"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Taxes’

Fracking The IRS: CEO Pay, Political Lobbying, Exceeds Company Tax Bill At Major Corporations

In Uncategorized on September 1, 2011 at 11:58 am

Oldspeak: “21st century welfare queens: CEOs of Verizon, Boeing, Honeywell, General Electric, International Paper, Prudential, eBay, Bank of New York Mellon, Ford, Motorola, Qwest Communications, Dow Chemical, and Stanley Black and Decker. While the U.S. Gov’t relentlessly harasses and pursues actual flesh and blood citizens, many “corporate citizens’ are given a pass, as hundreds of thousands are layed off to maintain profits and millions in revenues are lost. Oligarchy in action.”

By Chuck Collins @ The Institute For Policy Studies:

As the Super Congress eyes trillions in budget cuts that will undermine the quality of life for most Americans, here’s a stunning fact to contemplate: 25 hugely profitable U.S. companies paid their CEOs more last year than they paid Uncle Sam in taxes.

In other words, the more CEOs dodge their civic responsibilities, the more lavishly they’re paid. That’s the key finding of a new Institute for Policy Studies report,Massive CEO Rewards for Tax Dodging, which I co-authored.

These artful dodgers include the CEOs of Verizon, Boeing, Honeywell, General Electric, International Paper, Prudential, eBay, Bank of New York Mellon, Ford, Motorola, Qwest Communications, Dow Chemical, and Stanley Black and Decker. Their average annual compensation totaled $16.7 million, well above last year’s average of $10.8 million for the CEOs of S&P 500 companies.

Click here to see the full infographic.

Instead of paying their fair share, these companies spend millions lobbying for additional tax breaks and loopholes. Twenty of the 25 companies spent more lobbying Congress last year than they paid the IRS in federal corporate taxes. General Electric invested $41.8 million in lobbying and got $3.3 billion in tax refunds. Boeing spent $20 million on lobbying and got a $35 billion contract from the U.S. government, while paying a paltry $13 million in U.S. taxes for a company with $4.3 billion in U.S. income last year.

Eighteen of the 25 companies aggressively use off shore tax havens to shift profits around the globe to avoid U.S. taxes. These 18 companies together had 556 subsidiaries in the Cayman Islands, Singapore, Ireland, and other havens. The offshore scam works like this: companies pretend their profits are earned in low-tax or no-tax jurisdictions — and then feign losses from their U.S. operations at tax time.>

Whatever happened to corporate civic leadership? A previous generation of CEOs would have been ashamed to be compensated so lavishly while their companies abandoned responsibility for paying their fair share. They would have been embarrassed to go year after year contributing little or nothing to the public investments that make the United States a vibrant business environment.

  • Chesapeake Energy paid its CEO Aubrey McClendon $21 million last year but paid zero federal corporate income tax in 2010. Chesapeake is fracking the tax code, drilling it for every possible subsidy it can extract — while lobbying to preserve antiquated tax breaks for oil and gas industry.
  • Online retailer eBay paid its CEO John Donahoe $21.4 million last year while collecting a federal tax refund of $131 million. eBay’ 31 subsidiaries in Switzerland, Singapore, and seven other tax havens facilitate its efforts to move money around the planet as a tax-dodging strategy.
  • Insurance brokerage Marsh & McLennan paid its CEO Brian Duperrault $14 million yet collected a $90 million tax refund from Uncle Sam. The company has 105 subsidiaries in 20 off shore tax havens, including 25 in Bermuda — a favorite locale for insurance companies seeking to avoid both taxes and regulation.

These super-moocher companies happily benefit from the privileges and advantages of doing business in the United States. If a competitor tries to steal their product or idea, these corporations rush to the U.S court system and law enforcement agencies for remedies and justice. The U.S. military guards their global assets.

They use the fertile ground of publicly funded research and infrastructure to bolster their own profits. They create new products from a foundation of Uncle Sam’s investments in medical and scientific research and government funded technologies like the Internet. Our taxpayer-funded roads, ports, and bridges bolster their business environment. Our public schools and universities educate the workers these companies rely on. In fact 16 of these 25 CEOs attended public universities. They personally were educated with help from U.S. tax dollars.

These CEOs profess to love America. But when it comes time to pay the bills, they’d rather outsource that job over to you or the small business down the road.

Congress should pass the Stop Tax Haven Abuse Act which would limit some of these tax shenanigans. In the face of growing fiscal austerity, these companies should contribute to the solution and pay their fair share of U.S. taxes.

Read the full report, here

Social Security’s Future At Risk With New Tax Deal

In Uncategorized on December 24, 2010 at 1:44 pm

Oldspeak:” ‘If once the people become inattentive to the public affairs, you and I, and Congress and Assemblies, Judges and Governors, shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions.’ -Thomas Jefferson. Governments captured by monied interests, tend to serve monied interests. The Greater Good is secondary.”

From JONATHAN BATTAGLIA AND ROBERT WEINER @ The Palm Beach Post:

Under the radar screen, the new tax deal is threatening the livelihood of America’s present and future seniors – to line the pockets of millionaires.

If made permanent, a new Social Security “payroll tax holiday,” reducing the “match” employers pay from 6 percent to 4 percent of salary, will drop the solvency of the program 14 years, from 2037 to 2023, according to the Congressional Budget Office. At the same time, Congress agreed to increase high-end loopholes in the estate tax, exempting 39,000 estates worth as much as $5 million.

This bill puts in motion two devastating policies: lowering taxes for the rich and destabilizing the financing of Social Security. Without sufficient worker and employer matching money, which has kept Social Security solvent for 75 years and helped millions of Americans live out their senior years in comfort, the program could be doomed. Congress and the White House say they want to “protect Social Security’s solvency,” but this action does just the opposite.

The most dangerous aspect of the payroll tax holiday is that it could become permanent. The new philosophy in Congress seems to be “once a cut, always a cut.” When the payroll tax holiday expires in a year, Republicans will insist on keeping it, just as they did with the Bush tax cuts for the wealthy.

Democrats are falling for the same trap they did nine years ago when they helped pass the Bush tax cuts. Bush communications director Dan Bartlett explained how they used “temporary” cuts to get votes: “We knew that, politically, once you get it into law, it becomes almost impossible to remove it.”

Breaking the promise of Social Security will leave seniors with extra working years and reduced benefits. The White House and Congress can dig themselves out the same way Congress and President Obama just did with Medicare by extending reimbursements for physicians. Failure to do so would have stopped seniors from getting their health care.

Congress should have adopted an amendment to the tax bill proposed by some farsighted lawmakers that would have replaced changes in payroll taxes with a one-year credit to provide tax relief to businesses, while not threatening the solvency of the Social Security trust fund. Instead, Congress broke down the firewall of separate Social Security funding and gave it to general revenue to help business — and the heck with seniors.

We are left with the biggest affront to the solvency of Social Security since George W. Bush threatened to privatize it. The difference is that this attack received bipartisan support. If this is what bipartisanship looks like, Americans should run in the other direction.

The White House and Congress read that payroll tax holidays have recently “worked” in other countries to spur the economy. It’s an amazing statement, with the world’s economies in bad shape. Here, moreover, we have a contract to pay our seniors back with their money, not take it without permission. It’s a separate, paid-for insurance plan, not a social welfare giveaway to business. Social Security funding must be off-limits to Congress, especially when it wants to give the money to millionaires.

The great Florida Congressman Claude Pepper, known as “Mr. Social Security,” was outraged in 1978 at Commerce Secretary Juanita Kreps’ suggestion to increase the retirement age to 68 for full Social Security benefits. Rep. Pepper demanded and got a meeting with Ms. Kreps and House Social Security Chairman James Burke, D-Mass. Rep. Pepper kept saying that he and Rep. Burke would “fight it to our death.” Ms. Kreps asked, “Even (delaying the start) to the year 2000?” Both members vehemently exclaimed, “Yes!” Ms. Kreps finally responded, “Well, I haven’t made the proposal anyway.” That’s the courage we need from somewhere now.

Congress should clean up the mess it just created for seniors, and for all the young and middle- aged who hope to grow old.

Robert Weiner is a former chief of staff of the U.S. House Select Committee on Aging. Jonathan Battaglia is a policy analyst at Robert Weiner Associates.

 

Obama Caves on Tax Cuts, Endorses ‘Bush-McCain Philosophy’

In Uncategorized on December 7, 2010 at 3:11 pm

Oldspeak:”Yet another example of Candidate Obama saying the right thing and President Obama doing the wrong thing. It really is disheartening. But the reality is in the U.S. you’re highly unlikely to be elected president unless you are able to generate vast amounts of money, and are beholden to powerful and monied interests. Far too many elected officials have been bought and paid for to affect far-reaching change for the people who need it most, without first paying tribute to the Corporatocracy.”

From Ari Berman @ The Nation:

During the 2008 presidential campaign, Barack Obama said over and over that he was running to “put an end to the Bush-McCain philosophy.” Campaigning in Colorado just days before the election (see video below), Obama clearly stated his opposition to Bush-era economic policies and ridiculed the idea that “we should give more and more to millionaires and billionaires and hope that it trickles down on everybody else. It’s a philosophy that gives tax breaks to wealthy CEOs and to corporations that ship jobs overseas while hundreds of thousands of jobs are disappearing here at home.”

Now Obama, in a blatant reversal, is preparing to do just that, agreeing to extend the Bush tax cuts for the wealthy [1], which my colleague Chris Hayes accurately calls the “single defining domestic policy of W.”

In 2008, Obama presented himself as a clean break from the Bush and Clinton dynasties and a fresh face for the nation and the world. Yet once in office he packed his White House with holdovers from the Bush and Clinton administrations and continued or even accelerated key Bush-era policies, whether in the realm of counterterrorism, Afghanistan or offshore drilling. The latest “compromise” on the Bush tax cuts, extending the upper-income tax cuts for two years in exchange for the continuation of unemployment benefits, is simply the latest in a series of capitulations from the Obama White House.

Obama and Congressional Democrats bungled the tax debate [2] from the start, even though it was clearly a winning issue for the president and his party. Even though everyone knew the Bush tax cuts were set to expire at the end of this year, Democrats failed to develop an overall strategy for this issue last summer or force a vote in the Congress before the election—at a time when even Republicans like John Boehner said they’d vote to extend only the middle-class tax cuts if that was their only option. Yet Democrats refused to put the GOP on the spot or talk about the tax cuts during the campaign, blurring what should have been a core distinction between the parties; Democrats for the middle class, Republicans for the rich. As former Ohio Governor Ted Strickland [3] said recently: “If we can’t win that argument we might as well just fold up.”

Once Democrats finally decided to vote on only the middle-class tax cuts, last week, Republicans had all the momentum and the issue had become mere political theater. Even as Congress was voting on the Democrats’ plan, Obama signaled to Republicans that a more favorable deal was just around the corner, giving the GOP no incentive to side with Democrats. The Obama administration’s posture on the tax cuts is eerily similar to its stance on the public option during healthcare reform—the president says he wants the policy, but does absolutely nothing to fight for it, either through his own bully pulpit or on Capitol Hill. Last week, Organizing for America asked Obama supporters to phone bank in support of the DREAM Act, repealing “don’t ask, don’t tell,” and a pay freeze for federal workers [4] (yet another concession to the GOP), but did nothing on the tax front.

So now Obama is planning to spend $60 billion a year on tax cuts for millionaires and billionaires rather than, for example, a national infrastructure plan [5] that would rebuild America and put people back to work. It’s hard to see how the president will benefit either politically or substantively from this latest reversal of policy—caving on the tax cuts will only embolden GOP leaders, who already see Obama as weak and unprincipled, and will further deflate restless Democratic activists and Obama supporters. If this is how Obama plans to govern in the future, we’re in for a rough next two years.

UPDATE: Five major progressive groups–MoveOn, Democracy for America, TrueMajority, Credo Action and the Progressive Campaign Change Committee–are now urging the Senate not to ratify the imminent Obama deal. Says DFA chair Jim Dean: “Voters – and activists – are not buying the notion that tax cuts for high income earners are the only path to extending the middle class tax-cuts. As for any Democratic members of Congress who are going along with extending the tax cuts for high income earners — this is the stuff that primaries are made of.”

 

Americans Are Ratting Out Their Neighbors to the IRS at a Record Pace to Reap Cash Whistleblower Rewards

In Uncategorized on May 5, 2010 at 2:39 pm

Oldspeak: As the Surveilance State expands, spheres of privacy, civil liberties, and trust contract.

From  Bloomberg Business Week:

Americans seeking reward money are turning in neighbors, clients and employers they suspect of cheating on taxes to the IRS at a rate of nearly eight per day, the director of the agency’s whistleblower program said.

Steve Whitlock, the director, told an audience of about 200 lawyers, investigators and government officials at a Miami Beach conference on offshore banking that his office receives 40 to 50 tips per month alleging tax liability in excess of $2 million. Americans submit another 200 per month alleging smaller violations, he said.

Whitlock said submissions have surged since the enactment in 2006 of a law that requires the Internal Revenue Service to pay awards of between 15 percent and 30 percent in cases where more than $2 million is collected. Prior to the law, both the decision on whether to make an award and the amount of payment were discretionary.

“Right after we got the new law” containing the minimum award, “the fax machine was running the next day,” Whitlock told the Offshore Alert Financial Due Diligence Conference.

The rate of submissions is on pace to eclipse the 476 applications filed in 2008, a number that was four times the previous year. Whitlock said the submissions have “stabilized.”

Awards

Whitlock told reporters after his speech that there are about 1,000 whistleblower submissions involving about 4,500 taxpayers under investigation.

Whitlock said the IRS will soon release guidance on how awards will be paid under the new program. The guidance will establish positive and negative criteria that will be used to determine awards, he said. Whistleblowers will be allowed to challenge an award in an administrative hearing.

It typically takes five to seven years to adjudicate a claim and collect delinquent taxes before award determinations can be made, he said. He said his office is working to try to close the first spate of cases submitted in early 2007.

The IRS established the whistleblower office headed by Whitlock in February 2007 to process claims. The 2006 law has spurred a legal industry built around submitting claims.

Informants

After the law was enacted, the Miami-based Ferraro Law Firm, which specialized in personal-injury cases involving cancers related to asbestos, opened a Washington office that recruits and represents clients making such claims. The firm has said it made several claims alleging more than $1 billion in unpaid taxes.

Interest in the whistleblower awards also increased after informants helped the IRS pursue high-profile tax-evasion cases involving Americans who hid assets at Zurich-based UBS AG, Switzerland’s largest bank, and at Liechtenstein’s LGT Group, a bank owned by Liechtenstein’s ruling family.

One informant was sentenced to prison. UBS banker Bradley Birkenfeld was sentenced to three years and four months in prison for helping billionaire Igor Olenicoff cheat on his taxes. Olenicoff was sentenced to two years of probation and paid $52 million in back taxes, penalties and interest.

The informant in the LGT case, former bank employee Heinrich Kieber, lives under a new name in a witness protection program, Senator Carl Levin, a Michigan Democrat, has said. Kieber is seeking an IRS award but has not yet been paid, according to his attorney, Jack Blum.

–Editors: Brigitte Greenberg, Bill Schmick.

To contact the reporter on this story: Ryan J. Donmoyer in Miami at rdonmoyer@bloomberg.net.

To contact the editor responsible for this story: Jim Kirk in Washington atjkirk12@bloomberg.net