Tag: Corporate Greed

How Many Corporations Pay Their Taxes?

Riddle me that…….

(sorry this is a bit longer than most of my posts….but it needs to be said….)

I know that some of my more conservative readers will not want to hear these proposals…..I believe that if the middle class must suffer and sacrifice then so should the others……I believe in shared sacrifice…..in action not in the idle words of politicians…….

For years conservs have been rattling on about the high corporate taxes in the US…..but they seemingly leave out the part that they get enormous tax breaks and tax cuts almost yearly….and in some states, mine to be exact, the conserv legislature is trying to eliminate corporate income tax, even though they pay very little as compared to what the working stiffs pay……

Think not?  This from Politifact Ohio……..

To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America — that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts

I say if I pay a 30% tax then corporations pay the same….a shared sacrifice….that they all keep going on about……and there are other ways that corporations can be more socially involved…….I read a piece in the UK’s Guardian by Nicholas Shaxson and I say it is worth considering…..

1) Corporate profits depend on tax-financed public goods: healthy and educated workforces; good infrastructure; publicly enforced respect for contracts and property rights, and so on. When corporations avoid or evade tax, legally or illegally, they free ride on the backs of the rest of us. Stop taxing them, and you savagely undermine political community.

2) Corporation taxes are an essential backstop to personal income tax. Cut them to zero, and wealthy individuals will increasingly reclassify their earnings as corporate income, typically using offshore corporate structures, and escape tax. Gauke’s arguments about employees footing the corporate tax bill are irrelevant.

3) Gauke’s claim of a “consensus among economists” that the burden of corporation taxes falls on employees and not on capital owners, is false. The US Congressional Budget Office said last week that it was “unclear” how much of the corporation tax burden fell on employees; earlier, it said that capital bore most or all of the corporate tax burden. The Institute for Taxation and Economic Policy (ITEP) in Washington said this month that the incidence of corporate tax fell mostly on capital owners, not employees. It added that corporate income tax was among the most progressive taxes, because stock ownership was heavily concentrated among the wealthiest taxpayers. This is an especially precious tax.

4) When Gauke talks about “employees”, who does he mean? Goldman Sachs employees earned $430,700 on average last year. To the extent that the burden falls on them, taxing such firms makes the tax system more progressive. It would also cut into excessive bank remuneration, which has been a big factor in the recent financial crisis. Taxing financial corporations also curbs the “too big to fail” problem where large banks can hold governments hostage and shift losses on to taxpayers.

5) If corporation taxes didn’t fall on the owners of capital, as Gauke claims, then corporations, responding to shareholders’ wishes, shouldn’t mind being taxed. So why do they spend so much time and money designing tax avoidance strategies?

6) Limited liability companies are separate legal persons, greater than the sum of their parts. So they should be taxed separately: this is not “double taxation”. Limited liability lets shareholders dump costs on to society when things go wrong. Corporations must pay for this privilege.

7) Many corporations earn what economists call rents. These – like oil money that flows effortlessly into Saudi or Kuwaiti coffers – are earnings that arise not from hard work and real innovation but from accidents of nature or good fortune. Adair Turner recently explained how banks in the City of London are particularly adept at earning rents, such as from exploiting insider knowledge and expertise; from natural oligopolies in market-making and other activities; and from “valueless” trading activity. Economists since Adam Smith – including Turner – have advocated taxing rents especially hard.

8) Corporate tax avoidance, despite hiding behind weasel words such as “tax efficiency”, is unproductive and inefficient. When corporate managers pursue tax avoidance they take their eye off what they do best – producing better or cheaper goods or services – and focus instead on engineering transfers of wealth from taxpayers to corporations. Clamp down on it, hard, to make markets more efficient.

9) It matters where company owners and business activities are. Take a US mining company digging gold in Zambia. If Zambia raises corporation taxes, wealth will flow from wealthy US stockholders to ordinary African taxpayers. The investor will stay, because that’s where the gold is – and even if it goes, another will take its place. That basic formula works for profitable opportunities in general. Tax corporations, within reason, and they may bluff and bluster – but they will stay.

10) The “Laffer argument” that corporation tax cuts pay for themselves has been thoroughly debunked. Even Greg Mankiw, formerly chairman of George W Bush’s Council of Economic Advisers, calls Laffer’s adherents “charlatans and cranks”.

Good stuff and excellent proposal……it will NEVER come about……special interests are in control….they have almost always been in control…….but what about shared sacrifice?

Give Us A Break!

We hear over and over how Obama and his policies have killed economic activity and jobs…..or that tax cuts will produce more employment…..or that the….well you get the idea….it is all so much crap!

Why would I say such a thing?

One of the shining lights, according to some, is Caterpilla…the heavy duty machine manufacturer….but look at this…

Seeking to bolster one of its more profitable business areas, Caterpillar Inc. agreed to acquire MWM Holding GmbH, a German maker of power-generation equipment, from 3i Group PLC and related investment funds for 580 million euros ($810 million).

3i, a British private-equity firm, bought the Mannheim, Germany-based company in 2007 for 360 million euros. The planned purchase is another move by Caterpillar to expand businesses outside its core areas of construction and mining …

Or maybe this….

Construction-equipment maker Caterpillar  said Tuesday it will buy locomotive maker Electro-Motive Diesel for $820 million from a private-equity firm.EMD is one of the world’s oldest and best-known makers of locomotives, producing its first engine in 1922.  The brand will remain unchanged as EMD’s brand is well-known in the rail industry.

So Caterpilla is spending about $1.5 billion on acquisitions….this will NOT create jobs…if anything some jobs will be lost because of the purchases…..none of this is to help put people back to work…..it is about the bottom line…the profits and the stock prices……business has NO desire to hire more people now and in the near future…it is more profitable the way it is today…..

So, give us a break!  Stop harping on the extension of benefits for corporations…they have NO intention of hiring more people…..nice try though….but I am not that stupid as to believe the hype!

Revisionism–It’s The Government’s Fault

Daily Agitator

From the VOMITORIUM

We have all heard the rumblings from the Right…..the government is at fault….does not matter what we were talking about…it is always the government’s fault.  It never fails someone will accuse the government of something and then there will be hundreds jumping on the bandwagon….right now it is the oil spill in the news and yes, you have it, it is the government’s fault…..

As usual I was watching the early morning news and came across CNBC’s famous Maria Barto……whatever her name is…and this morning while the panel was discussing the oil spill she said that it was like the finanacial crisis…the government’s fault…because there were no less than 400 agerncies involved in the regulation of the financial sector…this was her example…..and she tied it to the agencies that oversee the drilling stuff…she made a point to emphasize that less regulation was better somehow…..

It struck me that she was for no regulation and uncontrollable greed….yes!  I said GREED!…..in the financial sector and in the oil industry.  I mean this kinda irritated me….because capitlaism has become a dis organized operation that enoronously rewards price fixers, exploiters, con artists, gamblers, stock manipulators and in general most forms of corruption…..it has created a class of thieves with NO policemen.

I will, in sorts, agree with Maria and agree that she is a spokesperson for this class and a cheerleader of uncontrollable greed……and IMO she is probably the best person to be the spokesperson for the Banksters (bankers + gangsters…a term popular in the 1930’s).

Like I said, I agree with her, somewhat…..it is the government’s fault……Why?…I knew you would ask that…..the government was moronic to trust the industry, whether it be financial or oil, to do the right thing and play fair…that is the first mistake of the government…..2nd mistake was allowing Clinton and his Gang to repeal Glass-Steagall….3rd mistake was a treasury department with its head up its butt and lastly and the most important mistake was the American people for putting their blind trust in a group of NO CLASS people to represent them in Washington.

This returns me to Maria…..she, like ALL other journalist, have an agenda and that agenda is one of hegemonic control……l know…huh?  Anything done to promote and control the system and the media is our hegemonic control….and Maria is doing her part to further the agenda that the government is too large and in being so is at fault.  If you think I am wrong then just listen to the questions that the pundits ask the guests on their shows….they are all leading questions and the answer will be used to continue this control.  So the theory is if you say something is so long enough and often enough…it will be believed.

Watch the boob tube and especially the news….pundit after pundit will come forward and make this claim or that and after a significant amount of time a poll is taken and the results will show whether the mind control has taken or if further indoctrination is needed.  And the American people are perfect subjects for this type of control.

Did Corporate Perks Go Away?

Remember back about a month ago when bashing corporate CEOs was all the rage?  But that is silent now, the populist backlash has been silenced by a flu bug and a political deserter.

You do realize that the problem has not gone away?

U.S. companies remain generous with the perks they give to CEOs, including some that are unfathomable to the average American worker: chauffeured cars, bodyguards, club memberships and free travel in company jets.

The median value of these and similar perks rose nearly 7 percent in 2008, according to an Associated Press analysis of regulatory filings from 309 companies in the Standard & Poor’s 500. The increase came even as overall CEO compensation fell 7 percent to $7.6 million.

Perks rose despite a public backlash against such benefits, which many investors and lawmakers deem excessive. They argue well-paid executives should cover the costs of life insurance, charitable donations and financial planning themselves, especially as companies struggle with falling profits, slumping stock prices and massive job cuts.

But plenty of companies are keeping the spigots open. Occidental Petroleum CEO Ray Irani, for example, received $400,000 worth of financial planning, part of a $30 million pay package in 2008. To put it another way, that $400,000 in financial planning is more than the total annual household income of the vast majority of Americans. Occidental spokesman Richard Kline said the comprehensive financial planning helps Irani to “keep his complete attention on the company’s business.”

The median value of perks — which is the midpoint at which half of the executives received more and half less — was $170,501 in 2008, up from $159,586 the year before. Only three CEOs in the AP survey received no perks in 2008.

And perks made up a bigger percentage of total compensation, rising to 2.25 percent in 2008, up slightly from 1.95 percent, the AP’s analysis found.

So you see the perks are still being paid to the CEOs, just now it is done more quiet than before and they try to get it in under the populist radar.  THe workers are losing their jobs at an alarming rate and the corporate leaders are getting their perks at an even more alarming rate.

Taxpayers need to pay attention, their money is being misused and they are getting nothing out of their generosity.  Let the CEOs eat cake and the real people that should be benefiting from the government’s philanthropy.

What A Difference A Collar Makes

That would be a white collar…..as opposed to a blue collar.

U.S. Representative Anthony Weiner denounced a federal judge’s decision to allow Bernard Madoff to remain free on bond while awaiting trial for allegedly running a $50 billion Ponzi scheme.

“He should not be living at home, he should be in a jail cell,” said Weiner, a Democrat from New York, at a press conference yesterday in front of Madoff’s Manhattan apartment on East 64th Street. His comment followed the judge’s ruling in Manhattan federal court. “This judge doesn’t seem to get it.”

U.S. Magistrate Judge Ronald Ellis said Madoff, 70, may remain free on a $10 million bond, denying a request by federal prosecutors that he be jailed because he mailed a diamond necklace, Tiffany and Cartier watches and other jewelry to relatives. The mailing violated a court-ordered asset freeze.

Now take a look a a guy that has stolen $750…where would he be today?  Most likely sitting behind bars waiting for a trial.  Why?  He is a risk of flight person….but some a/hole that steals billions is a secure person from flight.  Is that logic or stupidity?

On another note along these same lines.

This man has ruined the lives of many people and yet when he is in public he has this arrogant smirk on his face.  You know the kind of smirk I am talking about, the same type that Pres. Bush has when speaks of war.  This man should be help under the jail or put him in with Big Bubba and llet them get married.

The Madoff Saga Continues

First of all would you seriously invest with a person whose name is pronounced “made-off”?

Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the U.S. Securities and Exchange Commission (SEC) and other regulators, who often came armed with suspicions, the Wall Street Journal said.

SEC officials followed up on emails from a New York hedge fund that described Bernard Madoff’s business practices as “highly unusual,” the paper said.

The Financial Industry Regulatory Authority, the industry-run watchdog for brokerage firms, reported in 2007 that parts of the firm appeared to have no customers, according to the paper.

Madoff was interviewed at least twice by the SEC, the paper said, adding that regulators never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s.

The SEC could not be immediately reached for comment by Reuters.

The serial regulatory failures will be on display on Monday when Congress holds a hearing to probe why the alleged fraud went undetected, according to the Journal.

Among the key witnesses is SEC Inspector General David Kotz, who was asked last month by the agency’s chairman, Christopher Cox, to investigate the mess, the paper said.

See what having billions can do for you?

The Grinch Who Stole The Show

A French investment manager who put $1.4bn (£1bn) into Bernard Madoff’s fraud-hit scheme has killed himself in his New York office, police said.

Rene-Thierry Magon de la Villehuchet, 65, was found sitting at his desk with both wrists slashed, New York police spokesman Paul Browne said.

A bottle of pills was found near him, but there was no suicide note.

Mr Villehuchet, who was married without children, was co-founder of money manager Access International.

To Build A Better Scheme

I was not going to post on the Ponzi scheme of Madoff, but as time goes on it gets better and better.

Bernard Madoff’s contention that he pulled off one of the biggest financial frauds in history without any help is being met with disbelief by his investors and experts in the securities industry. It normally takes a team of accountants, stock brokers, lawyers and more to operate the kind of multibillion-dollar investment fund that Madoff ran from the 17th floor of his Manhattan headquarters.

Financial wizard Bernie Madoff didn’t just fool investors. He also conned the nation’s top securities regulators, who investigated his business last year and apparently missed the fact he was running a $50 billion Ponzi scheme.

Madoff may have avoided scrutiny, regulatory experts said, in part because he simultaneously operated a legitimate, regulated and high-profile business as one of the largest middlemen between the buyers and sellers of stock. In that role, he helped to create Nasdaq, the first electronic stock exchange, and advised the SEC on electronic trading issues.

Many people keep asking, how could this happen?  Really?  You have NO idea how this type of thing can happen?

Do any of you remember the scams in the junk bond market in the early 90’s?  How about the S&L scandals of the 80’s?  All that was about onbe thing–GREED!  It is little different with the Madoff hustle.  Once investors see dollar signs they become stupid with greed and when that happens they are easy pickings.

It is as easy as that.  If we could eliminate greed then we could eliminate such scandals.  But unfortunately, greed is here to stay and so are the schemes to steal more money.

Carbon Trading: Crisis In Waiting

The plan, at first glance, seems simplicity itself: by charging companies for the right to emit CO2, the government hopes to encourage them to switch to cleaner and greener technologies. It is the latest development in a global campaign to save the planet by making polluters pay.

We are witnessing the birth of the greatest and most complex commodity market the world has seen. Last year alone, permits worth more than £55 billion were traded on the world’s carbon markets – but future trading volumes, if all goes global according to plan, will dwarf these.

Carbon trading schemes originate from the Kyoto protocol on climate change agreed under the auspices of the United Nations in 1997. Governments adhering to Kyoto accept limits on the CO2 their countries can emit. To meet their pledges, they put caps on the carbon outputs of domestic companies, which have to buy annual permits to exceed them.

Permits are bought from governments or from carbon traders, who, naturally, charge a commission. For the City the arrival of carbon trading is a bonanza. The sector already employs about 3,000 people and has created a few dozen new millionaires.

It sounds good news for everyone: governments, taxpayers, City boys and the environment. The reality is a great deal less rosy – indeed some of those closest to the carbon markets say openly that the system is doomed to failure.

Many carbon traders believe they could make the system work but fear the politicians who oversee it will never dare put a sufficiently high price on carbon emissions to make a difference.

The idea is certainly appealing: if a company is emitting too much CO2 it can either make cuts or pay other companies to cut their emissions instead. If it turns out to be cheaper to pay someone in China to plant a forest to absorb carbon dioxide, or a factory in India to install clean technology to cut its emissions of greenhouse gases, then this is allowed, provided the project has been approved under the UN framework convention on climate change. For each tonne of CO2 saved, the convention issues a certified emission reduction certificate, or CER. These are valuable: indeed, they are the nearest thing to currency that the carbon markets acknowledge. Each one is worth about £14.

The original plan was to create a system for transferring wealth from developed countries such as Britain and America to the Third World, hence killing two birds with one stone: cutting emissions and helping international development.

Greed—the buzz kill–will rear its ugly little head and then this will become just another crisis waiting to happen.

The Bank Of American Express

Everybody is looking to save their collective butts with hand outs from the government.

American Express (AXP 23.98) is now licensed as a bank holding company and will be regulated by the Federal Reserve.  The company grew into its own by issuing credit cards to well-heeled customers, but strains in the economy and broader financial system led to write-downs and increased loss provisions.

Status as a bank holding company does not mean American Express will change its focus away from the payments industry.

Operating as a bank holding company provides American Express stability and flexibility in the current environment, while expanding its deposit-taking capabilities — a relatively inexpensive source of funds.  The newly granted status also enables American Express to issue debt backed by government guarantee.  Additionally, American Express now has access to Treasury’s Troubled Asset Relief Program (TARP), which will allow the company to put up dodgy assets in exchange for fresh capital.

Access to such resources helps solidify the firm’s balance sheet and mitigate against losses.  For the third quarter, American Express reported increased net loan write-offs, increased loss provisions, and intentions to restrain loan growth.

People, please wake up!