BP - CVS Proves "Big Government" Is Working

BP - Who are the REAL Obamacare Hypocrites?

DN - As Workers Strike, Fast-food CEOs Fatten Pockets With Tax Loopholes, Social Assistance for Employees

TYT - Middle Class Benefits Targeted By Washington Post

TYT - Elizabeth Warren Nails It On Social Security

BP - How America Could Be the Happiest Country on Earth

BP - Stop Treating Capitalists As If They're Gods...

BP - IMF Now Says, "Tax the Rich!"

BP - A Cautionary Tale on Privatizing Tax Collection

TYT - The IRS Scandal, Totally Debunked

Milking a "Scandal" For All They Can Get

Trey Smith

Tea Party and other conservative groups delivered an emotional plea for Washington to rein in government overreach on Tuesday as they told lawmakers about how the Internal Revenue Service targeted them with relentless paperwork and intrusive questions when they sought tax-exempt status.

The House Ways and Means Committee invited a collection of groups to speak about their experiences as details continue to emerge about how and why IRS officials in a Cincinnati, Ohio, field office began targeting conservative groups for extra scrutiny.

"This was not an accident. This is a willful act of intimidation intended to discourage a point of view," said Becky Gerritson, president of a Tea Party group in Wetumpka, Alabama.

She tearfully described how she and her husband had to seek legal counsel when confronted with questionnaires about their donors, communications with legislators and their voter education activities.

"I'm not interested in scoring political points. I want to protect and preserve the America I grew up in," Gerritson said.
~ from Tea Party Groups Emotionally Describe Harassment by IRS by Kim Dixon ~

This whole "scandal" is getting sillier by the day. These groups are claiming they were persecuted because...the IRS asked them pertinent questions? Yes, it is pertinent to ask organizational leaders of political groups masquerading as social welfare organizations tough questions. As I have stated previously, what I find scandalous is that these overtly political groups were granted tax-exempt status! What this means is that lots of Americans who do NOT subscribe to their conservative views are now forced to subsidize them!

I also want to note one salient fact that generally has gone unmentioned in the mainstream media. When an organization applies for tax-exempt status, they can behave as if they are tax-exempt until a decision has been made on their application. Since every one of the applications of these whiners was, in fact, approved, there was no injury to each organization's bottom line. In other words, aside from answering pertinent questions, there were no encumbrances. So, why are the screaming bloody murder?

And we know the answer to that question. They didn't want to admit that they indeed ARE overtly political organizations that shouldn't qualify for tax-exempt status.

TYT - Biden Wants to Tax Violent Video Games?

This Apple Falls Far From Its Tree

Trey Smith

If you've been following along at home, then you read Friday afternoon's post about the [sort of] legal shenanigans of the corporation -- Apple Computers -- that so-called progressives gush over. It was revealed in said post that Apple is hiding a great deal of their profits in Ireland because the Irish allow them to pay a very meager 2 percent tax on their profits. By hiding their wealth over there, they are depriving the US and many other nations of tax dollars they should be paying.

Well, the story gets even worse. As Richard Eskow writes,

Even though only four percent of its workforce is based in Ireland, and only a small percentage of its profits are earned in that country, Apple recorded 65 percent of its worldwide profits there. Many other "American" companies are also taking advantage of Ireland's lax tax laws, including Google, Facebook, Pfizer, Johnson and Johnson and Citigroup.

We now know that, as the Wall Street Journal reports, "Apple used technicalities in Irish and U.S. law to pay little or no corporate taxes on $74 billion over the past four years." Sen. Carl Levin described Apple's bookkeeping as the product of "alchemy" and "ghost companies," and that's true insofar as the United States is concerned.

A Senate panel concluded that Apple negotiated a deal with the Republic of Ireland whereby it would declare earnings there and pay an ultra-low rate of two percent. That arrangement sits atop a corporate tax filing in which, as the New York Times reports, Apple assigns more than $100 billion in profits to overseas subsidiaries.

As the Times also reports, Apple created an entity called Apple Operations International and incorporated it in Ireland. But despite the fact that this entity is purportedly based on the Emerald Isle, it "keeps its bank accounts and records in the United States and holds board meetings in California."

Apple Operations International gets all the benefit of being an American company, and collects the lion's share of profits for one of the most profitable countries in the world. And yet it pays a tax rate of only two percent.

I get so sick of hearing these corporate CEOs talk about "shared sacrifice," patriotism and how they are so victimized by the US tax system!! They aren't sacrificing. They are laughing all the way to the bank! How patriotic is it to shift their profits around like a shell game? And how can they say they are victims of the US tax system, when many of them pay little or no taxes?

But that's not the worst of it for me. The thing that drives me up the wall is that liberals hold up Apple as a model for what a "progressive" company can and should be. If this is the best American capitalism has to offer, then we're in far deeper shit than most people realize!

Not the Apple of My Eye

Trey Smith

Apple has called for US corporate tax rates to be slashed after it admitted sheltering at least $30bn (£20bn) of international profits in Irish subsidiaries that pay no tax at all.

In a dramatic display of how threats from multinational corporations are driving down taxes across the world, chief executive Tim Cook warned Congress that he would refuse to repatriate a total of $100bn stashed offshore unless it acted to slash the 35% US rate.

Cook said the tax rate for repatriated money should be set "in single digits" to persuade companies to bring it back. Standard tax for US profits should be, he said, in the "mid 20s".

He also revealed that Apple had struck a secret deal with the Irish government in 1980 to limit its domestic taxes there to 2%.

Three subsidiaries based in Ireland are also used to shelter profits made in the rest of Europe and Asia but are not classed as resident in any country for tax purposes – a tactic dubbed the "iCompany" by critics.

Cook's testimony to a Senate sub-committee investigating multinational tax practices largely confirmed its findings that Apple had taken tax avoidance to a new extreme by structuring these companies so they did not incur tax liabilities anywhere.
~ from Apple Chief Calls on US Government to Slash US Corporate Tax by Dan Roberts and Dominic Rushe ~

Okay, let's see if we can get this straight. Apple -- the darling of so many liberals -- has utilized quasi-legal and unethical means to avoid its patriotic duty to pay US corporate taxes. In exchange for saving itself tens of billions of dollars, the company struck a secret deal to pay peanuts to Ireland on a very small amount of its largess. If that wasn't bad enough, Apple is also manipulating the system so that it isn't paying much in the way of taxes to a slew of others countries.

With all this admitted to, the Apple CEO has the audacity to suggest that the ONLY way his company might consider behaving in a more ethical manner is IF the US changes its corporate-friendly tax laws to allow Apple to shirk even more of their civic duty! (How magnanimous of him.)

Folks, this is a showcase for unmitigated greed. It is a showcase for how multinational corporations want boatloads of perks without any communitarian responsibilities. They believe that people should pay their taxes -- just not them!

As with all discussions of this nature, please do not allow yourselves to be caught up in that 35% tax rate figure. That merely represents the marginal tax rate -- the rate before any credits, deductions or exemptions are subtracted. Few, if any, US-based corporations actually pay the marginal rate. Study upon study has shown that most large corporations pay somewhere between one-third to one-half of the marginal tax rate. In other words, their effective tax rate is somewhere between 10-20%...for those corporations who pay ANY corporate income tax at all.

This provides us with some perspective in terms of Mr. Cook's suggestion that repatriated money should have a marginal tax rate in the single digits. What he is really suggesting is that his company would be more than happy to bring their money home IF they didn't have to pay ANY penalty at all because, as noted above, the marginal tax rate isn't the effective tax rate. If the repatriated tax rate was set at something like 7%, it would be relatively easy to conjure up enough deductions to bring the effective tax rate to zero!

The Other Way Around

Trey Smith

Again and again, self-righteous critics have portrayed Social Security as the profligate monster borrowing from the Treasury and sucking the life out of federal government.

Guess what? It's the other way around. The federal government borrows from Social Security. The Treasury has been borrowing from the Social Security Trust Fund for 30 years, and the debt to Social Security beneficiaries now totals nearly $3 trillion. The day is approaching when that money will be needed for its original purpose: paying Social Security benefits to the working people who contributed to the fund.

That is the real crisis that makes the financial barons and their media collaborators so anxious to cut Social Security benefits. They would like to get out of repaying the debt — that is, giving the money back to the people who earned it. The only way to do this is cut the benefits — over and over again. Count on it. If the president and Congress succeed in this malicious scheme, they will come back again and again to cut more and more. (emphasis added)
~ from Will Voters Forgive Obama for Cutting Social Security? by William Greider ~

Both political parties have been duplicitous in this disinformation campaign. The leaders of both parties are hiding the fact that Greider outlines above. It is a typical Orwellian ploy -- turn reality on its head by calling up down and down up.

To compound the problem, the mainstream media plays along. This explains why so many average folks are so mixed up. This is the reason most people have the equation backwards.

A lot of hay has been made in the past two or three years about the wealthy elite shirking their responsibility to pay their fair share of taxes. While that indeed is a big issue, this one is far bigger. They are stealing OUR money only to turn around to blame us for the theft.

People, wake up!!

Bearing the Brunt

Trey Smith

It might have been worth making this point in an article on President Obama's budget proposal that tells readers of his plan to cut Social Security by reducing the annual cost of living adjustment. It would have been worth putting this proposal in some context, since many readers may not understand its consequences.

President Obama's proposal would reduce benefits by 0.3 percent for each year after a worker retires. After ten years benefits would be cut by 3.0 percent, after twenty years 6.0 percent, and after 30 years 9.0 percent. Over a twenty year retirement, the average cut would be 3.0 percent.

This cut would be a bigger hit to the typical retiree's income than President Obama's tax increases at the end of 2012 were to the typical person affected. A couple earning $500,000 a year would pay an additional 4.6 percentage points on income above $450,000. This would amount to $2,300 a year (4.6 percent of $50,000). That is less than 0.5 percent of their pre-tax income and around a 0.6 percent reduction in their after-tax income.

By comparison, Social Security is about 70 percent of the income of a typical retiree. Since President Obama's proposal would lead to a 3 percent cut in Social Security benefits, it would reduce the income of the typical retiree by more than 2.0 percent, more than three times the size of the hit from the tax increase to the wealthy.
~ from President Obama Proposes a Bigger Hit to Seniors Than to the Rich by Dean Baker ~

Read that analysis again. After you reread it, remind yourself that this is the proposal from what the Right calls the "socialist" president! This over-the-top liberal leader is proposing to sock it to the poor, while going easier on the rich.

So, I ask those right-leaning critics: Would you mind pointing out to me the "socialist" part of this plan?

Let's Do a Little Math

Trey Smith

If every single resident of Allentown, PA or Surprise, AZ received an average of $300/month in Food Stamps for the entire year, it would add up to around $429 million. As I reported in an earlier post, that is the same amount as an anticipated federal tax refund for Facebook. Of course, unlike Facebook, none of the people receiving those Food Stamps would have over $1 billion in pre-tax income. In fact, some of those people might be lucky to bring home $25,000!

Since Facebook certainly isn't the only mega wealthy corporation that will receive a huge tax refund this year, using the calculation above, maybe we could plug in the population of Wyoming, Vermont or South Dakota! Heck, since I don't know how high the aggregate figure is, it might be more accurate to juxtapose the final tally to the population of states like Nebraska or Connecticut.

Whatever the true ratio is, it is mind boggling that a significant number of the wealthiest corporations in this nation constantly whimper and cry about the supposedly too high federal income tax rate and yet they don't ACTUALLY pay ANY federal income tax and many of these sniveling crybabies ACTUALLY receive huge refunds year after year after year!!!!!!!

To add insult to injury, the execs of these same corporations lecture the rest of us about patriotism and fiscal responsibility.

Darn Galling (To Say the Least)

Trey Smith

In news that is no longer surprising, another corporate behemoth has figured out a clever way to shirk its tax responsibilities. According to Business Week, financial titan Facebook earned more than $1.1 billion in pre-tax profits and yet "it will probably pay zero federal and state taxes — and even receive a federal tax refund of about $429 million."

Think about this. Facebook makes money hand over fist, but it doesn't owe a single penny in taxes? That's absolutely insane! Even more insane is that Facebook is getting a refund!!

But you probably won't hear ANY of our elected leaders grousing about this legal crime. You also won't hear them complain about all the other Fortune 500 companies who have somehow managed to shirk their tax responsibilities too. No, what we have been hearing and will continue to hear is that the federal budget is such a mess because of all of us leeches on Food Stamps or all those old fogies on Social Security.

Yeah, we are the problem. Certainly NOT Facebook!

(Fill in the Blank) - Industrial Complex

Trey Smith

You've got to hand it to the corporate honchos. Long ago they figured out a surefire formula for levering taxpayer dollars out of our public treasuries. They cobble together enough of a presence in local communities along with strong lobbying groups in the nation's capitol and, before you know it, we have a (Fill in the Blank) - Industrial Complex.

The most famous of these is the military-industrial complex. The military has become so interwoven with our political and economic system that it has become a force that shapes national policy. Why do you think the US spends more on its military than the next 13 nations combined? It is because a) the military-industrial complex provides so many jobs in communities across the country, b) those workers spend money in those communities and c) there are a lot of fat cats who have grown egregiously rich feeding at the public trough.

When well-intentioned politicians or citizens suggest that maybe, just maybe, we should cut back a tad on military spending to save this nation's vital infrastructure from crumbling beneath our feet, scores of groups, local governments and lobbyists howl with indignation. A local mayor will declare that such an action will cause economic hardship for his/her community. Labor unions will decry the loss of well-paying jobs. Politicos will panic at the thought of losing huge political contributions.

The military-industrial complex has become so large with tentacles spreading out so wide that military spending today is a sacred cow. Suggest that the cow needs butchering and you will wreak havoc on the nation's financial infrastructure. Like the notion of "banks too big to fail," the military-industrial complex is now in the same boat.

Seeing how well this strategy worked, people involved in prisons developed the prison-industrial complex. It has followed the same trajectory and now ANY suggestion of lessening this nation's prison beds or incarceration rates meets with the same kind of over-the-top hand-wringing.

There is another industrial complex that few Americans are aware of. David Sirota writes about it today: the sports-industrial complex. Just like their compatriots in the military and prison industries, the wealthy owners of America's professional sports teams have figured out how to hold American taxpayers hostage.

Two Crises: One Real, One Fake

Trey Smith

The truth about Social Security is that it is not in crisis. After all, 2033, or even 2031, is a long way off from 2013. Two decades off in fact. What other crisis facing the US can you think of that Congress is preparing for two decades in advance? The answer is none. I can, in fact, think of a real crisis that is two decades off that Congress is blithely ignoring, and that is the global climate crisis. In two decades, if there is no major action to reverse the pace of carbon emissions into the atmosphere, it will be too late to do anything to stop runaway heating of the seas and the atmosphere, which will be a much more serious disaster than exhausting the Social Security Trust Fund! Yet Congress and the president are doing nothing about climate change. Why? Because corporate interests, which only care about making profits over the next quarter or at most the next year, don’t want to be burdened by regulations and taxes designed to force them to reduce their carbon emissions. Those same corporations, and especially the financial interests on Wall Street, happen to want to destroy Social Security in order to force workers to invest in the stock and bond markets that they now thoroughly manipulate, instead of relying on a retirement system that has worked well for over three quarters of a century! [emphasis mine]
~ from Wall Street Pulls the Strings: Social Security Under Attack in February by Dave Lindorff ~

Here we have a looming calamity -- one that will impact all life on this planet -- and yet both our political and corporate leaders have, at best, a ho-hum attitude. Over the past two decades or so, scientists keep coming up with one dire prediction after another and, even worse, we keep exceeding the benchmarks from previous forecasts. All signs point toward a "point of no return" and yet no one in Congress or the White House seems all that concerned.

Instead of focusing on this one REAL crisis staring us in the face, the oligarchy, in conjunction with the mainstream media, manufactures fake ones. As Lindorff and many others have made clear, the Social Security Fund is NOT in crisis. It IS true that it MAY face a 25% shortfall in twenty years time, but as Lindorff points out, there is (and always has been) an easy solution.

All it would take would be to eliminate the cap on income subject to the FICA tax, which is currently set at $113,000, and to levy a small FICA tax either on investment income (not including retirement savings accounts), or on stock and bond trades that are not held in retirement accounts. In other words, if the wealthy and their employers were required to pay the full FICA tax on all their earned income, and to pay FICA taxes on their so-called “unearned” income, there would be no shortfall at all, right through the retirement years of the Baby Boom generation and beyond.

You see, the way the tax code has been written, rich folks aren't required to pay into the system at the same rate as poor folks. While most of us in the middle and working class are required to pay Social Security taxes on 100% of our earnings, the wealthy can pay as little as 1% on their total earnings. Talk about a tax break!!

But we won't hear about this easy solution in Washington or the mainstream media simply because it doesn't benefit Wall Street. And that's what really matters in this country!