tax raises a significant amount of revenue — $352 billion over the next 10 years, or enough to refund about one-third of what the sequester will slash from the federal budget. It’s also enough to put many air traffic controllers back to work, Head Start teachers back in preschools, and crucial government programs back in business.

As the saying goes, “Nothing can resist an idea whose time has come.”

And after years of Wall Street excess, and at a moment when new revenues are badly needed, the time has surely come for a financial transaction tax .

Indeed, support for such a tax has never been stronger — or broader. Many on the progressive left have long favored it . Now, though, another group of bleeding-heart liberals, otherwise known as the American people, is on board. When it comes to cutting the deficit, 6 in 10 Americans prefer taxing the financial industry to cutting social spending.

But this idea doesn’t just have the masses on its side; it has the elites, and even some Republican elites. Once championed by the granddaddy of liberal economics, John Maynard Keynes, the banner of a financial transactions tax has been picked up by conservative economists including Sheila Bair, George W. Bush’s appointee to the Federal Deposit Insurance Corp.

After all, the tax isn’t just a good revenue raiser. It’s smart regulatory reform.

The high-frequency traders that now dominate our markets would be hardest-hit by the tax. A top economist recently concluded that their lightning speed, algorithm-driven trading drains profits from traditional investors. And analysts fear that such mass trading strategies could lead to disaster if markets behave unexpectedly.

The new tax would discourage these kinds of trades, which would be a good thing.

Europe, at least, seems to agree. Eleven nations, led by the conservative German government, are on track to start collecting the tax by January 2014. Expected revenues: $50 billion per year.

Of course, we’re talking about a tax on Wall Street.

It’s no wonder that, over the past few weeks, K Street appears to have upped the financial sector’s retainer. Their lobbying effort against the tax — here and in Europe — is in full swing.

Even the Obama administration has been convinced to come out against the tax in the United States. And they’re pressuring Europeans to water down their version by insulating American banks. What’s the logic driving this opposition?

Some have argued that, historically, these taxes have been ineffective because of widespread evasion. But they’re cherry-picking a few badly designed examples, such as Sweden’s lemon of a tax from nearly 30 years ago. This is like saying cars don’t work because you bought a Datsun in the ’70s.

Many countries have implemented such taxes effectively. The United Kingdom, for example, manages to raise more than $5 billion per year on a 0.5 percent tax on stock trades alone.

Another common argument is that the tax will be passed on to mom-and-pop investors. The just-introduced U.S. legislation addresses these concerns by providing tax credits for contributions to typical middle-class investment accounts, including 401(k)s. Investment funds would still be taxed on their trades, but this could encourage longer-term productive investment instead of the short-term speculation that adds little to no value to the real economy.

If the Obama administration is serious about fair taxation and a smart approach to the deficit, it should change its position. Rather than trying to derail Europe’s efforts, it should cooperate with Europe to ensure that the tax there is effectively enforced. And the administration should build support in Congress, including among Republicans.

Yes, we’ve all heard House Speaker John Boehner’s line that the debate over revenue raising is over. We also remember former President George H.W. Bush’s line, “Read my lips, no new taxes,” and how quickly his lips starting saying something else.

For tea partyers, wouldn’t a tax on Wall Street, the beneficiaries of the bailout they so reviled, be less objectionable than most other revenue options?

Sequestration is a septic wound, self-inflicted by lawmakers who can’t agree on anything. Here, at last, we have a smart idea with widespread support — Americans and Europeans, populists and economists, progressives and conservatives.

After Friday’s dumb budget cuts, a little smart policymaking would be nice for a change.

© 2013 The Washington Post

Katrina vanden Heuvel

Katrina vanden Heuvel is editor of The Nation.

How California Turned Its Own Sequester Into Higher Taxes and Economic Growth

How California Turned Its Own Sequester Into Higher Taxes and Economic Growth

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Posted on Mar 4, 2013
Neon Tommy

California Gov. Jerry Brown.

If President Obama follows the example of Gov. Jerry Brown in California, he can use devastating budget cuts to deal conservatives a crushing blow, argues David Sirota.

Although Democrats have a tight grip on the Golden State, Republican lawmakers have historically been able to keep taxes low thanks to a hocus pocus budgeting process and the anti-tax fervor of residents.

Gov. Jerry Brown, who campaigned on the promise to restore adult supervision to the budget, was faced with the choice of making tough cuts or papering over California’s shortfalls. Brown made the cuts, but he also made the case that Republicans were to blame, and he used austerity as a teaching moment (at the expense of the most vulnerable Californians, it must be said) and was able to persuade voters to pass their own tax increases to help fund popular programs like education.

The results are in, writes Sirota:

Last month, California budget officials reported a surplus. Meanwhile, following the tax hikes, Reuters reports that the state’s “job growth tops the national average, unemployment has fallen to below double-digit levels for the first time in nearly four years.” Meanwhile, Bloomberg reports that “California’s credit rating on its general-obligation bonds was raised by Standard & Poor’s for the first time since 2006.”

These results, if they hold, come with the prospect of tectonic political change because they so clearly counter the standard GOP talking points about budgets and taxes. Yes, rather than tax hikes harming the economy, the tax hikes and California economic recovery are happening simultaneously (and Brown’s poll numbers have hit a record high).

The Salon scribe (and syndicated columnist) says President Obama now faces his Jerry Brown moment: “Will Obama and congressional Democrats follow the Brown model? Will they cite the cuts to fundamentally challenge the anti-tax zeitgeist that has dominated American politics since the 1980s? Will they, in short, maximize the opportunity?”

—Posted by Peter Z. Scheer. Follow him on Twitter: @peesch.

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Bad Cop: 7 Cities Where Shocking Police Abuses Cost Taxpayers Millions

Bad police behavior runs roughshod over civil liberties, and costs cities millions of dollars in payouts to those who successfully sue.

Photo Credit: Shutterstock.com

March 4, 2013  |  

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When it comes to interactions between regular citizens and police on the street, the police hold all the cards. They can, and often do, act however they want. One of the few meaningful mechanisms for restitution if you are a victim of police misconduct is to sue for damages. The costs of these lawsuits and payouts add up, and bad police behavior takes a toll not only on our civil liberties, but also on a city's budget.

It's worth mentioning that lawsuits against the police rarely result in million-dollar payouts for victims, are difficult to win, and represent only a fairly small slice of total reports of police misconduct. Also, the reported costs of settlements and judgments to victims often exclude fees paid to attorneys representing the city, so in many cases the real numbers are higher.

This list doesn't include every example of police misconduct or every study about how much it costs, but below are some recent instances of reports that detail just how much money police misconduct costs taxpayers. The point here isn't to argue that people shouldn't sue cops. They should, if they have a good case. The cops should simply give people fewer reasons to sue them.

1. Chicago

Lieutenant Jon Burge is in many ways the posterchild for police brutality. He oversaw a torture regime at the Chicago Police Department from 1973-1991 that included 64 other cops directly and an untold number of police who were aware of what was going on. According to a recent report, over 100 African Americans were allegedly tortured under his watch.

As the Chicago Reader reported in 2003, charges against Burge and his crew included “electric shock, suffocation, burnings, attacks on the genitals, severe beating, and mock executions.”

Burge was eventually prosecuted by the US attorney and sentenced to four and a half years for perjury, though according to the report the Cook County State Attorney never prosecuted any officers for torture or for covering it up. The “blue code of silence” plays a large role in perpetuating corruption.

The report, by the University of Illinois at Chicago, claims that corruption and abuse of power are rampant problems in the Chicago Police Department. The authors looked at CPD corruption dating back to 1960, and conclude that  “[t]oleration of corruption, or at least resigned acceptance, appears to be the order of the day for at least the past 50 years.”

Top Chicago officials have allowed (or created) a culture of impunity for officers. A separate study the authors cite claims only “19 of 10,149 (or less than 2%) civilian complaints of excessive force, illegal searches, racial abuse, sexual abuse and false arrests between 2002 and 2004 led to police suspensions of a week or more.”

Over the last decade, police misconduct lawsuits against the city and out-of-court settlements “have cost taxpayers several hundreds of millions of dollars at a time when all levels of government have to cut services and raise taxes,” according to the University of Illinois report. Defending cops against litigation has cost Chicago more than $82.5 million since 2003, and “Jon Burge cases have cost local taxpayers more than $53 million since 1998.”

2. New York

According to a 2012 report  from NYC's Comptroller's office, the city paid out $185.6 million in claims for fiscal year 2011. That's a 35% increase over the previous year, which came in at $137.3 million in settled claims. Fiscal year 2011 saw “an historical high of 8,882 claims filed” against the NYPD, with a 55% rise in claims against the NYPD over the past five years.

Kathleen Parker: Republicans Can’t Give on Taxes Because It Would Damage Their Brand

Republicans have done a whole lot of things to damage their "brand" and still haven't figured out what to do to quit being the "stupid party" after their losses in the last election, but note to Kathleen Parker -- refusing to raise taxes in order to lower the budget deficit is not one of them. The majority of their own constituents don't agree with them on this issue, but that didn't stop Parker from pretending it would damage them on this Sunday's Meet the Press:

GREGORY: What's striking to me is that these issues are still so hard and that the elections didn't seem to solve them completely enough. […] Is that true? I mean, why didn't it?

PARKER: Why didn't it? Because, look, the Republicans cannot give on taxes. They simply can't. It would damage their brand permanently and the President is unwilling... he is insisting on raising revenue through taxes. There's no way for them to have a meeting of the minds when those differences exist and that's not going to change.

Republicans are not worried about damaging their brand on tax increases with anyone other than the members of the one percent who are paying to keep them in office.

Private Jet as Security Write-Off? 10 Most Insane Tax Loopholes

Corp. Tax Loopholes(Photo: suenosdeuomi / Flickr)For corporations and the 1 percent, tax season offers plenty of ways to dodge Uncle Sam.

With the national tax filing deadline fast approaching, Americans are once again plopping down with pen, paper and potentially Turbotax to determine just how much they owe their state and federal governments. But while the popular refrain posits that nothing in life is certain but death and taxes, for many corporations and wealthy individuals, having to pay a tax bill is anything but a certainty.

Due to the proliferation of loopholes, deductions, credits, and the growing use of offshore tax evasion, many rich Americans and corporations are able to dodge the bulk of, if not all, their taxes. Between 2008 and 2011, 26 major American corporations paid nothing in federal corporate income tax, despite making $205 billion in pretax profits. In 2011 (the last year in which data is available), corporations paid just a 12.1 percent effective tax rate, the lowest in four decades. Many wealthy individuals, meanwhile, are able to drive their tax rates down below the rate paid by middle-class families. Some drive it all the way down to zero.

There are certainly large, systemic reasons for these disparities. But part of the problem is that the rich and the biggest companies have access to a slew of tax breaks from which the average household or small business derives very little benefit. Here are 10 of the most ridiculous.

  1. CEO “private security.” A “common corporate tax trick,” according to the New York Times, is corporate boards paying for private jets and other perks for their CEOs under the guise of security. As Steven Davidoff reported, typically CEOs would have to pay taxes on these benefits, but if the benefit is classified as necessary for security purposes, “the chief executive will pay a reduced tax bill or sometimes no tax at all.”
  1. Florida cow scam. In Florida, wealthy developers, lawmakers and even some corporations game the tax code by placing cows on their land for a limited amount of time each year, thereby qualifying for agricultural tax breaks. Sen. Ben Nelson (D-FL) has benefited from this absurd loophole for years, as has Disney World. But Florida isn’t the only offender. From rock stars in New Jersey to movie stars in Colorado, tax breaks meant for farmers get gamed by the most privileged, using everything from sheep to beehives.
  1. Facebook stock options. The social media giant Facebook made more than $1 billion in profits last year, but paid no corporate tax thanks to a huge write-off after its initial public offering. In fact, the company received a refund of $451 million. As Citizens for Tax Justice, explained, “Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options.” This loophole will also allow Facebook to avoid more than $2 billion in taxes in future years. LinkedIn used the same gimmick to pay no federal taxes for the last three years.
  1. Bluegrass boondoggle. This tax break, created by Senate Minority Leader Mitch McConnell (R-Kentucky) in 2008, gives wealthy horse owners a break worth $126 million over 10 years by allowing faster depreciation (quicker tax write-offs) of race horses. McConnell has defended the break by claiming it helps Kentucky’s “farm economy.”
  1. Sheryl Crow loophole. Low tax rates on investment income are one of the main reasons the wealthy are able to pay lower taxes than those in the middle-class (and are also a prime driver of income inequality). Lawmakers from America’s heartland felt it was necessary to let super-wealthy musicians get in on the action, and so “passed a law allowing songwriters to avoid income taxes and sell their publishing catalogs at capital gains rates.” As San Francisco Weekly’s Chris Parker noted, “Three years later, Sheryl Crow sold her publishing rights to one of Australia's largest banks for nearly $10 million. Her estimated savings courtesy of this congressional giveaway: $2 million.”
  1. NASCAR tax break. Thanks to a provision in the 2008 bank bailout, owners of NASCAR tracks are able to write off the costs of their facilities over seven years, rather than “over the 39 years that the government estimates it will take for the tracks to depreciate.” This particular loophole costs the government $40 million per year, but Congress reauthorizes it over and over again.
  1. John Edwards/Newt Gingrich loophole. Both the former presidential candidate and the former Speaker of the House have taken advantage of a provision allowing them to dodge payroll taxes. By forming “S corporations,” Edwards and Gingrich are able to classify the money they receive from various ventures as “business profits,” rather than payments for services rendered, which exempts that money from the payroll tax. This loophole is regularly abused by lawyers, doctors and accountants, who can count the work they do every day as part of operating a “small business” that consists only of themselves. As tax expert Seth Hanlon noted, “Regular wage-earners can’t do this, and neither can the owners of other kinds of small businesses.”
  1. Tax breaks for vacation homes and yachts. The mortgage interest deduction, which is supposed to boost homeownership, can be used on second homes, or even yachts, so long as they are large enough to accommodate a bathroom, along with a cooking and sleeping space. Limiting the deduction to primary residences would raise $1 billion per year in revenue.
  1. “Double Irish” and “Dutch Sandwich.” Many companies, from Google to Amazon to Starbucks, use offshore tax havens to drive down their corporate tax rates, sometimes down into the single digits. Some of the inventive strategies they’ve used include routing profits through Ireland, the Netherlands, Bermuda, or Luxembourg, using tax tricks with cheeky names like the “Double Irish” and the “Dutch sandwich.” European countries have recently attempted to crack down on some of the more flagrant abuses.
  1. Large SUVs. We’ve already discussed the yacht tax break, but going out and purchasing a large SUV will get a member of the 1 percent another write-off. As Bloomberg News noted, the tax code’s restrictions on write-offs for luxury vehicles don’t apply to those “rated at 6,000 pounds unloaded gross vehicle weight or more.” This means that “purchasing a large SUV often provides faster writeoffs than similar but smaller vehicles.”

Closing these loopholes would certainly not fix the tax code’s much larger problems or put a huge dent in the federal deficit. But they would at least get rid of some of the more egregious giveaways that plague the American tax system, while raising some money that can go to providing the critical services upon which many Americans depend.

How to Know When to Tax and When to Spend

(Photo: Jim Larson / Flickr)Let's talk economics 101. Capitalism has cycles of bust and boom. They're normal, and they're called the "business cycle." From the George Washington administration to the Ronald Reagan administration, when the business cyc...

Private Jet as Security Write-Off? 10 Most Insane Tax Loopholes

For corporations and the 1 percent, tax season offers plenty of ways to dodge Uncle Sam.

Photo Credit: Shutterstock.com

March 1, 2013  |  

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With the national tax filing deadline fast approaching, Americans are once again plopping down with pen, paper and potentially Turbotax to determine just how much they owe their state and federal governments. But while the popular refrain posits that nothing in life is certain but death and taxes, for many corporations and wealthy individuals, having to pay a tax bill is anything but a certainty.

Due to the proliferation of loopholes, deductions, credits, and the growing use of offshore tax evasion, many rich Americans and corporations are able to dodge the bulk of, if not all, their taxes. Between 2008 and 2011, 26 major American corporations paid nothing in federal corporate income tax, despite making $205 billion in pretax profits. In 2011 (the last year in which data is available), corporations paid just a 12.1 percent effective tax rate, the lowest in four decades. Many wealthy individuals, meanwhile, are able to drive their tax rates down below the rate paid by middle-class families. Some drive it all the way down to zero.

There are certainly large, systemic reasons for these disparities. But part of the problem is that the rich and the biggest companies have access to a slew of tax breaks from which the average household or small business derives very little benefit. Here are 10 of the most ridiculous.

  1. CEO “private security.” A “ common corporate tax trick,” according to the New York Times, is corporate boards paying for private jets and other perks for their CEOs under the guise of security. As Steven Davidoff reported, typically CEOs would have to pay taxes on these benefits, but if the benefit is classified as necessary for security purposes, “the chief executive will pay a reduced tax bill or sometimes no tax at all.”
  1. Florida cow scam. In Florida, wealthy developers, lawmakers and even some corporations game the tax code by placing cows on their land for a limited amount of time each year, thereby qualifying for agricultural tax breaks. Sen. Ben Nelson (D-FL) has benefited from this absurd loophole for years, as has Disney World. But Florida isn’t the only offender. From rock stars in New Jersey to movie stars in Colorado, tax breaks meant for farmers get gamed by the most privileged, using everything from sheep to beehives.
  1. Facebook stock options. The social media giant Facebook made more than $1 billion in profits last year, but paid no corporate tax thanks to a huge write-off after its initial public offering. In fact, the company received a refund of $451 million. As Citizens for Tax Justice, explained, “Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options.” This loophole will also allow Facebook to avoid more than $2 billion in taxes in future years. LinkedIn used the same gimmick to pay no federal taxes for the last three years.
  1. Bluegrass boondoggle. This tax break, created by Senate Minority Leader Mitch McConnell (R-Kentucky) in 2008, gives wealthy horse owners a break worth $126 million over 10 years  by allowing faster depreciation (quicker tax write-offs) of race horses. McConnell has defended the break by claiming it helps Kentucky’s “ farm economy.”
  1. Sheryl Crow loophole. Low tax rates on investment income are one of the main reasons the wealthy are able to pay lower taxes than those in the middle-class (and are also a prime driver of income inequality). Lawmakers from America’s heartland felt it was necessary to let super-wealthy musicians get in on the action, and so “passed a law allowing songwriters to avoid income taxes and sell their publishing catalogs at capital gains rates.” As San Francisco Weekly’s Chris Parker noted, “Three years later, Sheryl Crow sold her publishing rights to one of Australia's largest banks for nearly $10 million. Her estimated savings courtesy of this congressional giveaway: $2 million.”
  1. NASCAR tax break. Thanks to a provision in the 2008 bank bailout, owners of NASCAR tracks are able to write off the costs of their facilities over seven years, rather than “ over the 39 years that the government estimates it will take for the tracks to depreciate.” This particular loophole costs the government $40 million per year, but Congress reauthorizes it over and over again.
  1. John Edwards/Newt Gingrich loophole. Both the former presidential candidate and the former Speaker of the House have taken advantage of a provision allowing them to dodge payroll taxes. By forming “S corporations,” Edwards and Gingrich are able to classify the money they receive from various ventures as “business profits,” rather than payments for services rendered, which exempts that money from the payroll tax. This loophole is regularly abused by lawyers, doctors and accountants, who can count the work they do every day as part of operating a “small business” that consists only of themselves. As tax expert Seth Hanlon noted, “ Regular wage-earners can’t do this, and neither can the owners of other kinds of small businesses.”
  1. Tax breaks for vacation homes and yachts. The mortgage interest deduction, which is supposed to boost homeownership, can be used on second homes, or even yachts, so long as they are large enough to accommodate a bathroom, along with a cooking and sleeping space. Limiting the deduction to primary residences would raise $1 billion per year in revenue.
  1. “Double Irish” and “Dutch Sandwich.” Many companies, from Google to Amazon to Starbucks, use offshore tax havens to drive down their corporate tax rates, sometimes down into the single digits. Some of the inventive strategies they’ve used include routing profits through Ireland, the Netherlands, Bermuda, or Luxembourg, using tax tricks with cheeky names like the “Double Irish” and the “Dutch sandwich.” European countries have recently attempted to crack down on some of the more flagrant abuses.
  1. Large SUV’s. We’ve already discussed the yacht tax break, but going out and purchasing a large SUV will get a member of the 1 percent another write-off. As Bloomberg News noted, the tax code’s restrictions on write-offs for luxury vehicles don’t apply to those “rated at 6,000 pounds unloaded gross vehicle weight or more.” This means that “purchasing a large SUV often provides faster writeoffs than similar but smaller vehicles.”

Closing these loopholes would certainly not fix the tax code’s much larger problems or put a huge dent in the federal deficit. But they would at least get rid of some of the more egregious giveaways that plague the American tax system, while raising some money that can go to providing the critical services upon which many Americans depend.

Virtually ALL of the Big Banks’ Profits Come from Taxpayer Bailouts and Subsidies

bankers

The government has propped up the big banks for years through massive, never-ending bailouts and subsidies.

Bloomberg noted last year that 77% of JP Morgan’s net income comes from government subsidies.

Bloomberg reported yesterday:

What if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?

***

Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. In one relatively thorough effort, two researchers — Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz — put the number at about 0.8 percentage point. The discount applies to all their liabilities, including bonds and customer deposits.

Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of$83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.

The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. – – account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry — with almost $9 trillion in assets, more than half the size of the U.S. economy — would just about break even in the absence of corporate welfareIn large part, the profits they report are essentially transfers from taxpayers to their shareholders.

The money hasn’t just gone to the banks shareholders … It has also gone to line the pockets of bank management:

Indeed:

All of the monetary and economic policy of the last 3 years has helped the wealthiest and penalized everyone else. See thisthis and this.

***

Economist Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

Nobel economist Joseph Stiglitz said in 2009 that Geithner’s toxic asset plan “amounts to robbery of the American people”.

And economist Dean Baker said in 2009 that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”.

We’ve noted for years that the big banks – including CitiWellsBank of America and the rest – areactually insolvent.

Breaking up the big banks would stabilize the economy … and dramatically increase Main Street’s access to credit.

But the government has chosen the banks over the little guy … dooming both:

The big banks were all insolvent during the 1980s.

And they all became insolvent again in 2008. See this and this.

The bailouts were certainly rammed down our throats under false pretenses.

But here’s the more important point. Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not. They were insolvent.

Tim Geithner falsely stated that the banks passed some time of an objective stress test but they did not. They were insolvent.

Both the creditors and the debtors were mortally wounded by the 2008 financial crisis. The big banks wouldn’t have survived without trillions in handouts, guarantees, loans, idiot-proof profits courtesy of the government.

The little guy hasn’t been helped since 2008. He has been left to suffer with his life-threatening wounds. See thisthis and this.

So the government chose sides. The creditors were wiped out, just like a lot of Main Street was wiped out. In one sense, the government chose who would live (the giant banks and other bailed out and favored companies) and who would die (the other 99%).

But in fact, the big banks were no longer creditors after the 2008 crash. Specifically, the big banks which held the mortgages and the loans were wiped out.

The government moved the arms and legs of the big banks to pretend they were still alive … and have been doing so ever since. But they were no longer going concerns after they went bust.

The government pumped blood back in these dead banks and turned them into zombies. They will never come back to life in a real sense … they are still zombies, 3 years later.

Many of the world’s leading economists and financial experts say that by choosing creditors over debtors, the government is dooming the economy. See this and this.

The big zombie banks can never come back to life, and – by trying to save them – the government is bleeding out the little guy.

By choosing the big banks over the little guy, the government is dooming both.

Remember, the Federal Reserve has paid banks high interest rates to stash money (their “excess reserves”) with the Fed for the express purpose of preventing loans to Main Street.

And the Fed plans to throw more money at the banks when the Federal Reserve starts to tighten.  As FTreports:

US Federal Reserve officials fear a backlash from paying billions of dollars tocommercial banks when the time comes to raise interest rates.

The growth of the Fed’s balance sheet means it could pay $50bn-$75bn a year in interest on bank reserves at the same time as it makes losses and has to stop sending money to the Treasury.

***

In an interview with the Financial Times, James Bullard, president of the St Louis Fed, said: “If you think of the profitability of the biggest banks, if you’re going to talk about paying them something of the order of $50bn – well that’s more than the entire profits of the largest banks.”

***

At the moment it only pays 0.25 per cent interest on those reserves. But according to its exit strategy, published in June 2011, the Fed plans to raise interest rates before it sells assets. Interest of 2 per cent on $2.5tn of reserves would run to $50bn a year.

***

The eventual tightening could lead to substantial amounts being transferred to commercial banks from the Fed, given the amounts of cash they have parked there. Wells Fargo has $97.1bn sitting at the Fed, the largest amount of any bank, ahead of JPMorgan Chase at $88.6bn and Goldman Sachs at $58.7bn, according to an FT analysis of SNL data.

Foreign banks also have a striking amount of cash at the Fed, potentially aggravating the Fed’s PR problem. Analysts at Stone & McCarthy noted recently that there had been a steep increase in foreign banks placing reserves at the Fed and suggested that “US banks may have distaste for the opportunistic arbitrage”, between lower market rates and the interest on reserves, whereas overseas institutions “might not feel encumbered in the same fashion”.

Canada’s TD Bank, Germany’s Deutsche Bank and Switzerland’s UBS each have more than $12bn at the Fed.

And while this post focuses on bailouts and subsidies to big American banks,  a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.

MPs: Tax Dodgers ‘Should Be Named And Shamed’

Tax dodgers should be "named and shamed" to stop celebrities using legal loopholes to cut the amount they pay to the Treasury.

The Public Accounts Committee says promoters of tax avoidance schemes are "running rings" around the taxman by taking advantage of the time it takes HM Revenue and Customs (HMRC) to shut them down.

It wants promoters and those who use their schemes to be listed and called on HMRC to be "more robust in its approach".

Margaret Hodge, who chairs the Public Accounts Committee, said: "We have seen how public anger and consumer pressure can influence large companies, such as Starbucks, to behave more responsibly.

"HMRC should publicly name and shame those who sell or use tax avoidance schemes in order to discourage such activity.

"With at least £5 billion lost to tax avoidance each year, HMRC has got to get much more robust in its approach."

Mrs Hodge highlighted the case of comedian Jimmy Carr, who last year admitted making a "terrible error of judgment" after using a complex avoidance scheme to reduce his tax bill.

The K2 scheme he used enabled its members to pay income tax rates as low as 1%.

"Promoters of 'boutique' tax avoidance schemes like the one brought to our attention by the case of Jimmy Carr, are running rings around HMRC," Mrs Hodge said.

"They create schemes which exploit loopholes in legislation or abuse available tax reliefs such as those intended to encourage investment in British films, and then sign up as many clients as possible, knowing that it will take time for HMRC to change the law and shut the scheme down.

"Their clients can then take advantage of this window of opportunity to make a lot of money at the expense of the UK taxpayer, while the promoter simply moves on to a new scheme and repeats the process.

"It is a game of cat and mouse and HMRC is losing."

According to the Public Accounts Committee, some tax avoidance schemes have been shut down because of tax rules that require promoters to notify HMRC of new tactics.

However, it warned officials do not know how many promoters are ignoring the requirement.

Labour Tax Plans A ‘Con’, Says Osborne

Chancellor George Osborne dismissed Labour's tax plans as a "con" which would see state inspectors assessing people's homes.

Labour leader Ed Miliband last week announced proposals to bring back the 10p lower rate of income tax which was scrapped by Gordon Brown, funded by a levy on homes worth more than £2 million.

george osborne

George Osborne claimed Labour didn't 'understand aspiration' in the UK

But Osborne said the coalition government's policy of raising the income tax threshold was a fairer way of helping the low paid and claimed Labour's "mansion tax" would end up being extended to more modest properties.

He told ITV's The Agenda: "It's very costly to implement. It means you have to send inspectors round the country valuing all the homes - not just the homes worth over £2m but those worth less."

The chancellor said there were not enough "mansions" to cover the cost of a tax cut for millions of people.

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"So either it's a tax con and the money comes from somewhere else or it's soon a homes tax and they say it's a mansion tax before the election and then very quickly (it) becomes a homes tax on many people who are not living in mansions at all."

Osborne claimed that "the inspectors get their foot in the door" and then "after the election suddenly it's everyone's homes that are potentially a target and Labour will have created a new tax".

The chancellor added: "It's just another thing that proves that I don't think they understand aspiration in this country."

Osborne acknowledged that the rich should be expected to pay more, but fairness in the tax system also meant allowing working people to "get on".

He said: "In a time like this you expect the rich to pay more and actually we are forcing the rich to pay more and indeed cracking down on those who don't pay their taxes but fairness is also about having a system where people who work hard and get on can get on in our society, fairness is about a welfare system that doesn't pay for people to stay at home.

"Fairness is quite a broad concept and people feel the system's unfair but I don't think this kind of tax con is a solution to that."

Deputy prime minister Nick Clegg, whose Liberal Democrats back a mansion tax, also rejected Miliband's proposals as a "pale imitation" of his own party's policies.

Miliband hopes to split the coalition with a Commons vote forcing the Lib Dems to choose between backing a mansion tax or maintaining unity with the Tories.

But in a keynote speech in the City of London Clegg said: "All we've got from Ed Miliband last week is some blatant plagiarism of Liberal Democrat ideas and still no remorse for the biggest economic meltdown in modern times.

"Labour cannot be taken seriously until its leaders apologise for the economic mess they created, apologise for the unfair tax system they left behind, and apologise for letting tax avoidance rip."

Labour vice chair Michael Dugher said: "Nick Clegg is a poster boy for a politician who breaks his promises and fails to deliver. Clegg and the Lib Dems will be judged for what they do, not what they say - and they are complicit in the Tory record of failure.

"The Lib Dems are cutting taxes for millionaires while millions of families are asked to pay more, seeing their living standards decline, wages failing to keep pace with inflation and cuts to their tax credits.

"Labour will vote in Parliament for a mansion tax. In government Labour wants to use this to pay for a reinstated 10p tax rate for low and middle earners.

"Nobody will take a word Nick Clegg says seriously as long as Lib Dems continue back this Tory-led government with all its unfairness and failing economic policies."

Shadow Treasury financial secretary Chris Leslie said: "It's laughable for George Osborne to claim his policies are fair when he's giving a huge tax cut to millionaires while forcing millions on middle and low incomes to pay more.

"Labour wants action now to kick-start our flatlining economy and help people struggling with the rising cost of living.

"George Osborne should back Labour's plan for a new lower 10p rate of tax paid for by a mansion tax on homes worth over £2m. This would be fair, help 25m working people on middle and low incomes and boost spending power in the economy."

Barrasso: Tax Increases Are Off the Table to Prevent Sequester

It seems Republicans are ready to die on their sword of protecting tax cuts for the rich and are going to do their best to blame President Obama for their unwillingness to negotiate on anything in good faith. They've been wanting to take a pound of flesh from the working class by slashing our social safety nets and it looks like they might use this sequester to finally get their way: GOP Eager For The Sequester To Go Into Effect So They Can Blame Obama For Its Devastating Consequences:

With the sequester deadline looming just two weeks away, Republicans have adopted the public posture of cheerleading for the anticipated spending reductions to social programs, while preparing to blame President Obama for their devastating impact on middle class Americans and national security.

Republicans have yet to offer a proposal that would offset the cuts in the 113th Congress and have categorically rejected the Senate’s balanced approach of higher revenues and spending cuts. Instead they’re sitting on their hands until the March 1 deadline, informing Obama that they will not act to head off the automatic reductions. [...]

Pressed by Crowley on the consequences of the across-the-board cuts, Barrasso initially dismissed their impact before blaming Obama for any deleterious effects. “I believe the president has a lot of authority that he can decide how this works, and, yeah, he can make it very uncomfortable, which i think would be a mistake on the part of the president, but when you take a look at the total dollars there are better ways to do this, but the cuts are going to occur,” he said.

Here's more from them on the damage the cuts would do: How The Sequester’s Budget Cuts Will Devastate Already-Battered Programs:

Federal spending is scheduled to reach historic lows thanks to the Budget Control Act, which placed caps on spending as part of the deal to raise the debt ceiling in the summer of 2011. Non-defense spending is already 14 percent lower than it has been at any time in the last half-century, and it could go even lower if the so-called “sequester,” a series of automatic budget cuts that will begin to take effect at the beginning of March, is allowed to occur.

The drop in domestic spending has already devastated many programs on which Americans depend. But on March 1, those cuts will get even deeper when the first $85 billion of sequester cuts take effect.

That will have a substantial impact on food safety, education, law enforcement, and safety net programs, according to estimates from Democrats on the House Appropriations Committee. And if the sequester is left in place for the full year, it will cut $1.5 trillion and those effects will only get worse: Read on...

Here's a reminder from Greg Sargent on the right's decision to use the sequester as "leverage" against President Obama: We all agree that spending cuts hurt the economy. Right? Right.:

Thrush very well be right that people won’t take the right message from the contraction. But in a rational world, what should be glaringly obvious is that the belief that this gives the party “leverage” highlights how absurdly incoherent the GOP message about the economy has become. (Read Steve Benen for all the other problems here.)

The economic contraction was driven largely by a steep drop in defense spending. As Ezra Klein details, this shows that “government is hurting the recovery” by “spending and investing too little.” As Ezra notes, “government spending and investment have, at all levels, been contractionary since 2010.”

Yet Republicans are responding to the news of the economic contraction by suggesting it validates their view that we need to further cut spending to help the economy. Hence their claimed “leverage” in the coming battle over the sequestered cuts, half of which is to defense spending. Republicans are actively using the sequester to force Dems to agree to avert it by offsetting it entirely with other deep cuts to social programs, and no new revenues from the wealthy. In response to the contraction, John Boehner tweeted out this hashtag:

#spendingistheproblem

In other words, the contraction confirms that we need more spending cuts.

You could chalk this up as a philosophical difference between the two parties — Republicans think spending cuts help the economy; Democrats think spending cuts hurt the economy — except for one small problem: Republicans themselves previously said the sequestered spending cuts threatened severe damage to the economy, back before they had decided to use it as leverage to get other cuts they wanted.

Back in September, when Republicans were eager to avert the sequester’s defense cuts, Eric Cantor warned that the sequestered cuts would make unemployment “soar,” adding that this risked “setting back any progress the economy has made.” The RNC predicted that sequestered cuts would drive Virginia’s economy “into a recession.” On the stump, Paul Ryan repeatedly said the cuts threatened massive job loss.

Now that Republicans are trying to use the threat of the sequester to extract other spending cuts, they have backed off this rhetoric, since it would reveal their case to be untenable: If the sequestered spending cuts threaten dire harm to the economy, wouldn’t replacing them with other cuts do the same? At the same time, they are now claiming that the economic contraction validates their push for these new cuts.

But Republicans are unambiguously on the record previously saying that the sequestered cuts do threaten to damage the economy — which is to say, they have admitted spending cuts will imperil the recovery. Which is to say that they have confirmed what yesterday’s news of the economic contraction reminds us. And so even if it’s true that the public won’t necessarily perceive the contraction in these terms, those of us who are writing about this should note clearly that the contraction does, in fact, validate Obama’s claim that we should not offset the sequester only with deep and damaging spending cuts. Republicans themselves have essentially confirmed it.

Here's transcript of Crowley and Barrasso's exchange on CNN:

CROWLEY: I don't know if you heard Senator Schumer at the top of the show. He was talking about sequestration.

He expressed the belief either on the eve of or sometime in the first two or three weeks of sequestration, if it goes into effect, those big across-the-board budget cuts, that Republicans indeed will come to the middle and agree to essentially what the Democrats have proposed, which is some cuts in farm programs as well as closing the loopholes for oil and gas companies, as well as taxing more -- the so-called Buffett tax, that no millionaire should pay less than 30 percent.

He said that your current position, Republicans' current position is untenable, given what sequestration will do.

Do you think that Republicans will go ahead and agree to some kind of cuts, and perhaps an increase in revenue for those making $1 million or more?

BARRASSO: No. Let me be very clear, and I would say this to the president as I say it to you.

These spending cuts are going to go through on March 1st. The -- their taxes are off the table. I've read the Democrat proposal that even Chuck Schumer said is just a chess piece, so the American people need to know tax cuts are off the table, and the Republican Party is not in any way going to trade spending cuts for a tax increase.

CROWLEY: So you have heard all these dire warnings, so you think Republicans are willing to walk off this particular cliff and say, no, we are not going to raise taxes in order to stop these across-the- board cuts, which will dig deeply into the Defense budget, among other things?

BARRASSO: I think there are much better ways to do these budget cuts, and I welcome that sort of discussion with the president, but the cuts are going to occur.

We're talking about 2.5 percent of what we spend this year, and this is just the first year of 10 years of cuts, so you have to be realistic about this. Families all across the country, Candy, have had their budgets cut by larger than that as a result of the economic downturn.

CROWLEY: So you don't believe all these dire warnings that, you know, it's going to -- it's going to hollow out the military, that it's going to interfere with getting onto planes, it's going stop food inspection, you don't believe any of that?

BARRASSO: Well, I believe the president has a lot of authority that he can decide where this -- how this works, and, yes, he can make it very uncomfortable, which I think would be a mistake on the part of the president. But when you take a look at the total dollars, there are better ways to do this, but the cuts are going to occur.

Cameron Denounces ‘Aggressive’ Tax Avoidence

David Cameron launched another broadside at "aggressive" tax avoidance today, on the first day of a trade visit to India. The prime minister said the Government wanted to keep business taxes low, but in return businesses must accept that they have to ...

Fat tax on sugary drinks urged by doctors

Britain's doctors want the cost of sugary drinks increased by a fifth and a ban on unhealthy food in hospitals, according to reports.

The Academy of Medical Royal Colleges says the moves would help to break the cycle of "generation after generation falling victim to obesity-related illnesses and death".

The Guardian cited a report by the academy which says doctors are "united" in seeing obesity as the greatest public health crisis facing the UK.

The academy said government efforts so far have been "piecemeal and disappointingly ineffective", given the scale of the problem.

Figures show that one in four adults in England is obese. Obesity can lead to heart disease, cancer and diabetes.

The academy's chairman, Professor Terence Stephenson, said the report did not claim to offer a full solution to obesity, but "it does say we need together to do more, starting right now, before the problem becomes worse and the NHS can no longer cope".

Its recommendations include an experimental 20% tax on sugary soft drinks for at least a year, to see what effect it has on sales.

The academy believes the potential £1bn annual tax yield could help fund an increase in weight management programmes.

Local councils are also urged to limit the number of fast food outlets near schools and leisure centres.

And NHS staff should routinely talk to overweight patients about their eating and exercise habits, the report adds.

Chef and anti-obesity campaigner Jamie Oliver welcomed the report as "the clearest warning sign yet that the medical profession is deeply concerned about obesity".

But the Food and Drink Federation , which represents produce manufacturers, said the report was a "damp squib" that added "little to an important debate".

The British Soft Drinks Association said its products accounted for just 2% of calories in an average diet and it is what people consume overall that needs to be addressed.

Its director-general Gavin Partington said: "Over the last 10 years, the consumption of soft drinks containing added sugar has fallen by 9% while the incidence of obesity has been increasing, and 61% of soft drinks now contain no added sugar.

"Soft drinks companies are also committing to further, voluntary action as part of the Government's Responsibility Deal Calorie Reduction Pledge.

"Don't forget that there already is a 20% tax on soft drinks, 10p out of every 60p can of drink already goes to the Government thanks to VAT.

"Putting up taxes even further will put pressure on people's purses at a time when they can ill afford it," he added.

Will ‘Bedroom Tax’ Punish Pensioners’?

Some pensioners with spare rooms will be hit by reductions in housing benefit under what critics dub the Government's "bedroom tax", the Department of Work and Pensions confirmed. Existing claimants in homes where someone of working age also lives hav...

Tax On Holiday Homes, Jewellery, Paintings

Owners of holiday homes and rental properties would be drawn into paying a "mansion tax" under Liberal Democrat proposals to extend the policy beyond £2 million main residences.

An internal policy consultation has concluded there "may be merit" in imposing the 1% levy instead on anyone with a land and property portfolio worth above the same threshold.

The document, to be debated by activists at the party's spring conference next month, includes a number of radical options, including a French-style wealth tax on assets such as jewellery and paintings.

mansion

Holiday homes could be included in the £2m threshold for mansion tax

The proposals emerged as Labour - which this week backed the idea of a mansion tax to fund the return of a 10p income tax rate - challenged the Lib Dems to support it in a Commons vote.

The party played down the prospect of it adopting the idea of a "net wealth tax" - which would involve tax inspectors visiting people's homes to verify the value of declared items such as jewellery and paintings.

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Extending the mansion tax was reported to be favoured by some within the party as a vote-winner in the South West, where there is anger over second-home buyers forcing up prices.

But senior figures are also believed to have concerns that the move - in a package drawn up as part of preparations for the 2015 general election manifesto - could see some people taxed twice.

Landlords already pay tax on any rent they receive.

MP Tessa Munt, one of those who helped draw up the consultation paper, told the Mail on Sunday it was an "interesting idea" and would be put to activists in Brighton.

But the document says it would be "generally quite complex to administer" and party Treasury spokesman Stephen Williams said he expected it to be "firmly spiked" by activists.

A Lib Dem spokesman said: This consultation is part of the process of asking for ideas on how to ensure a fairer tax system.

"It is up to Lib Dem party members as to whether these eventually become party policy."

Osborne In Calls For International Action Against Tax Avoidance

George Osborne has renewed his call for international action in tackling tax avoidance and the so-called "profit shifting" by multinational giants as he unveils the next steps in his fight to reform global tax rules.

The need to overhaul tax laws, including the controversial transfer pricing rules that were written almost 100 years ago, will be highlighted to finance ministers at the G20 in Moscow in a report by the Organisation for Economic Co-operation and Development (OECD).

osborne

George Osborne to is to unveil the next steps in the fight against global tax abuse

It comes as companies such as Google, Facebook, Amazon and Starbucks faced a backlash after paying only minimal tax on large UK revenues.

The revelations in particular have hurt Starbucks, with many boycotting their shops and buying their hot drinks elsewhere.

In December, Starbucks said it will pay "somewhere in the range of £10 million" in UK corporation tax for each of the next two years.

The US coffee firm - valued at £25 billion - has generated more than £3 billion of sales in the UK since 1998 but it emerged in October it has paid less than 1% in corporation tax.

starbucks

Starbucks has said they will pay somewhere in the range of £10m each year

In the wake of the revelations, banking giant Barclays also announced it was to close its tax avoidance unit, which gave advice to large companies on how to avoid paying out tax.

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The chancellor will announce that Britain will chair a new transfer pricing group which will look at how to reform the system which allows profits to be diverted to parent companies or to lower tax jurisdictions, via royalty and service payments.

It is one of three groups set up by the OECD to look at the tax issues which will help the group prepare a "plan of action" to be put forward to the G20 in July.

Germany and the US and France also lead the other two groups, which will include looking at how to determine tax jurisdiction, particularly in the context of e-trading.

Osborne said: "Britain has cut its corporation tax rate by more than any other country in the G20 over the past two years, a message to the world that we are open for business that has seen companies return to Britain, and helping to create and secure thousands of jobs and millions in investment.

"But our commitment to the most competitive corporate tax system goes hand in hand with our call for strong international standards to make sure that global companies, like anyone else, pay the taxes they owe.

"That's why Britain, with Germany and France, asked the OECD to scrutinise the international rules, and we will together welcome their report to the G20 this weekend. The report shows this is an international issue that requires international action.

"It shows the global economy has changed massively over the last decade, but global tax rules have stood still for almost a century, and Britain will lead the international effort to bring them into the twenty first century."

clegg

Both Clegg and Osborne have called for global reform

Osborne wants to use Britain's presidency of the G8 in 2013 to push international progress on the reform of international tax rules, which were first developed by the League of Nations in the mid-1920s and remain essentially unchanged.

Nick Clegg also used a G8 trip to Africa to call for global action against tax-dodging firms earlier this week arguing that tackling abuses would bolster public support for increasing foreign aid.

He said: "Many of the difficulties that governments face in the developing world are becoming increasingly common in the developed world.

"For too long, the developed world ignored the way in which tax revenues, which rightfully belonged to developing countries, disappeared as people exploited different tax regimes, and made a mockery of governments in the developing world. We must work together to overcome it."

The Great Tax-Cut Experiment

Since the late 1970s, during the Carter Administration, conservative economists have been warning that high taxes retard economic growth by discouraging productive work and investment. These arguments have resonated with politicians, who have steadily cut income taxes, especially those borne by the richest Americans. The highest marginal tax rate, which stood at 70% by the end of the 1970s, was cut to less than 30% in less than a decade. (The marginal rate for a person is the one applied to his or her last dollar of income. A marginal rate that applies to, say, the bracket above $250,000, then, is paid only on that portion of income. The portion of a person’s income below that threshold is taxed at the lower rates applying to lower tax brackets.) Despite increases in the early 1990s, the top marginal rate remained below 40%, when it was cut further during the administration of George W. Bush. These dramatic cuts in tax rates, however, have not led to an acceleration in economic growth, investment, or productivity.

Falling Tax Rates for the Richest: The federal government has been cutting taxes on the richest Americans since the end of World War II. The average tax paid by the richest taxpayers, as a percentage of income, is typically less than the top marginal rate. Some of their income (the portion below the threshold for the top marginal rate, any capital-gains income, etc.) is taxed at lower rates. Some is not subject to federal income tax because of deductions for state and local taxes, health-care costs, and other expenses. The decline in the average tax rate for the richest, however, does follow the cuts in the top marginal income-tax rate. (See Figure 1.)

Figure 1: Federal Taxes on Richest Americans,Marginal and Average Rates, 1945-2010

Comparisons with Other Countries: Americans pay a smaller proportion of total income in taxes than do people in any other advanced capitalist economy. As recently as the late 1960s, taxes accounted for as high a share of national income in the United States as in Western European countries. After decades of tax cuts, however, the United States now stands out for its low taxes and small government sector. (See Figure 2.)

Figure 2: Tax Revenue as a Percentage of GDP, 2008

Higher Growth When Taxes Are Higher: On average, the economy has grown faster during presidential administrations with higher tax rates on the richest Americans. Growth was unusually slow during George W. Bush’s two terms (Bush II) and during Obama’s first term, when the Bush tax cuts remained in effect. On average, every 10 percentage-point rise in the average tax rate on the richest has been associated with an increase in annual GDP growth of almost one percentage point. (See Figure 3.)

Figure 3: Average Tax Rates on Richest and Real GDP Growth, by President, 1947-2010

Declining Tax Rates Haven’t Stimulated Investment: Cutting taxes on the richest Americans has not led them to invest more in plant and equipment. Over the past 50 years, as tax rates have declined, there has been no increase in investment spending as a percentage of GDP. (The flat trend line shows that changes in the highest marginal income-tax rate have not affected investment much, one way or the other.) Instead, the investment share of the economy has been determined by other factors, such as aggregate demand, rather than tax policy. (See Figure 4.)

Figure 4: Top Marginal Income-Tax Rateand Investment Share of GDP, 1963-2011

Lower Taxes, Slower GDP Growth: Despite lower and declining tax rates, especially on the rich, the United States has had slower productivity growth over the last several decades than other advanced economies. Overall, lower taxes are associated with slower growth in GDP per hour worked. A 10 percentage point increase in taxes as a share of GDP is associated with an increase in the productivity growth rate of 0.2 percentage points. (See Figure 5.)

Figure 5: Tax Share of GDP and Productivity Growth

Tax the world: EU’s controversial ‘Tobin’ tax might take effect in 2014

European Commission President Jose Manuel Barroso gestures during a press conference with EU Trade commissioner on a major transatlantic trade initiative on February 13, 2013 at EU Headquarters in Brussels.(AFP Photo / John Thys)

European Commission President Jose Manuel Barroso gestures during a press conference with EU Trade commissioner on a major transatlantic trade initiative on February 13, 2013 at EU Headquarters in Brussels.(AFP Photo / John Thys)

The controversial ‘Tobin’ tax on financial transactions which could raise over $40 billion a year has been agreed upon by 11 EU member states.

­The European Commission agreed a proposal for a financial transaction tax (FTT) to be introduced in eleven EU member states in 2014 despite wide spread opposition. The countries that supported the initiative are France, Germany, Belgium, Estonia, Greece, Spain, Italy, Austria, Portugal, Slovenia and Slovakia. Together they make up roughly two-thirds of the EU's GDP.

Now the law needs to be unanimously ratified by the governments of the 11 members of the FTT zone.

According to the Commission, the main aim of the tax is to raise public funds and encourage more responsible trading by financial institutions. The tax will affect all financial transactions carried out by financial institutions on all financial instruments and markets, except transactions involving the European Central Bank (ECB), the European Financial Stability Facility (EFSF), and the European Stability Mechanism (ESM).

“On the table is an unquestionably fair and technically sound tax, which will strengthen our single market and temper irresponsible trading,” said Algirdas Semeta, EU Commissioner responsible for taxation.

According to the European Commission the FTT “will not apply to day-to-day financial activities of citizens and businesses,” to protect “the real economy.” Also exempt from the tax will be “traditional investment banking activities in the context of the raising of capital or to financial transactions carried out as part-restructuring operations.”

The tax is to levy 0.1 percent on stock and bond trades and 0.01 percent on derivatives transactions involving one financial institution with its headquarters in the FTT zone, or trading on behalf of a client based there.

The tax also includes tough anti-avoidance measures that would apply to trades executed outside Europe when no eurozone entity is buying or selling the product, which is causing the most controversy.

The long arm of the levy has raised the concerns not only in Britain, Luxembourg and other EU states, but also as far away as the US. Wall Street and the US administration joined others warning that the tax overreaches borders, flouts international treaties and “breaks the bonds that bind our global economy.”

A US Treasury spokesperson said the tax would “harm US investors in the US and elsewhere who have purchased affected securities.”
The jurisdiction issues raise concern among big financial groups about double- and multiple taxation and trade protectionism.

These novel and unilateral theories of tax jurisdiction are both unprecedented and inconsistent with existing norms of international tax law and long-standing treaty commitments,” the groups argue in a letter to Algirdas Semeta, the EU tax commissioner. “There is a high risk that their adoption could lead to -double and multiple taxation and a deterioration of international tax co-operation and trade -protectionism.”

EU officials argue the tax will not place additional burdens on ordinary citizens, although many are concerned the tax “will hit savers and pensions.” Jorge Morley-Smith, head of tax at Britain’s Investment Management Association, told Reuters.

“The impact could be devastating in reducing activity … and could erode up to six out of every 30 years’ worth of contributions to an actively managed retirement savings plan,” he said. Further, stock lending could become uneconomical because the average fee was less than the planned tax.

According to Insurance Europe, which represents the bulk of the bloc’s insurance sector, “the tax would harm savings products at a time when people should be encouraged to save for retirement,” Reuters reported.

Anna Bodrova, analyst from Investcafe, believes there should not be any rush in introducing the ‘Tobin’ tax in its current form.

In its present shape the ‘Tobin’ initiative might be harmful for capital markets. For example, introducing a tax on stocks will increase the cost of capital raising for companies, and the situation with bonds will be even more complex,” Bodrova told RT.

“This measure is quite ambiguous, but it can bring good results if it is implemented step by step, in a course of 2-3 years, so that to avoid provoke sharp market reaction,” Bodrova added.

Alexandria Carr, a former UK Treasury lawyer now at law firm Mayer Brown, told CNN that those 11 countries moving ahead under so-called “enhanced co-operation” are legally bound to respect the rights of member states that do not participate.

"If [the] proposal has the expected extraterritorial reach, it would appear to ride roughshod over the competences of the 16 member states who have opted out," she said.

“This tax is actually quite draconian and bad for the eurozone. It will drive a coach and horses through the single market and force banks to relocate outside the FTT zone,” Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants (ACCA) told the BBC. 

The ‘Tobin’ tax is named after the US economist James Tobin who proposed a global tax on currency trades in the 1970s. It was proposed by the EC in September 2011 and last January it was adopted by majority of EU’s Council of Finance Ministers in Brussels. However, as 27 member states could not agree, 11 eurozone countries applied to go it alone under “enhanced co-operation” rules.

Six UK water firms paying zero tax

British water companies are evading millions of pounds in tax by the fraudulent method of getting loans from their owners abroad and listing themselves as under debt.

Following a public outcry over billions of pounds of corporate tax avoidance in Britain, involving names such as Google and Starbucks, research group Corporate Watch said that six British water companies have taken out high-interest loans from their owners through the Channel Islands stock exchange so that they could dodge tax using a legal loophole that reduces taxable profits in proportion to interest payments abroad.

That means their owners get fully untaxed profits from Britain by pretending that their subsidiaries in the country are under debt.

According to Corporate Watch, the six water companies of Northumbria, Yorkshire, Anglia, Thames, South Staffs and Sutton and East Surrey have got £3.4 billion in loans from overseas.

The group said the Northumbrian case is the “most brazen” as it has promised an 11 percent interest on a loan of over £1 billion from a Hong Kong-based group that belongs to Li Ka-shing, the world's ninth-richest person.

The situation also directly affects British tax-payers who should foot the bill for the high-interest loans taken out by water companies.

Corporate Watch said water companies could secure loans with much lower interests if they were government-run adding the current situation is costing British consumers an additional £2 billion a year.

AMR/HE

Congress Can Avert Dangerous Automatic Cuts and Protect Investments in Jobs and Education by...

WASHINGTON - February 14 - Unless Congress acts, on March 1 automatic and indiscriminate spending cuts will hit key programs, costing our economy more than 1 million jobs and cutting essential services for millions of low- and middle-income families. But a new infographic released today by the Center for American Progress explains how Congress can act to avert these dangerous cuts and protect investments. The infographic, “Tax Loopholes for Corporate Jets or Investments in Jobs and Education?”, illustrates how through a balanced approach to deficit reduction—an approach that eliminates wasteful tax loopholes that only benefit a wealthy few—Congress can protect critical investments that create jobs and lift up the most vulnerable Americans.

“Congress has a choice to make. They can ensure that 600,000 women and children don’t go hungry, that 125,000 American families don’t lose their homes, and that 7,400 teachers and staff who support students with disabilities don’t lose their jobs, or they can protect an irresponsible tax loophole,” said Melissa Boteach, Director of CAP’s Poverty to Prosperity program. “This choice should be easy.”

Just by eliminating a loophole that gives special treatment to corporate jets, for example—at a cost to taxpayers of $3.2 billion over 10 years—Congress could avert cuts that would cost thousands of jobs, hurt millions of disadvantaged students, and force hundreds of thousands of vulnerable families to lose critical nutrition and housing supports this year. Here’s the math:

Congress has some key choices to make in the coming weeks. If they don’t close the loophole for corporate jets:

  • 600,000 women and children will lose the critical nutrition assistance they need
  • 125,000 families will lose their permanent housing
  • More than 100,000 formerly homeless people, including veterans, will be at risk to go back on the streets
  • Students with disabilities will lose critical instruction and support from more than 7,400 teachers and staff
  • 1 million disadvantaged students will lose critical education funding and 10,500 teachers and staff will be at risk for losing their jobs
  • 70,000 poor children will lose their Head Start and Early Head Start slots as the jobs of 14,000 teachers and other staff are put at risk

To speak to CAP experts about this issue, please contact Madeline Meth mmeth@americanprogress.org or 202.741.6277.

Related resources:

  • Follow Half in Ten’s #TalkPoverty campaign here.

The Center for American Progress is a think tank dedicated to improving the lives of Americans through ideas and action. We combine bold policy ideas with a modern communications platform to help shape the national debate, expose the hollowness of conservative governing philosophy, and challenge the media to cover the issues that truly matter.

Congress Can Avert Dangerous Automatic Cuts and Protect Investments in Jobs and Education by...

WASHINGTON - February 14 - Unless Congress acts, on March 1 automatic and indiscriminate spending cuts will hit key programs, costing our economy more than 1 million jobs and cutting essential services for millions of low- and middle-income families. But a new infographic released today by the Center for American Progress explains how Congress can act to avert these dangerous cuts and protect investments. The infographic, “Tax Loopholes for Corporate Jets or Investments in Jobs and Education?”, illustrates how through a balanced approach to deficit reduction—an approach that eliminates wasteful tax loopholes that only benefit a wealthy few—Congress can protect critical investments that create jobs and lift up the most vulnerable Americans.

“Congress has a choice to make. They can ensure that 600,000 women and children don’t go hungry, that 125,000 American families don’t lose their homes, and that 7,400 teachers and staff who support students with disabilities don’t lose their jobs, or they can protect an irresponsible tax loophole,” said Melissa Boteach, Director of CAP’s Poverty to Prosperity program. “This choice should be easy.”

Just by eliminating a loophole that gives special treatment to corporate jets, for example—at a cost to taxpayers of $3.2 billion over 10 years—Congress could avert cuts that would cost thousands of jobs, hurt millions of disadvantaged students, and force hundreds of thousands of vulnerable families to lose critical nutrition and housing supports this year. Here’s the math:

Congress has some key choices to make in the coming weeks. If they don’t close the loophole for corporate jets:

  • 600,000 women and children will lose the critical nutrition assistance they need
  • 125,000 families will lose their permanent housing
  • More than 100,000 formerly homeless people, including veterans, will be at risk to go back on the streets
  • Students with disabilities will lose critical instruction and support from more than 7,400 teachers and staff
  • 1 million disadvantaged students will lose critical education funding and 10,500 teachers and staff will be at risk for losing their jobs
  • 70,000 poor children will lose their Head Start and Early Head Start slots as the jobs of 14,000 teachers and other staff are put at risk

To speak to CAP experts about this issue, please contact Madeline Meth mmeth@americanprogress.org or 202.741.6277.

Related resources:

  • Follow Half in Ten’s #TalkPoverty campaign here.

The Center for American Progress is a think tank dedicated to improving the lives of Americans through ideas and action. We combine bold policy ideas with a modern communications platform to help shape the national debate, expose the hollowness of conservative governing philosophy, and challenge the media to cover the issues that truly matter.

Ed Miliband’s 10p Tax Plan Attacked As ‘PR Wheeze’ By Tory Who Favours Move

Ed Miliband’s dramatic decision to outflank David Cameron on the economy by calling for the 10p rate of income tax to be brought back had been dismissed as a "PR wheeze" by the Conservative MP who has campaigned in favour of the move.

On Thursday the Labour leader said reintroducing the band - controversially scrapped by Gordon Brown - would make society fairer. In a keynote speech, he said the move could be funded by a new "mansion tax" on homes worth more than £2m.

Tory backbenchers, led by Harlow MP Robert Halfon, have been campaigning for the 10p rate to be brought back by George Osborne in next month's Budget.

But writing on The Huffington Post UK, Halfon said Miliband’s surprise announcement was "a half-hearted Damascus conversion" to the cause, suggesting it was made with one eye on the impending Eastleigh by-election.

"Only in 2008, HuffPost readers will remember, the Labour Leader said that abolishing the 10p rate of income tax for the poorest Brits was ‘fairer’, and he voted that way in Parliament," Halfon said.

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"What are voters to make of this? In my view, what the public want to know is this: is this just jam for the Eastleigh by-election or is this a substantive policy pledge?

Robert Halfon: Can We Trust Labour's Surprise 10p Announcement?

"Consider the record of the two main parties: Ed Miliband has whipped his MPs to vote against every single tax-cut for the poorest Brits that the Coalition has delivered; whether this is on council tax, fuel duty, or income tax.

"By contrast, Conservatives in government this April will cut income taxes for 25 million people. Two million will have been taken out of income tax altogether.

"And, the poorest who benefited from the 10p rate under Labour (until they scrapped it in 2008) now pay no income tax at all."

Halfon adds: "Today could have been a real policy announcement from Labour, rather than a PR wheeze written on the back of an envelope. As it stands, Labour’s suggestion would only mean an extra £34 a year for a family."

Labour's tax plan has been dismissed by David Cameron, who said it appeared as though it was not properly "costed".

"We'll discover over the course of the day all sorts of problems and issues with a policy that looks like it's been cobbled together overnight," he said.

Lib Dem Chief Secretary to the Treasury Danny Alexander said: "The two Eds are rather late to the party, wanting to cut taxes for those on low and middle incomes.

"After 13 years in government, the only action Ed Balls took was to raise the amount of tax those on low incomes paid by abolishing the 10p rate. It was the biggest tax mistake they ever made and it has taken them until now to realise their error.

Related on HuffPost:

Labour Plans Mansion Tax To Fund 10p Tax Rate

Ed Miliband has called for the 10p tax rate to be reintroduced, funded by a mansion tax on homes worth more than £2m.

In an audacious bid to outflank David Cameron, he claimed Labour would use next month's Budget to bring back the band controversially scrapped by Gordon Brown in 2007.

The measure, which if reinstated in full would cost an estimated £7bn, would be funded by a mansion tax on homes worth £2m or more, Mr Miliband explained.

The announcement was a surprise inclusion in a major speech on the economy in Bedford, which had been billed as featuring no significant new policy.

Workers would save £250 if the first £2,500 of taxable income was subject to a 10p rate instead of 20p, but Mr Miliband said his giveaway would depend how much a mansion tax raised.

He said: "A One Nation Labour Budget next month would lay the foundations for a recovery made by the many, not just a few at the top.

"Let me tell you about one crucial choice we would make, which is different from this Government. We would tax houses worth over £2m. And we would use the money to cut taxes for working people.

"We would put right a mistake made by Gordon Brown and the last Labour government. We would use the money raised by a mansion tax to reintroduce a lower 10p starting rate of tax, with the size of the band depending on the amount raised.

"This would benefit 25 million basic rate taxpayers - moving Labour on from the past and putting Labour where it should always have been - on the side of working people."

The Labour leader will be hoping that, in one swoop, he has stolen Mr Cameron's thunder and also appealed to the Lib Dems who champion a mansion tax.

The move is also a clear attempt to pile pressure on Chancellor George Osborne, who will deliver his Budget next month amid mounting concerns about the sluggish recovery.

And it will be seen as a clever tactical move as Mr Miliband tries to restore the public's trust in Labour on the economy because it is a clear rejection of his predecessor.

Tory MPs have recently been campaigning for the return of the 10p rate and the Prime Minister appeared to signal he was open to the idea at PMQs on Wednesday.

"We won't forget the abolition of the 10p tax rate," Mr Cameron said when Mr Miliband argued the coalition was doing little to help ordinary workers.

The coalition is already committed to raising the income tax threshold to £10,000 over this Parliament but the Treasury was also understood to be considering plans for a new lower tax rate.

Mr Cameron, on a visit to Eastleigh, said: "My prediction is that they won't have thought it through or costed it properly and we will discover over the course of the day all sorts of problems and issues with a policy that looks like it has been cobbled together overnight."

Labour party proposes mansion tax to help low earners

LONDON (Reuters) - The leader of the Labour Party called on Thursday for a tax on expensive homes to fund a new lower-income tax band to help the country's lowest earners. Setting out some of the first concrete ideas of what his party would offer vote...

Ed Miliband Announces Plans To Re-Introduce 10p Tax Rate

Ed Miliband has announced a Labour government would reintroduce the 10p tax rate abolished by his predecessor, Gordon Brown, potentially benefitting 25m basic tax rate payers.

In a much-anticipated speech in Bedford on Thursday morning, the Labour leader said his plan would be funded by a mansion tax on houses worth over £2m.

He said: "Let me tell you about one crucial choice we would make, which is different from this government.

"We would tax houses worth over £2 million. And we would use the money to cut taxes for working people.

"We would put right a mistake made by Gordon Brown and the last Labour government."


Jim Pickard

Okay here is how miliband 10p rate only costs 2bn - only applies to first 1k of income above threshold. So only partial reversal of Gordo.

Despite being introduced by then-chancellor, Brown, in 1999, he then abolished the 10p tax rate it to much outcry eight years later.

As well as trying distancing himself from the sins of the previous Labour government, Miliband is keen for his 'One Nation' Labour Party to be seen as supporting hard-working people on lower incomes.

This is in contrast to a Conservative-led government that, according to the polls, is seen as favouring the wealthy with policies such as the controversial cut to the 50p top rate of tax and a reluctance to implement a tax on higher priced properties.

On Wednesday, at PMQs, David Cameron mocked the Labour leader for planning to give a speech without any policies in it.

Miliband declared: “Moving Labour on from the past and putting Labour where it should always have been, on the side of working people.


Joey Jones
So takes up an emblematic libdem policy and junks an emblematic gordon brown policy. V interesting.

“Britain is at a fork in the road. We can carry on as we are: falling wages, low growth, failure to tackle the deficit.

“Or Britain can take the path I have outlined: a recovery made by the many, tackling low growth and reducing the deficit, building not squeezing the middle, all of us playing our part in turning this economy around.”

In a Q&A session after the speech, shadow chancellor, Ed Balls, outlined how the mansion tax would work, saying he would work with the Lib Dems to ensure it's success.

Balls claimed it could raise over £1.7bn and he would be happy to start talks with the Treasury on Monday and work on plans with chief secretary, Danny Alexander.


Owen Jones

Labour's plan to reintroduce 10p tax - disastrously scrapped by Brown - funded by mansion tax will be very popular. Redistribution is back

Speaking to the BBC Balls said: "This is a very clear statement. It's what we want to do now and it's what we want to do in 2015."

Questions have been raised however in the wake of the speech as to the viability of funding the required cut through a mansion tax alone.


Jim Pickard

Sorry to break this to you all but return of 10p income tax rate would cost about 7bn pounds

Cameron rubbished the proposals on a visit to Eastleigh on Thursday.

He said: "My prediction is that they won't have thought it through or costed it properly and we will discover over the course of the day all sorts of problems and issues with a policy that looks like it has been cobbled together overnight," reports Sky News.

Treasury sources told the BBC the plans lacked "economic credibility".


James Chapman (Mail)
No-one who paid Gordon Brown's 10p tax rate pays any tax at all today http://t.co/GjrrmzfM

The government will have a chance to respond when chancellor George Osborne announces the Budget on March 20th.

Also in his speech Miliband stressed it was up to individuals to play their part in a successful British economy and to increase their own living standards.

He said: "When you play your part, when you make your contribution to the economy, you will be rewarded.

"And that Britain’s economic success will be built by the many, not just by a few at the top."

The Labour leader also highlighted the importance of skills training for young people who don't go to university and outlined a new vocational qualification.


Jonathan Freedland

As for Cam's "no policy" jibe, one Lab source says "Cameron yesterday was v helpful for expectations management! It set us up nicely."

He said: "We must end the culture which says University is always best and vocational education is second-best.

"It simply isn’t true.

"That’s why One Nation Labour will create a new technical baccalaureate, to complement A-levels."


Tim Montgomerie

Can't strategically disagree with Ed Miliband's speech. We should be increasing tax on high value properties and cutting income tax (1/2)

Other Labour proposals covered in the speech are to:

  • Break the stranglehold of the big six energy suppliers.
  • Stop the train company price rip-offs on the most popular routes.
  • Introduce new rules to stop unfair bank charges.
  • And cap interest on payday loans.


Joe Murphy
Something borrowed (Vince's Mansion Tax), Something blue (Halfon's 10p restoration) - Ed Miliband grabs both http://t.co/s7rogzdE

Miliband contrasted today's economic climate to that of 1957 when Conservative prime minister Harold Macmillan gave a speech just across the river celebrating a booming British economy, in a speech that became known as the “you’ve never had it so good” speech.

He said: "It’s what Harold MacMillan understood when he spoke here in Bedford more than half a century ago.

"We can rebuild this country, we can offer people hope.

"We can make an economy that works for working people.

"It’s a goal worth fighting for.

"It’s what One Nation Labour will do."

Ed Miliband's speech text network visualised

State Tax Systems Need to Become More Progressive, Not Less

State tax systems, according to a new report from the Institute for Taxation and Economic Policy, take a far larger share of income from their lowest income residents than they do from the wealthy, exacerbating income inequality within and between states, encouraging the wealthy to move to low tax states, and even worse, threatening the effectiveness of federal and state programs designed to ease the tax burden for the poorest families.

The report, called Who Pays: A Distributional Analysis of the Tax Systems in all 50 States, measures the state and local taxes paid by different income groups in 2013 (measured at 2010 income levels, and accounting for the impact of tax changes enacted through January 2, 2013). After combining all of the state and local income, property, sales and excise taxes state residents pay, researchers found that the average overall effective tax rates by income group nationwide are 11.1 percent for the bottom 20 percent, 9.4 percent for the middle 20 percent and 5.6 percent for the top 1 percent. 

Ten states that are particularly egregious offenders. In the "Terrible Ten" as the authors call Washington State, Florida, South Dakota, Illinois, Texas, Tennessee, Arizona, Pennsylvania, Indiana, and Alabama the bottom 20 percent pay up to six times as much of their income in taxes as their wealthy counterparts. 

Five of these "Terrible Ten" derive roughly half to two thirds of their tax revenue from sales and excise taxes, compared to a national average of roughly one third. Five also do not levy a broad-based personal income tax. The other five have a personal income tax rate that is flat or virtually flat, no matter what the income.

Some Republican governors in states that do have an income tax are pushing to get rid of that tax, which would pile an even greater burden on the poor -- not to mention undermine funding for things like education, hospitals, and roads. It's the poorest residents, says Matthew Gardner, the Executive Director of ITEP in a Citizen's For Tax Justice article, who are forced to make up the difference when the low tax promises become law. Often, income taxes are reduced while sales taxes are increased, which of course overwhelming hurts the poor who are forced to pay more for food, gas, and other basic needs. Gardner calls this trend "the surest way to make an already upside down tax system even more so." 

Sometimes credits and deductions like the Earned Income Tax Credit can help. The EITC improves progressivity in 24 states and the District of Columbia, though often the wealthy still have the advantage of low capital gains taxes, and more knowledge of their own eligibility for deductions, or at least access to professionals who can help them. 

In order to counter this increasingly inequal pattern, the report recommends that states adopt a progressive personal income tax, and to reduce their reliance on consumption and sales taxes, whose costs often reduce the impacts of credits like the EITC, since families end up spending much of the money they would have samed from lower taxes on food and gas. Without these changes, inequality between, as well as within states will only get worse. 

So to repeat: Yes, we need state income taxes and such taxes should be even more progressive than they are. The last thing we want for states to go in the opposite direction.

Clegg Calls For Tax Abuse Action Ahead Of Africa G8 Talks

Nick Clegg has called for global action against tax-dodging firms as he embarked on a G8 trip to Africa, arguing that tackling abuses would bolster public support for increasing foreign aid. As part of the UK's presidency of the G8 group, the deputy p...

New York raises taxes on Sandy-hit houses

A destroyed home is viewed in Oakwood Beach in Staten Island on February 5, 2013 in New York City.(AFP Photo / Spencer Platt)

A destroyed home is viewed in Oakwood Beach in Staten Island on February 5, 2013 in New York City.(AFP Photo / Spencer Platt)

New York homeowners from regions most severely impaired by Hurricane Sandy have suffered damage to their homes and expensive repairs – but the city is now inflicting a heavy tax hike upon those residents, claiming their property values have risen.

“Common sense dictates their property values have fallen, if not plummeted in some cases,” Councilman Michael Nelson (D-Brooklyn) told the New York Post.

But the city claims that property values for homes in Manhattan Beach, Coney Island, Staten Island and the Rockaways have shot up – even though many of these properties were damaged in the storm and still require repairs. As a result, the city is inflicting higher taxes upon many of these residents to make up for the lost revenue from the storm – including residents whose homes remain so impaired that they have not been able to move back in.

“This is totally insensitive and heartless,” Ira Zalcman, president of the Manhattan Beach Community Group, said in the interview with the Post. “We just sustained one of the worst national disasters in our nation’s history, and now the city is delusional, claiming our property values went up.”

Zalcman said he has already received more than 30 complaints from residents about the tax increases, and he himself is a homeowner whose property tax bill will go up – probably by $200 for the fiscal year.

Nelson has called the tax hikes “heartless” and “something the city must immediately remedy.”

It raises real doubts about whether [the Finance Department] is doing enough to ensure fair and accurate assessments,” said City Council Speaker Christine Quinn. “As New Yorkers world to rebuild their homes and lives, we cannot allow them to be hit twice.”

Even homes that were partially swept away and houses whose windows and doors are boarded shut will be subjected to the tax hikes, whose rates will be finalized in May.

Stephen Moran, vice chairman of Community Board 13, said that Hurricane Sandy left him with $300,000 worth of repairs and cannot understand how the city is justifying raising his taxes.

“How do you increase taxes for people who no longer have 100 percent of their houses remaining?” he said.

The citywide outrage has prompted the City Council to launch an investigation into the heightened property-tax assessments. One city official told the Post that these assessments were made before Sandy ravaged New York in late October, but Mayor Bloomberg on Monday defended the tax hikes and suggested that the storm did not affect property values.

“Prices continue to go up in spite of these things,” he said, despite real estate brokers claiming the opposite.

And unless property owners appeal to the city Tax Commission before March 15, many homeowners and hurricane victims will see their tax rates go up this fiscal year, thereby inflicting further costs on those already burdened with repairs.

Fix the Debt and a Wall Street Sales Tax

Peter G. Peterson, a Wall Street private equity mogul, in New York in a Jan. 29, 2008 file photo. (Photo: Fred R. Conrad / The New York Times) At this point everyone knows about Fix the Debt. It is a collection of corporate CEOs put together by Peter ...

Eric Cantor: ‘We Can’t Be Raising Taxes Every Three Months’

From this Sunday's Meet the Press, despite all of his rhetoric attempting to help the Republican party with their so-called rebranding effort, Eric Cantor didn't do a very good job of hiding just who his party is looking out for, and it sure as hell isn't the average worker out there: Cantor: We Can’t Raise Taxes ‘Every Three Months’:

House Majority Leader Eric Cantor (R-VA) said Sunday that he does not support bringing in new revenue by closing tax loopholes in order to avoid sequestration, during an appearance on NBC's "Meet the Press."

"We can't be raising taxes every three months in this town," Cantor said, referring to the tax increases that went into effect in early January.

Cantor added that he doesn't want the sequester to go into effect and said it's up to President Obama to make a move now on avoiding it.

Politicususa has more on Cantor's interview here: Eric Cantor Embarrasses Himself Playing Sequester Blame Game and here: Hypocrisy Alert: Eric Cantor Added $3.4 Trillion to Debt But Blames Obama for His Debt. NBC has the full transcript up here, but for this segment, I think I prefer the Bobblespeak version.

Meet The Press - February 10, 2012 :

Gregory: the sequester automatic
spending cuts could happen in a
few days and would cripple
Virginia's economy

Audience: yes Virginia there
is a Sequester Clause

Cantor: these are horrible
indiscriminate cuts I supported

Gregory: so why can't you make
a deal with Obama?

Cantor: because Obama wants to raise taxes

Gregory: so you can't compromise?

Cantor: no because Obama got his
tax hikes and took things from the rich
and now it's our turn to get what we want

Gregory: which is what?

Cantor: take things from the poor
and give them back to the rich

Gregory: but the sequester
would wreck the economy

Cantor: look we can't raise
taxes every 3 months

Gregory: or once every 20 years

Cantor: we actually have things
Obama supports in our plan

Gregory: well good

Cantor: but first he has to agree
not to raise taxes

Gregory: ok

Cantor: also this is all Obama's fault

Gregory: do you like sequester or not?

Cantor: it would be an epic disaster
but not as bad a raising taxes on
our precious job-creating billionaires

Gregory: you changed your
mind on immigration

Cantor: these illegal immigrants
came here as children through
no fault of their own

Gregory: would you support
the DREAM Act?

Cantor: no because it has Obama cooties on it

Gregory: what can you support?

Cantor: something exactly like it

Gregory: what would it take for
Republicans to support immigration reform?

Cantor: If Obama came out against it

Gregory: that would do it

Cantor: right

Gregory: how can you re-brand the
Republican party when people
don't like your central beliefs?

Cantor: we have to persuade people
that cutting taxes for very rich
people will make their lives better

Gregory: okay

Cantor: also school scholarships
seem to be popular

Gregory: wow

They translated the entire show, so go read the rest. It's much more enjoyable than actually watching it. Take my word for it.

Protesters Confront CEO and “Fix the Debt” Leader over Corporate Tax Breaks

Flip the Debt unveils corporate debt clock outside IRS building in New York City. (Sign by People's Puppets of Occupy Wall Street; Photo by Amber King) "Fix the Debt," the CEO-led campaign promoting fear and what some have called near-hysteria over th...

Rep. Tom Cotton: We Can’t Keep Raising Taxes to Pay for Obama’s ‘Welfare Spending’

They just can't stop themselves. Here's Rep. Tom Cotton (R-Ark) on this week's Fox News Sunday, explaining to host Chris Wallace why he doesn't think it's fair to be raising taxes on the rich and why we cannot make any cuts to defense spending, but ...

Thousands More To Be Hit By Inheritance Tax To Pay For Elderly Care

Thousands more people are likely to be hit with inheritance tax to pay for an extension in state support for the elderly in a social care cap that been condemned as "about as credible as a Findus lasagne."

The coalition is expected to announce a three-year extension of the freeze in the inheritance tax threshold in a move that could affect 5,000 people.

Anybody bequeathing more than £325,000, or £650,000 for couples, has to pay 40% tax on anything over those levels, which have not been raised since April 2009 despite inflation.

jeremy hunt

Jeremy Hunt revealed the plans on Sunday

Extending the freeze to 2018, is intended to cover the £1 billion cost of introducing a cap on the total amount anybody has to pay on social care.

The expected £75,000 cap is more than twice as high as the £35,000 limit suggested by the independent Dilnot Commission appointed by Prime Minister David Cameron to make recommendations on the highly-fraught issue.

Alongside the cap, Health Secretary Jeremy Hunt is to announce a large rise in the assets threshold beneath which people receive means-tested support meeting care bills.

Currently £23,250, that is set to rise to £123,000.

Mr Hunt said: "The worst thing that can happen is at the most vulnerable moment in your life you lose the thing you worked hard for, that you saved for, your own house.

"And what we are trying to do is to be one of the first countries in the world which creates a system where people don't have to sell their own house."

Speaking on BBC1's Andrew Marr Show said the current situation was a "scandal".

Every year 30,000 to 40,000 people are having to sell their houses to pay for their care costs," he said.

"About 10% of us end up paying more than £100,000 in care costs."

Mr Hunt said it would be a "fully funded solution", adding: "Finances are very, very much constrained at the moment and the fact that we are finding what might be as much as £1 billion a year to do this, shows that we want to help those hard-working people who have saved all their life and suddenly quite randomly find that their house is at risk."

findus horsemeat lasagne

The plans were slammed as being 'as credible as Findus lasagne' the brand at the centre of the horsemeat scandal

Labour peer Lord Warner, who sat on the Dilnot Commission, said: "Essentially, we thought that the fairest way of doing this, and it wasn't a precise science setting the cap, but we thought it was somewhere in that range, £35,000 to £50,000.

"At that level, give or take, you would actually mean on average no-one would have to dispose of more than about a third of the value of their housing assets."

The National Pensioners Convention (NPC) described the social care reforms as "about as credible as a Findus Lasagne".
NPC general secretary Dot Gibson said: "Using inheritance tax or money saved from the state pension system simply won't raise enough money to bring about the change that's needed.

"The social care system needs urgent and radical reform, but these proposals simply tinker at the edges.

"The current system is dogged by means-testing, a postcode lottery of charges, a rationing of services and poor standards and nothing in the plan looks like it will address any of these concerns.

"Setting a lifetime cap on care costs of £75,000 will help just 10% of those needing care, whilst the majority will be left to struggle on with a third rate service.

The Association of British Insurers (ABI) said the reforms were a potential "step forward".

Stephen Gay, the ABI's director of life, savings and protection, said: "This is potentially another positive step forward in tackling the challenges of an ageing society. The cap and the higher means test give people greater certainty and will enable them to plan ahead for later life."

Shadow care and older people's minister Liz Kendall said: "This would be a small step forward for some people who need residential care in five or more years time.

"But it won't be fair for people with modest homes. Andrew Dilnot recommended a cap on care costs of £35,000 and warned that anything above £50,000 won't provide adequate protection for people with low incomes and low wealth.

"And these proposals won't do anything for the hundreds of thousands of elderly and disabled people who are facing a desperate daily struggle to get the care and support they need right now.

"More than £1.3 billion has been cut from local council budgets for older people's social care since the coalition came to power. As a result, many vulnerable people can't get the support they need and are having to pay more for vital services."

Barclays To Close Its Tax Avoidance Unit

Banking giant Barclays is to close its tax avoidance unit, which gave advice to large companies on how to avoid paying out tax.

It is thought new chief executive Antony Jenkins will reveal his plans to repair the bank's battered reputation and overhaul its culture and practices following a string of damaging scandals on Tuesday.

The scandal-hit bank is also due to deliver its annual profits and the long-awaited results of a strategic review.

Jenkins is expected to warn of pay cuts and a swathe of job losses, having told the Banking Standards Commission earlier this week he was "shredding" the legacy left by former boss Bob Diamond - who quit after the bank's £290 million Libor rigging settlement last year.

Mr Jenkins is expected to say on Tuesday: "There are some areas that relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits.

"Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again."

Mr Jenkins has already waived his bonus for 2012, saying it was "only right that I bear an appropriate degree of accountability" after a "very difficult" year for the group.

But Barclays is set to reveal how much its wider bonus pool is for 2012 and what it will pay the 24,000 staff in its investment banking arm, around 9,000 of which are based in London.

Amid intense public and political pressure to rein in bonuses, the pot is likely to be sharply lower than the £2.2 billion set aside for 2011, which included £1.5 billion for Barclays Capital employees.

Mr Jenkins has already assured that bonuses have been slashed to take account of its mounting mis-selling compensation bill and the Libor fixing affair.

This week's additional £1 billion to cover mis-selling of payment protection insurance and interest rate swap products to small businesses resulted in another "material" cut to the bonus pot, he told the Banking Standards Commission.

Barclays is also reportedly telling more than a thousand top investment bankers there will be no upfront cash bonus this year, with 1,200 managing directors in Barclays Capital receiving nothing until next year.

The bonuses, split 50% in cash and 50% in shares will be paid out in equal portions over three years to 2016.

It is understood cash bonuses in the wider business will be capped at £65,000, while those below managing director level with payouts of between £65,000 and £250,000 will be required to defer 35% of their bonuses.

Sanders Wants to End Corporate Tax Handouts, O’Reilly Makes Big Error, and More

Sanders Wants to End Corporate Tax Handouts, O’Reilly Makes Big Error, and More

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Posted on Feb 7, 2013

Impaired Hearing: The confirmation hearing of John Brennan—President Obama’s nominee to head the Central Intelligence Agency—was repeatedly interrupted by protesters angry over the CIA’s use of drone strikes that have killed an unknown number of innocent civilians. The demonstrators were so disruptive that the proceedings had to be halted and the room cleared in an effort to block them from returning. When Brennan did speak without being interrupted, the counterterrorism chief defended the controversial drone program in front of the Senate Intelligence Committee. Said Brennan: “I believe there are people who believe we take strikes to punish terrorists for past transgressions. Nothing could be further from the truth. The people who are standing up here today, I think, have a misunderstanding of what we do as a government.” (Read more)

Ax Shelter: Sen. Bernie Sanders has introduced legislation that would end huge corporate tax handouts and close tax loopholes, potentially raising hundreds of billions of dollars in revenue over the next decade. The bill, called the Corporate Tax Fairness Act, would prevent corporations from sheltering their profits in places like the Cayman Islands while also ending the practice of “rewarding” companies that ship U.S. jobs overseas with tax breaks. The measure states: “Under this legislation, corporations would pay U.S. taxes on their offshore profits as they are earned. This legislation takes away the tax incentives for corporations to move jobs offshore or to shift profits offshore because the U.S. would tax their profits no matter where they are generated.” (Read more)

All Is Not Right With the Right: The Republican infighting between Karl Rove and some conservatives seems to have reached a boiling point. On Wednesday, a group that includes activists Mark Levin and Tony Perkins requested that the spokesman for American Crossroads (a Rove super PAC) be fired for calling right-wing commentator Brent Bozell a “hater” over his opposition to Crossroads offshoot the Conservative Victory Project. Jonathan Collegio had gone on Washington, D.C.’s WMAL and said Bozell “is a hater, and he also, like, has a long, sordid history, like, hating Karl Rove, too. So he has, like, a weird personal ax to grind.” (Read more)

Kill Bill: One Republican lawmaker in Iowa is on a crusade to redefine abortion—which, let’s remember, is very much a legal procedure in this country—as murder. State Rep. Rob Bacon said he introduced the legislation because he personally believes abortion is murder and that Iowa law should reflect that belief (never mind what other people think). Under the measure, the definition of a “person” in a murder case would be changed to “an individual human being, without regard to age of development, from the moment of conception, when a zygote is formed, until natural death.” As a result, a woman who induces an abortion with drugs or a doctor who performs an abortion could be charged with murder. The bill doesn’t include exceptions in instances of rape, incest or in the event that the mother’s life is in danger, undoubtedly again reflecting the beliefs of the lawmaker who introduced it. (Read more)

Fox Talk: Fresh on the heels of parting ways with Dick Morris and Sarah Palin, Fox News is reportedly in talks with former Massachusetts Sen. Scott Brown to provide commentary for the right-wing channel. The news comes nearly a week after the Republican said he was not going to run in the special election to fill the Senate seat vacated by John Kerry. (Read more)

Video of the Day: On “The O’Reilly Factor” on Wednesday night, Bill O’Reilly criticized NBC News for not covering the leaked Justice Department memo that outlined the Obama administration’s controversial drone program. The glaring error in his attack? NBC News was the one that broke the story to begin with. As Rick Perry might say here, oops!
 

—Posted by Tracy Bloom.

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Sanders, Schakowsky Propose Tax Fairness Act

WASHINGTON - February 7 - Sen. Bernie Sanders (I-Vt.) today introduced a bill to stop profitable corporations from sheltering income in the Cayman Islands and other tax havens. The legislation also would end tax breaks for companies that ship jobs and factories overseas. 

Sanders’ bill and a companion measure to be introduced in the House by Rep. Jan Schakowsky would yield more than $590 billion in revenue over the next decade, according to the Joint Committee on Taxation.

“At a time when we have a $16.5 trillion national debt and an unsustainable federal deficit; at a time when roughly one-quarter of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high, it is past time for corporate America to contribute significantly to deficit reduction,” said Sanders, a member of the Senate Budget Committee.

“Even as profits grow to record levels, corporations’ share of tax revenues paid has dropped significantly in recent decades.  Sen. Sanders and I are offering a comprehensive and commonsense solution that would eliminate tax subsidizes for big oil companies and corporations that are shipping jobs and profits overseas,” Schakowsky said. 

Sanders was joined at the news conference by Bob McIntyre, director of Citizens for Tax Justice; Damon Silvers, the policy director for the AFL-CIO; and Dorigen Hoffman, policy director for the Norwich, Vt.-based Clean Yield Asset Management.

The legislation “would increase investment, employment and wages in the United States,” said Richard L. Trumka, president of the AFL-CIO. Mary Kay Henry, the Service Employees International Union president, said the proposal would “raise revenue, restore fairness to our tax code and create good jobs in the U.S.”

Under current law, U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until the money is brought back into the United States.  U.S. corporations are also provided foreign tax credits to offset the amount of taxes paid to other countries.

According to a 2008 Government Accountability Office Report, 83 of the Fortune 100 companies in the United States use offshore tax havens to lower their taxes.  Today, U.S. corporations have an estimated $1.7 trillion of un-repatriated foreign profits sitting offshore. 

Sanders also released a report today on how 31 corporations represented by the Business Roundtable have avoided $128 billion in federal income taxes by setting up more than 500 subsidiaries in tax haven countries.  The Business Roundtable recently released a report calling for Congress to slash Social Security and Medicare benefits something that Sanders called “shameless.”

The Corporate Tax Fairness Act would require U.S. companies to pay taxes on all of their income by ending the deferral of foreign source income.

Under the legislation proposed by Sanders and Schakowsky, corporations would pay U.S. taxes on their offshore profits as they are earned.  The legislation would take away the tax incentives for corporations to move jobs offshore or to shift profits offshore because the U.S. would tax their profits no matter where they are generated.

For a fact sheet on the bill, click here.

To read the bill, click here.

To read a report on corporate tax dodgers, click here.

Billionaire Tax Avoider Penny Pritzker For Commerce Slot?

Penny Pritzker, union buster.

Penny Pritzker, sub-prime lender who drove Superior Bank into the ground.

Penny Pritzker, Chicago Board of Ed members who thinks your children only deserve enough education to make them a member of the workforce.

Penny Pritzker, billionaire tax dodger.

Penny Pritzker, potential Secretary of Commerce nominee? Is this a joke?

Chicago businesswoman Penny Pritzker has emerged as a leading candidate to serve in the administration of President Obama, for whom she has long been a campaign supporter and top fund raiser.

A senior administration official cautioned that no announcement is imminent and that Obama has made no decision. But Pritzker is under consideration to serve as Commerce secretary or perhaps in another senior position involving relations between Obama and business leaders, according to officials close to the process who spoke anonymously to comment on internal deliberations.

Pritzker is a member of the Chicago family behind the Hyatt Hotels Corp. She has been a prominent Obama friend and supporter since his early days in politics and ran his 2008 campaign fundraising operation.

[...] Forbes’ annual list of the world’s billionaires last March put Pritzker at No. 719 and said her hotels and investments were worth $1.8 billion.

Greek Tax Hikes Backfire As Tax Revenues Plunge 16%

There was some hope that Greece, which for the past few months was desperately trying to show it has a primary surplus when in fact it was merely shoving unpaid bills under the rug, was at least getting its runaway deficit situation under control. This, despite what many sensible people pointed out was the return of nearly daily strikes, which meant zero government revenue as zero taxes could be levied on zero wages. Turns out the sensible people were again right, and the Greek and European propaganda machine has failed once more as the Greek Finance Ministry just reported that despite big tax hikes demanded as part of austerity measures by international lenders, tax revenues fell precipitously in January, with the Greek Finance Ministry reporting a 16 percent decrease from a year earlier, and a loss of 775 million euros, or $1.05 billion in one month.

This means that the government took in only €4.05 billion ($5.47 billion) in tax revenues in January, far short of its target of €4.36 billion ($5.89 billion), a $420 million shortfall in one month, which also came during an annual holiday sales period for shops who are bleeding customers and shutting down by the thousands.

It is all downhill from here as the feedback loop of more spending cuts is activated to offset declining revenues, leading to even less revenue, and culminating with the complete collapse of Greek society.

From Greek Reporter:

If Greece fails to meet revenue targets it will trigger a correction clause at the end of each quarter of the year, setting off automatic spending cuts except for pensions and salaries. That could further harm already-depleted government services.

Finance Ministry officials attributed the decline in tax revenues to the drop in consumption, as revenues from Value Added Tax (VAT) shrank by 15 percent, while those from the special consumption taxes were also lower. Greeks hammered by big pay cuts, tax hikes and slashed pensions have cut back spending even on essential items, with supermarket sales falling 500 million euros, ($6763 million) in 2012.

The numbers could have been worse as the government gained revenues from doubled property taxes and big hikes in income taxes that have hit most Greeks except for tax cheats who continue to largely escape sacrifice or prosecution.

This may well be the last straw for a "fixed" Greek crisis - "the only options left for the government is to collect from tax evaders and improve tax collections, although tax hikes have led to many more Greeks trying to hide their income, statistics showed." Of course, nobody could have predicted that too.

The Troika and other EU countries offered to help Greece collect taxes but little interest has been shown by the government. The new General Secretary for State Revenues, Haris Theoharis, plans to meet directors of the 36 biggest tax offices in the country to study ways of collecting expired debts, according to proposals by the country’s creditors and the European Commission’s Task Force for Greece.

Does this mean that paying hedge funds at 50 cents on the dollar on their worthless Greek bonds was not the best idea?

But, but the spin was that if only all Greek debt was converted into zero coupon perpetuals all would be well?

Or maybe they were just referring to Deutsche Bank. As for the Greek population, where everyone is simply doing what they can to survive, which certainly does not mean paying taxes to the government, it is every man, woman and child for themselves.

Finally, one can only hope that the US will learn something from what this terminal collapse of a socialist utopia looks like. Sadly, it won't.

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The Great Tax-Cut Experiment

Since the late 1970s, during the Carter Administration, conservative economists have been warning that high taxes retard economic growth by discouraging productive work and investment. These arguments have resonated with politicians, who have steadily cut income taxes, especially those borne by the richest Americans. The highest marginal tax rate, which stood at 70% by the end of the 1970s, was cut to less than 30% in less than a decade. (The marginal rate for a person is the one applied to his or her last dollar of income. A marginal rate that applies to, say, the bracket above $250,000, then, is paid only on that portion of income. The portion of a person’s income below that threshold is taxed at the lower rates applying to lower tax brackets.) Despite increases in the early 1990s, the top marginal rate remained below 40%, when it was cut further during the administration of George W. Bush. These dramatic cuts in tax rates, however, have not led to an acceleration in economic growth, investment, or productivity.

Falling Tax Rates for the Richest: The federal government has been cutting taxes on the richest Americans since the end of World War II. The average tax paid by the richest taxpayers, as a percentage of income, is typically less than the top marginal rate. Some of their income (the portion below the threshold for the top marginal rate, any capital-gains income, etc.) is taxed at lower rates. Some is not subject to federal income tax because of deductions for state and local taxes, health-care costs, and other expenses. The decline in the average tax rate for the richest, however, does follow the cuts in the top marginal income-tax rate. (See Figure 1.)

Comparisons with Other Countries: Americans pay a smaller proportion of total income in taxes than do people in any other advanced capitalist economy. As recently as the late 1960s, taxes accounted for as high a share of national income in the United States as in Western European countries. After decades of tax cuts, however, the United States now stands out for its low taxes and small government sector. (See Figure 2.)

Higher Growth When Taxes Are Higher: On average, the economy has grown faster during presidential administrations with higher tax rates on the richest Americans. Growth was unusually slow during George W. Bush’s two terms (Bush II) and during Obama’s first term, when the Bush tax cuts remained in effect. On average, every 10 percentage-point rise in the average tax rate on the richest has been associated with an increase in annual GDP growth of almost one percentage point. (See Figure 3.)

Declining Tax Rates Haven’t Stimulated Investment: Cutting taxes on the richest Americans has not led them to invest more in plant and equipment. Over the past 50 years, as tax rates have declined, there has been no increase in investment spending as a percentage of GDP. (The flat trend line shows that changes in the highest marginal income-tax rate have not affected investment much, one way or the other.) Instead, the investment share of the economy has been determined by other factors, such as aggregate demand, rather than tax policy. (See Figure 4.)

Lower Taxes, Slower GDP Growth: Despite lower and declining tax rates, especially on the rich, the United States has had slower productivity growth over the last several decades than other advanced economies. Overall, lower taxes are associated with slower growth in GDP per hour worked. A 10 percentage point increase in taxes as a share of GDP is associated with an increase in the productivity growth rate of 0.2 percentage points. (See Figure 5.)

© 2012 Dollars and Sense

Gerald Friedman

Gerald Friedman is a professor of economics at the University of Massachusetts-Amherst

Clegg’s Tax Promise Signals Start Of Eastleigh By-Election Race

Deputy Prime Minister Nick Clegg will fire the starting gun in the Liberal Democrats' Eastleigh by-election campaign today with a promise to press for higher taxes on the wealthy to ease the burden on "hard-working families".

In the Commons, Lib Dem chief whip Alistair Carmichael will move the writ formally triggering the contest to elect a successor to disgraced former Cabinet minister Chris Huhne.

Polling will take place in just three weeks' time, on February 28, in a battle which will pitch the Lib Dems into a head-to-head fight with their Coalition partners, the Tories, who finished second in the 2010 general election.

Both parties are braced for a bruising contest, with Conservative Party chairman Grant Shapps signalling that they intend to focus on Huhne's past after he pleaded guilty in court to dodging punishment for a speeding offence.

"The residents of Eastleigh have for a long time been sold a lie by their Lib Dem MP. That's why they'll welcome the opportunity to express the way they feel about it very soon," he said.

"Conservatives will present the opportunity to start afresh with a hard-working local MP who gets on with looking after her constituents."

Lib Dems insisted their decision, as the sitting party in the constituency, to opt for a short contest reflected the high state of preparedness of the local party, even though they have yet to choose a candidate.

"We are going to throw the kitchen sink at it. I'm pretty sure that the Conservatives will as well," one source said.

"It is going to be a tight contest, and generally in tight contests in two-way marginals you get some pretty robust exchanges."

Clegg is expected to travel to the Hampshire constituency to campaign as soon as he can clear the space in his diary.

Officials would not be drawn on whether he would offer an apology for Huhne's conduct, but acknowledged that he would have to deal with the issue.

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"Clearly the issue of Chris Huhne's resignation as an MP is going to be of relevance to the by-election," the source said.

Officially, the Lib Dems want to make jobs and taxes the key campaign issues - drawing clear battlelines with the Conservatives.

Clegg will use a speech at the Institute for Government in London today to highlight the Lib Dems' commitment to a 1% annual "mansion tax" levied on properties worth more than £2 million - a proposal the Tories have consistently rejected.

Alternatively, he will say, the Lib Dems will press for the introduction of new council tax bands at the top end, again affecting properties worth more than £2 million.

"That we should ask a small number of very wealthy individuals to make a reasonable contribution, in order to provide desperately needed help for millions of ordinary people - nothing could do more to demonstrate a commitment to greater fairness in our tax system," he is expected to say.

"It's an open secret that our Conservative partners do not share our views on this. However, we will continue to make this argument, in this Coalition and beyond.

"Our approach is simple: taxes on mansions, tax cuts for millions. An approach to tax that puts payslips before palaces, if you like."

The Lib Dems will select their candidate at a private hustings on Saturday. Officials insist they are confident of retaining a seat they have held since 1994.

Huhne had a majority of 3,684 at the last general election and the party has not lost a seat in a by-election for more than 50 years.

There is speculation that the Tory candidate will be Maria Hutchings, who fought the seat in 2010. Her chances of achieving the necessary 3.6% swing to win have been boosted by UK Independence Party leader Nigel Farage's decision not to stand.

Labour sources are hoping for a strong showing, but privately accept they have little chances of winning.

Shadow chief Treasury secretary Rachel Reeves dismissed Clegg's attempts to distance his party from the Tories.

"The Liberal Democrats will be judged on what they do not what they say, and their record is the Tory record - one of economic failure," she said.

"Nick Clegg failed to deliver a mansion tax, but went along with a £3 billion tax cut for the richest. And his cuts to tax credits will dwarf any gain from the rise in personal allowance for millions of working families."

Simon Hughes, deputy leader of the Lib Dems, said the party will be "all guns blazing" at the next by-election.

Speaking on Daybreak he said: "We don't take anything for granted, we have a very well run council, we run the council, and a fantastic reputation for work.

"So we're going to go in all guns blazing and this weekend pick a candidate, who will be up and running as of Saturday.
"I think people increasingly do know that it's us who've delivered the tax cuts.

"It's the most important thing you can do, to put money back in the hands and the pockets of families who are struggling to pay the bills."

Asked whether Chris Huhne had damaged the image of the party, he said: "Of course it is a very unsatisfactory state of affairs, both for him and his family, and for the party. He's resigned as MP, we fight a by-election.

"Chris Huhne paid the penalty, we move on."

Members of Congress Introduce Historic Bills to Regulate and Tax Marijuana Like Alcohol at...

WASHINGTON - February 5 - Members of Congress introduced bills Tuesday to end marijuana prohibition and start regulating and taxing marijuana like alcohol at the federal level.
 
Rep. Jared Polis (D-CO) introduced the Ending Federal Marijuana Prohibition Act of 2013, which would remove marijuana from Schedule I of the Controlled Substances Act and establish a system in which marijuana is regulated similarly to alcohol at the federal level. It would also remove marijuana from the jurisdiction of the Drug Enforcement Administration (DEA) and place it in the jurisdiction of a renamed Bureau of Alcohol, Tobacco, Marijuana, Firearms, and Explosives.
 
Rep. Earl Blumenauer (D-OR) introduced the Marijuana Tax Equity Act, which would create a federal excise tax on the sale of marijuana similar to that imposed on the sale of alcohol. It would also require occupational taxes for those engaged in the industry.
 
“Marijuana prohibition has proven to be just as ineffective, wasteful, and problematic as alcohol prohibition,” said Steve Fox, director of government relations for the Marijuana Policy Project. “Regulating and taxing marijuana like alcohol will take marijuana sales away from cartels and the criminal market and put them in the hands of legitimate, tax-paying businesses.”
 
“Voters and elected officials nationwide are fed up with laws that criminalize adults simply for using a product that is objectively less harmful than alcohol,” Fox said.
 
In November, voters in Colorado and Washington State approved measures making marijuana legal for adults 21 and older and directing state regulatory bodies to create regulations for businesses to cultivate and sell marijuana to adults. Bills to regulate and tax marijuana like alcohol have been introduced this year in the Hawaii and New Hampshire state legislatures, and lawmakers in Maine, Massachusetts, Rhode Island, and Vermont are expected to bring forward similar legislation.
 
A record high 58% of Americans think marijuana should be made legal, according to a survey conducted by Public Policy Polling from Nov. 30 to Dec. 2 of last year. A USA Today/Gallup poll released in December found that 63% of Americans believe the federal government should not interfere in the implementation of state marijuana laws such as those approved in Washington and Colorado.
 
In light of the growing momentum behind efforts to regulate marijuana like alcohol at the state and federal levels, the nation’s largest marijuana-policy-reform organization, the Marijuana Policy Project, has changed the name of its federal political action committee from the “MPP Medical Marijuana PAC” to the “Marijuana Policy Project PAC.”
 
“The re-naming of our PAC reflects the new reality in Washington, D.C.,” Fox said. “Following the passage of the initiatives to regulate marijuana similarly to alcohol in Colorado and Washington last November, there is finally significant momentum in Congress behind ending marijuana prohibition across the board at the federal level.”
 
“The introduction of the two new bills this week is evidence of this philosophical shift,” Fox said. “While we are obviously still committed to protecting medical marijuana patients and providers, our PAC's new name reflects our broader mission in Congress. The end of marijuana prohibition is coming, and we plan to support elected officials and candidates who favor the repeal of this unfair, irrational, and wasteful policy.”

With more than 26,000 members and 100,000 e-mail subscribers nationwide, the Marijuana Policy Project is the largest marijuana policy reform organization in the United States. MPP believes that the best way to minimize the harm associated with marijuana is to regulate marijuana in a manner similar to alcohol. For more information, please visit http://MarijuanaPolicy.org.

New Study: Offshore Tax Dodging Blows $40 Billion Hole in State Budgets

WASHINGTON - February 5 - With states across the country facing dire fiscal crunches and lawmakers in Washington gearing up for more budget showdowns, U.S. PIRG Education Fund released a new study revealing that state budgets were hit collectively with $40 billion in lost revenue from offshore tax dodging last year. Many of America’s wealthiest individuals and largest corporations use tax loopholes to shift profits made in America to offshore tax havens, where they pay little to no taxes. U.S. PIRG Education Fund was joined at the event by Congressman Lloyd Doggett, the Main Street Alliance, the American Sustainable Business Council, and a small business owner.

“Offshore tax abuses undermine public confidence in our tax system. They add to both the deficit and the tax burden imposed on small businesses and individuals that play by the rules,” said Congressman Lloyd Doggett (TX-35), a senior member of the House Ways and Means Committee. “In quantifying the enormous cost to our economy of tax haven abuse, U.S. PIRG has, once again, offered valuable work. More state and federal action is required to ensure that the cost of necessary security and other public services is shared fairly.”

“Tax dodging is not a victimless offense. When corporations skirt taxes, the public is stuck with the tab. And since offshore tax dodgers avoid both state and federal taxes, they hurt everyday taxpayers twice,” according to Dan Smith, Tax and Budget Advocate for U.S. PIRG Education Fund and report co-author. “States should be using that money to benefit the public.”

All told, state taxpayers across the country lost nearly $40 billion last year from offshore tax loophole abuse. To put that amount in context, $40 billion roughly equals the total amount spent by all state and local governments on firefighters in 2008. It’s also enough money to cover the educational costs for 3.7 million children for one full year.

At the national level, offshore tax loopholes cost federal taxpayers $150 billion each year, which would be more than enough to cover the scheduled spending cuts that are set to take effect in just a few weeks.

"Our economic progress is undermined when companies are rewarded for financial manipulation rather than innovation and productive investment," said Bryan McGannon, Deputy Director of Policy at the American Sustainable Business Council.

“When corporations use offshore tax havens to avoid paying their taxes, they’re robbing states of the resources they need to lay the foundations for local, independent businesses to grow and thrive,” said Sam Blair, Network Director for the Main Street Alliance. “They’re also leaving small businesses at a direct competitive disadvantage.”

Tax havens are used by both wealthy individuals and corporations. The study found that states lost $28 billion from the corporate abuse of tax havens and $12 billion from individuals.

As of 2008, at least 83 of the top 100 publicly traded corporations in the U.S. used tax havens, according to the Government Accountability Office. At the end of 2011, 290 of the top Fortune 500 companies reported that they collectively held a staggering $1.6 trillion offshore, a Citizens for Tax Justice report found. By using offshore tax havens, corporations and wealthy individuals shift the tax burden to ordinary Americans, forcing us to make up the difference through cutting public services, growing our already big deficit, or raising taxes on everyday citizens.

“Some budget decisions are tough, but closing the offshore tax loopholes that let large companies shift their tax burden to the rest of us is a no-brainer,” Smith added.

Here are some increasingly notorious ways that some of America’s largest corporations drastically shrink their tax bill:

•    Google used accounting techniques nicknamed the “double Irish” and the “Dutch sandwich,” which involved two Irish subsidiaries and one in Bermuda, to help shrink its tax bill by $3.1 billion from 2008 to 2010.
•    Wells Fargo paid no federal income taxes in 2008, 2009, and 2010, despite being profitable all three years, largely due to its use of 58 offshore tax haven subsidiaries.
•    Microsoft avoided $4.5 billion in federal income taxes over three years by using sophisticated accounting tricks to artificially shift its income to tax-friendly Puerto Rico. The company pays its Puerto Rican subsidiary 47% of the revenue generated from its American sales, despite the fact that those products were developed and sold in the U.S.

You can download the report, “The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure from Tax Loophole Abuse,” here: www.uspirgedfund.org/reports/usf/hidden-cost-offshore-tax-havens

A Few Good (and Fair) Tax Hikes

While the New Year’s deficit deal divided congressional Republicans, there’s one point on which they’re all reading from the same hymnal: No more tax talk! The revenues under the deal are relatively modest—they leave rich people’s taxes Protestors in support of a Robin Hood tax. (Photo: Martin Argles /Observer)well short of Clinton era rates. But Republicans, while claiming to care deeply about the deficit, have locked arms to take further tax increases off the table. We can’t let them.

The truth is, we could do our economy a world of good with some smart and fair tax hikes. While the current deficit hysteria is unmoored from reality, the right tax hikes could improve economic incentives, reduce obscene inequality and fund much-needed programs. Rather than the usual dust-ups over competing flavors of austerity, our budget debate should have healthy tax hikes front and center.

To start with, Congress should listen to Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. As Anderson noted at The Huffington Post last week, while progressive taxation may appear an uphill battle, politics is fluid, and “Openings will come…. The even more important challenge is to push progressive reforms into the center of the debate so they get plucked when the stars are aligned.”

Anderson has a few good taxes in mind to start with. First: Close the carried-interest loophole, so that money made by managing private equity or hedge funds no longer gets preferential treatment over wages earned by teaching kids or mining coal (President Obama offered welcome support for this change in his Super Bowl Sunday interview). Second: Cap executive pay deductibility, so that calling obscene bonuses “performance-based” no longer lets them be easily exempted from taxation. Third: Tax financial transactions, so bad behavior can be discouraged, and the people who crashed the economy can be required to pay for the cost of recovery. And fourth: Shut down offshore tax haven loopholes, so our tax code stops seducing money away from America.

Each of these tax changes would be a victory for the 99 percent, and a step towards economy sanity. We have a long way to go. As Oxfam International wrote in a briefing published last month, the world’s 100 richest billionaires alone last year made four times as much money as it would have taken to end extreme poverty. While “great progress” has been made in the fight to improve the lives of the world’s poorest, Oxfam warns, “as we look to the next decade, and new development goals we need to define progress, we must demonstrate that we are also tackling inequality—and that means looking at not just the poorest but the richest…. In a world of finite resources, we cannot end poverty unless we reduce income inequality.”

The Republican Party will pull out all the stops to avert any progress on taxes. But as House Ways and Means Committee Chair Dave Camp reminded us last month, even GOP congressmen know that taxing the wealthiest is politically popular. GOP sources told The Huffington Post’s Ryan Grim and Zach Carter that Camp is considering legislation that could transform the tax treatment of derivatives, discouraging extreme risk-taking and recouping little-taxed profit. Ironically, Grim and Carter’s sources suggested that the bill was motivated by payback: Camp resented top CEOs for supporting the (quite conservative) Fix the Debt in calling for a Grand Bargain, rather than taking the Grover Norquist line and refusing to entertain any tax increases at all. But if true, the story is telling: It shows that Republicans know that their CEO friends are depending on them to shield them from reasonable taxation, and that the top 1 percent are vulnerable to public outrage if a true tax debate breaks out.

That’s the debate we need now. It’s time for a few good tax hikes.

© 2013 The Nation

Katrina vanden Heuvel

Katrina vanden Heuvel is editor of The Nation.

A Few Good (and Fair) Tax Hikes

While the New Year’s deficit deal divided congressional Republicans, there’s one point on which they’re all reading from the same hymnal: No more tax talk! The revenues under the deal are relatively modest—they leave rich people’s taxes Protestors in support of a Robin Hood tax. (Photo: Martin Argles /Observer)well short of Clinton era rates. But Republicans, while claiming to care deeply about the deficit, have locked arms to take further tax increases off the table. We can’t let them.

The truth is, we could do our economy a world of good with some smart and fair tax hikes. While the current deficit hysteria is unmoored from reality, the right tax hikes could improve economic incentives, reduce obscene inequality and fund much-needed programs. Rather than the usual dust-ups over competing flavors of austerity, our budget debate should have healthy tax hikes front and center.

To start with, Congress should listen to Sarah Anderson, who directs the Global Economy Project at the Institute for Policy Studies. As Anderson noted at The Huffington Post last week, while progressive taxation may appear an uphill battle, politics is fluid, and “Openings will come…. The even more important challenge is to push progressive reforms into the center of the debate so they get plucked when the stars are aligned.”

Anderson has a few good taxes in mind to start with. First: Close the carried-interest loophole, so that money made by managing private equity or hedge funds no longer gets preferential treatment over wages earned by teaching kids or mining coal (President Obama offered welcome support for this change in his Super Bowl Sunday interview). Second: Cap executive pay deductibility, so that calling obscene bonuses “performance-based” no longer lets them be easily exempted from taxation. Third: Tax financial transactions, so bad behavior can be discouraged, and the people who crashed the economy can be required to pay for the cost of recovery. And fourth: Shut down offshore tax haven loopholes, so our tax code stops seducing money away from America.

Each of these tax changes would be a victory for the 99 percent, and a step towards economy sanity. We have a long way to go. As Oxfam International wrote in a briefing published last month, the world’s 100 richest billionaires alone last year made four times as much money as it would have taken to end extreme poverty. While “great progress” has been made in the fight to improve the lives of the world’s poorest, Oxfam warns, “as we look to the next decade, and new development goals we need to define progress, we must demonstrate that we are also tackling inequality—and that means looking at not just the poorest but the richest…. In a world of finite resources, we cannot end poverty unless we reduce income inequality.”

The Republican Party will pull out all the stops to avert any progress on taxes. But as House Ways and Means Committee Chair Dave Camp reminded us last month, even GOP congressmen know that taxing the wealthiest is politically popular. GOP sources told The Huffington Post’s Ryan Grim and Zach Carter that Camp is considering legislation that could transform the tax treatment of derivatives, discouraging extreme risk-taking and recouping little-taxed profit. Ironically, Grim and Carter’s sources suggested that the bill was motivated by payback: Camp resented top CEOs for supporting the (quite conservative) Fix the Debt in calling for a Grand Bargain, rather than taking the Grover Norquist line and refusing to entertain any tax increases at all. But if true, the story is telling: It shows that Republicans know that their CEO friends are depending on them to shield them from reasonable taxation, and that the top 1 percent are vulnerable to public outrage if a true tax debate breaks out.

That’s the debate we need now. It’s time for a few good tax hikes.

© 2013 The Nation

Katrina vanden Heuvel

Katrina vanden Heuvel is editor of The Nation.

Tax Games and Redistributing Income Upward

The corporate profit share of national income is near a post-World War II high. The share of income going to the richest 1 percent is almost at its pre-Depression peak. These would seem like impressive accomplishments, but the process of upward redist...

100 Years Of U.S. Federal Income Tax

On February 3rd, 1913, one of the two most historic events in US history took place: the ratification of the 16th amendment, which established Congress' right to impose a Federal income tax on Americans, and overturned Article I, Section 9 of the US Constitution which explicitly prohibited a general income tax. The amendment was brief and to the point, and read as follows: "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." And with that, the US Federal Income Tax was born and has been with us for precisely 100 years.

The amendment itself:

The result: the first ever iteration of what would henceforth become the most hated form in US history.

From OurDocuments.gov

Passed by Congress on July 2, 1909, and ratified February 3, 1913, the 16th amendment established Congress's right to impose a Federal income tax.

Far-reaching in its social as well as its economic impact, the income tax amendment became part of the Constitution by a curious series of events culminating in a bit of political maneuvering that went awry.

The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax. Congress repealed the income tax in 1872, but the concept did not disappear.

After the Civil War, the growing industrial and financial markets of the eastern United States generally prospered. But the farmers of the south and west suffered from low prices for their farm products, while they were forced to pay high prices for manufactured goods. Throughout the 1860s, 1870s, and 1880s, farmers formed such political organizations as the Grange, the Greenback Party, the National Farmers’ Alliance, and the People’s (Populist) Party. All of these groups advocated many reforms (see the Interstate Commerce Act) considered radical for the times, including a graduated income tax.

In 1894, as part of a high tariff bill, Congress enacted a 2-percent tax on income over $4,000. The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881. Although farm organizations denounced the Court’s decision as a prime example of the alliance of government and business against the farmer, a general return of prosperity around the turn of the century softened the demand for reform. Democratic Party Platforms under the leadership of three-time Presidential candidate William Jennings Bryan, however, consistently included an income tax plank, and the progressive wing of the Republican Party also espoused the concept.

In 1909 progressives in Congress again attached a provision for an income tax to a tariff bill. Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. Much to their surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect. Yet in 1913, due to generous exemptions and deductions, less than 1 percent of the population paid income taxes at the rate of only 1 percent of net income.

This document settled the constitutional question of how to tax income and, by so doing, effected dramatic changes in the American way of life.

As for the other historic event of US history, ironically it, too, took place in 1913, on December 23: this was the day when the Federal Reserve was founded.

The charts below summarize what has happened next:

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Marriage Tax Breaks: Cameron Faces Revolt

Tax breaks for married couples will not be part of next month's Budget, a senior Government source has said.

The news is likely to upset many Conservative backbenchers who have suggested the change should be included in Chancellor George Osborne's next Budget in return for their supporting plans to introduce gay marriage.

The Conservative general election manifesto pledged to introduce a marriage tax break, and the commitment was included in the coalition agreement.

It is expected that one member of a married couple or civil partnership would be allowed to transfer £750 of their tax-free personal allowance to their partner, reducing their tax bill. This would be worth around £150 a year to basic-rate taxpayers.

But the senior Government source flatly rejected the idea of a "quid pro quo" deal, and ruled out a marriage tax break featuring in the Budget.

"It won't be in the Budget but it will be in this Parliament," the source said. "This Budget obviously, with all that has happened in recent weeks and months, will be very much focused on growth in the economy".

Mr Cameron views the introduction of same-sex marriage - which is expected to split his MPs when it is put to a Commons vote next week - as the "Conservative Party delivering the promise it made".

"This is a difficult issue for some in the Conservative Party and he understands the strong feelings that people have, and of course it's a free vote," the source said.

"He is proud of the fact that it's a coalition Government with strong Conservative participation that is bringing forward a modern and progressive change.

"It is good to encourage people to come together and stay together."

The source also said Mr Osborne had the "full confidence" of the Prime Minister - insisting he will still be Chancellor at the 2015 general election.

It came as some MPs are said to be circulating a letter demanding that Mr Osborne is replaced as the economy continues to falter.

"He is an extremely successful Chancellor. He is battling very difficult economic circumstances," the source said.

"George Osborne will be Chancellor at the next general election."

The issue of gay marriage is causing Conservative party members to quit in significant numbers, according to The Times.

Backbenchers insist the issue has sparked "serious unrest" among the party's rank and file and are claiming some constituencies have lost as many as 100 card-carrying Tories each.

Conservative headquarters, however, does not hold up-to-date membership records, the newspaper said.

Tory MP David Burrowes told The Times: "There's serious unrest in the grassroots. You cannot avoid the fact that the troops are unhappy. People are drifting away."

Cameron Faces Revolt Over Marriage Tax Breaks

David Cameron is facing further pressure from Tory backbenchers after it was confirmed that marriage tax breaks will not be included in next month's Budget.

It had been planned that one member of a married couple or civil partnership would be allowed to transfer £750 of their tax-free personal allowance to their partner, reducing their tax bill. This would be worth around £150 a year to basic-rate taxpayers.

There had been speculation that the Government was planning to introduce the tax break in an attempt to appease backbenchers angry over same-sex marriage legislation.

In 2010, the Conservative general election manifesto pledged to introduce the marriage tax break, and the commitment was also included in the coalition agreement with the Lib Dems.

But the government is yet to bring in the tax break, angering sections on the right of the party.

Senior Government sources have also had to dismiss calls for George Osborne to be sacked - instead insisting Osborne will remain as Chancellor through to the 2015 general election.

Amid fevered speculation over plots against the Prime Minister - currently in Liberia ahead of a UN meeting - there have been rumours that rebels have set a deadline of summer 2014 for the party's electoral fortunes to turn around.

cameron osborne

Cameron stood by his close friend and Chancellor Osborne this week

A number of backbenchers have suggested the change should be included in Osborne's Budget next month in return for their supporting controversial plans to introduce gay marriage.

However, a senior Government source flatly rejected the idea of a "quid pro quo" deal, and ruled out a marriage tax break featuring in this Budget.

"It won't be in the Budget but it will be in this Parliament," the source told the Press Association. "This Budget obviously, with all that has happened in recent weeks and months, will be very much focused on growth in the economy."

The source also made clear that Osborne had the "full confidence" of the Prime Minister.

"He is an extremely successful Chancellor. He is battling very difficult economic circumstances," the source said.

"George Osborne will be Chancellor at the next general election."

According to the Times, the issue of gay marriage is causing Conservative members to leave the party in significant numbers.

The newspaper claimed that as many as 100 members had revoked their affiliation in some constituencies.

Tory MP David Burrowes is quoted as saying: "There's serious unrest in the grassroots. You cannot avoid the fact that the troops are unhappy. People are drifting away."

READ MORE:

Earlier on HuffPost:

Should Taxpayers Be Funding Private Schools That Teach Creationism?

Should Taxpayers Be Funding Private Schools That Teach Creationism?

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Posted on Feb 1, 2013
John Scalzi (CC BY 2.0)

Part of an exhibit at the Creation Museum in Petersburg, Ky.

By Zack Kopplin

According to so-called education reform advocates like former Florida Gov. Jeb Bush and his Foundation for Excellence in Education, school vouchers, which allow parents to direct state money to private schools of their choice, are essential because “families need the financial freedom to attend schools that meet their needs.” From Louisiana Gov. Bobby Jindal, a Republican, to Newark, N.J.’s Democratic Mayor Cory Booker, these programs are backed by politicians on both sides of the aisle, and they enjoy the support of powerful interest groups such as the Friedman Foundation for Educational Choice and the American Federation for Children.

Voucher programs have been established in 12 states and the District of Columbia, and they are spreading as Texas and Tennessee attempt to create ones of their own. As the use of vouchers has expanded across the country in recent years, new questions have arisen that extend beyond concerns about their appropriateness and legality. We’ve pushed standards, testing and accountability for public schools, so why shouldn’t private institutions receiving vouchers have to meet those same requirements? Should private institutions be allowed to ignore state science standards and teach their students creationism while receiving taxpayer money? Does learning about biblical creation, rather than evolution, really help to meet students’ needs?

I first investigated the relationship between creationism and voucher programs after reading an AlterNet article in June about Eternity Christian Academy in Louisiana. Now removed from the state’s voucher program, the school was using the Accelerated Christian Education curriculum to teach students that the mythical Loch Ness Monster existed and somehow disproved evolution. As I looked further into Louisiana’s program, I found that there wasn’t just one school but at least 20 private ones getting vouchers and thus receiving millions of taxpayer dollars. After reviewing my research, New Orleans Times-Picayune columnist James Gill wrote that “vouchers have turned out to be the answer to a creationist’s prayer.”

This isn’t just a Louisiana problem. It seems clear that the U.S. is facing a national creationism epidemic. In an exposé I wrote posted by MSNBC host Melissa Harris-Perry, I identified hundreds of additional voucher schools in nine states and the District of Columbia using dozens of different creationist curriculums. These schools are receiving tens of millions of dollars, and maybe even hundreds of millions, to teach religious beliefs in violation of state science standards. With 164 such campuses, Florida’s John M. McKay Scholarships for Students With Disabilities Program contained the highest concentration of creationist voucher schools I was able to uncover. Indiana, which has been marketed as the “gold standard” for voucher accountability, has at least 37 such schools teaching creationism. A couple of its campuses proudly advertise that their students are taken to the Creation Museum on field trips. So far, I’ve discovered 311 creationist voucher schools across the country.

Those 311 schools are not the only taxpayer funded institutions teaching creationism. There are likely hundreds more. Although many are difficult to find, either because they don’t have websites or don’t advertise their creationist curriculum, lots of voucher schools fit the profile of creationist campuses that are already known. On top of this, two states, Arizona and Mississippi, have voucher programs but don’t release the names of participating schools. Officials with the Arizona Department of Education confirmed to me that every private school in the state is eligible to participate in the program, and since I’ve identified private creationist schools there that could be involved, there is little doubt that Arizona is funding some of them. I believe it’s a safe bet that every school voucher program in the country is financing creationism.

These campuses would be shut if they were subject to the same standards as public institutions. The courts have shot down the teaching of creationism and intelligent design with public money over and over again, so why are we letting taxpayer funded private voucher schools teach them? The scientists and educators who devised both state science standards and the national common core standards knew creationism was pseudo-science that would not help American students get the education they need to succeed in a global, 21st century economy. That’s why we don’t teach creationism in public schools. Taxpayers should be outraged that their hard-earned dollars are enabling the mis-education of private school students.
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Taxpayers Punished Over Jimmy Savile Investigation

A rise in council tax in Norfolk has been blamed at least in part, on the police probe into sexual abuse allegations made against Jimmy Savile.

UK govt. raises taxes to record levels

A research shows that the UK coalition government will have increased taxes 300 times by 2015.

Taxes will have been increased nearly 300 times by the coalition government before its term of office ends in 2015, a new research shows.

According to a review carried out by the Taxpayers Alliance (TPA), the Tor-led government has implemented or planned 299 separate tax rises but only 119 separate tax cuts. This means that the UK government has been responsible for 180 more tax rises than tax cuts since it came to power.

The research also calculated that the amount of tax paid in Britain would soar by 15 percent in real terms by 2015-16.

"Families are struggling to bear an increasingly heavy tax burden. High taxes kill jobs, depress wages and increase prices. With nearly 300 tax rises since the Government came to power, it is no wonder everyone is feeling squeezed,” said TPA chief executive Matthew Sinclair.

Sinclair also warned that a decade of tax increases, rather than tax cuts caused a crisis in public finances.

The TPA said the full tax take would go from £513 billion in 2009-10 to £671 billion in 2015-16. Adjusted to 2012-13 prices, the increase was from £549 billion to £633 billion.

BGH/SSM/HE

Sugary drink tax ‘could pay for school meals’

Sugary drinks should be taxed at up to 20p a litre, say health campaigners – with the proceeds helping to pay for free school meals.

Food and farming charity Sustain said the Government could raise £1bn a year from the duty, while also saving lives by cutting excessive consumption of unhealthy drinks.

The report has been backed by more than 60 organisations, including the Academy of Medical Royal Colleges, Friends of the Earth, the National Heart Forum and the Royal Society for Public Health.

Diet-related illness is now costing the NHS £6bn every year, said the report.

Sustain urged Chancellor George Osborne to introduce the duty in his March 20 Budget and to channel most of the cash raised into a Children's Future Fund for programmes to improve children's health.

Money could be spent on campaigns to encourage youngsters to eat more fruit and vegetables, the report said.

The group's campaigns manager, Charlie Powell, said: "Sugar-laden drinks are mini-health time bombs, contributing to dental diseases, obesity and a host of life-threatening illnesses which cost the NHS billions each year.

"We are delighted that so many organisations want to challenge the Government to show it has a public health backbone by including a sugary drinks duty in Budget 2013.

"It's a simple and easy-to-understand measure which will help save lives by reducing sugar in our diets and raising much-needed money to protect children's health."

Sustain chairman Mike Rayner, of Oxford University's Department of Public Health, added: "Just as we use fiscal measures to discourage drinking and smoking and help prevent people from dying early, there is now lots of evidence that the same approach would work for food.

"Our obesity epidemic causes debilitating illness, life-threatening diseases and misery for millions of people. It is high time Government did something effective about this problem."

Coalition tax hikes ‘to total 299’

Taxes will have been increased almost 300 times by the coalition Government before its term of office ends in 2015, according to new research.

The Taxpayers' Alliance (TPA) said it had reviewed all of the Government's tax policies and found 254 tax rises had already come into effect, with 45 more planned before the next election.

It calculated the amount of tax paid in Britain would rise in real terms by 15% as result. The TPA said its review of Treasury and HMRC documents had also uncovered 119 tax cuts, of which 10 are still to implemented.

Chief executive Matthew Sinclair said: "Families are struggling to bear an increasingly heavy tax burden. High taxes kill jobs, depress wages and increase prices. With nearly 300 tax rises since the Government came to power, it is no wonder everyone is feeling squeezed.

"The crisis in the public finances came after a decade of tax rises, not tax cuts, but politicians are still coming back for more. Endless tinkering at the edges of the tax system was a vice that George Osborne criticised in the last Government, but of which he is equally guilty now he is in office.

"Many of the coalition's hundreds of changes create just as many new complications as they resolve and every one will have affected long term investments, often in quite subtle ways. That creates uncertainty which will undermine economic growth. Britain needs more lasting, strategic tax reform and less fiddling at the margins."

The TPA said the full tax take would go from £513 billion in 2009/10 to £671 billion in 2015/16. Adjusted to 2012/13 prices, the increase is from £549 billion to £633 billion, they said.

In the detailed findings, the TPA said it was counting each change to a tax individually. It said this meant there had been 55 increases in VAT rates, and five cuts. Similarly, income tax had been increased 35 times but cut 24 times - referring variously to the position of tax bands, the level of personal allowance or reliefs, such as gift aid.

Responding to the TPA report, a Treasury spokesman said: "In 2010, the Government was faced with the challenge of restoring Britain's worst public finances in peacetime history. We have had to take difficult decisions to deal with the deficit, including to increase some taxes, but we have done this while supporting hard-working people and businesses that create jobs through tax cuts and our programme of tax reform. The Government wants a fairer, more efficient and simpler tax system in which those with the most contribute the most.

"Since 2010, we have increased the tax-free personal allowance by £2,965, cutting the tax bills of 25 million people over the Parliament, and taking 2.2 million people out of income tax altogether by 2013. In December last year, the Chancellor cancelled the January 2013 fuel duty rise, meaning that it will have been frozen for nearly two-and-a-half years by September this year, providing £19 billion-worth of support to motorists over the parliament. We have cut corporation tax from 28% in 2010 to 21% in 2014 and our corporate tax reforms have been welcomed by business and are making the UK more globally competitive."

‘Deficit’ Deal Included Sweetheart Tax Break For Biotech Firm

So much for the alleged "deficit reduction," huh? (As Atrios keeps repeating, nobody really cares about the deficit.) Bill Moyers interviews Rep. Peter Welch (D-VT) about a corporate tax exemption for Amgen, the world's largest biotech company, that was included in the "fiscal cliff" deal:

A recent article in The New York Times reported on a cost-control exception provided to Amgen, the world’s largest biotechnology firm. According to the report, the sweetheart deal — hidden in the Senate’s final “fiscal cliff” bill — will cost taxpayers half a billion dollars. Bill talks to U.S. Representative Peter Welch (D-VT) about the bi-partisan bill he recently sponsored to repeal that giveaway, and the political factors that allow such crony capitalism to occur.

“When there is this back room dealing that comes at enormous expense to taxpayers and enormous benefit to a private, well-connected, for-profit company, we’ve got to call it out,” Welch tells Bill. “Those members of Congress who are concerned about the institution, about our lack of credibility, about the necessity of us doing things that are in the public good as opposed to private gain, we’ve got to call it out.”

As Dave Johnson recently pointed out, let's not call this "crony capitalism" or plain old political reality. Call it what it is. It's corruption.

Our political culture is such that coercion, threats, extortion, blackmail and payoffs are now more common than not. And it all goes back to the same thing: Money in politics. Election finance reform would fix most of the problems. We've always had corrupt politicians, but we could at least minimize their impact.

Greek Tax Tzar: “I Have Difficulty Paying Property Taxes”

While it may be a little early for humor this week, this was just too ridiculous to pass up. As Keep Talking Greece notes, Charis Theocharis - Greece's new revenues general secretary - recently appeared at a conference and made the rather intriguing "me neither" reply to an audience member's “I have no money to pay property taxes" comment. “Me too, as all of you, I have difficulties to pay the property taxes,” a rather perplexed Theocharis told the audience in an effort to continue his speech.

This follows former deputy PM Theodoros Pangalos, a PASOK MP for several decades, who had often claimed he could not pay property taxes for his more than 50 residences.

If those who have salaries cannot pay property taxes, what should the unemployed or the pensioner do who has a roof over his head but no other income?

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What Fox Doesn’t Want You To Know About Texas Taxes

Fox & Friends hosted former California Republican Senatorial candidate Chuck DeVore this morning to hype discuss his book promoting Texas' zero income taxes and corporate taxes as a model for the rest of us. In case you were wondering, DeVore has left California and is now Vice President of Communications for the Texas Public Policy Foundation, a Koch-funded institution dedicated to “educating and affecting policy makers” among other goals. But he was merely introduced as an author. If you blinked during the brief period that Fox fessed up to his current job title (without pointing out the Koch connection), you might never know. Also not discussed? How Texas' no-income-tax policy likely means higher taxes overall for most of us.

DeVore couldn't seem to say enough bad things about the state he hoped to represent in the U.S. Senate just a few years ago. Host Clayton Morris, who talked about having family there, joined suit. Morris started with the Freudian slip of saying that the “burdensome tax rate in that country.... is a major problem.” He also complained about the “burdensome regulations” his father-in-law faces running a “large landscape business” there. He said he has other family members in California who “want to move their business out of that state.” He didn't say anything about anyone planning to do so, however.

After some more California bashing, Morris said, “I want to know what is Texas doing right that California is not.” He put up a graphic with Texas' supposedly favorable poverty and unemployment rates and noted that it has zero income taxes compared to California's “highest bracket” of 9.3% and zero corporate taxes compared to California's “flat 8.8%.”

“Remember during the election we were talking about Texas as a model for the nation? What were they doing right?” he “asked.” On cue, DeVore talked up not only the lack of taxes but how the lack of funding for state government supposedly prevented it from ruining everybody's lives through regulations. He claimed that taxes and regulations in California were causing a “massive out migration.”

Not according to Reuters. They cited findings from a September 2012 review of state tax records by the Stanford Center on Poverty and Inequality:

In fact, more millionaires came to the state than left after California's so-called Millionaire's Tax was introduced in 2005 - adding 1 percentage point of tax to incomes over $1 million. A 1996 cut to taxes for those earning $110,000 and up did not spur migration into the state, either.

The number of millionaires has risen or fallen by about 10,000 a year, but that change has been almost entirely due to the state economy, not wealthy people coming into or leaving the state. Such migration accounted for about 47 people, net, on average.

The very richest, who were likely to have houses and properties in many parts of the world with creative means to finesse their taxes, were the least likely to move after the tax hike, but even those at the bottom end of the millionaires scale did not pick up and leave, according to the September study.

These findings matched behavior in New Jersey after it raised its top rates, it was noted.

Meanwhile, there's plenty not to love about Texas' taxes. In 2011, when Rick Perry was talking up Texas economics as part of his bid for the presidency, the Texas Star-Telegram took the kind of look behind the numbers that “fair and balanced” Fox & Friends didn't:

What draws less attention is that sales, property and wireless service taxes are higher in Texas than in most other states.

...At the state level, Texas draws most of its revenue from federal funding and sales taxes. At the local level, property taxes play a major role.

...Combining state and local rates, Texas has the 14th-highest sales tax rates in the country and the 22nd-highest property tax rates, according to the Tax Foundation.

…Texas ranks near the top in property taxes as a percentage of home value.

"Once you start adding it all up and writing the check, you see there is no free lunch," (Texas Republican pollster David Hill) said. "Texas is a nice state with medium-to-high taxes."

...Texas has the fifth-most-regressive tax system in the country, according to a 2009 study by the Institute on Taxation & Economic Policy.

But Morris was too busy slobbering over DeVore to go into any of those pesky details. He closed by reiterating the title of DeVore's new book and saying, “Knows what he's talking about”

Starbucks Plays Down ‘Threats’ Over Tax Row

Starbucks is distancing itself from reports that it threatened to pull millions of pounds of investment out of the UK because of "cheap shots" from the Prime Minister over tax.

The company's UK managing director Kris Engskov demanded talks after David Cameron said tax-avoiding firms need to "wake up and smell the coffee", according to The Sunday Telegraph.

The Prime Minister's use of the phrase in a speech to the World Economic Forum in Davos was widely interpreted as a direct attack on Starbucks, which has faced criticism for not paying UK corporation tax.

A "source close to the firm" told the newspaper: "The PM is singling the business out for cheap shots, a company that, it should not be forgotten, has pledged to pay tax now and into the future."

The US coffee chain has faced criticism after it emerged that since its arrival in Britain in 1998, it has paid £8.5m in corporation tax, despite total sales of £3bn. 

It later agreed voluntarily to pay additional tax of at least £20m over the next two years.

Sources close to the business have reportedly said that plans announced last year to invest £100m in new UK branches could be put on hold, meaning fewer jobs will be created.

But in a statement, Starbucks said: "We had a very constructive meeting which was long-scheduled. We do not discuss the details of our government meetings but can say that we do not recognise how it has been reported.

"Starbucks agrees with the Prime Minister that all businesses should pay their fair share.

"In the UK, we employ 9,000 people, contribute £300m a year to the economy and are forgoing tax deductions that will make the Exchequer at least £20m better off."

Conservative Party chairman Grant Shapps told Sky News that the Government was not singling out any company for criticism.

He told Sky's Dermot Murnaghan: "I don't think we'd ever single out a single company but I do think that companies in this country need to pay their way and that applies to that company (Starbucks) and any other company you'd care to mention.

"It certainly applies to the millions of smaller businesses in this country, people who work very hard...and are paying their fair share to taxes all the way through. The same rules have to apply to everyone."

Cameron takes aim at corporate tax avoiders

(Reuters) - Prime Minister David Cameron on Thursday attacked multinational corporations that avoid paying their fair share of tax, promising action against such aggressive strategies after a public backlash in Britain. The issue of tax avoidance by b...

On The News With Thom Hartmann: Virginia Gerrymanders Presidential Votes, Robin Hood Tax Hits...

Thom Hartmann here – on the news...

You need to know this. Virginia is now poised to be the first state to move legislation forward, which will rig the Electoral College to benefit Republican presidential candidates in the future. On Wednesday, legislation to dole out Electoral College votes based on gerrymandered Congressional districts, instead of the current winner-take-all system, advanced out of a state Senate subcommittee. It now heads to full committee, where it will likely be approved, before heading to the full state Senate, which is controlled by Republicans. So, Republicans have actually taken rigging the next presidential election seriously, with efforts also underway in Pennsylvania, Michigan, and Ohio to do the same thing. Progressives must counter with an equally aggressive push for a national popular vote. Nine states have already passed National Popular Vote laws, which commit their electors to vote for whichever candidate wins the national popular vote, even if that candidate lost the state Electoral College vote. Those nine states that have passed national popular vote laws - including California, Maryland, and Illinois - account for 132 electoral votes among them, nearly half of the 270 needed in the Electoral College to win the White House. If this trend continues, and enough states sign up to bring their combined Electoral College votes to 270, then the Electoral College, which Republicans are currently trying to rig, dies just like that. Let's get active and fight fire with fire.

In screwed news...Welcome to America, where you have to go to jail to receive the healthcare you need. The Sun-Sentinel, out of Florida, is reporting on a man who threatened to kill President Obama just so he could be arrested, thrown in jail, and receive much-needed medical care. Fifty-seven year old Stephen Espalin told a judge last week that he, "would have no intent to hurt the president", but he knew federal agents would arrive and "take care of [him]." Espalin made the threat against the President after he was kicked out of a hospital for giving a false name, and lying about having health insurance. Florida's Governor Rick Scott is critical of Obamacare, and is unlikely to adopt the provision in the law that expands Medicaid coverage in his state, which would help people like Espalin. But now that Espalin is headed to jail, he will receive the care he needs. He's already receiving chemotherapy, and once he begins his four year prison sentence, he's scheduled to have heart surgery. This is a cautionary tale of what happens to a nation that doesn't provide basic medical care to its citizens. Either we make healthcare a basic human right in America, just like it is elsewhere in the developed world, or we commit ourselves to unrest, desperation, and a sick population.

In the best of the rest of the news...

Robin Hood is coming to Europe. On Tuesday, 11 European nations agreed to put in place a financial transaction tax – also known as a Robin Hood tax – on the banks. Such a tax could generate billions in much needed revenue for the cash-strapped continent. The tax, which will range between .1% and .01%, will be applied to all trading in stocks, bonds, and derivatives. According to a statement from the European Council, the purpose of this new tax is, "for the financial industry to make a fair contribution to tax revenues, whilst also creating a disincentive for transactions that do not enhance the efficiency of financial markets." The participating nations in this Robin Hood tax make up 90% of the EU – and it's estimated the tax will bring in roughly 37 billion euros annually. According to the European Commissioner in charge of tax policy, Tuesday's agreement was "a major milestone in tax history." Now let's kick start the movement here in the United States to create our own Robin Hood tax.

Well, there's at least one place now that women will soon see workplace equality: in the military. Today, the Pentagon officially announced that it's lifting its ban on women in combat, potentially opening up more than 200,000 new combat positions in the military to women. This decision will pave the way for women to serve on the front lines, for the first time in the history of our armed services. The military will have until May to come up with plans to implement these changes – and each branch of the military will have until 2016 to get official exemptions for certain combat roles, which will remain exclusive to men. From allowing gays to openly serve, to now allowing women in combat, President Obama has taken significant steps to bring equality to our military – and he should applauded for his efforts.

Beware of online surveillance. This week, Google released its Transparency Report, revealing a massive increase in government surveillance. According to the report, Google received over 21,000 requests for data from governments and courts worldwide, just in the second half of 2012. That's a 70% increase from 2009. During that same period, the United State government made the most requests – with more than 8,000 demands for online data. Protecting our online privacy from prying government, and corporate eyes, is the new frontier – and "we the people" are currently losing this struggle.

And finally...following reports that a drone stike in Yemen mistakenly killed two children, the United Nations is launching an official investigation into the legality and death toll of drone warfare. The investigation will focus on 25 different drones strikes carried out by US, UK, and Israeli forces in Afghanistan, Pakistan, Yemen, and Somalia. According to Benn Emmerson, the UN's special rapporteur on human rights and counter-terrorism, this investigation is, "a response to the fact that there's international concern rising exponentially, surrounding the issue of remote targeted killings through the use of unmanned vehicles." This will be President Obama's biggest foreign policy challenge in his second term – winding down our deadly covert drone warfare programs. And it's up to us to push him to do what' right.

And that's the way it is today – Thursday, January 24, 2013. I'm Thom Hartmann – on the news.

Eleven EU Nations Take on ‘Financial Elite’ with Robin Hood Tax

In a "major milestone in tax history," 11 European countries are taking on the financial industry by agreeing on Tuesday to implement a Robin Hood tax earning potentially billions of euros for a region besotted with economic distress, finally taxing those institutions that created the current fiscal mess.

Proponents of the tax who campaigned last February can now celebrate the 11 EU Nations who agreed to the levy on Tuesday Jan. 22. (Photo: Martin Argles/ the Observer) The micro 0.1-0.01% financial transaction tax (FTT) would apply to trading in stocks, bonds and derivatives and could be implemented as early as next year.

The goal of the tax, according to a statement issued by the European Council, is "for the financial industry to make a fair contribution to tax revenues, whilst also creating a disincentive for transactions that do not enhance the efficiency of financial markets."

Writing for the Guardian, Peter Hain notes:

The social justice arguments for an FTT are incontrovertible: the City's financial elite may have sparked the financial crisis, but it is the rest of society, especially the poor, who are paying the price with the harshest program of austerity since world war two. Yet amid the 2.5 million unemployed and the threat of a triple dip recession, the financial sector has over the past year enjoyed one of the strongest performances of any sector on the FTSE 100. But it is the economic common sense, the potential to raise billions in additional revenue, that has led the center-right in Angela Merkel's Germany, Mariano Rajoy's Spain and Mario Monti's Italy to back this tax. It will collectively raise the 11 countries involved £30bn [$47.5bn] a year – no small beer.

Meeting in Brussels at the Economic and Financial Affairs Council, the participating EU member states are Austria, Belgium, Estonia, France, Germany, Greece, Italy, Slovakia, Slovenia and Spain; together making up 90% of Eurozone GDP.

The one notable exception to the group is the United Kingdom. As the largest trading hub in Europe, British participation would bring an additional £8bn [$12.7bn] of annual revenue. "[The British] government opted out," said Hain, "choosing instead to dance to the City of London's tune," referring to the financial elite in the UK.

Calling the vote "an example the rest of Europe and the world should follow," EU policy adviser for Oxfam International Nicolas Mombrial called on those involved to ensure the tax lives up to its moniker and help fund climate and other development projects.

“It will only be a Robin Hood Tax if a big chunk of the estimated €37 billion annual revenue is used to help poor people at home and abroad who have been hit hardest by the economic crisis and climate change,” he said.

Oxfam is asking for a quarter of the sum be allocated to the Green Climate Fund (GCF), to help fund low-emission and climate-resilient development, particularly in poor, more vulnerable nations. However, there is no agreement yet on how revenues will be allocated.

Sarah Anderson from the Institute for Policy Studies said that international campaigners, like Oxfam, who have been pushing for this tax for several years, "will be redoubling their efforts to demand that revenues to go towards social and environmental purposes"

The European Commission still needs to draft the final legislation, and the 11 states in favor of the law will have to give their unanimous approval before it becomes law.

India Scrambles To Make Gold Purchases Ever More Difficult: Hikes Import Tax And Duties...

Three weeks ago it became clear that in its fight to curb consumer thirst for gold products, India, whose population is the largest single source of gold consumer demand (at least for now, soon to be replaced with China) is losing said fight, after it...

Senators give Big Pharma huge present at taxpayers’ expense

The bill that averted the fiscal cliff included a largely unnoticed section that granted world’s largest biotechnology firm a two-year delay in regulations of its drugs – even though the firm has just pleaded guilty in a federal fraud case.

The bill, H.R. 8, was passed with a paragraph that lawmakers included to give the biotechnology firm Amgen two years to sell Sensipar without government price regulations. Sensipar, an expensive prescription drug produced by Amgen and used by kidney dialysis patients, is projected to cost Medicare up to $500 million over the next two-year period, since the legislation delays Medicare price restraints of End Stage Renal Disease (ESRD) drugs, the New York Times reports.

Section 632 of the bill announces the “two-year delay of implementation of oral-only ESRD-related drugs in the ESRD prospective payment system; monitoring.” Even though the bill does not specify Amgen by name, it mainly affects the sale of Sensipar, costing the government millions while allowing the firm to keep its prices unregulated.

Amgen employs 74 lobbyists in Washington, DC and was the only company to lobby for this delay, Congressional aides told the Times. Most of the delay’s supporters are leaders of the Senate Finance Committee who have benefited from Amgen’s generous political donations. Critics of the measure discovered that Amgen had won a previous two-year delay already and consider the initiatives driven by personal gain.

“That is why we are in the trouble we are in,” Dennis J. Cotter, a health policy researcher, told the Times. “Everybody is carving out their own turf and getting it protected, and we pass the bill on to the taxpayer.”

Legislatives aides who support the delay said it would give providers like Amgen the time they need to determine the details of federal reimbursements for kidney care.

Most individuals who suffer from ESRD are eligible for Medicare, regardless of their age. Medicare spent about $10.1 billion on dialysis care for these patients in 2011. But the US Government Accountability Office published a report last month that showed a 23 percent decrease in use of ESRD drugs from 2007 to 2011. Still, Medicare is forced to pay a bundle rate for the drugs, and has been paying based on the 2007 utilization levels, which was $650 million to $880 million more than it needed.

Amgen has also been charged for illegally marketing one of its anti-anemia drugs, Aranesp. The firm pleaded guilty last month after a federal criminal investigation discovered evidence of its unlawful engagements. The company must now pay a $762 million settlement, which is its largest yet, but makes a small dent in its $15.6 billion annual revenue.

Still, two weeks after pleading guilty, Amgen was granted another break with the fiscal cliff bill’s section that allows the firm to keep its prices high. Lobbyists and Congressional aides told the Times that many of them first discovered the new language when the final bill was publicly posted, just hours before it was voted upon. With little time left to avert the fiscal cliff, lawmakers approved the bill.

Secrecy of Cayman’s off-shore tax haven to be blown

The legendary secret tax haven status of the Cayman Islands is coming to an end. The islands’ financial authorities are going to begin scrutinising the companies and hedge funds set up there.

Thousands of enterprises and financial institutions in the British overseas territory that kept a low profile will soon come into the spotlight. The Cayman Island Monetary Authority (CIMA) wants to set up a database of funds registered in the island which will include the names of the bosses, according to the Financial Times (FT).

Between $8.19tn and $12.6tn has leaked out of countries into such secret jurisdictions as the Cayman Islands and Switzerland, according to the Guardian.

Since the onset of the financial crisis, some of the key financial institutions have amended their operation rules to allow a clearer picture of their activities.

“In the 24 months subsequent to the onset of the financial crisis, the BVI Financial Services Commission, the Central Bank of Ireland, the Jersey Financial Services Commission, the Bahamas Financial Services Board and the Isle of Man Supervision Commission all updated their corporate governance codes, laws and/or regulations,” FT quotes a CIMA paper.

On Thursday, EU Tax Commissioner Algirdas Semeta offered an ultimatum to Switzerland, saying the country has six months to make its tax legislation more transparent in terms of disclosing data on companies and enterprises, and make it comply with EU laws.

The Caymans have long been a subject of anger and criticism by both politicians and investors. While the US and UK policymakers are struggling to keep pace with fast-moving new global regulations, investors have been complaining on the uncertainty around the entities they were considering as investment destinations.

“We have been screaming for more transparency for some time now,” Vincent Vandenbroucke, head of operational due diligence at Hermes BPK, told FT. “It’s no longer acceptable for [offshore] directors to act as rubber stamps.”

Hermes BPK makes hedge fund investments on behalf of some of the UK’s biggest pension funds.

One Year Of Tax Hikes On The Rich Is Promptly Spent As $60 Billion...

After more than two months of political grandstanding, finally the $60 billion pork-laden Sandy relief aid bill has passed through the House in a 241-180 vote (with 1 democrat and 179 republicans voting no), with the vote passing courtesy of just 49 republicans who voted with the democrats. The reminder objected in protest "against a bill that many conservatives say is too big and provides funding for things other than immediate relief for New York, New Jersey and Connecticut" Politico reports. Specifically, the House approved a $50 billion relief bill, after several hours of contentious debate in which scores of Republicans tried unsuccessfully to cut the size of the bill and offset a portion of it with spending cuts. $9.7 billion had been already voted on January 4th for a flood insurance lending facility.The biggest winner today? Chris Christie whose anti-Boehner soapbox rant drama two weeks ago may have been just the breaking straw that forced the passage of this porkulus bill.

From Politico:

Republican and Democratic supporters of the bill argued throughout the day that everyone should support it, or run the risk of losing votes for future disaster bills that might help people in their districts.

"Florida, good luck with no more hurricanes," Rep. Frank LoBiondo (R-N.J.) shouted to any member who might oppose the bill. "California, congratulations, did you get rid of the Andreas Fault? The Mississippi's in a drought. Do you think you're not going to have a flood again?

"Who are you going to come to when you have these things? We need this, we need it now. Do the right thing, as we have always done for you."

Minority Leader Nancy Pelosi (D-Calif.) issued a similar warning to members who oppose the bill."

I hope that we can have an overwhelming bipartisan vote," she said. "I think that ideally… that would be the right thing to do.

"But as a practical matter, you just never know what mother nature may have in store for you in your region, and you would certainly want the embrace of the entire nation around you and your area, for your constituents, for your communities, for our country."

In other words, let's cut spending... but not when that spending may involve me being the benficiary. Incidentally, this is precisely why the US government will never, ever address the true cause of its insolvency: spending. Because doing so may mean being unable to rely on other, generous taxpayers when push comes to shove.

Scores of Republicans ignored these warnings and voted to either cut the bill or offset parts of it with cuts elsewhere. But there were not enough deficit hawks to overcome the many Republicans who favored the bill as it was presented, along with nearly every Democrat.

And yet another reason why the debt ceiling deal has no choice but to be enacted, with the usual theater, is the following:

The other big vote was on whether to offset the $17 billion baseline bill with a 1.63 percent cut to discretionary government programs. The sponsor of this language, Rep. Mick Mulvaney (R-S.C.), argued that while prior disaster bills did not have offsetting spending cuts, Congress is now operating in the context of a $16 trillion debt.

"The time has come and gone in this nation where we can walk in here one day and spend nine or 17 or 60 billion dollars and not think about who's paying for it," Mulvaney said.

But Mulvaney was rebuffed by House Appropriations Committee Chairman Hal Rogers (R-Ky.), who opposed the idea of subjecting discretionary programs to an across-the-board cut. That left Mulvaney asking all members why Congress can't find cuts to fund important disaster recovery aid.

"Just tell me what you are willing to do without," said Mulvaney. "Are we willing and able to do without anything so that these people can get this money this year?"

Mulvaney's amendment failed 162-258, as Republicans split on the proposal 157-71. The vote split GOP leaders, as Majority Leader Eric Cantor (R-Va.) voted for it, while Majority Whip Kevin McCarthy (R-Calif.) and Budget Committee Chairman Paul Ryan (R-Wis.) voted against it.

So, basically, there is nothing that the House was willing and able to do without. But yes: spending cuts.

Funny stuff.

And putting it all into context, $60 billion just happens to be the annual benefit from the Obama tax hikes on the rich. And just like that, the entire first year's budget benefit was spent in under 2 weeks.

Because if you tell them there is more money, they will gladly take it...

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Mervyn King Slams Goldman Sachs Tax Avoidance Strategy

UPDATE: Goldman Sachs has decided not to hold back investment bankers' bonuses until the new financial year to benefit from the cut in the top rate of income tax from 50p to 45p, which comes into effect on April 6.


The Governor of the Bank of England has slammed bosses at Goldman Sachs for considering delaying bonus payments so its millionaire bankers can pay less tax.

The bank is one of a number of City institutions contemplating deferring bonuses until after April 6th when the top rate of income tax drops from 50p to 45p.

Mervyn King said he found the proposed tactic "depressing" given the country's current economic situation.

goldman sachs tax

In 2011 Goldman Sachs paid out nearly £8billion in bonuses

He said: "I find it a bit depressing that people who earn so much find it would be even more exciting to adjust their payouts to benefit from the tax rate, knowing that this must have an impact of the rest of society.

"I think it would be a rather clumsy and lacking in care and attention to how other people might react. And in the long run, financial institutions do depend on goodwill from society."

The move could cost the Treasury of millions of pounds.

King said that it would not be "unlawful" for banks to defer bonus payments in this way.

The chairman of the Commons Public Accounts Committee, Margaret Hodge, also condemned the reported move by Goldman Sachs.

"What we are seeing now is the immoral situation whereby people who earn a lot of money just believe it's cool not to pay tax," she told The Times.

"It fails to understand the importance of everyone contributing to the common good and Goldman Sachs just don't get it. They feel no responsibility for paying their fair share of tax."

His sentiments echoed those made in Westminster on Monday as Labour increased pressure on Chancellor George Osborne to prevent the "opportunistic money grab".

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chris leslie tax

Chris Leslie accused the government of being "out of touch"

Chris Leslie, shadow Treasury minister, said: “It cannot be right that this out-of-touch government is making millions of working people and pensioners on modest incomes pay more while giving millionaires and bankers a huge tax cut.

'Banks need to think carefully about their own reputations if they seek to avoid tax in this way, but the ultimate responsibility lies with David Cameron and George Osborne."