Category: Taxes

What Gail Collins Says

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Seriously:

Louisiana has gotten $130 billion in post-Katrina aid. How is it that the stars of the Republican austerity movement come from the states that suck up the most federal money? Taxpayers in New York send way more to Washington than they get back so more can go to places like Alaska and Louisiana. Which is fine, as long as we don’t have to hear their governors bragging about how the folks who elected them want to keep their tax money to themselves. Of course they do! That’s because they’re living off ours.

You go, girl.

Bad Idea Stopped, For Now

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It appears that the Congressional Democrats killed a proposal to convene a special Social Security task force, at least in the near term.

There will not be any announcement of such a body at the “fiscal responsibility summit”, and this is a good thing.

The solvency of Social Security is the least of our worries right now, the public already pushed back on this in 2005 when Bush tried it, and people are looking at their 401(k)s right now, and want no part of privatization.

Handing off social security to wall street is a bad idea.

Expanding the sorts of wages covered by social security, and dropping the earnings limit may not be a good thing, but the “a bipartisan group take up the issue and devise a plan” people like Representative Ellen O. Tauscher, chairwoman of the New Democrats coalition, have one plan:

  • Give the money to Wall Street.
  • Extract campaign contributions from Wall Street Bankers.

Further raising the retirement age, reducing benefits, and/or handing the money to investment bankers, which is what the “Social Security Reformers” really want is a bad idea.

Just look at Chile’s privatized pensions.

The problem is 40 years in the future, and if one were simply to drop the cap on the employers portion of social security taxes, and expand the wages that are covered, there are an awful lot of wages to fat-cats that don’t count, and the problem is solved.

New York Dems to Gov. David Paterson: Drop Dead

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Well, it’s clear that New York Governor David Paterson is in trouble.

First, he gets outed as releasing personal information about Caroline Kennedy in order to derail her Senate bid, and now Democrats are rebelling against his budget, because they think that it is stupid to slash services for 90% of the population to the bone in order to keep income tax rates on the rich low.

They are proposing an increase in state tax rates on earnings about $¼ million a year, from 6.85% it goes to 8.25% for $250-500K , 8.97% for $500k-1m , and 10.3% above $1M.

I think that the conflict here is that, following the support after Spitzer left office, Democrats are unsatisfied with Paterson, who has seemed to spend his time cozying up to the state ‘Phants and to Wall Street with his plan or draconian cuts and tax increases or new taxes on sweet drinks and music downloads.

Why? Because he is either a liar or an idiot:

Another question mark concerns Governor Paterson. He has sent mixed signals in private and in public on the matter, saying on the one hand that he thinks raising taxes would cause wealthy people to move out of New York, and on the other hand that all options to plug the budget gap have to be on the table.

Rich people live where they want, and New York City and its environs, and this is where the high-rollers live, already live in one of the most expensive places in the world.

If they wanted to move to save a few bucks, they already would have done so.

Seriously, what are they going to do, move to New Jersey?

My theory is that he wants to have an enormous war chest when the primary rolls around to scary away opponents, and enormous war chest means Wall Street bucks.

Considering the performance of Wall Street in the public mind, and the fact that leading rival, New York State Attorney General Andrew Cuomo, just announced in investigation of Merrill’s recent bonuses, which both makes Paterson look like a turd, and Cuomo look like a hero.

Because They Still Won’t Vote For It

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So while Barack Obama is meeting with Republicans to get support for the stimulus package, John Boehner has already instructed his caucus not to vote for it.

A bright spot in all this is the report that Obama told the ‘Phants at a meeting to go pound sand on low income tax cuts.

They are claiming that it’s “Welfare”, though Ronald Reagan called it the “Earned Income Tax Credit,” and strongly supported it.

H/t Americablog for the pic.

Why Carbon Cap and Trade is a Fraud

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I’ve always said that it is rife in opportunities for gaming the system and abuse.

We now can say that the system has already been gamed and abused:

China dams reveal flaws in climate-change weapon

By JOE McDONALD and CHARLES J. HANLEY – 1 day ago

XIAOXI, China (AP) — The hydroelectric dam, a low wall of concrete slicing across an old farming valley, is supposed to help a power company in distant Germany contribute to saving the climate — while putting lucrative “carbon credits” into the pockets of Chinese developers.

But in the end the new Xiaoxi dam may do nothing to lower global-warming emissions as advertised. And many of the 7,500 people displaced by the project still seethe over losing their homes and farmland.

…..

This is not a but, it’s a feature. If you want Wall Street and its worldwide siblings to run this shell game, this is what is called “value added”.

This is why a carbon tax is the way to go.

And on the Other Side of the Congress

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Pelosi has the right idea.

She is arguing for immediate repeal of tax cuts for people making more than $¼ million a year.

I like this for 2 reasons:

  • It’s good policy.
  • It’s an even better place to start negotiations from.

The you only need two republicans, plus Uncle Joe Lieberman, to get this through the Senate, and you do not even need them on a budget bill, though there other 60 vote (actually 59 right now with 2 vacant seats) hoops to jump through.

Great, Now I’m Agreeing With A German Politician

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Former German Finance minister Oskar Lafontaine, now a member of the Left Party, is calling for an 80% income tax for people earning more than €600,000 a year.

While a maximum marginal income tax rate of 91%, which persisted through much of the Eisenhower administration, and was lowered to 77% under Kennedy, is probably excessive, the explosion in executive pay, and the falling real wages for the rest of us , largely correspond with the maximum tax rate falling to 50% in 1980, and below 40% from 1987 on (link).

Higher marginal tax rates, with greater limits in deductions would go a long way to fixing much of what is wrong with the US economy.

Not Enough Bullets: Tax Loophole Edition

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Well, now we know why Wells Fargo wanted wanted to buy Wachovia, a tax loophole

The day after Citigroup made its bid, the Treasury changed a tax rule that lets banks accelerate the losses and writedowns on banks they acquire against their own net income, offsetting the charges as tax write-offs.

Wells plans on writing off some $74 billion of Wachovia’s $498 billion loan portfolio — an insanely large amount that reflects just how poisoned Wachovia’s books really were. With the new tax rules, it gets to use all of that $74 billion as a charge against its own net income, which means one thing: Wells Fargo’s going to be a tax-write-off machine for years to come.

Not enough bullets.

Because Swiss Banks are So Open and Transparent

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We no know, as a result of a computer technician selling data he downloaded, about a large number of using Lichtenstein bank secrecy laws to evade taxes.

While Liechtensteiner banking secrecy laws are actually more opaque than those of Switzerland, it has always been Swiss banks that have captured the public imagination when it came to the rich laundering money, and we are now seeing revelations regard Swiss banking giant UBS was helping its clients launder money, though this time it appears the discovery happened the old fashioned way, employees have been caught, and they are flipping to prosecutors for consideration on sentences.

Senator Carl Levin is now calling for regulators to revoke the banking license UBS American operations.

His call may have little bite, as UBS has revealed that it intends to wind down its US private banking operations.

It intends to stop taking new customers immediately, and wind down the rest of its services over time.

California Runs Out of Money for Fire Fighting

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Two weeks into the new fiscal year, California has already spent 1/3 of its firefighting budget for the year, and in the home of Proposition 13, the money is not there to cover this.

They are not talking about surcharges on insurance in fire zones and similar methods to cover current and expected shortfalls in the firefighting budgets.

I don’t know how any of this will make it through the state house, where you need a super majority, which requires Republican votes, and they have pretty much pledged to vote against all taxes, and their districts disproportionately benefit from the firefighting efforts.

Lichtenstein Banking Data Stolen and Turned Over to Tax Authorities

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Heinrich Kieber, a former bank clerk in Lichtenstein, downloaded the names and accounts of thousands of secret bank accounts, burned them to three CDs, and then sold them “tax authorities to 12 countries including Germany, Great Britain, France, Italy and the United States.”

Well, it now appears that a fair number of these rich pig tax dodgers people will be facing some serious scrutiny from the IRS.

It’s been a while since I had a Schadenfreude post.