Category: Taxes

16 August 2013, 7:32 PM

Where the Conventional Wisdom is Wrong

This New York Times article about German authorities freaking out about Germany’s falling birth rate:

At first glance, this town in central Germany, with rows of large houses built when it was a thriving center of toy manufacturing, looks tidy and prosperous. But Heiko Voigt, the deputy mayor here, can point out dozens of vacant homes that he doubts will ever be sold.

The reality is that the German population is shrinking and towns like this one are working hard to hide the emptiness. Mr. Voigt has already supervised the demolition of 60 houses and 12 apartment blocs, strategically injecting grassy patches into once-dense complexes.

“We are trying to keep the town looking good,” he said.

There is perhaps nowhere better than the German countryside to see the dawning impact of Europe’s plunge in fertility rates over the decades, a problem that has frightening implications for the economy and the psyche of the Continent. In some areas, there are now abundant overgrown yards, boarded-up windows and concerns about sewage systems too empty to work properly. The work force is rapidly graying, and assembly lines are being redesigned to minimize bending and lifting.

In its most recent census, Germany discovered it had lost 1.5 million inhabitants. By 2060, experts say, the country could shrink by an additional 19 percent, to about 66 million.

Demographers say a similar future awaits other European countries, and the issue grows more pressing every day as Europe’s seemingly endless economic troubles accelerate the decline. But bogged down with failed banks and dwindling budgets, few are in any position to do anything about it.

………

If Germany is to avoid a major labor shortage, experts say, it will have to find ways to keep older workers in their jobs, after decades of pushing them toward early retirement, and it will have to attract immigrants and make them feel welcome enough to make a life here. ………

This is not a problem.

A labor shortage is not a problem. One only has to look at what happened after the Black Death hit Europe: Wages for ordinary folks exploded, because of this.

The top of the feudal hierarchy was hurting, because they lost power, and wealth, relative to the hoi polloi, but that is a good thing.

Doubtless, the costs of supporting an elderly population will increase per capita, which is a sort of social safety net that did not exist in 1350, but if we look at things like a Social Security fix the costs for a timely fix are relatively low.

Even if the taxes of the 99% go up by 5%, and their wages go up by 10%, the 99% wins.

Do the math.

Ancient history, bitches, it just works.

23 April 2013, 8:31 PM

Contemptible Ratf%$# Decides Not to Run for Reelection

Senator, and Glenn Quagmire impersonator, Max Baucus

I am referring, of course, to short timer Senator Max Baucus, who has announced that he will not be running for reelection:

Sen. Max Baucus (D-Mont.), one of the most influential congressional figures of his era, announced his intention Tuesday to retire, a move that could produce sweeping changes in the political and legislative landscape over the next two years.

The announcement could mark the beginning of one of the most consequential periods in Baucus’s long public career, because he pledged to devote the rest of his time in Washington to pursuing a comprehensive rewrite of the federal tax code, an effort that many see as key to breaking the fiscal gridlock that has paralyzed Washington in recent years.

BTW, if thie following paragraph does not fill you with dread, you have no soul:

That paralysis of taxes and spending has been a central feature of Obama’s presidency, and Baucus said that when the president called him Tuesday about his retirement, the talk quickly turned to tax reform. “They’re going to get tired of me,” Baucus said in an interview, adding that White House officials do not “know themselves where they are” on a strategy for ending the stalemate.

Because Baucus has been a cancer on the Senate in general, and Democratic Party in particular, and unencumbered by the potential for reelection, I think that he will try to f%$# the Democratic Party, and the country in any way he can.

After all, he has to be angling to get a cushy, and highly remunerative, gif from corporate America after he retires

As TPM reporter Brian Beutler pithily observes, it’s not just that he comes from a conservative state, and so has to hew right. It is that he hews right except when the politics make it absolutely impossible for him to do so:

Some pols are more or less faithful party-men who stray on occasion during challenging electoral cycles. Baucus, by contrast, has amassed a remarkably consistent record of working at cross-purposes with the rest of his party whether politics in Montana have demanded it or not.

He voted for the Bush Tax Cuts in 2001; then after securing re-election, and against the will of Democratic leadership, supported a Medicare prescription drug benefit that routed tax payer money through private insurers. He spent months and months behind closed doors with GOP lawmakers in 2009 in a futile search for bipartisan support for what became the Affordable Care Act. That quixotic effort dragged on well past the point at which party leaders believed it might pay off, and it delayed legislative action for so long that the bill nearly died when Democrats lost Ted Kennedy’s seat to Scott Brown in early 2010.

………

A key exception to this track record is his long history of bucking GOP attempts to slash and privatize popular social insurance programs like Medicare and Social Security. But viewed through the prism of his broader approach to politics, this seems more an idiosyncratic instance of liberal priorities lining up with Baucus’ venal decision making, than an expression of genuine commitment to the legacy of the New Deal and Great Society.

By contrast, his recent votes against gun legislation and the Democratic budget are vintage Baucus. One can argue that this sort of “independent streak” might protect Montana Democratic candidates in the abstract. But polling on the specifics doesn’t really back up the view that Baucus needed to buck his party on these measures to remain viable. Which helps explain why Baucus’ fellow Montanan Jon Tester (whom, I should note as a caveat won’t be in cycle again until 2018) voted ‘yes’ on both occasions.

(Read the whole thing)

I would also note that he, and his staff leave a trail of slime all the way to K Street:

Restaurant chains like McDonald’s want to keep their lucrative tax credit for hiring veterans. Altria, the tobacco giant, wants to cut the corporate tax rate. And Sapphire Energy, a small alternative energy company, is determined to protect a tax incentive it believes could turn algae into a popular motor fuel.

To make their case as Congress prepares to debate a rewrite of the nation’s tax code, this diverse set of businesses has at least one strategy in common: they have retained firms that employ lobbyists who are former aides to Max Baucus, the chairman of the Senate Finance Committee, which will have a crucial role in shaping any legislation.

No other lawmaker on Capitol Hill has such a sizable constellation of former aides working as tax lobbyists, representing blue-chip clients that include telecommunications businesses, oil companies, retailers and financial firms, according to an analysis by LegiStorm, an online database that tracks Congressional staff members and lobbying. At least 28 aides who have worked for Mr. Baucus, Democrat of Montana, since he became the committee chairman in 2001 have lobbied on tax issues during the Obama administration — more than any other current member of Congress, according to the analysis of lobbying filings performed for The New York Times.

“K Street is literally littered with former Baucus staffers,” said Jade West, an executive at a wholesalers’ trade association that relies on a former finance panel aide, Mary Burke Baker. “It opens doors that allow you to make the case.”

(emphasis mine)

Hopefully, former Montana Governor Brian Schweitzer, who is popular and rather liberal by the standards of Montana politics.

15 April 2013, 7:24 PM

On Tax Day, Read Joseph Stiglitz

He makes the obvious point that the tax code since the Reagan tax cuts has skewed increasingly toward the richest people in our society:

………

Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.

About 6 in 10 of us believe that the tax system is unfair — and they’re right: put simply, the very rich don’t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes — far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners — almost a third — paid less than 15 percent of their income in taxes.

Conservatives like to point out that the richest Americans’ tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive — that is, a system that taxes the affluent at higher rates than those of modest means. It’s also true that as the wealthiest Americans’ incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.

What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan “revolution” of the 1980s.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 — about the same as the share of income they took home, an outcome that is not progressive at all.

With such low effective tax rates — and, importantly, the low tax rate of 20 percent on income from capital gains — it’s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation’s wealth, and the picture becomes even more disturbing.

LEONA HELMSLEY, the hotel chain executive who was convicted of federal tax evasion in 1989, was notorious for, among other things, reportedly having said that “only the little people pay taxes.”

As a statement of principle, the quotation may well have earned Mrs. Helmsley, who died in 2007, the title Queen of Mean. But as a prediction about the fairness of American tax policy, Mrs. Helmsley’s remark might actually have been prescient.

Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.

About 6 in 10 of us believe that the tax system is unfair — and they’re right: put simply, the very rich don’t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes — far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners — almost a third — paid less than 15 percent of their income in taxes.

Conservatives like to point out that the richest Americans’ tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive — that is, a system that taxes the affluent at higher rates than those of modest means. It’s also true that as the wealthiest Americans’ incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.

What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan “revolution” of the 1980s.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 — about the same as the share of income they took home, an outcome that is not progressive at all.

With such low effective tax rates — and, importantly, the low tax rate of 20 percent on income from capital gains — it’s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation’s wealth, and the picture becomes even more disturbing.

He also notes that the increasingly unfair tax will hamstring voluntary compliance, which is at the core of our tax system.

If Republicans want to call this belief socialism, then we need a f%$#load more socialism.

11 April 2013, 10:20 PM

Whiny Bitch of the Day

Ambrose Evans-Pritchard is mad as hell about the Eu’s proposed financial transaction tax.

Oh the horror of a tax of one tenth of 1% on stock trades, and one one-hundredth of 1% on derivatives will destroy all life as we know it on the planet.

His argument is that it will crush the speculative arbitrage that is the meat and potatoes for Wall Street and the City of London, causing a shrinkage of the financial industry.

He says that it “has the character of a pogrom.”

Well, I got your “pogrom” right here.

Randall Munroe accurately reflects my feelings on this in this cartoon:

Excess financialization of our economy is not productive, nor is it symbiotic. It is a parasitic drain on society, and a source of instability.

It needs to be ended.

18 March 2013, 7:52 PM

Priceless

The Michigan state legislature, chock full of wingnuts, after losing an initiative on creating emergency managers for localities, promptly repassed the law with an attached appropriation to make it unchallengable.

And now they have appointed an emergency manager for Detroit, who has tax liens on his home in Maryland:

The man charged with fixing Detroit’s faltering finances has been hit with four liens in four years from the state of Maryland for unpaid taxes, records show.

State records show Kevyn D. Orr, who was appointed emergency manager on Thursday, has two outstanding liens on his $1 million home in Chevy Chase, Md., for $16,000 in unemployment taxes in 2010 and 2011. Two other liens of more than $16,000 in unemployment and income taxes were satisfied in 2010 and 2011, records show.

Orr said he didn’t know anything about the liens when shown records of them Friday morning by The Detroit News.

“I don’t know what they are,” Orr said, as his new boss, Gov. Rick Snyder, sat next to him in The News’ offices. “That’s surprising to me, to be honest.”

Late afternoon, a spokeswoman for Snyder — who appointed Orr to the $275,000 per year post Thursday — said Orr spent the day researching the issue and would pay “in full ASAP.” The Washington, D.C., bankruptcy attorney blamed the problems on an outside accountant hired to file his tax returns, said Sara Wurfel, a Snyder spokeswoman.

He had 4 liens filed on his home, and did not know about it. Yeah ……… right.

The emergency management process is a clown show for a reason, and it’s no accident that over half of the black voters in Michigan will be under emergency managers.

First they cut state aid to troubled municipalities, and then effectively abolish .

The motivation for this is two fold:

Modern movement (teabagger) conservatives visceral opposition to majority minority communities having meaningful self rule.
By eliminating self rule, they eliminate electoral possibilities for less senior politicians.

Basically, they are hoping to eliminate the “farm system” for a generation of politicians for political advantage.

That is why we are seeing this clown show.

They don’t care about governance, they just care about power. Everything is subverted to to that.

20 February 2013, 8:14 PM

China Moves Toward Carbon Tax

It looks like the Chinese have learned a lesson from their recent near lethal smog incidents in Beijing:

China’s Ministry of Finance has announced that the country will levy a tax on carbon emissions, reports Xinhua. Policy experts in the United States and Europe have long argued that a carbon tax is the most effective way to reduce emissions of carbon dioxide and other greenhouse gasses, but implementing one in most large industrialized countries has always seemed politically infeasible.

In the same announcement, China’s Ministry of Finance said that direct taxes on resources, including coal and water, will also be forthcoming.

Details on the carbon tax are scant, but previous reports indicated that it would come into force by 2015 and might start at 10 yuan ($1.60) per tonne of carbon, rising to 50 yuan ($8) per tonne by 2020. Notably, the tax would be collected by local tax authorities, and not municipal environmental protection bureaus.

BTW, I did some quick back of the envelope calculations.

If you look at the weight of carbon in a gallon of gasoline (4.2 lbs of carbon per gallon based on a chemical formula of C₈H₁₈), 10 yuan per gallon is a bit less than ⅓ of a penny a gallon, and 50 yuan, about 1⅔ cents a gallon.

It’s not a whole bunch of money, though it’s probably about twice that per BTU for coal, but it’s a start, which puts it ahead of the United States.

Also I approve of a carbon tax, because, unlike cap and trade, it does not prevent Wall Street from using “financial innovation” to rip the rest of society off.

30 January 2013, 7:39 PM

Some Good News

It looks like Europe will be implementing a financial transaction song with teeth:

The details of Europe’s new financial transactions tax won’t be made public for a few weeks, but the FT’s Alex Barker has seen a draft, and it looks impressively robust. The tax is being implemented by 11 countries, including most importantly Germany and France, and it’s going to be levied at two levels: 0.1% on securities trades, and 0.01% on derivatives trades. It’s also going to be very difficult to dodge: any trader whose institutional headquarters is in one of the 11 countries will have to pay the tax, as will all transactions taking place in those countries, and all transactions involving securities issued in those countries.

The tax will have two main purposes. The first is to raise substantial tax revenues on the order of $45 billion per year; the second is to discourage financial speculation. I’m hopeful on the former, but less so on the latter.

As Robert Peston and Avinash Persaud pointed out back in 2011, financial transactions taxes work pretty well: even the UK, which is implacably opposed to the European tax and which won’t ever join such a scheme, levies a surprisingly large 0.5% tax whenever anybody — anywhere in the world — trades a UK stock. And yet, somehow, London remains the first choice for international companies looking for a place to list their shares.

I aggee with Felix Salmon’s closing:

So let’s hope that this tax gets introduced; that it works; and that the rest of the world, seeing the costs and the benefits, starts to follow suit and sign on too. The area covered by the initial 11 countries is big enough that the tax will work well at inception, but as more and more countries join the scheme, the tax will become increasingly efficient and effective. Maybe, eventually, it could even incorporate the U.S.

Personally, I would like to see the tax on securities should be a bit hither (about 0.3%) derivatives should be much higher (at least .1%, and better yet something north of ½%), but I really want to see this camel’s nose to get under the tent.

24 January 2013, 9:49 PM

More Agreement With the IMF

They are saying that Britain should back off its austerity policies:

Britain should tone down its austerity plans to help the struggling economy, the International Monetary Fund’s chief economist has suggested.

Olivier Blanchard said the budget in March would be a good time for George Osborne to “take stock” of his plan A.

The comments, in an interview with BBC Radio 4’s Today programme, came after the IMF trimmed its forecasts for the UK and global growth. The British economy is now expected to expand by 1% rather than 1.1% this year, and 1.9% rather than 2.2% next year.

Twice in a day I agree with them.

Go figure.

24 January 2013, 8:44 PM

Tobin Tax Progresses in Europe

The EU has begun to implement a plan to tax financial transactions:

A hotly contested tax on financial trades took a big step forward on Tuesday when European Union finance ministers allowed a vanguard of member states to proceed with the plan.

The so-called Robin Hood tax would apply to trading in stocks, bonds and derivatives. Although the tax would probably be small — one-tenth of a percentage point or less on the value of a trade — it could earn billions of euros for struggling European governments.

Algirdas Semeta, the European commissioner in charge of tax policy, called the decision “a major milestone in tax history” and said the levy could be imposed starting next year. But deep concerns about how it would work could still lead to delays.

The European Commission, the bloc’s policy-making arm, 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 — two more than the minimum required for legislation to be drafted.

A significant complication is opposition to the tax by Britain, which has the largest trading hub in Europe in the City of London. But because Britain has decided to stay outside the group of states applying the tax, its resistance would probably not stop the plan from moving ahead.

Among the 27 members of the European Union, the proposal has firm backing from Germany, France and nine other countries. Others might eventually support the idea, which is closely associated with James Tobin, a United States economist and Nobel laureate who suggested a version of it in the 1970s.

In addition to be a good source of revenue, it creates a large disincentive for short-term speculation by making it more expensive.

Here is hoping that this becomes a permanent fixture of the world economy.

17 January 2013, 9:23 PM

What World do They Live In?

These people are very sad, because their taxes are going up so much:

In the nick of time, and amid much political drama, Congress passed the American Taxpayer Relief Act on New Year’s Day—averting massive tax increases for nearly all earners that were slated to take effect Jan. 1.

Even so, millions of people soon will feel something less than relief from the new law.
Tim Foley

The bill approved in Congress to avert the fiscal cliff would bring the first major tax increase on high earners in 20 years. Laura Saunders breaks down how new tax increases will impact across different tax brackets. Photo: AP.

While the top 1% of taxpayers will bear the biggest burden, many other families, affluent and poor, will pay more as well.

Yes, they all haz a sad, the single mom who makes 5x what the average household in the United States, the Family of 6 that makes 13x what the average household makes, and even the retirees, who pay no extra taxes, and make 3½x what the average household does, they haz a sad.

They all haz a sad.

Seriously, do the writers at the Wall Street Journal have even the vaguest idea of how most Americans actually live?

2 January 2013, 8:04 PM

Boehner told Reid to go Cheney Himself

Republicans, such classy people:

House Speaker John Boehner couldn’t hold back when he spotted Senate Majority Leader Harry Reid in the White House lobby last Friday.

It was only a few days before the nation would go over the fiscal cliff, no bipartisan agreement was in sight, and Reid had just publicly accused Boehner of running a “dictatorship” in the House and caring more about holding onto his gavel than striking a deal.

“Go f— yourself,” Boehner sniped as he pointed his finger at Reid, according to multiple sources present.

Reid, a bit startled, replied: “What are you talking about?”

Boehner repeated: “Go f— yourself.”

The harsh exchange just a few steps from the Oval Office — which Boehner later bragged about to fellow Republicans — was only one episode in nearly two months of high-stakes negotiations laced with distrust, miscommunication, false starts and yelling matches as Washington struggled to ward off $500 billion in tax hikes and spending cuts.

Seriously, this sort of childish sh%$ is not the mark of someone who you can negotiate with in good faith.

Saying it in the middle of a contentious meeting is one thing, but this was a “drive by” f%$# you, and then he bragged about it to colleagues.

This is College Republican bullsh%$, and it is an indication of just how unserious the Republican leadership is about doing their jobs.

I experienced this when I was in the SGA Senate at UMass, and dealt with people who later figured in the Abramhoff, and they freuently behaved the same way, but they were in their early 20s, and it was the student senate.

That is why this deal is so bad. Barack Obama just gave the keys to Eddie Haskell, and this does not bode well.

26 December 2012, 8:44 PM

I Miss Madame La Guillotine

Roll Stewart!

Jerry Della Femina, who made his fortune on Madison Avenue, is whining like a baby about taxes, and claims that he is selling his posh Hamptons estate as a result:

He got taxed out of town.

Legendary advertising guru Jerry Della Femina is the latest Hamptons fat cat to unload his East End spread at the precipice of the dreaded fiscal cliff, The Post has learned.

The flamboyant Madison Avenue guru has sold his 8,500-square-foot estate — the host of many legendary Hamptons bashes — for $25 million, and blames his flight squarely on President Obama’s fiscal policies.

“I want the proceeds of this sale to go to my kids and my grandkids,” said the man behind iconic ad campaigns for Meow Mix and Absolut Vodka. “I don’t want my money going to Obama, and that’s what’s going to happen in the New Year. That’s why I sold right now, that’s why I wanted to get this done.”

Seriously.

This sort of sh%$ has me wishing for the return Maximilien de Robespierre.

I’ll leave it to Jon Stewart to express how I feel, though he was actually directing it to hack journo Bernie Goldberg.

13 December 2012, 10:41 PM

Platinum Coin Seigniorage Is Starting to Get Mainstream Coverage

Joe Firestone notes that we are starting to see coverage in the media of the trillion dollar platinum coin:

Did the MSM’s new wave of commentaries on platinum coin seigniorage (PCS) miss the really big story about it? Of course, I think it did, and I’ll continue my review of the MSM commentaries with the efforts of Chris Hayes at MSNBC, substituting as host on the Rachel Maddow show (12/05 at 9:20 PM); and John Carney at CNBC (12/06 at 11:54 AM). This is my second review post on this subject.

Platinum Coin Seigniorage is the idea that the US Treasury can use its right to print coins or arbitrary value, (the Federal Reserve has this power with regard to paper and electronic currency) which can then be used to pay down the debt by depositing at the Federal Reserve.

I think that this is a good thing, and so does Firestone, but he takes issue with a couple of points made by Hayes and Carney.

First, he objects to their characterization that such an action is unlikely to happen. I disagree.

I understand his point, that the legal and economic barriers to doing this are not great, but the psychological and political barriers, particularly for two people as wedded to economic and financial orthodoxy as Barack Obama and Timothy Geithner does make the possibility that this strategy would be implemented to be vanishingly small.

The area where I disagree is his argument that using the coin won’t cause inflation.

While it is clear that if the coins are used exclusively to retire debt held by the Fed will not have much inflationary effect, Federal Reserve held Treasury Bonds are basically an accounting trick.

That being said, if you start retiring other debt, that money has to go somewhere, and if the trillions parked in US government securities need to find another place to park, one could expect these funds to slosh around and this would have an inflationary effect.

My more significant area of disagreement is his assumption that inflation is a bad thing, which is why he argues against the potential inflationary impacts.

I do not think that inflation right now is a bad thing. Given that we have a significant debt overhang, and inflation serves to devalue debt, favoring the debtor over the creditor, I think that inflation is a good thing.

In a very real way, we are in a position very similar to that at the end of the 1800s, when William Jennings Bryan gave his “Cross of Gold” speech.

Seigniorage is today’s free silver, and much like free silver, it is not a likely to be implemented, except as a bargaining strategy.

12 December 2012, 8:20 PM

Tax the Rich, or Eat the Rich, Your Choice

H/t DC at the Stellar Parthenon BBS for the Pic.

John Judis demolished the idea that rich need piles of money for our economy to grow:

As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs – as many as 700,000, according to House Speaker John Boehner.

Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class. “I’m not going to ask students and seniors and middle-class families to pay down the deficit while people like me who make more than $250,000 are not asked to pay a dime more in taxes,” he has declared.

Obama is right that a tax increase on the rich would not cost jobs; and he is certainly right that it would be fairer to tax the wealthy whose incomes have shot up, even during the downturn. And he is also correct that taxing the rich will actually benefit the economy–but not primarily for the reasons he cites. If the government extracts income from the wealthy, and then spends it on a $50 billion infrastructure program, an extension of unemployment insurance, and a Social Security payroll tax cut, as Obama has proposed, that will not only boost the recovery, but will also discourage the wealthy from rerouting their savings into the kind of speculative activity that helped create the Great Recession. A closer approximation of income equality is not only better for our souls—it’s also better for the economy. The question of fairness aside, the rich have been making relatively too much money for the country’s good.

Last September, the Congressional Research Service published a report countering Republican claims that lowering top tax rates would lead, or had led, to higher economic growth. “Changes over the past 65 years in the top marginal rate and the top capital gains tax rate do not appear correlated with economic growth,” the report concluded. Republican Minority Leader Mitch McConnell responded by having the report suppressed, but its findings were incontrovertible.

………

Regressive policies can also lead to financial crises. When firms suffer from global overcapacity or merely from domestic overproduction – when a glut arises of automobiles, ships, textiles semiconductors or fiber optic cable — as happened in the late 1920s and again in the earlier part of the last decade, the wealthy, joined by corporate treasurers and bankers, have tended to pour their money into speculation rather than productive investment. The financial sector has become a casino for the rich, where they have gambled away funds that could have fueled the economy. So redistributing income through tax policy isn’t just fair; it is one way to began restructuring the economy to prevent future slowdowns and crashes.

Republican pleas to retain tax breaks for the wealthy and corporations and to eviscerate social programs do suggest a Romneyesque indifference to the 99 percent; they also presume an economy that no longer exists. “These incentives,” Livingston writes, “are merely invitations to inflate speculative bubbles.” Obama’s concession to arguments about the deficit, which come from Tea Party Republicans and business groups like Fix the Debt, is understandable, but unfortunate. There will come a time — when unemployment dips, say, below six percent, and the countries’ businesses are at full capacity – when it will be important to reduce government deficits. And raising marginal taxes on the wealthy will be one way – along with other measures – to bring the deficit down.

But bringing down the deficit should not be the principal objective right now. What’s important is to continue the recovery from the Great Recession and to take measures to prevent future crises. Supply-siders were right about one thing: the best way to reduce the government deficit is to create economic growth. Obama’s proposal to raise taxes on the wealthy and to transfer those revenues to workers and the unemployed isn’t just the fair thing to do; it is exactly what’s right for the economy.

Not only does coddling the rich not help the economy, it destroys it.

Go read, and supply your recipes below.

12 December 2012, 7:38 PM

From the Department of, “Well Duh!”

Chris Van Hollen is suggesting that John Boehner is sandbagging the “fiscal cliff” negotiations until after his reelection as speaker, to avoid the possibility that his caucus will give his orange ass the boot for whatever deal he cut.

I’m not surprised. If he cuts a deal, he will have the Teabagger back benchers screaming for his head.

31 October 2012, 9:41 PM

Pass the Popcorn

A court has ruled that the Montgomery County (PA) Recorder of Deeds can sue MERS (Mortgage Electronic Registration Systems) and the banks over their evading recording fees:

The federal court has upheld the Montgomery County Recorder of Deeds’ right to sue an electronic mortgage registry company and banks doing business with that company for $15.7 million that she claims is owed to the county in recording fees.

The court Friday issued a 36-page memorandum and order denying a motion by MERS, also known as Mortgage Electronic Registry System, and its participating banks to dismiss the lawsuit filed last year by Recorder of Deeds Nancy J. Becker.

The court’s ruling, while not discussing the merits of the case, essentially states that Pennsylvania does have a law requiring that mortgage assignments be recorded with the recorder of deeds office and that the recorder of deeds has the right to bring legal action when he or she does not believe an entity is complying with the law.

“This is one major hurdle that we have now leaped,” Becker said Monday. “Now, we can move forward on the issues.”

………

Some 146,715 MERS mortgages have been recorded in her office from April 2004 through September 2011, according to Becker.

146,715 mortgages? In one county?

Well Montgomery County has about 800K people, or about ¼% of the US population.

If you assume a lower number of multi-family residences, and double it, you have something in the neighborhood of 30 million mortgages, and fee evasion on the order of $3 billion.

With penalties, it might be north of $10 billion, and when you consider the potential liabilities that the banksters might have incurred because MERS did not work, and does not provide an accurate (or for that matter legal) record of who holds the note on the loan:

Becker has said that, when these mortgage loans are transferred electronically, sometimes multiple times, through MERS and not filed in the county recorder of deeds office, “it makes it difficult, almost impossible sometimes” for property owners to determine what institutions are holding their mortgages.

I would be very surprised if the liabilities incurred by this are not hundreds, if not thousands, of times more.

22 September 2012, 10:01 PM

I Knew that Rmoney Was Using His Taxes to Deceive

Romney’s lawyer has admitted that they massaged his tax returns to hit a politically expedient:

Mitt Romney’s lawyer admitted to the Democratic accusation that the Romneys could have paid a lot less in taxes in 2011, but they manipulated the returns so as to conform to an August Romney claim that he always paid at least 13%.

The AP reported:

But, Brad Malt acknowledged, the couple “limited their deductions of charitable contributions to conform to the governor’s statement in August, based on the January estimate of income, that he paid at least 13 percent in income taxes in each of the last 10 years.”

………

Romney told us that paying more than he owed would disqualify him from the presidency, but he has now paid more than he owed in order to make his earlier statement about never paying below 13% appear to be true. Not to worry, though, Mitt Romney can merely amend his return after the election in order to get that money back from the government, like any 47%-er would want to do.

Additionally, there are no details on the offshore accounts in his Bain Retirement account, and note here, Romney is not personally evading taxes here, he couldn’t because it’s his retirement fund that is pays taxes right now, not the Romneys.

Furthermore, his use of the average rate may be a bit of statistical slight of hand:

5:32 pm by Liam Denning

We checked with the Romney campaign and the 20-year tax-rate average is a simple one (i.e., the average of the percentage in each year) rather than a weighted one (i.e., where you add up all the tax paid across the 20 years and divide it by all the income).

It’s a potentially important difference because the simple average treats each year equally — whether Romney earned, say, $5 million in that year or $30 million. It is especially important if Romney paid a low tax rate in a year in which he earned a lot but paid a high tax rate in years when he earned less. The weighted average would give a more accurate picture.

Of course, releasing the actual underlying year-by-year data would clear up any confusion — but that is a step Mr. Romney has said he won’t take.

Well, we don’t know what is hiding in has tax returns, but we know some of what he is intended to obscure in this release.