Posts
Gone way too soon.
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Voting for Judges? www.votingforjudges.com
Don't watch the video below if you want to sleep well from now on.
Well? Strike that.
Crashing Banks
Remembering the old days?
How about the new days?
Much harder to fathom.
The very richest are able to quietly shape tax policy that will allow them to shield billions in income.
Mr & Mrs L. M. Bacon and their Island (image by NYTimes.com)
The very richest are able to quietly shape tax policy that will allow them to shield billions in income. They have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. It includes tax loopholes quietly slipped into law by their bought-and-paid-for politicians. It also involves a phalanx of high-priced lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers not available to taxpayers of more modest means. Result: The effective tax rate of the 400 richest Americans is the same as the tax rate for a middle-class family of 4.
And why do they need so many millions/billions?
My guess is to continue to buy the ability to hurt everyone else while enriching themselves (even if they swear to gods that it's unintentional).
Sociopaths.
Or worse.
Or, at least that's what my study of logic and morals tells me (and this type of logic used to be found nationwide - and certainly worldwide).
The hedge fund magnates Daniel S. Loeb, Louis Moore Bacon and Steven A. Cohen have much in common. They have managed billions of dollars in capital, earning vast fortunes. They have invested large sums in art — and millions more in political candidates._ _ _ _ _ _ _
Moreover, each has exploited an esoteric tax loophole that saved them millions in taxes. The trick? Route the money to Bermuda and back.
With inequality at its highest levels in nearly a century and public debate rising over whether the government should respond to it through higher taxes on the wealthy, the very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. Some call it the “income defense industry,” consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means.
In recent years, this apparatus has become one of the most powerful avenues of influence for wealthy Americans of all political stripes, including Mr. Loeb and Mr. Cohen, who give heavily to Republicans, and the liberal billionaire George Soros, who has called for higher levies on the rich while at the same time using tax loopholes to bolster his own fortune.
All are among a small group providing much of the early cash for the 2016 presidential campaign.
Operating largely out of public view — in tax court, through arcane legislative provisions and in private negotiations with the Internal Revenue Service — the wealthy have used their influence to steadily whittle away at the government’s ability to tax them. The effect has been to create a kind of private tax system, catering to only several thousand Americans.
The impact on their own fortunes has been stark. Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.
The ultra-wealthy “literally pay millions of dollars for these services,” said Jeffrey A. Winters, a political scientist at Northwestern University who studies economic elites, “and save in the tens or hundreds of millions in taxes.”
Some of the biggest current tax battles are being waged by some of the most generous supporters of 2016 candidates. They include the families of the hedge fund investors Robert Mercer, who gives to Republicans, and James Simons, who gives to Democrats; as well as the options trader Jeffrey Yass, a libertarian-leaning donor to Republicans.
Mr. Yass’s firm is litigating what the agency deemed to be tens of millions of dollars in underpaid taxes. Renaissance Technologies, the hedge fund Mr. Simons founded and which Mr. Mercer helps run, is currently under review by the I.R.S. over a loophole that saved their fund an estimated $6.8 billion in taxes over roughly a decade, according to a Senate investigation. Some of these same families have also contributed hundreds of thousands of dollars to conservative groups that have attacked virtually any effort to raises taxes on the wealthy.
In the heat of the presidential race, the influence of wealthy donors is being tested. At stake is the Obama administration’s 2013 tax increase on high earners — the first substantial increase in two decades — and an I.R.S. initiative to ensure that, in effect, the higher rates stick by cracking down on tax avoidance by the wealthy.
While Democrats like Bernie Sanders and Hillary Clinton have pledged to raise taxes on these voters, virtually every Republican has advanced policies that would vastly reduce their tax bills, sometimes to as little as 10 percent of their income.
At the same time, most Republican candidates favor eliminating the inheritance tax, a move that would allow the new rich, and the old, to bequeath their fortunes intact, solidifying the wealth gap far into the future. And several have proposed a substantial reduction — or even elimination — in the already deeply discounted tax rates on investment gains, a foundation of the most lucrative tax strategies.
. . . Each of the top 400 earners took home, on average, about $336 million in 2012, the latest year for which data is available. If the bulk of that money had been paid out as salary or wages, as it is for the typical American, the tax obligations of those wealthy taxpayers could have more than doubled.
Instead, much of their income came from convoluted partnerships and high-end investment funds. Other earnings accrued in opaque family trusts and foreign shell corporations, beyond the reach of the tax authorities.
The well-paid technicians who devise these arrangements toil away at white-shoe law firms and elite investment banks, as well as a variety of obscure boutiques. But at the fulcrum of the strategizing over how to minimize taxes are so-called family offices, the customized wealth management departments of Americans with hundreds of millions or billions of dollars in assets.
Family offices have existed since the late 19th century, when the Rockefellers pioneered the institution, and gained popularity in the 1980s. But they have proliferated rapidly over the last decade, as the ranks of the super-rich, and the size of their fortunes, swelled to record proportions.
“We have so much wealth being created, significant wealth, that it creates a need for the family office structure now,” said Sree Arimilli, an industry recruiting consultant.
Family offices, many of which are dedicated to managing and protecting the wealth of a single family, oversee everything from investment strategy to philanthropy. But tax planning is a core function. While the specific techniques these advisers employ to minimize taxes can be mind-numbingly complex, they generally follow a few simple principles, like converting one type of income into another type that’s taxed at a lower rate.
Mr. Loeb, for example, has invested in a Bermuda-based reinsurer — an insurer to insurance companies — that turns around and invests the money in his hedge fund. That maneuver transforms his profits from short-term bets in the market, which the government taxes at roughly 40 percent, into long-term profits, known as capital gains, which are taxed at roughly half that rate. It has had the added advantage of letting Mr. Loeb defer taxes on this income indefinitely, allowing his wealth to compound and grow more quickly.
The Bermuda insurer Mr. Loeb helped set up went public in 2013 and is active in the insurance business, not merely a tax dodge. Mr. Cohen and Mr. Bacon abandoned similar insurance-based strategies in recent years. “Our investment in Max Re was not a tax-driven scheme, but rather a sound investment response to investor interest in a more dynamically managed portfolio akin to Warren Buffett’s Berkshire Hathaway,” said Mr. Bacon, who leads Moore Capital Management. “Hedge funds were a minority of the investment portfolio, and Moore Capital’s products a much smaller subset of this alternative portfolio.” Mr. Loeb and Mr. Cohen declined to comment.
Organizing one’s business as a partnership can be lucrative in its own right. Some of the partnerships from which the wealthy derive their income are allowed to sell shares to the public, making it easy to cash out a chunk of the business while retaining control. But unlike publicly traded corporations, they pay no corporate income tax; the partners pay taxes as individuals. And the income taxes are often reduced by large deductions, such as for depreciation.
For large private partnerships, meanwhile, the I.R.S. often struggles “to determine whether a tax shelter exists, an abusive tax transaction is being used,” according to a recent report by the Government Accountability Office. The agency is not allowed to collect underpaid taxes directly from these partnerships, even those with several hundred partners. Instead, it must collect from each individual partner, requiring the agency to commit significant time and manpower.
The wealthy can also avail themselves of a range of esoteric and customized tax deductions that go far beyond writing off a home office or dinner with a client. One aggressive strategy is to place income in a type of charitable trust, generating a deduction that offsets the income tax. The trust then purchases what’s known as a private placement life insurance policy, which invests the money on a tax-free basis, frequently in a number of hedge funds. The person’s heirs can inherit, also tax-free, whatever money is left after the trust pays out a percentage each year to charity, often a considerable sum.
Many of these maneuvers are well established, and wealthy taxpayers say they are well within their rights to exploit them. Others exist in a legal gray area, its boundaries defined by the willingness of taxpayers to defend their strategies against the I.R.S. Almost all are outside the price range of the average taxpayer.
Among tax lawyers and accountants, “the best and brightest get a high from figuring out how to do tricky little deals,” said Karen L. Hawkins, who until recently headed the I.R.S. office that oversees tax practitioners. “Frankly, it is almost beyond the intellectual and resource capacity of the Internal Revenue Service to catch.”
The combination of cost and complexity has had a profound effect, tax experts said. Whatever tax rates Congress sets, the actual rates paid by the ultra-wealthy tend to fall over time as they exploit their numerous advantages.
From Mr. Obama’s inauguration through the end of 2012, federal income tax rates on individuals did not change (excluding payroll taxes). But the highest-earning one-thousandth of Americans went from paying an average of 20.9 percent to 17.6 percent. By contrast, the top 1 percent, excluding the very wealthy, went from paying just under 24 percent on average to just over that level.
“We do have two different tax systems, one for normal wage-earners and another for those who can afford sophisticated tax advice,” said Victor Fleischer, a law professor at the University of San Diego who studies the intersection of tax policy and inequality. “At the very top of the income distribution, the effective rate of tax goes down, contrary to the principles of a progressive income tax system.”
For those with Economics dementia or developing Alzheimers, the early American history you may have forgotten (or missed due to its stupefying boredom level):
"There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs - a company whose average employee still made more than $350,000 last year, even in the midst of a depression - was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole.
That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card.
"The people who have spent their lives cloistered in this Wall Street community aren't much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don't know what the hell LIBOR is or how a REIT works or how to use the word 'zero coupon bond' in a sentence without sounding stupid - well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them...
"The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex.
It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner - himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm - picked a former Goldman lobbyist named Mark Patterson to be his top aide.
"In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called 'bad bank' that would systemically relieve private lenders of bad assets - the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits."
Even with Matt Taibbi's regular-guy style of writing, this is hard stuff to understand. But it's a start ... and it's necessary. You don't want to be fooled again, do you?
Posted by jazzolog
Remember the truisms we've been fed for decades? (OK, over a century now.)
“America would never elect a socialist.”
P-l-e-a-s-e. America’s most successful and beloved government programs are social insurance – Social Security and Medicare. A highway is a shared social expenditure, as is the military and public parks and schools. The problem is we now have excessive socialism for the rich (bailouts of Wall Street, subsidies for Big Ag and Big Pharma, monopolization by cable companies and giant health insurers, giant tax-deductible CEO pay packages) – all of which Bernie wants to end or prevent.
Someone in England is telling the truth.
It's so novel.
British Politics Like a Francis Durbridge Thriller - Nothing Is What It Seems
It's just over forty years since British television first screened Francis Durbridge’s classic thriller "The Doll," in which - much like Britain's present political system - few people and things are what they at first appear.
RT‘s motto is ‘Question More,’ while Francis Durbridge encourages us to question everything and everybody. Without giving away too much of the plots (and you’re in for a real treat if you’ve never see a Durbridge thriller before), the character you thought was the hero’s friend, often turns out to have been plotting against him and is part of some criminal conspiracy. The people you thought were the ‘bad guys’ were actually on the side of justice. The man who’s behaving very suspiciously turns out to have been a detective. But can we even trust the detective?
We can’t be sure about anything in a Durbridge series until the very final scenes.
Now here’s the irony: Francis Durbridge’s heyday was an era in which things generally were what they seemed in Britain: We had a Conservative Party that genuinely tried to conserve things; we had a Labour party that represented the interests of working people; we had Liberals that were genuinely liberal; political ‘moderates’ were actually moderates; people who said they supported free speech supported free speech and didn’t try to shut it down.
The world of Francis Durbridge may have been a confusing one where nothing could be taken for granted, but the same didn’t apply to the political arena.
We could be sure, for instance, that leading politicians of the time did have Britain’s best interests at heart. Harold Wilson, the Prime Minister of Britain at the time "The Doll" was first screened on television had, in the 1960s, stood up to American pressure to send British soldiers to Vietnam. Edward Heath, the Conservative leader from 1965-75, nationalized Rolls-Royce in 1971 when the prestigious company went bankrupt.
Neither Wilson nor Heath would have allowed vast swathes of the British economy - including our railways, our water, our gas and electricity - to have been bought up by foreign companies, as is the case today. Neither Wilson nor Heath would have lied us into the disastrous Iraq war, alongside a hard-right US President who somehow resembled a chimpanzee.
In place of politicians and parties and movements who acted as you’d expect them to act, we’ve now got politicians, parties and movements who do the complete opposite to what’s said on the tin.
The Conservative Party of David Cameron, as I argued here, should really be called the Destructive Party.
"The only thing Cameron and his multimillionaire chums want to 'conserve' is their wealth and the rule of international finance capital. Everything else can be destroyed."
I wrote that back in 2011, and the situation has only got worse since then.
The list of things the ‘Conservatives’ have destroyed, or are planning to destroy, is a long one. They sold off the Royal Mail, the national postal service which had been in state ownership since its inception in the 16th century. They’ve been gradually privatizing the NHS. Up and down the country much-loved public libraries have been closing, or being run by volunteers, due to government cuts. The ‘Conservative’ government wants to end the traditional British Sunday as a day of rest and reflection by abolishing the Sunday trading laws, a move opposed by trade unions and The Church.
Internationally the ‘Destructive Party’ has helped to destroy Libya - a country which had the highest living standards in Africa - and done their best to destroy Syria, where they’ve backed extremist rebels to overthrow a government which had protected Christians and other religious Syria, where they’ve backed extremist rebels to overthrow a government which had protected Christians and other religious minorities.
Genuine 'conservatives’ who vote Conservative must feel as perplexed as viewers watching The Doll were forty years ago.In February 2015, research revealed that almost 50 percent of Tory donors were hedge fund managers.Labour too, in the neoliberal/neocon era, carried out policies which were the direct opposite of those it had supported in the past. Under Tony Blair it morphed into a party of capital, not labor. A party that in the 1970s had introduced a top rate of income tax of 83 percent, and which presided in the lowest levels of inequality in Britain’s history, went out of its way to pander to the super-rich.Politicians who had served the national interest back in the Sixties and Seventies now served the interests of a rapacious global capitalist elite. Whether they came with a ‘centre-left’ or centre-right’ or ‘liberal’ label the policies they supported were the same: endless war and further privatization and outsourcing. Again, in another example of false labeling, the new system was called ‘the free market’ or 'the market economy’, but in fact it was a rigged market with enormous amounts of taxpayer subsidies being transferred to big corporations. Meanwhile, the gap between rich and poor continued to grow.The dishonesty reached a new level with the Iraq war in 2003.This imperialist attack on an oil-rich, independently-minded sovereign state was justified by blatant lies about Iraq possessing WMDs which could be ready for use within 45 minutes. The ensuing military offensive.The most reactionary people in our society posed as concerned ‘humanitarians’ - keen to help/liberate suffering Iraqis or Libyans - in much the same way that Durbridge’s scheming villains always pretended to be on the side of justice.The label ‘the decent left’ was claimed by ‘progressives’ who supported US-led wars, while those who opposed them were smeared as ‘extremists’ and ‘apologists for dictators’. But in fact, the genuinely ‘decent left’ (and genuine conservatives for that matter) opposed these wars of choice as they knew hundreds of thousands of innocent people would be killed and that life in the countries concerned was likely to be far worse after the ‘interventions’' as indeed proved to be the case.The real ‘humanitarians’ were the ones who opposed the wars, not the so-called 'leftists' who wrote ‘Something Must Be Done’ articles targeted at ‘official enemy’ states for neocon propaganda sheets.A pernicious New McCarthyism, every bit as bad as the McCarthyism of the 1950s, was deployed to smear and marginalize truth tellers. Free speech advocates were often the worst culprits when it came to attempts to silence dissidents.To narrow the parameters of 'acceptable’ debate, we were told that politics had to be centered around a phoney elite-friendly ‘center-ground', which, on issue after issue, had no relation whatsoever to where majority public opinion was, and which was in a very different place to the center-ground of the mid-1970s.Anyone who attempted to move politics away from this phoney center ground was attacked, particularly if they challenged the pro-intervention foreign policy ‘consensus’.For those brought up not to tell lies, and who can remember the time when we had a proper left, a proper right and a proper center, and where the names given to things were generally accurate, this period of widespread deceit and deception in politics and foreign policy was a demoralizing one to live through.For those brought up not to tell lies, and who can remember the time when we had a proper left, a proper right and a proper center, and where the names given to things were generally accurate, this period of widespread deceit and deception in politics and foreign policy was a demoralizing one to live through.Then in 2015, almost forty years on from the first showing of The Doll, a sign that perhaps a more honest form of politics in Britain was, at long last, on its way back.The election of Jeremy Corbyn as Labour leader, to the horror of Establishment gatekeepers, faux-humanitarians and the ‘let’s promote democracy abroad by air strikes’ brigade, represents a real threat to the Francis Durbridge-esque politics of the neoliberal/neocon era.Labour was now being led by a man who wanted the party to go back to being what it was in the 1970s, a party that stood up first and foremost for ordinary people and did not support neo-liberal economics and illegal neocon wars of aggression. In fact, Corbyn has praised the record of Labour governments of the 1970s.Corbyn’s victory was warmly welcomed not only by the genuine left - the left that had opposed the Iraq war - but by all those genuine democrats who had had enough of the politics of the last few decades where a fake-left and fake-right had dominated and political mislabeling was widespread.Predictably, the attacks on the new Labour leader have been severe and unrelenting. This most mild-mannered of men has been cast as a dangerous ‘extremist' and even a ‘terrorist sympathizer'By contrast, those Blairites who oppose Jeremy Corbyn within the Parliamentary Labour Party are referred to as ‘moderates’, even though almost all of them supported the far from ‘moderate’ Iraq war.Whether we’re talking about his anti-war stance, his support for re-nationalizing the railways or cutting tuition fees, the fact is that Corbyn is more in tune with majority public opinion than pro-war Blairites and his laughably out-of-touch detractors in the ‘punditocracy' - which is, of course, why he won such a resounding victory in September.The main problem with Corbyn for his critics is not that he’s unpopular and unelectable, but that he’s all too popular and electable and could very well lead his party to victory on a ‘Real Labour’ program in 2020. Make no mistake: the bearded 66-year-old MP for Islington North is a dangerous man to those who want to maintain the status quo. These people want to keep it all like a Francis Durbridge drama, where labels don’t mean anything and things are often the very opposite as to what they appear: confusion, deceit and deception serves their purpose.I for one, however, would much rather watch a Francis Durbridge thriller on television, than have it all played out live in the political arena.Follow Neil Clark on Twitter @NeilClark66(The Doll in German ('Die Puppe') and in English, can be purchased here).
No one should watch this "Saturday Night Live" video on the Republican Party Debates:
Not if they want to continue taking them seriously.
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WTF. I cannot believe that Glenn Frey has passed away.
Another music magician has succumbed to life.
"Already Gone" was one of my favorite lines as a young software hustler. Thanks for the music, Glenn. I'll miss you. (Just kidding about the hustling.)
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