Category: Taxes

Mitt Has Released His Taxes

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Well, he sort of released his taxes. He released his 2011 taxes, and “summary” for the past decade:

Republican presidential candidate Mitt Romney fought back on Friday against Democratic charges he paid no taxes in some years, releasing a letter from his accountants saying he paid an effective federal tax rate of at least 13.6 percent annually over 20 years.

 Despite heavy political pressure, Romney stood firm in refusing to make those returns public, but followed through on an earlier promise to release his 2011 return. It showed he paid $1.9 million in taxes on more than $13 million in income – an effective tax rate of 14.1 percent.

 ………

 Romney has refused to release returns from his years as head of Bain Capital, a private equity fund that Democratic critics have charged plundered companies and cut jobs in a quest for profits. Romney has an estimated net worth between $190 million and $250 million.

 ………

 The Romney campaign published a statement on Friday from former Internal Revenue Service Commissioner Fred Goldberg, who declared the returns “reflect the complexity of our laws and the types of investment activity that I would anticipate for persons in their circumstances.”

 Goldberg said, “In my judgment, they have fully satisfied their responsibilities as taxpayers.”

 The letter from accountants PricewaterhouseCoopers said the average of Romney’s annual effective federal personal income tax rate during the 20-year period up to 2009 was 20.2 percent, and he and his wife, Ann, had a charitable deduction rate of 13.45 percent.

Seriously, there is something really hinky about his tax returns that Mitt is desperately trying to hide.

BTW, if you want to run the numbers, I guarantee that he paid only about $10K in social security and medicare taxes, which would be less than 1%.

Ordinary mortals who earn less than about $100K pay about 7½% on every penny for social security and medicare, and that’s before the stuff that he squirreled away in his (now closed) Swiss bank account.

Hun, Some of Rmnney’s Tax Evasion Was Pretty Simple

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Basically, he took management fees and converted them to carried interest, in order to secure the lower capital gains rate:

Two and Twenty. Private equity fund managers are compensated in two primary ways: management fees and carried interest. The management fee, traditionally two percent annually, is paid to the managers to cover overhead, salaries, and so forth. The carried interest, traditionally twenty percent, is a share of the profits from the underlying investments. My paper Two and Twenty described the typical arrangement. Management fees are taxed at ordinary income rates; carried interest is often taxed at capital gains rates. I focused in the article on why the carried interest portion is better viewed like bonus compensation and should be taxed at ordinary income rates.

Management Fee Conversion. Current law on carried interest is already a sweetheart tax deal for private equity, but why not make it better? Private equity folks are not the type to walk past a twenty-dollar bill lying on the sidewalk. In the 2000s it became common for private equity fund managers to “convert” their management fees into carried interest. There are many variations on the theme, but here’s how many deals worked: each year, before the annual management fee comes due, the fund manager waives the management fee in exchange for a priority allocation of future profits. There is minimal economic risk involved; as long as the fund, at some point, has a profitable quarter, the managers get paid. (If the managers don’t foresee any future profits, they won’t waive the fees, and they will take cash instead.) In exchange for a minimal amount of economic risk, the tax benefit is enormous: the compensation is transformed from ordinary income (taxed at 35%) into capital gain (taxed at 15%). Because the management fees for a large private equity fund can be ten or twenty million per year, the tax dodge can literally save millions in taxes every year.

The problem is that it is not legal. Because the deals vary in their aggressiveness, there is some disagreement among practitioners about when it works and when it doesn’t. But in my opinion, and the opinion of many tax practitioners, the practices that were common in the private equity industry in the 2000s became very, very questionable, and it’s unlikely that they would have stood up in court.

Tax attorney and professor Victor Fleischer does the dumpster diving in Gawkers Bain document dump and this is the first bit of specific skulduggery that I’ve seen as a result.

Pass the Popcorn…

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Gawker has acquired a cache of nearly 1000 internal documents detailing activities at Bain Capital, and they appear to show some fairly arcane tax avoidance schemes used by Rmoney to hide income from the IRS:

Mitt Romney’s $250 million fortune is largely a black hole: Aside from the meager and vague disclosures he has filed under federal and Massachusetts laws, and the two years of partial tax returns (one filed and another provisional) he has released, there is almost no data on precisely what his vast holdings consist of, or what vehicles he has used to escape taxes on his income. Gawker has obtained a massive cache of confidential financial documents that shed a great deal of light on those finances, and on the tax-dodging tricks available to the hyper-rich that he has used to keep his effective tax rate at roughly 13% over the last decade.

Today, we are publishing more than 950 pages of internal audits, financial statements, and private investor letters for 21 cryptically named entities in which Romney had invested—at minimum—more than $10 million as of 2011 (that number is based on the low end of ranges he has disclosed—the true number is almost certainly significantly higher). Almost all of them are affiliated with Bain Capital, the secretive private equity firm Romney co-founded in 1984 and ran until his departure in 1999 (or 2002, depending on whom you ask). Many of them are offshore funds based in the Cayman Islands. Together, they reveal the mind-numbing, maze-like, and deeply opaque complexity with which Romney has handled his wealth, the exotic tax-avoidance schemes available only to the preposterously wealthy that benefit him, the unlikely (for a right-wing religious Mormon) places that his money has ended up, and the deeply hypocritical distance between his own criticisms of Obama’s fiscal approach and his money managers’ embrace of those same policies. They also show that some of the investments that Romney has always described as part of his retirement package at Bain weren’t made until years after he left the company.

H/t Americablog, and the documents can be examined here.

It also appears that it’s getting coverage in the main stream old media (ABC) as well.

Heh.

Well This Might Explain the Whole Tax Return Thing

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Marcy “Emptywheel”  Wheeler finally has a decent theory as to why Mitt Rmoney is refusing to release his taxes.

Basically this theory concludes that Reid (a fellow Mormon) has good information that Romney has been shorting the Mormon Church on his tithes:

For the record, I think Mitt has multiple reasons to hide his tax returns. I think it’s largely about what his returns would say about his business practices, it’s partly about his tax shelters, and, one way or another, it’s about his relative loyalty to his church and his country.

But here’s a thought.

Harry Reid, Mormon, and Senator from Nevada, is the one leading the charge to return attention to Mitt’s tax returns.

He attributes his claim that Mitt paid no taxes for ten years to someone who invested with Bain. Now he may know his purported Bain-related source because he travels the halls of power. But Bain has very close cultural ties to the Mormon Church–according to some, improperly so. Moreover, because Mitt and other Bain execs have given so much to the Mormon Church in the form of Bain stocks, high ranking Mormon insiders may have a better idea of what Bain Capital actually does–and how Mitt valued his holdings before he gave them to the Church–than most others.

So Reid may be calling out Mitt not just as a former boxer, but as someone who shares a very wealth-based and close knit faith with Mitt.

Add in the practice–which even an outsider like me saw when I lived in UT and worked for a predominantly Mormon company in the 1990s–of gossip about tithing, notably whether Mormon colleagues tithed pre- or post-tax. That’s another reason why Reid may have a better sense of what Mitt’s tax practices look like than DC pundits might guess on face value.

Finally, though, there’s this. If one of the reasons Mitt is hiding his tax returns does have to do with under-tithing (as the returns Mitt released may suggest), and not just his business practices and tax shelters, remember that both CO (2.15%) and especially NV (over 5%) have larger Mormon populations than average. Nate Silver considers NV the state with the biggest return on investment per voter (CO is 6th). These are lean Democratic states that Mitt might need to win if Obama’s attacks on Bain outsourcing continue to turn the race in the manufacturing swing states (though if Mitt doesn’t win FL and VA, it may be moot anyway). Driving down the Mormon enthusiasm for Mitt might be one way to boost Obama’s chances.

It’s an interesting theory.

H/t Atrios.

Amity Shlaes is a F%$#ing Moron, Part LVMXXVII

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Here latest brain fart is the suggestion that the federal government place levies on the states, and to allow them to collect the taxes, because the Articles of Confederation were such a good idea.

I’m not being metaphorical here.  She literally extolls the virtues of the articles of confederation:

.There will be objections, of course. The first is that states’ collecting the money isn’t our tradition. It is, actually. Under the Articles of Confederation, the states, not individuals, owed payments to the federal government. The modern income tax, where citizens pay the federal government, came into being only a century ago. 

Which is not the same thing as saying that the federal government hasn’t had taxing authority for the past 223 years, though she is implying that the failed and rejected Articles of Incorporation is part of the American tradition of governance.

The Magna Carta, and the Marine Insurance Act of 1746 have more to do with the heritage and traditions of the United States than does the Articles of Confederation.

Just remember that she spent decade as a “senior fellow in economic history at the Council on Foreign Relations,” as well as being an adjunct (temp) prof at NYU’s Stern School of Business, despite making sh%$ up in her so called histories, and despite the fact that she her degree in is in English.

So if a representative from either of the above institutions claims that the sky is blue, find independent verification.

Any organization that hires her has no credibility.

It Would Be Nice if This Stuck, But It Won’t, the Sequel

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Is Yves Smith at Naked Capitalism noted some time ago, the failure to properly convey notes to trusts technically to the trusts that managed the mortgage backed securities means that there are tens, if not hundreds, of billions in tax liabilities owed:

The Internal Revenue Service has launched a review of the tax-exempt status of a widely-held form of mortgage-backed securities called REMICs.

The IRS confirmed to Reuters that the review comes in response to mounting evidence that banks violated tax requirements by mishandling the transfer of mortgages to REMICs, short for Real Estate Mortgage Conduits.

………

As of the end of 2010, investments in REMICs totaled more than $3 trillion, according to data supplied by the Securities Industry and Financial Markets Association.

In a brief statement in response to questions from Reuters, the agency said: “The IRS is aware of questions in the market regarding REMICs and proper ownership of the underlying mortgages as set out in federal tax law, and is actively reviewing certain aspects of this issue.”

………

The review, however, is a sign that the widespread bank misdeeds in home foreclosure cases are spilling over to threaten the interests of investors in mortgage-backed securities. The banks originated the mortgages and packaged them into securities.

………

For investors, one of the big attractions of REMICs has been that they aren’t “double-taxed.” While individual investors pay taxes on income they receive from REMICs, the securities themselves are exempt from business income tax.

But if the IRS concludes that the REMIC investments failed to comply with strict requirements in the federal tax code, the REMIC would have to pay a 100 percent tax on the income from those investments.

That means that the IRS could confiscate the full amount. Tax law experts said the REMICs also could be subjected to additional penalties for failing to file tax returns on the income.

James Peaslee, a partner at law firm Cleary Gottlieb who is an expert on taxation of securitized investments, said that even if the IRS finds wrongdoing, it might be loath to act because of the wide financial damage the penalties would cause. He notes that the REMIC investors, who he called “innocent parties,” would have to pay rather than the banks that were responsible for any wrongdoing in transferring mortgage ownership.

But Adam Levitin, a Georgetown University Law School professor and expert on taxation, said that if the IRS fails to act, “it would be a backdoor bailout of the financial system.”

Well, we know nothing is going to happen, because Obama and Geithner have made it clear that the banksters never pay, the taxpayers do.

Of course they are going to go for the backdoor bailout, particularly because this would reflect back on the banks:

If the IRS did impose penalties, the REMICs could turn around and sue the banks for causing the problems and not living up to the terms of the agreements establishing each REMIC, thus transferring the costs to the banks. If the IRS finds wrongdoing but fails to act, the IRS would forego “potentially enormous tax revenue that would be passed on to the federal government,” Levitin said. “Given the federal budget deficit that’s not something to sniff at,” he added.

Yeah, let’s run the numbers.  $3 trillion, let’s assume 5 years of 5% returns, and no compounding.

Well, with the 100% tax rate, regulatory forbearance will cost the taxpayers $750 billion for the taxpayer before even considering penalties and interest.

The scary thing is that by the standards of the bankster bailouts, this is just pocket change.

IRS Yanks 501(c)4 from Phony Charity

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About f%$#ing time:

An Internal Revenue Service decision revoking the tax-exempt status of a small political nonprofit organization may foreshadow an investigation into groups such as Crossroads GPS and Priorities USA that spend millions on the 2012 U.S. presidential election.

At risk would be the groups’ nonprofit status, which lets them collect millions of dollars from individuals and corporations while keeping donors anonymous.

…………

The IRS decision released last month involved a so-called campaign school in which a partisan group trained candidates.

“You are not operated primarily to promote social welfare because your activities are conducted primarily for the benefit of a political party and a private group of individuals, rather than the community as a whole,” said the IRS letter telling the group it was losing its exempt status.

Unfortunately, it looks like there won’t be major action this year.

H/t Susie Madrak.http://www.bloomberg.com/news/2012-06-08/irs-denial-of-tax-exemption-to-u-s-political-group-spurs-alarms.html

Just When You Thought that Grover Norquist Could Not Get Any More Absurd

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He is now comparing the Schumer-Casey bill to penalize people like Facebook co-founder Eduardo Saverin for renouncing US citizenship is like Nazi Germany:

The anti-tax activist Grover Norquist on Friday compared a new Democratic proposal to penalize Americans who renounce their citizenship to evade taxes to policies employed by the Nazis and communists.

Sens. Chuck Schumer (D-N.Y.) and Bob Casey (D-Pa.) introduced legislation this week — in response to a Facebook co-founder ditching his citizenship — that would force wealthy people who give up their U.S. citizenship to prove that they did not do so for tax reasons.

Norquist, the president of Americans for Tax Reform, said the targeting people that turn in their passports reminded him of regimes that had driven people out of the country, only to confiscate their wealth at the door.

“I think Schumer can probably find the legislation to do this. It existed in Germany in the 1930s and Rhodesia in the ’70s and in South Africa as well,” said Norquist. “He probably just plagiarized it and translated it from the original German.”

This guy has as his goal for the federal government is that he wants to, “shrink it down to the size where we can drown it in the bathtub.”

And people think he’s a “very serious person” in DC. He isn’t.

He’s a radical whose ultimate goals are closer to that of Timothy McVey than they are to David Brooks.

It Looks Like the IRS Crackdown on Foreign Banks is Creating Real Results

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The number of rich expat Americans who are renouncing their citizenship has increased as a result of new banking regulations:

Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago.

About 1,780 expatriates gave up their nationality at U.S. embassies last year, up from 235 in 2008, according to Andy Sundberg, secretary of Geneva’s Overseas American Academy, citing figures from the government’s Federal Register. The embassy in Bern, the Swiss capital, redeployed staff to clear a backlog as Americans queued to relinquish their passports.

The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport.

Good.

If they renounce their citizenship, they cannot make political contributions to buy legislators.

Though I’m Sure that New Yorkers are Glad to be Rid of Rush…

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It appears that the numbers don’t lie, but right wing economists do:

Proponents of the migration myth are at it again, trying to sell the idea that if states with lower taxes gain more population than states with higher taxes, taxes must be the reason.

To prove that people migrate from state to state in search of lower taxes, the latest edition of the American Legislative Exchange Council’s (ALEC) “Rich States, Poor States” report notes that, over the past two decades, Hawaii (which has an income tax with a relatively high top rate) has lost twice as many residents to other states as Alaska (which has no income tax).

Wait, you might ask. What about differences in the job market? Oil prices? Housing costs? Shouldn’t we take these and other potential factors into account?

………

For example, ALEC attributes Florida’s 46 percent population gain between 1990 and 2010 to its lack of an income tax, ignoring the fact that neighboring Georgia — which has an income tax — grew by 50 percent over that period.

As for Alaska and Hawaii – the states that ALEC uses to illustrate the tax-flight myth — IRS data show that, in fact, slightly more households are moving from no-income-tax Alaska to high-income-tax Hawaii than the other way around. In 2010, the last year for which data are available, 300 households moved from Alaska to Hawaii; 287 moved the other way.

As our report stated:

It would not be credible to argue that no one ever moves to a new state because of the desire to live someplace where taxes are lower. But neither is it credible to say that taxes are a primary motivation, nor that migration has a large impact on the revenue impact of tax measures.

As for Rush, he probably decided to move to Florida because it’s easier to get a direct flight to the Dominican Republic from the sunshine state.

After all Rush has to be able to indulge his “tourist proclivities.”

H/t Mark Thoma.

While We Are On the Subject of Jabba the Governor

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It appears that Republican “It-Girl” Chris Christie lied through his teeth about the reasons that he canceled the new tunnel to New York City:

Gov. Chris Christie of New Jersey exaggerated when he declared that unforeseen costs to the state were forcing him to cancel the new train tunnel planned to relieve congested routes across the Hudson River, according to a long-awaited report by independent Congressional investigators.

The report by the Government Accountability Office, to be released this week, found that while Mr. Christie said that state transportation officials had revised cost estimates for the tunnel to at least $11 billion and potentially more than $14 billion, the range of estimates had in fact remained unchanged in the two years before he announced in 2010 that he was shutting down the project. And state transportation officials, the report says, had said the cost would be no more than $10 billion.

Mr. Christie also misstated New Jersey’s share of the costs: he said the state would pay 70 percent of the project; the report found that New Jersey was paying 14.4 percent. And while the governor said that an agreement with the federal government would require the state to pay all cost overruns, the report found that there was no final agreement, and that the federal government had made several offers to share those costs.

Canceling the tunnel, then the largest public works project in the nation, helped shape Mr. Christie’s profile as a rising Republican star, an enforcer of fiscal discipline in a country drunk on debt. But the report is likely to revive criticism that his decision, which he said was about “hard choices” in tough economic times, was more about avoiding the need to raise the state’s gasoline tax, which would have violated a campaign promise. The governor subsequently steered $4 billion earmarked for the tunnel to the state’s near-bankrupt transportation trust fund, traditionally financed by the gasoline tax.

On Tuesday, in a speech at a conference on taxes and the economy in Manhattan, Mr. Christie did not mention the report, but defended his decision to cancel the project, saying, “I refuse to compromise my principles.”

………

Martin E. Robins, the founding director of the Alan M. Voorhees Transportation Center at Rutgers University and an early director of the ARC project, criticized the governor. “In hindsight, it’s apparent that he had a highly important political objective: to cannibalize the project so he could find an alternate way of keeping the transportation trust fund program moving, and he went ahead and did it,” he said.

(emphasis mine)

His principles in this case are pandering to “No New Taxes” promises that he made.

What a surprise.

H/T the Shrill One, Paul Krugman.

This is a Feature Not a Bug

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Michael Hiltzik of the Los Angeles Times is noticing that the Social Security tax holiday is putting the program at risk:

The accepted response to the economic deal reached in Congress last week, extending the Social Security payroll tax holiday and unemployment insurance and maintaining reimbursement levels for Medicare doctors, is huzzah!

Finally Congress got something important done with a minimum of brinkmanship and posturing, and more than a few minutes before the deadline. A threat to the embryonic economic recovery was averted, and the extensions even pushed any subsequent fracas over the same issues to the end of this year, safely past the presidential election.

So why should we consider this action cause for despair?

It’s because with every extension of the payroll tax holiday, which was first enacted in 2010, the prospect that Congress will ever restore the tax to its statutory 6.2% of covered income recedes a little bit further over the horizon. And that’s bad medicine for Social Security.

To be fair, thus far the payroll tax holiday hasn’t impaired Social Security’s fiscal resources one bit. By law, 100% of the cut must be compensated for by transfers from the general fund; those transfers have come to about $130 billion since 2010, covering the original “temporary” one-year holiday and a two-month extension passed late last year.

The new extension will require a further transfer of about $94 billion, according to the Congressional Budget Office.

Yet because of the unique features of the program’s financing, tampering with its revenue stream is playing with fire. The payroll tax is currently set at 12.4% of wages, split equally between employer and employee, up to a maximum of $110,100. The tax holiday cuts the employee’s 6.2% share to 4.2%.

Sen. Tom Harkin (D-Iowa) put it well when he excoriated President Obama and his fellow congressional Democrats for approving a measure that places Social Security’s financial stability on the table. “I never thought I would live to see the day when a Democratic president … would agree to put Social Security in this kind of jeopardy,” he said. “Never did I ever imagine a Democratic president beginning the unraveling of Social Security.”

Even conservatives who aren’t fans of the program’s current structure acknowledge how hard it will be at any point in the foreseeable future to restore the old rate.

………

But the worst aspect of the payroll tax holiday is that it erodes Social Security’s standing as a unique government program with its own revenue stream, a tax dedicated to its upkeep alone. Melding its own revenue with that of the federal government at large chips away at its standing, facilitating no one’s goals except those who want to see the edifice pulled down.

The more the program has to rely on general income tax revenue, the shakier becomes its claim to being a special case among government expenditures. When program-slashers sharpen their axes in Washington, the line has always been drawn at Social Security because it’s funded by a source distinct from the income tax.

Barack Obama has been looking to dismantle Social Security since the start of his Presidential campaign, he stacked the “super-committee” with Social Security foes, and tried to sell the program out in the debt ceiling deal, so this course of action is consistent with past behavior. (Additionally, he tried to do the same to Medicare. where he suggested means testing)

I’m not sure why, it could be his exposure to Chicago School economists, it could be that he feels that this is a way to stroke his “bipartisanship” fetish, or he could simply have a temperament that cannot see beyond the consensus of the “very serious people”.

Remember, notwithstanding the alleged benefits for the poor, this replaced “Making Work Pay,” which was more generous for people making less than the median household wage.

OK, These Are Some Tax Collectors That I Could Love

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So, the Italian police have taken to staking out posh neighborhoods and pulling over drivers of expensive cars. They then take their personal information, and send that to the tax bureau to make sure that their lifestyle matches up to their declared income:

Police fanned out across Milan in late January halting more than 350 vehicles, mostly luxury SUVs and Porsches.

At checkpoints, including one adjacent to the fashionable Corso Como, the police got the driver’s license and registration, which they passed on to the national tax agency. The tax authorities will use the data to check if the cars’ owners had declared enough income — and of course paid the right amount of income taxes — to justify their lifestyles.

It was at least the fifth raid targeting wealthy Italians since a Dec. 30 sweep at the posh Cortina d’Ampezzo ski resort, where 251 high-end cars were stopped, including Ferrari and Lamborghini supercars, Bloomberg Businessweek reports in its Feb. 13 issue. Rome, Portofino on the Italian Riviera and Florence have also been targeted.

I’m Matthew Saroff, and I approve of this tactic.

Europe is F%$#ed

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Because the Germans have been allowed to force their self delusions on the rest of Europe:

Chancellor Angela Merkel cemented her political ascendancy in Europe on Monday when 25 out of 27 EU states agreed to a German-inspired pact for stricter budget discipline, even as they struggled to rekindle growth from the ashes of austerity.

Only Britain and the Czech Republic refused to sign a fiscal compact in March that will impose quasi-automatic sanctions on countries that breach European Union budget deficit limits and will enshrine balanced budget rules in national law.

The accord was eagerly greeted by the European Central Bank which has long pressed euro zone governments to put their houses in order.

The solution to problems caused austerity and overly aggressive efforts at European integration will be more austerity and overly aggressive efforts at European integration.

Well, Knock Me Over With a Mackerel!

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Congress has ended both the subsidy on corn ethanol and the tariff on imported Brazilian sugar based ethanol:

Tom Buis, CEO of Growth Energy, an ethanol trade group, clearly wasn’t thrilled with the decision, but in an interview earlier this month he claimed the ethanol industry would survive without government handouts stating, “The blenders’ tax credit initially helped the ethanol industry develop. But today, we don’t have a production problem, we have a market access problem. Without the tax credit, the ethanol industry will survive; it will continue to reduce our dependence on foreign oil, create jobs and strengthen our economy.”

By some estimates the total gifts to corn ethanol business totalled $45B USD since 1980.

The subsidy cut — approved by a 73-27 Senate vote in June — also is accompanied by the end of a tariff on the importation of Brazilian ethanol. Brazil has an excess of sugarcane ethanol, but the U.S. government had previously penalized this fuel stream as a means of allowing U.S. ethanol producers to escape competing on the free market.

The ethanol debate has divided both political parties and even set federal representatives within certain corn-producing states against each other.

I wonder if this says something about the increasing irrelevance of Iowa caucuses this year.

I’m pleasantly surprised by this development.

It Sucks to be John Boehner

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Yes, I know, orange, likely drinking problem, looks like a poster child for sex without partners, so it always sucks to be him.

It’s just that today, it sucks even more, because he had to back down on his attempt to short circuit the 2 month extension of payroll tax cuts and unemployment benefits.

The problem here is that he backed out on a deal that he cut with, among other folks, the Senate Republicans, because he has no control of his caucus, and once the members of his caucus realized that they looked like complete prats, though not as complete as John Boy, they got in his face too.

When one looks at the basic mechanics of the office of Speaker of the House, and excludes the prism of ideology, Boehner is still the worst speaker in recent memory:  He can’t count votes, and he can’t hold onto them, and he cannot protect his caucus from their own worst impulses.

The word is that it’s Eric Cantor who is setting himself up for this sh%$, because he wants the gavel, but Boehner, having attempted an unsuccessful coup against Gingrich in the 1990s, should know what is going on, and how to deal with it.

Why Protesters With Military Training Get Better Results

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Admittedly they’ve been at it for a few months longer than Occupy Wall Street, but the fact that if cops just wanted to bust heads, they are deterred by the fact that almost all Israelis have served in the military, and have at least some training in hand to hand combat as a result serves as a deterrent.

Thus we have the Israeli cabinet voting to raise taxes on the wealthy and corporations:

Israel’s summertime protest movement, which was occupying “Wall Street” before it was cool, can now celebrate their first major tangible success.

At a Sunday cabinet meeting the government approved the restructuring of Israel’s tax system, shifting a few degrees of the social burden onto corporations and the very rich.

On Monday, during the opening day of the winter session of parliament after a three-month summer break, legislators received the new tax plan for approval, alongside a lengthy list of demands for financial reform and social justice that were nonexistent when the Knesset, Israel’s parliament, was last in session and which have been catapulted to the forefront of a pre-electoral year.

As lawmakers gathered it became clear that Likud, the party of Prime Minister Benjamin Netanyahu, hoped the government’s imprimatur of approval on significant changes in taxation would shift credit from the young protest leaders to the party itself.

This reminds me of a story from the 1960s, when there was a protest against German Chancellor Adenour at a university, and the police went in with batons swinging, and were physically ejected from campus by the protesters.

Obviously, part of this is that Netanyahu, and Likud, are scrambling to avoid an electoral debacle in the next election.

They are widely loathed at this point, and deservedly so, because they have aggressively promoting and implementing Thatchernomics, cutting taxes on the wealthy and raising indirect taxes (particularly indirect ones like sales taxes, fees, etc.) on everyone else.

There are real economic issues driving these changes, but if a few dozen cops been able to rout the demonstrators at the beginning of their protests, the discontent would have remained buried for a while longer.

It’s the Vampire Squid’s World, We Just Live in It

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So when Goldman Sachs gets caught helping clients evade taxes, and British authorities hand them a get out of jail free card:

Britain’s tax authorities have given Goldman Sachs an unusual and generous Christmas present, leaked documents reveal. In a secret London meeting last December with the head of Revenue, the wealthy Wall Street banking firm was forgiven £10m interest on a failed tax avoidance scheme.

HM Revenue and Customs sources admit privately that the interest-free deal is “a cock-up” by officials, but refuse to say who was responsible.

Documents leaked to Private Eye magazine and published in full by the Guardian record that Britain’s top tax official, HMRC’s permanent secretary Dave Hartnett, personally shook hands on a secret settlement last December.

Hartnett is due to be questioned on Wednesday by the Commons public accounts committee. The leaked documents suggest that a previous PAC chairman, Edward Leigh, was misled when he was told it was illegal to reveal details of such cases to parliament.

Leaked legal advice from James Eadie QC, which the Guardian also publishes today, says the opposite. Hartnett has discretion to reveal such facts to the parliamentary watchdog, according to the advice.

………

In the 1990s, Goldman set up a company offshore in the British Virgin Islands. This entity, called Goldman Sachs Services Ltd, supposedly employed all of Goldman’s London bankers, who were then “seconded” to work there.

The device appears to have been designed to conceal the size of the bonuses. Judge David Williams said in 2009 that it was “a way of keeping information about the GS accounts and payroll out of the public domain and confidential”.

Goldman also begrudged paying its share of UK national insurance on the six-figure bonuses. Court judgments disclose that a typical Goldman bonus to a junior banker was £143,000 in 1998, and £191,000 the following year.

The company, along with 21 investment banks and other firms, purchased blueprints for an avoidance scheme called an employee benefit trust (EBT). The bonuses were indirectly invested into elaborate share option schemes.

It took the Revenue until 2005 to demonstrate in court that these EBTs were merely illegitimate tax avoidance devices. The 21 other firms surrendered, and handed over what they owed.

But Goldman Sachs refused to pay its £30.81m bill. Instead the city firm Freshfields and the tax QC David Goldberg fought tooth and nail on Goldman’s behalf through the courts. By 2010, according to a public judgment, the unpaid bill with accumulated interest had mounted to £40m.

Seriously, we need to take these muthas down hard.