Category: Taxes

The Eu Gets Real, Beotches

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The EU has routinely insisted that in accordance with EU rules, countries in crisis have to impoverish their ordinary citizens, cutting wages and the social safety net.

Well it looks like the EU will start going after money for the big guys now with Eurocrats going after Ireland’s tax deal with Apple, and Luxemburg’s and the Netherland’s deals with FIAT and Starbucks:

In a warning shot to companies shopping for tax deals around the globe, the European Commission publicly accused Ireland on Tuesday of giving illegal subsidies to Apple and cautioned that the country might need to collect back taxes from the company, which outside analysts said could reach into the billions of dollars.

These findings, which constitute a preliminary indictment of Apple’s past arrangements with Ireland, come as policy makers in the United States and Europe try to block some of the inventive maneuvers multinationals use to limit taxes in their home countries and reduce their worldwide payments as much as possible.

“The light bulb has gone off that trade wars by another name and conducted through the tax system are just as ruinous,” said Edward D. Kleinbard, a professor at the University of Southern California’s Gould School of Law and a former chief of staff to the Congressional Joint Committee on Taxation.

And from the European lowlands:

The European Union is to accuse US tech giant Apple of taking illegal aid from the Irish state through sweetheart tax deals over two decades, the Financial Times reported Monday.

A European Commission investigation into Apple’s tax affairs in Ireland, where it has enjoyed a rate of less than 2.0 percent, found that the company benefitted from illegal state aid, the FT reported citing sources close to the matter.

Ireland’s Department of Finance confirmed that the EU would be publishing a document on Monday but stressed that “the Commission has not formally decided that there is state aid” at play.

“Ireland is confident that there is no breach of state aid rules in this case and has already issued a formal response to the Commission earlier this month, addressing in detail the concerns and some misunderstandings contained in the opening decision,” the department added.

The European Union launched a probe in June into sweetheart tax deals negotiated by Apple, Starbucks and Fiat with three member states.

The investigation seeks to determine whether such arrangements offered by Ireland, Netherlands and Luxembourg give the companies an unfair competitive advantage and thus amount to illegal state aid.

Here’s a phrase that I did not expect to say, “Good job, European Union Bureaucrats.”

Follow this to its logical conclusion, please, and ban this sh%$.

Everyone but the corporations lose in this beggar thy neighbor strategy, and besides, Ireland really needs the money.

Because Our Government Has Been Completely Captured by the Banksters

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James Kwak asks, “Why Is Credit Suisse Still Allowed to Do Business in the United States?”

Thia has been another episode of simple answers to simple questions.

On a slightly less glib level, Kwak wonders why, if the financial markets are all better, and the banks insist that they are not to big to fail, why we cannot see fit to suspend the banking license of a foreign bank that has spent decades defrauding the American government.

The fundamental point is that if Credit Suisse really is solvent, then there are no losses that have to be absorbed by someone else (other financial institutions or taxpayers). If its assets really are worth more than its liabilities, then it must be possible to close down the bank without harming anyone else (except shareholders), given enough time. The whole point of capital regulation is to make sure that this can always be done. People would lose their jobs, but the whole premise of the financial sector is that it is providing useful services, which means that those jobs would be recreated elsewhere in the industry (except for the jobs based on tax fraud, which should go away for good).

Our finance system is not just corrupt, it is criminogenic.

We gotta figure out a way to shut this all down in an orderly manner, and replace it with something, you know, sane.

Because the IRS Cannot Make Campaign Donations, I Guess

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A few years back, there was an experiment with allowing private contractors to go after people who owed taxes.

It was a failure, with abusive behavior, indifferent record keeping, higher costs, and lower performance, but the private debt collectors can make campaign donations, so the Senate is looking to bring back this clusterf%$#:

The Internal Revenue Service would be required to turn over millions of unpaid tax bills to private debt collectors under a measure before the Senate, reviving a program that has previously led to complaints of harassment and has not saved taxpayers money.

The provision was tucked into a larger bill, aimed at renewing an array of expired tax breaks, at the request of Sen. Charles E. Schumer (D-N.Y.), whose state is home to two of the four private collection agencies that stand to benefit from the proposal.

It requires all “inactive tax receivables” to be assigned to private debt collectors if the IRS cannot locate the person who owes the money or if IRS agents are unable to make contact within a year.

Some taxpayers would be spared the barrage of notices and phone calls, including innocent spouses, military members deployed to combat zones and people “identified as being deceased.”

But bereaved relatives could find themselves under siege for unpaid estate taxes under the proposal. So could people who incur a tax debt under the new Affordable Care Act — either because they owe a penalty for not buying health insurance or because the government was too generous in estimating the size of their health-care tax subsidy.

As the measure arrived on the Senate floor this week, Nina E. Olson, the nation’s taxpayer advocate, wrote a long letter to lawmakers, urging them to withdraw the proposal.

“Outsourcing the collection of federal tax debts is a bad idea,” she wrote. “It disproportionately impacts low-income and other vulnerable taxpayers, and despite two attempts [in the past] at making it work, the program has lost money both times, undermining the sole rationale for its existence.”

Moreover, “if debt collectors come to be seen as the public face” of President Obama’s health-care program, Olson wrote, “I am concerned that could make the IRS’s job” of administering the new health-insurance program “more difficult.”

But it’s back, like a bad penny.

Do you know why it is back? Because Schumer wants some local firms to to make money off the taxpayers, “$1.2 billion would be paid to the private debt collectors, potentially showering fresh cash on two companies based in Upstate New York: ConServe, of Fairport, and Pioneer Credit Recovery, of Arcade.”

To quote Declan Patrick Macmanus, “I used to be disgusted, now I try to be amused.”

It’s a Start………

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The IRS has revoked the 501(c)3 tax exempt status of The Patrick Henry Center for Individual Liberty, a right wing group that has routinely engaged in illegal electioneering.

The kicker is that Center is in part a political advocacy group formed by Ginny Thomas, wife of Supreme Court justice Clarence Thomas:

Under the tax code, it’s illegal for a charity to engage in electoral politics. In its response to the IRS, the Patrick Henry Center said its statements could be interpreted differently by different people, and that many of them did not advocate voting for or against a candidate.

The center’s most recent tax return disclosed $343,503 in revenue for tax year 2012. In recent years, it’s become aligned with the Tea Party movement, contributing to at least one of the groups targeted for extra scrutiny by the IRS beginning in 2010. Also in 2010, the Patrick Henry Center merged with Liberty Central, an advocacy group headed by Virginia Thomas, the wife of Supreme Court Justice Clarence Thomas. Former U.S. Attorney General Edwin Meese serves on the center’s board.

The IRS’s revocation means contributions to the Patrick Henry Center are no longer tax deductible.

I incorporated a 501(c)3 tax exempt organization in the early 1990s, and I recall the sh%$ I had to go through to incorporate.

I was originally turned down, because the examiner thought that the organization was better suited to 501(c)7 status, a membership organization, as opposed to a charity, which would lose tax exempt status and (more importantly to us) a special low postal rate. (Had to explain some terminology we used in my appeal,k and it worked)

In retrospect, I believe that the examiner morally right on this, though my application was was within the parameters of existing law and regulation.

It’s just that and the rules that the IRS is not enforcing are way too lax, and more observed in the breach than in actual enforcement.

It’s nice to see that this is changing.

Conservative Politics in a Nutshell

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Looting.

Case in point, the Tory proposal to sell British taxpayer’s data to private firms because it’s a good way to throw some vig in the direction of your supporters, in the hope that it will eventually flow back to you:

The personal financial data of millions of taxpayers could be sold to private firms under laws being drawn up by HM Revenue & Customs in a move branded “dangerous” by tax professionals and “borderline insane” by a senior Conservative MP.

Despite fears that it could jeopardise the principle of taxpayer confidentiality, the legislation would allow HMRC to release anonymised tax data to third parties including companies, researchers and public bodies where there is a public benefit. According to HMRC documents, officials are examining “charging options”.

The government insists that there will be suitable safeguards on personal data. But the plans, being overseen by the Treasury minister David Gauke, are likely to provoke serious worries among privacy campaigners and MPs in the wake of public concern about the government’s Care.data scheme – a plan to share “anonymised” medical records with third parties.

The Care.data initiative has now been suspended for six months over fears that people could be identified from the supposedly anonymous data, which turned out to contain postcodes, dates of birth, NHS numbers, ethnicity and gender.

Seriously, John Kenneth Galbraith had it nailed when he said that, “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”

It’s all about looting, and it is all justified under the rubric of the Gordon Gekko quote, “Greed is good.”

Nothing is the Matter With Kansas

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Thomas Frank in his book, What’s the Matter with Kansas? he is flummoxed about why the so-called American heartland vote against their economic interests when they vote “God, Guns, and Gays” social issues.

Well, over at MoJo, Kevin Drum notes that any serious analysis, “Democrats have done virtually nothing for the middle class in 30 years.”

He’s right.  The  Democrat Party’s record on economic for the middle class, and the poor is amazingly weak tea when compared to anyone but the Republicans:

There are two problems with the Democratic approach. First, it’s too abstract to appeal to anyone. Second, it’s not true anyway. Democrats simply don’t consistently support concrete policies that help the broad working and middle classes. Half of them voted for the bankruptcy bill of 2005. They’ve done virtually nothing to stem the growth of monopolies and next to nothing to improve consumer protection in visible ways. They don’t do anything for labor. They’re soft on protecting Social Security. They bailed out the banks but refused to bail out underwater homeowners. Hell, they can’t even agree to kill the carried interest loophole, a populist favorite if ever there was one.

Sure, Democrats do plenty for the poor. They support increases in the EITC and the minimum wage. They support Medicaid expansion. They passed Obamacare. They support pre-K for vulnerable populations. They expanded CHIP. But virtually none of this really benefits the working or middle classes except at the margins.

Democrats have been unwilling to do any more than nibble around the edges for years.

It’s all about extracting large donations from rich people, which requires that you support policies that make them richer and richer, and this money is extracted from the rest of us.

I Called for Amputating the Financial Sector Years Ago

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See here.

JD Alt at New Economic Perspectives has just called for the same thing:

All this talk about the 99% versus the 1%? I say the easiest—and likely the most useful—thing to do is just forget the 1%. Write them off. Let them have their gated communities, their mega-yachts, their island retreats and off-shore bank accounts. What do we need them for?

 For one thing, we DON’T need their money. Even if we could get it—which we can’t because they steadfastly refuse to use it for anything other than casino gambling in their private and secretive financial networks. We wonder why we have a “jobless recovery”? Does it have anything to do with the fact that such a large percentage of our “capital” has, for all practical purposes, been removed from the economy?

 Even when the 1% decides to invest some of their Dollars to manufacture or build something, they rarely decide to manufacture or build anything we really need—only things we really don’t need. Like strip-mines in the Bristol Bay salmon fishery, or pipe-lines across Nebraska’s freshwater aquifers, or rocket-planes for space-tourism. Thanks, but we really don’t need—or want—any of it. We’d much rather have fresh wild salmon (rather than the artificially colored hatchery-stuff) than more copper and gold, fresh water instead of tar-sands oil, and the good-old week-at-the-beach is just fine for a vacation.

He then gives the example of the huge transformers that are essential to our electrical grid.

We do not, and can not, make them in the United States, because the casino finance class doesn’t care, because they can always get them from Korea, with a a 2 year lead time.

If that’s a problem, they can always move to their summer house on a Greek island.

Here is how he poresents it going:

This little tale is made even more interesting by the fact that these very-large transformers—usually situated inside a compound protected by chain-link fencing—are easily destroyed with a few rounds of fire from a semi-automatic assault rifle. Thankfully, semi-automatic assault rifles are difficult to come by in the U.S., otherwise there might be cause for concern. The seventeen transformers recently shot to death in California (we can’t explain how this actually happened, since the NRA is only marginally active on the West Coast) are a cautionary tale: If this were repeated on just a little bit larger scale, the Department of Homeland Security has determined, our entire electric grid could be down for months—or even longer. (Come on South Korea, hurry it up…. We’re waiting!)

 So my example is this: Why doesn’t President Obama propose that since the 1% have no interest in doing it, the U.S. sovereign government build a plant to manufacture very-large transformers, hire engineers to train unemployed people to do the labor, pay those unemployed trainees for making the effort to learn how to make a giant-sized transformer, then hire those newly trained workers to run the manufacturing process? We could build a backup supply of these critical electric grid components so that in the (increasingly likely) event some crazy, anti-government sociopath seizes the opportunity to turn out America’s lights, we could turn them back on in fairly short order.

It’s an interesting mental exercise, and I am not sure how serious this proposal is,it has a Jonathan Swift — A Modest Proposal snarky feel to it.

Still, breaking the lock of the “Washington Consensus” of so-called free trade and the continuing financialization of our economy is a non trivial task.

That’s why my calls for amputation involve a zero tolerance criminal prosecution policy. 

Obama Punts on Equal Healthcoverage Coverage for CEO’s, Lets the 1% Loot Again

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One of the provisions of the PPACA was that senior executives had to get the same sort of insurance as the rest of their workers.

Well, it seems that the Department of Health and Human Services has decided that it’s just too hard to come up with rules to implement this portion of the statute:

The Obama administration is delaying enforcement of another provision of the new health care law, one that prohibits employers from providing better health benefits to top executives than to other employees.

Tax officials said they would not enforce the provision this year because they had yet to issue regulations for employers to follow.

The Affordable Care Act, adopted nearly four years ago, says employer-sponsored health plans must not discriminate “in favor of highly compensated individuals” with respect to either eligibility or benefits. The government provides a substantial tax break for employer-sponsored insurance, and, as a matter of equity and fairness, lawmakers said employers should not provide more generous coverage to a select group of high-paid employees.

But translating that goal into reality has proved difficult.

Officials at the Internal Revenue Service said they were wrestling with complicated questions like how to measure the value of employee health benefits, how to define “highly compensated” and what exactly constitutes discrimination.

Bruce I. Friedland, a spokesman for the I.R.S., said employers would not have to comply until the agency issued regulations or other guidance.

This sh%$ ain’t rocket science.

Either they are dragging their feet, or they are writing Byzantinely complex rules.

The only reason for complexity is to create loopholes that millionaire campaign contributors executives can drive their Beemers through.

Not Enough Bullets

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The tech companies are trying to dodge taxes again:

Silicon Valley has launched a last-ditch attempt to derail plans devised by the G20 group of countries to close down international loopholes that are exploited by the likes of Google, Amazon and Apple to pay less tax in the UK and elsewhere.

The Digital Economy Group, a lobbying group dominated by the leading US digital firms, has written to the OECD, the Paris-based thinktank tasked by G20 leaders with drawing up reforms, saying it is not true that communications advances have allowed multinational groups to game national tax systems.

Suggesting that any leakage of tax revenues flowing from the complex corporate structures of digital groups is merely coincidental, the Digital Economy Group says: “Enterprises that employ digital communications models do not organise their business operations differently as a legal or tax matter.”

Their denial of tax engineering follows a string of tax scandals in Europe and the US in the past two years. In the UK, Google bore the brunt of criticism from Margaret Hodge, who chairs the public accounts committee, after it emerged that Google – which the Guardian understands is a member of the DEG – had been allowed to pay £3.4m in tax to HMRC in 2012 despite UK revenues of £3.2bn.

“Merely coincidental,” my ass.  0.09% tax rate?  This is not a boating accident.

I guess that you need all that money you save from tax cheating that you can pay your senior executives obscene bonuses.

How about throwing these motherf%$#ers in jail.

Better Than Bullets

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François Holland has gotten court approval for a 75% tax on €1 million:

French President Francois Hollande received approval from the country’s constitutional court to proceed with his plan to tax salaries above 1 million euros at 75 percent for this year and next.

Under Hollande’s proposal, companies will have to pay a 50 percent duty on wages above 1 million euros ($1.4 million). In combination with other taxes and social charges, the rate will amount to 75 percent of salaries above the threshold, the court wrote in a decision published today.

“The companies that pay out remuneration above 1 million euros will, as expected, be called upon for an effort of solidarity on remuneration paid in 2013 and 2014,” the Economy Ministry said in an e-mailed statement.

………

A first proposal to put the change into law was turned down by the constitutional court in December last year because the tax applied to individuals and not households. The country’s top administrative court said any rate above 66 percent would be rejected as confiscatory.

Hollande revived the plan this year, making it apply to salaries and be paid by employers rather than individuals. The total amount is limited to 5 percent of a company’s revenue.

I’m not sure if “company’s revenue” means total revenue (turnover) or profit (net revenue).

Hopefully the former.

€1 million is about $1.3 million, and I’m fine with that.  It’s a sin tax, like those on alcohol, tobacco, marijuana, (in Colorado) and gambling.

If there is anything that the financial crisis shows, it is that excessive compensation is at least as corrosive as society as anything mentioned above.

As Much as I Like Liz Warren, I Wish that Martha Coakley Had Beaten Scott Brown in the Senate Race in 2010

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She ran a truly horrible campaign, but her tenure as Massachusetts AG has generally been pretty positive.

Case in point, her most recent report showing that not-for-profits pay obscene remuneration to their top executives, and proposing changes in corporate governance:

Nonprofit groups in Massachusetts are paying their chief executives huge amounts of money and giving them lavish perks unavailable to most workers, according to a new report from Attorney General Martha Coakley’s office that calls for reform in the way groups disclose executive compensation.

The 92-page study, which covered 25 large charitable organizations in Massachusetts, mainly hospitals, insurers and colleges, found all of them paid their leaders at least a half-million dollars a year in total compensation. And many of the organizations offered their executives an assortment of other benefits, including bonuses, deferred compensation, auto allowances, financial planning, life insurance and other benefits that are more commonly associated with corporate leaders.

Even when executives retire, they often leave with hefty severance or consulting deals that allow them to earn millions more. The executives covered by the report each received between $487,000 and $8.8 million in total compensation each year between 2009 and 2011 — pay levels that Coakley’s office said should cause concern in some cases.

“It is not always clear that large compensation benefits packages are actually necessary to attract and retain talent,” the report argued.

Gee, you think?

Doubtless, there is some politics involved here, Coakley is looking to run for Governor, but when we are talking about tax-exempt organizations, there is a direct governmental interests, because it is the taxpayer who pays for these excesses.

I Agree With the Shrill One

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Krugman’s latest OP/ED calls for raising the minimum wage.

It’s well thought out, but the limited space of the Times OP/ED page has him leaving out an important point to make, that a low minimum wage is actually a taxpayer funded subsidy for bad employers, because many of these employees qualify for food stamps, welfare, Medicaid, or the EITC.

Walmart and McDonalds actually have a policy to help their employees register for the public dole, because it is cheaper (for them) to dump it all off on the taxpayers.

Raising the minimum wage would tend to be stimulative, because poorer people spend a greater proportion of their income more quickly, and it would lower the deficit, by increasing tax revenues, and decreasing safety net programs.

Of course, the so-called “Deficit Hawks” don’t care, because they don’t really care about the deficit.  They just want to punish the poors.

Ratf%$#s.

Bye Bye Silvio

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Berlusconi has been expelled from the Italian parliament following his conviction for tax fraud:

The Italian Senate has voted to expel ex-Prime Minister Silvio Berlusconi from parliament with immediate effect over his conviction for tax fraud.

Berlusconi, who has dominated politics for 20 years, could now face arrest over other criminal cases as he has lost his immunity from prosecution.

He told supporters in Rome it was a “day of mourning” for democracy.

Ahead of the vote, he vowed to remain in politics to lead his Forza Italia in a “fight for the good of Italy”.

A defiant Berlusconi told supporters gathered outside his Rome residence that “no political leader has suffered a persecution such as I have lived through”.

He said: “It is a bitter day, a day of mourning.”

Central to Berlusconi’s success has always been his near monopoly on commercial TV in Italy, particularly when juxtaposed with his control of the state TV networks after he was first elected.

What the need to do now is to pass regulations preventing this ghastly intersection of monopoly media ownership and electoral politics from recurring.

Sounds Good, but I do not Expect Anything Meaningful to Come of This

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We’ve seen this before.

The White House puts out a potentially significant rule, or rule change, and the right wing noise machine cranks up, and they back off.

This is why I’m dubious that their place greater restrictions on tax-exempt political groups will amount to much:

The Obama administration proposed new rules on Tuesday to rein in tax-exempt groups that have transformed the U.S. political landscape in recent years by harnessing hundreds of millions of dollars in anonymous donations to influence elections.

The proposal would alter definitions in the tax code that allow limited campaign and fundraising activities by the tax-exempt groups, some of which have been at the center of allegations that the Internal Revenue Service targeted conservative Tea Party groups for extra scrutiny.

These tax-exempt “social welfare” groups, organized under section 501(c)(4) of the tax code, mushroomed after a 2010 U.S. Supreme Court ruling that relaxed campaign finance rules. Part of their appeal is that the groups do not have to disclose the identities of their donors as long as they spend less than half their time and money on political activities.

Critics say the relaxed rules have opened the door to the abuse of campaign finance rules meant to curb the influence of wealthy donors in U.S. politics.

………

U.S. government officials have struggled for years to determine what qualifies as political activity. The proposed rules would more clearly define “candidate-related political activity” and also ask for public comment about how much political spending these groups should be allowed to do. The proposed rules introduce several bright-line tests that would determine when a 501(c)(4) is doing too much campaign activity and is violating its tax-exempt status.

Among these new definitions, advertising that names a candidate 60 days before a general election would count as political activity. Certain contributions that can now be made anonymously by these groups may need to be reported. Any “voter guides” that refer to a candidate would be considered political activity.

Also, any event within 60 days of a general election at which a candidate appears as part of the program would be a political event.

“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by social welfare organizations,” Mark Mazur, Treasury assistant secretary for tax policy, said in a statement.

If they implement this, it would be good first step, but I expect it to be watered down beyond recognition.

Fed Judge Rules Parsonage Tax Exemption Unconstitutional

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The Freedom From Religion Foundation prevailed in their challenge:

The Freedom From Religion Foundation and its co-presidents Annie Laurie Gaylor and Dan Barker have won a significant ruling with far-reaching ramifications declaring unconstitutional the 1954 “parish exemption” uniquely benefiting “ministers of the gospel.”

 “May we say hallelujah! This decision agrees with us that Congress may not reward ministers for fighting a ‘godless and anti-religious’ movement by letting them pay less income tax. The rest of us should not pay more because clergy pay less,” Gaylor and Barker commented.

 U.S. District Judge Barbara B. Crabb for the Western District of Wisconsin issued a strong, 43-page decision Friday declaring unconstitutional 26 U.S. C. § 107(2), passed by Congress in 1954. Quoting the Supreme Court, Crabb noted, “Every tax exemption constitutes subsidy.” The law allowed “ministers of the gospel” paid through a housing allowance to exclude that allowance from taxable income. Ministers may, for instance, use the untaxed income to purchase a home, and, in a practice known as “double dipping,” may then deduct interest paid on the mortgage and property taxes.

 “The Court’s decision does not evince hostility to religion — nor should it even seem controversial,” commented Richard L. Bolton, FFRF’s attorney in the case. “The Court has simply recognized the reality that a tax free housing allowance available only to ministers is a significant benefit from the government unconstitutionally provided on the basis of religion.”

 Crabb wrote: “Some might view a rule against preferential treatment as exhibiting hostility toward religion, but equality should never be mistaken for hostility. It is important to remember that the establishment clause protects the religious and nonreligious alike.”

 The benefit to clergy is huge — saving an estimated $2.3 billion in taxes in the years 2002-2007 alone, according to a statement by Congressman Jim Ramstad in 2002. Clergy are permitted to use the housing allowance not just for rent or mortgage, but for home improvements including swimming pools, maintenance and repairs. They may exempt from taxable income up to the fair market rental value of their home, particularly benefiting well-heeled pastors. The benefit extends to churches, which can pay clergy less, as tax-free salaries go further.

 The 1954 bill’s sponsor, Rep. Peter Mack, argued ministers should be rewarded for “carrying on such a courageous fight against this [godless and anti-religious world movement].”

 “I agree with plaintiffs that §107(2) does not have a secular purpose or effect,” wrote Crabb, adding that a reasonable observer would view it “as an endorsement of religion.”

Given the decades of Republican court stacking, I would expect this to be overturned on appeal, but I hope that it isn’t.

I do not know about the general makeup of the 7th circuit court of appeals, but if it does not get shut down at that level, it will be by the Supreme court.

H/t Cthulhu at the Stellar Parthenon BBS.

What? You Mean that Taxpayer Funded Stadiums Don’t Create Growth?

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Hoocoodanode:

Boosters of Baltimore’s Oriole Park at Camden Yards, built at taxpayer cost of $210 million, promised the baseball stadium would lead an urban renaissance, revitalizing blighted neighborhoods and bringing jobs and tax revenue to the city’s struggling downtown.

More than two decades later, the pledge stands unfulfilled. Baltimore is burdened with 16,000 vacant properties and some of the highest taxes in Maryland. The neighborhoods around Camden Yards have fewer businesses than they did in 1998. And the ballpark and a National Football League stadium nearby will require state and local debt service of about $24 million in 2014.

Baltimore’s lesson is one that Atlanta Mayor Kasim Reed has taken to heart. He said Nov. 11 that Georgia’s capital city wouldn’t pay to build a new stadium for the Atlanta Braves — regardless of the team’s promises to bring thousands of jobs and pump tens of millions of dollars into the local economy. So the franchise said it would relocate to suburban Cobb County, which agreed to pay $300 million of the facility’s $672 million cost.

“It’s wrong to take money from taxpayers and hand it to millionaires and billionaires,” said Arthur Rolnick, a senior fellow at the University of Minnesota who has studied the public cost of professional sports stadiums. “If you try to justify it on economic development, the arguments dissolve pretty fast. The public would be much better off if they invested in things that would improve the quality of life, like roads and bridges, education and lowering crime.”

It ain’t just stadiums. It’s all the corporate welfare out there.

It is a losing proposition for governments.

Just wait until Cobb County gets hit with the real bill for the Braves’ ballpark.

You are Welcome to Our Health Care System Design, But We Insist that in Compensation, Rob Ford Be Appointed Mayor of Some Town in Vermont…*

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While we are talking about the progress of Obamacare, it is important to note that Vermont is going with a full up single payer system:

All but ignored in the multitude of media coverage about the ACA and its problems, Vermont has become the first state in the union to pass a single-payer universal health care law for its residents. It has a snappy slogan: Everybody in, nobody out.

The system will be fully operational by 2017, funded by Medicare, Medicaid, federal money for the ACA given to Vermont, and a slight increase in taxes. Everyone will be able to go to any doctor or hospital in the state free of charge. No plans to figure out, no insurance forms to sweat over, no gotchas.

………

Dr. William Hsaio, the Harvard health care economist who helped craft health systems in seven countries, was Vermont’s adviser. He estimates that Vermont will save 25 percent per capita over the current system in administrative costs and other savings. Employers will suddenly be free to give raises to their employees instead of paying for increasingly expensive health benefits. All hospitals and health-care providers in Vermont will be nonprofit. Medicare recipients will no longer need to wade through an inch-thick book to choose supplemental plans and sort out other complex options in their Medicare enrollment.

If (and it is a big if) Vermont can decide on the funding method, it should be fully implemented by 2017.

* Not my bon mot. Stolen from TP at the Stellar Parthenon BBS.

What, You Mean that Gazillionaires Won’t Leave New York City for Orlando, Florida for Lower Taxes

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So not surprised.

Studies show that the idle rich do not relocate over their tax levels:

It is not news that New York’s political and media elites worship the extremely rich. You can see this when in a tough economy the New York Times publishes a “Wealth” section fronted by a how-to piece on buying Irish castles. You can see it when you hear the city’s billionaire mayor insisting that critics of wealth inequality should be quiet because they interfere with his dream to “get all the Russian billionaires to move here.” And you can see it when you behold Gov. Andrew Cuomo, D-N.Y., slamming a modest initiative to slightly increase taxes on the Big Apple’s millionaires.

Again, none of this unto itself is all that newsy because it isn’t all that new. New York’s “let them eat cake” culture has been around for a long time in a city where almost half of all residents live below or near the poverty line. However, what is news is the extent to which this wealth-obsessed environment helps strengthen the mythologies that distort economic reality.

Cuomo’s attack, in particular, perfectly illustrates this trend. Fresh off raising millions from wealthy donors for his political front group, the governor slammed Democratic mayoral nominee Bill de Blasio’s tax hike proposal, claiming it will drive Cuomo’s beloved millionaires out of the state.

“What they fear is that they’re in a place where the taxes will continually go up and there will be a ceiling and they’ll say, ‘I’m going to Florida,’” Cuomo said of the rich. “I believe that.”

Before you join Cuomo in weeping for the Manhattan fat cats supposedly forced to flee from economic persecution, remember that his story is a fantastical fact-free fable — one that conveniently serves the political interests of the aristocracy, but has nothing to do with reality.

Rich people leaving New Jersey and California actually fell after taxes rose, and the decrease in millionaires in New York happened because their wages fell after the financial crisis.

Whiskey Tango Foxtrot?!?!? The IMF is calling for Taxing the Rich?!?!?!

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I’m not joking. The IMF actually suggesting that countries need to tax the rich in order to reduce deficits and improve economies:

Tax the rich and better target the multinationals: The IMF has set off shockwaves this week in Washington by suggesting countries fight budget deficits by raising taxes.

 Tucked inside a report on public debt, the new tack was mostly eclipsed by worries about the US budget crisis, but did not escape the notice of experts and nongovernmental organizations (NGOs).

 “We had to read it twice to be sure we had really understood it,” said Nicolas Mombrial, the head of Oxfam in Washington. “It’s rare that IMF proposals are so surprising.”

 Guardian of financial orthodoxy, the International Monetary Fund, which is holding its annual meetings with the World Bank this week in the US capital, typically calls for nations in difficulty to slash public spending to reduce their deficits.

 But in its Fiscal Monitor report, subtitled “Taxing Times”, the Fund advanced the idea of taxing the highest-income people and their assets to reinforce the legitimacy of spending cuts and fight against growing income inequalities.

 “Scope seems to exist in many advanced economies to raise more revenue from the top of the income distribution,” the IMF wrote, noting “steep cuts” in top rates since the early 1980s.

 According to IMF estimates, taxing the rich even at the same rates during the 1980s would reap fiscal revenues equal to 0.25 percent of economic output in the developed countries.

 “The gain could in some cases, such as that of the United States, be more significant,” around 1.5 percent of gross domestic product, said the IMF report, which also singled out deficient taxation of multinational companies.

I did not expect that the IMF would suggest this before pigs ……… Well, you know.

I guess they have been following the purchase levels of pitchforks and torches, and have become concerned.

Now if only they start supporting a Tobin Tax on financial transactions.

Not Enough Bullets………

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In the New York City Mayoral primary, Bill De Blasio, the New York City Public Advocate, is leading in all the polls.

In fact, he is leading by enough that, in a 9 candidate race, he has a shot to clear the 40% requirement in a runoff, is rather telling.

It is heartening that in the home of Wall Street an unabashed liberal appears likely to be the next Mayor of New York.

One of his central proposals is to, “Increase the city’s income tax on wealthy residents earning over $500,000, from 3.86 percent to 4.41 percent,” (PDF) to fund universal preschool.

If you do the math, you will realize that this means an additional $2750.00 in taxes for someone earning a million dollars a year, basically chump change, particularly amongst the well to do in New York.

However, it appears the suggestion that the rich and very rich toss a few more pennies toward public resources has hurt the feeling of rich self absorbed assholes:

When New York mayoral candidate Bill de Blasio first proposed taxing the rich so every child in the city could attend all-day preschool, it was October and he had support from fewer than 10 percent of Democrats in polls.

 Now he leads the pack. And some of the wealthy New Yorkers who’d pay more under his plan say it bewilders and offends them.

Oh, it offends them, their delicate feelings are hurt.

F%$# that.

“It shows lack of sensitivity to the city’s biggest revenue providers and job creators,” said Kathryn Wylde, president of the Partnership for New York City, a network of 200 chief executive officers, including co-Chairman Laurence Fink of BlackRock Inc. (BLK), the world’s biggest money manager.

I am so concerned that we are being insufficiently “sensitive” to the parasites from Wall Street.

E.E. “Buzzy” Geduld, who runs the hedge fund Cougar Capital LLC in the city and is a trustee of Manhattan’s Dalton School, where annual tuition tops $40,000, said de Blasio’s plan “is the most absurd thing I’ve ever heard” and “not a smart thing to do.”

Yes, because someone who can afford $40,000.00 for a year at private school, will be absolutely destroyed by a 0.55% increase in their taxes on income over ½ a million dollars a year.

De Blasio first presented his tax plan to a quiet audience attending his Oct. 4 speech to the Association for a Better New York, a real-estate developers’ civic group. He called on them, as some of the city’s wealthiest individuals, to provide about $532 million for universal all-day pre-kindergarten and after-hours middle-school programs.

About 20,000 of New York’s 68,000 four-year-olds get city-funded full-day pre-kindergarten classes, with 38,000 enrolled in three-hour programs and 10,000 in none. The added pre-K slots would cost roughly $342 million, de Blasio said.

It’s rather telling that George Soros has contributed to De Blasio campaign. I think that he earns a decent salary.

Additionally, that raving Bolshevik Ben Bernanke has endorsed increased pre-school and after school programs as well.

What a bunch or useless self-absorbed jerks.  I would call them schmucks, but a schmuck has a head.