Why so hung up on the effective RATE? The “rich” pay way more $$ than those they oppress. Taxes on capital gains are taxed at a lower rate as a means to coax investments into the economy (to do things like, oh, say, create JOBS).

Let’s in the same breath decry that some people who buy a home are taxed at a lower RATE than someone making the exact same income but renting a home. Why, because they get a deduction for their mortgage interest. Does that make the homeowner an oppressor of the renter?

You simply cannot tax the “rich” at a high enough rate to make up for the fact that half of this country pays no taxes whatsoever and many at the bottom actually make an income off of the tax code.

democracynow had a good segment on tax havens this morning. Book author has done some amazing work on the subject. U.K., owing to bought pols and former colonies, is apparently as bad as, if not worse than U.S.

There’s nothing probable about it.

A billionaire hedge fund manager can make billions every year; as long as s/he doesn’t cash in gains, but leaves them invested in the portfolio, there’s no taxable event to tax. Even lowly millionaires who can will lock in but defer “realizing” income. They manage cash flow problems, like the need to buy a condo on the Upper East Side for $10-20 million, through borrowing. Its costs are largely tax deductible – subsidized by taxpayers because it’s deemed to be productive.

The experience of managing taxes and banking for the rich is not at all the experience you and I have with either reality.

I heard that. Good story.

Yep. EW reminded me that Nicholas Shaxson and his Treasure Islands will be the book salon discussion on April 30th, hosted by Yves Smith of Naked Capitalism.

I would add that Shaxson’s book may focus on the use of tax havens by City types in London, but their utility is global. Witness the EW story earlier this week about John Mack’s wife having set up her bankster bail-out money investment arm in the Caymans.

The abuses hosted by tax havens directly affects us here, depriving us of badly needed tax revenue. The games played also divert resources by attracting top talent (Raiders of the Lost Ark’s infamous “top men, top men”) to tasks wholly unproductive for society. They corrode the public good when governments, like ours and the Brit’s, tolerate or facilitate their use for political gain.

What really blows me away is that when people hear the repugs talk about taxes and cutting them these people think they are getting the cuts.

Sheesh! Kinda like comment #1 above. Those investments are not to create jobs for us little people! They are to make more money for the elites.

Corporations and wealthy individuals have had tax cuts since Raygun and still can’t manage to employee America at 100%. Therefore, it is plain as a rock that tax cuts don’t create jobs or an economic foundation for a country.

Ah-Men! TALF ME! I want me some of that Wall Street wives Talf.

Great to hear that Shaxson is going to be on book salon.

I would withhold judgment about how top the talent is in FIRE. My personal experience is that men at the top of Wall St. are not very bright at all.

The troops, also in my experience, are incredibly smart and hard working. However, there’s something missing in their makeup. Not sure I can articulate what it is yet. But it makes me think it might be better to keep them isolated in FIRE, build firewalls around them, and let them bankrupt each other with gay abandon.

Help is on the way:

As part of his strategy for reigning in the federal deficit, president Barack Obama plans to raise taxes on carried interest for a wide range of hedge funds and private equity managers, according to officials within the administration. The rate would jump from 15 percent (the usual for capital gains) to the income tax rate of 35 percent, more than doubling the tax investors pay on most of their income. Carried interest can briefly be defined as interest earned on profits from investments (typically 20 to 25 percent), and is largely used to pay general partners at firms.

Oops, that was February, 2009. Never mind. Despite O’s fierce advocacy, it never happened.

Ya got me. I had my snark all prepped, and then you gave the punch line. :-)

What jobs and where? US companies are presently sitting on in excess of a Cool $Trillion, and doing precisely zippo with it. I thought these MOTU were The Risk Takers, etc, blah, blah, blah. What a load of steaming horseshit.

If I had a moving van full of cash driving around looking for an investment opportunity, (and I was feeling like the much-vaunted patriot the wingnuts brag about 24 hours / day), I’d get some heavy-duty infrastructure projects going. Roads, bridges, electrical grids, airports, rail systems, etc. (Getting the picture?) Even if the overall margin was, say, 10%, it beats the shit out of US Treasuries. Moreover, the investment would be in tangible assets, not exotic, fantasy bullshit dreamed up by twisted Wall Street geeks looking to make a killing (figuratively and (as we have seen over the past several years) literally.)

On the other hand, nothing like a tall, icy glass of Ayn Rand Kool Aid on a hot day…

The rich get us into all of the wars and all of the corruption…everyone else is billed for the messes they get us into. I really think only those making over a million per year should carry the entire tax burden. Let the bastids pay for their own shit…oh yeah, and they can get lost too.

Most dividends and cash out payments are never seen in the US anyway. They are transferred immediately offshore to accounts in tax havens. Even with all the loopholes and deductions they can wiggle around, they still do everything possible to avoid paying one dollar in tax.

I was able to get in about 1 1/2 hours reading Shaxson’s “Treasure Islands” today, and it is blowing my mind. Even after reading EW these past years, my mind is totally blown.

The patina of respectability, the normalcy, the businesslike cache of it all is just magnificently laid out. (I’m going slow – lots of notes and underlining…)

And Shaxson is a guest today on Ratigan’s show.

“Treasure Islands” is like reading a thriller, except it’s actually true.
It really needs to be widely read.

Can’t wait to get back to it this evening (!).

(Also downloadable from iBooks, and any bookstore should be able to get a copy quickly. Book Salon is the 30th of April.)

Link you’ll love.

You have not done your homework.
At all.

I’d suggest you start with Shaxson’s book.
It’s quite the page-turner.

I’m with ya on that one! If they want oil, minerals, etc. let them pay for their own armies, and their own infastructure costs to do it. I’m sick of American lives and dollars paying for exploration and extraction in other countries when the profits are all private to them.

Blessedly, it appears to have been a hit ‘n run. Don’t waste good typing fingers going after bad talking points.

And for those of you who missed Rude’s explication of the President’s address, here you are.

I’d love to read it, but can’t buy it. I have the impression the author tells it all about our tax dollars being used by business men that are not really anything other than just average Joe’s, raking in the profits for themselves and wrecking the ecosystem and economy of every country they operate in.

Taxes on capital gains are taxed at a lower rate as a means to coax investments into the economy (to do things like, oh, say, create JOBS).

That’s working out well, isn’t it?

Why so hung up on the effective RATE? The “rich” pay way more $$ than those they oppress.

Correct, but as a percentage, the amount of wealth they control only rises because of the effective rate. While you or I pay 25-35%, they are paying just under 17%. So the income gap in this country continually widens, creating poverty as wealth is concentrated in the upper crust of society.

You simply cannot tax the “rich” at a high enough rate to make up for the fact that half of this country pays no taxes whatsoever and many at the bottom actually make an income off of the tax code.

Yes, you can. It was done for decades. Especially in war times. As for the bottom of this country making an income off of the tax code, that’s horseshit. People get back what they pay and also get an earned income credit and a child tax credit. This isn’t income. It’s our government recognizing that the income discrepancy in this country is immense and there are many people in a position where they can’t even afford to survive, let alone thrive.

Go hate on poor people elsewhere, JayJay. That dog don’t hunt here.

It’s amazing how obvious points often escape me, even in my own field.

For all my life I accepted the talking point that certain socialist administrations elected in some countries nationalized industries without compensation to the ‘owners’. (How they got to be owners with their home govt military & other contributions is another part of the story.)

Until some one pointed out within the last couple of years, that the copper ind in Chile earned astronomically above ‘normal’ returns before Allende nationalized it. Point being they had been more than compensated for many many years.

I threw up just a little bit while watching the trailer. Here’s the detail… And here’s a wiki on the producer.

OT, sort of.

Has anyone here e-filed and OWED taxes???

I’m unclear on how to do that (yes I was an accountant and used to do taxes every year, but I haven’t since the 90′s and we never efiled when I was doing them).

If you pay with a credit card isn’t there an extra fee attached?

I’ve got to get this done by Monday. I guess I could print them out, and mail in a check as long as it’s postmarked by Monday.

Filing my mother’s return, and it’s first time she’s ever owed in her life she said.

A major take-away in Shaxson’s book is that tax havens are widespread and not at all peripheral.

Yes, places like Monaco, Switzerland, and islands in the Caribbean and the English Channel are used by managers for top athletes, film stars and millionaire heiresses to hide cash and income from Uncle Sam and Inland Revenue. Mark McCormack’s International Management Group (IMG), the manager of golf and tennis stars worldwide, made that a peculiar specialty.

More importantly, tax havens are used by every major business enterprise to do the same. Hand tool maker Stanley didn’t officially relocate to Bermuda for the weather and the golf. Halliburton didn’t move its headquarters to Dubai because it couldn’t find enough deserts in Texas. Hundred millionaire Erik Prince didn’t set up shop in Abu Dhabi only because it lacks an extradition treaty with the US.

Those were tax-driven choices. The same is true for offshore operations Fortune 1000 companies and those who plan to be: automotive, software, computer and electronics, textile, retailing, chemical and other industrial giants. They own strategic assets such as intellectual property through offshore arms, they pour large streams of sales and profits through tax havens, to shield them from immediate tax.

Deferring taxes due on profits for a single year can net millions in interest income for a large corporation. Lobbying for and getting a tax “holiday” – as the US did under Bush and is considering doing under Obama – as an incentive to repatriate profits at a greatly reduced corporate rate can save billions.

Reinvesting funds offshore to pay for future growth can avoid US taxes permanently, even though those profits are consolidated on US financial statements and lead to outsized bonuses for US managers. Dollar for dollar, that’s lost revenue to the US Treasury and the US economy. It provides a perverse incentive to grow business offshore rather than here, to the detriment of US cities, towns, neighborhoods, workers and families.

A quick example, and I’m sure your local library system has a copy you could get your hands on ;-)

“A bunch of bananas typically take two routes into your home: a real route and an artificial offshore paper route. On the first route a Honduran worker, say, is employed by Big Banana, a US multinational I’ve just invented to pick the bananas, which are then packaged and shipped… sold to a supermarket… and sold on to a customer.

The second route — the accountants’ paper trail — is different. When a banana is picked in Honduras and shipped to Britain and sold, where are the final profits generated? I the multinational’s US head office? ANd how do you work this out? How much do the corporation’s management expertise, or the brand name, or the insurance, or the accounting business, contribute to profits and consts? Which country ought to tax each component of the profit? Nobody can say for sure, so the accountants can, up to a point, decide for themselves.”

It’s a bit closer to thinking about how things morph and change form.

Think sci-fi for finance.
It’s a thriller, I’m tellin’ ya!

Most websites offer an option to have the money drawn against a checking account.

Except that too often they bankrupt us and get off scot free or leap ahead by millions.

What I think many of those folks miss in their makeup is a conscience. Wall Street and the City tend to attract sociopaths and predators in large numbers. They also tend to gravitate toward and crawl to the top of large bureaucracies, public and private.

Yeah, and I have just learned this in the past two years. I’ve always been in the thought circle that these people were determined, knowledgeable types that struck out on their own like you or I would have to do.

eCahn, you are one of the smartest in the place and when it takes you, Selise, Spocko, Scarecrow, and others to point to this stuff it still causes people to sit back and say…What????

I have wasted most of my life thinking I had to keep educating myself to keep up with the greats. Now, I know that even the developers that developed half of the city I live in were nothing but two year tech school grads. They put on a suit and bullshitted their way through every step!

And meanwhile someone like me gets punished for making more than $23,000 while on early social security. I get less than $10,000 in social security. This year for the first time, my business income was above the $13,560 that I am allowed to make without having to give back some of my social security. So for 2010 I not only paid $2,700.00 in social security on my business income (having to pay the whole amount as a self employed person) and then had to pay back $1,700.00 to social security. See? I made more money than I’m allowed to have.

If you liked that, you’ll love this one. I notice no one is brave enough to post photos, at least on the front page.

h/t SD for both from earlier today.

Surely your mother is over 69, right? I would think that her tax burdens would be nil. Unless she is getting dividend payments, I would think she would not have to pay.

Snark: You could zip a letter off to Geithner on how to use the Tubo Taxless edition.

I always chuckle a bit when I hear the story about bankster Buffet saying he pays a lower tax rate then the people that works for him. I guess it would never cross a banksters mind to pay his people enough extra money so they would take home more money, as to negate the unfairness of the tax rates.

As far as I am concerned Buffet is no better than the Wall Street banksters. I’m getting tired of “aw shucks” schtick.

That was my assuming a firewall around them. I’m an economist. I’m allowed to assume anything I want. :-)

You may be able to remit payment by check-in-the-mail, but I’m pretty sure you can pay by debit card.

The less attached to the real world the better? *g*

What were you thinking? Just stay dirt poor, damnit.

/GOP

Wow, what a phenomenal concept. I think you may be further in the book than I am.

Part of what I find such a relief about the book is that he shows how all of this has been ‘normalized’. City of London and Wall Street are the biggest money launderers on the planet. It’s kind of post-colonial financial colonialism.

I think it’s one of the key issues of our time, myself.
And from a corporate perspective, if them’s the rules, them’s what you gotta play by.

No FDLers will be surprised to learn that Rupert Murdock is a tax haven maven extraordinaire. If he weren’t, he’d have had to pay taxes that would have built infrastructure and community services where he does business. Instead, like the parasite he is, the communities get screwed while he increases his wealth.

I’ll search for the article, but he was referring to his administrative assistants, IIRC, and he does pay them well above the norm, somewhere in the 200-250K range.

What I think many of those folks miss in their makeup is a conscience. Wall Street and the City tend to attract sociopaths and predators in large numbers. They also tend to gravitate toward and crawl to the top of large bureaucracies, public and private.

They strike me as really, really good at sucking up. And at telling themselves that sucking up is somehow economically productive. Wayyyy too much ego per brain cell.
Ick.

Murdoch gets special mention on the Shaxon segment on dn.

After you e-file, fill out Form 1040V, and mail a check to the proper IRS processing center. TurboTax prints out the form for you.

It seems pretty obvious to me that taxing “capital gains” on what the English would call passive investments benefits only the rich; those who dream they’ll win the lottery support it, too.

It makes no rational sense to me. If an economic risk is worth taking, it will be run without the artificial incentive of a tax subsidy. If it’s not, it might be run anyway because the tax subsidy appears to lower the risk.

I would tax capital gains at the same rate as ordinary income. Deferring tax on gains until there’s a “realization”, until it’s reduced to cash, is mechanically convenient, but a further subsidy for the wealthy.

They put on a suit and bullshitted their way through every step!

Ding!

Makes me sick and mad as hell. Here I am with nothing left but a 401K that they stole 2/3rds from and I can’t touch it without paying almost 60% of it in fees, taxes, and penalties. Too young for Social Security but too old to get a job! Crazy!

If you’re doing wingnut economics, whatsa matter with a flat tax, meaning capital is taxed the same as labor income. Last I was familiar with the theoretical production function, it contained labor as well as capital. So there’s no reason to tax one more favorably than the other.

And while we’re at it, since CEOs are ordinary employees, let’s compensate them in like fashion.

But I dream.

dn?

I’m not the conspiracy type in any way, shape or form, but I have to assume that influence peddling is taking place offshore on a scale that would embarrass the lobbyists currently working on Capitol Hill. Is that idea nutty, or does it have some merit?

Murdoch is another topic altogether. He is arguably the single most powerful individual on the planet, owing to his many billions and his control of media in so many markets. The Wall Street Journal is merely one of his best known titles.

You raise another point in Shaxon’s book, which is that avoiding or deferring tax is a game nearly every company engages in. That’s “normal” and routine. What is still shocking is the role of the City and Wall Street in laundering the billions annually taken out of the global economy by organized crime.

“Kay, in five years the Corleone family will be completely legitimate. Trust me. That’s all I can tell you about my business.”

Which is why I am yelling about us little peoples paying the same tax rate on our retirement investments! The elites used pre-tax dollars on their investments as well.

democracynow.org Link to the segment above in one of my comments.

On second thought, why don’t we just remove the tax burden on wages. Wages are not really income. Wages are what are paid for labor. Income is something that comes from an interest or investment that is a risk.

There should be a differentiation between the two.

If an economic risk is worth taking, it will be run without the artificial incentive of a tax subsidy. If it’s not, it might be run anyway because the tax subsidy appears to lower the risk.

Great point.

One of the things that I really appreciate about Shaxson’s book is how he demonstrates that tax havens completely upend and expose as complete nonsense talk about ‘market efficiencies.’ Market efficiencies cannot, and do not, occur with so much artificial mumboJumbo and currency conversions.

Tim Geithner, Paul Ryan, and Hank Paulson are going to **hate** this book. I’m betting that Bruce Bartlett, Robert Reich, and James Galbraith I think will probably all give it a gold star of approval, but that’s just a guess on my part ;-)
Yves has been really complimentary about it ;-)

Attach a check to a filled in Form 1040-V and mail it into the IRS.

That must be from the Godfather…?
(I’m probably one of 6 Americans who have never actually seen those films. I was living overseas, or in remote locations when those came out. There’s a whole period of movies and music that I missed… did I interpret the allusion correctly?)

I’m guessing there are probably a fair number of dead people who didn’t live to tell the tale. I think you are probably underestimating by multitudes.

eCAHN @51, thank you ;-)

Ask that question of Shaxson on April 30th. I suspect there are a lot of interests in play that keep tax havens going. Hundreds of billions are chasing lower tax rates and places to hide.

Many havens, such as Caribbean and English Channel islands, have almost no income beyond hotels, flowers and beaches. I think their legislatures look on providing tax relief to non-residents as another form of “hospitality”. (I suspect that’s how Las Vegas looks at prostitution.) It generates enormous revenue, for royal families, heirs and heiresses, former politicians, current CEO’s, and the nouveau riche. The most reliable way to become rich is still the old-fashioned way: be born with it. Bill Gates’ dad was a millionaire, the Bushes had been for a hundred years before Shrub was born.

As Shaxson points out, the corruption is most evident when aimed at critics of the system, such as Shaxson. He is persona non grata on Jersey and Guernsey, the two most well-known Channel Islands tax havens.

Godfather I, the scene (filmed in Ross, CA, not New England) where Michael has returned from Sicily and proposes marriage to Kay Adams, after his first wife was killed in a car bomb planted by Barzini’s henchman.

No need to rent the video; read the reviews at rogerebert.com.

As Shaxson points out, the corruption is most evident when aimed at critics of the system, such as Shaxson. He is persona non grata on Jersey and Guernsey, the two most well-known Channel Islands tax havens.

Yeah, and I figure that since Shaxson was a reporter for FT, no one had better touch a hair on his head (figuratively, he appears to be balding ;-)

But it made me think about Bradley Manning, and the way that he’s been treated. Recall that there were emails about financial arrangements in those Wikileaks, including info about the oil corruption in Nigeria IIRC.

I think arguably part of Manning’s treatment is related to some kind of economic data or info that he leaked. After all, as Shaxson points out, there are plenty of CIA and MI6 and other spooks hanging out around tax havens. And think of the huge black budgets internationally for munitions (heck, I figure weapons sales must be a big part of the Russian GDP, along with natural gas sales…)

And look how that Russian oiligarch (the Yukos exec) has been imprisoned in Siberia for trying to call bs on Russia’s corrupt economic system.

Look globally, and anyone who leaks about this festering mess gets imprisoned or treated like a pariah.

Which makes it all more interesting, no…?

An important public good of Shaxson’s book is that he points out the huge volume of money that such havens protect from tax, and the vast number of household names who give them business: from top players at Wimbledon and the Masters to gun runners, drug lords, porn heiresses named after hotels and Fortune- and Forbes-listed companies and executives.

also to Arkinsaw @30:
I started a small one person service business 8 years ago.
My accountant advised that until I had enough regular income to pay myself a salary, pay Social Security and unemployment taxes, I should take income from the company as dividends (taxed at the lower rate.)
I have some good months and some terrible months, never enough regular income to pay myself a salary and contribute to SS.
Every penny I invest in my business comes off the top, I pay taxes on the dividends on our personal tax return.
I am far from wealthy (very far,) but benefit from the lower tax rate on capital gains.
Probably the exception, rather than the rule.

Oh, man… maybe I’ll get to that tonight.
It’s a page-turner, and wow this book is so good that it was really hard for me to put down ;-)

Part of what I think is so useful so far is how he shows how ‘normalized’ all this has become. And having had to deal with eComm issues, and been in conversations about what category X falls in, and why, and what if X gets moved to K… well, I see how easily all these things pile up.

And as a company, you’re at a competitive disadvantage if you are paying taxes and your competitors are not. It’s economically disruptive in that sense alone.

I kind of keep thinking the nation states are like, “Why, Grandmother, what big eyes you have…”

Grandmother: “The better to see you with my dear…”

We all know how this is going to end unless Red Riding Hood gets her shit together. JesusMaryAndJoesph…!

What a united and fruitful way to brand an image.

Yes, libraries that are still open, – many in Wisconsin, Ohio, Indiana and in Britain will shortly be closing – should have copies that you can reserve.

The Banana example is good one. Everyone has one on their kitchen table or counter, or used to when they were employed. Or an apple, originally from Ohio or Washington state, now as likely to come from China, South Africa or Israel.

Physically, the bananas are shipped directly from, say, Honduras to the Port of London, and physically distributed as quickly as possible to a retailer like Safeway, Costco, Sainsbury’s or Marks & Sparks Spencer.

For legal, tax and accounting purposes, they may go through several hands before you pick them up at the grocery store. They could be purchased from the grower in Honduras by multinational subsidiary in tax haven A, and sold to a parent’s international sales subsidiary in country B, then sold or delivered to a distributor in the UK and then the retailer in the UK. Commodities with volatile prices, oil is a good example, change hands even more often.

The brand name stamped on those bananas could be “owned” by the parent through an intellectual property holding subsidiary in tax haven C, with an international sales or holding company in country D charging a servicing fee for coordinating all of the above.

All of that would be spelled out in detailed sales, purchase and service agreements that the parent would trot out whenever audited, to “substantiate” the pieces of the pie allocated for international transfer pricing purposes. I went into other examples in my comments on transfer pricing at the end of EW’s post on the GE Hoax here.

Interesting metaphor. Modern versions of Red Riding Hood, and earlier, pre-censorship ones, are more explicit in their sensuality and the Freudian imagery of Ms. Hood and her scarlet cloak.

You highlight part of the dilemma. Tax planning and avoidance schemes are legislated and sold as benefiting all would be entrepreneurs. It would be irrational not to utilize them in running a business of any size.

The benefits of such schemes, however, as is true of subsidies for agricultural and oil exploration, accrue overwhelmingly to the biggest players. Every dollar spent lobbying produces outsized returns, which is why K Street is such a lucrative business. The number of lobbyists there has tripled since Shrub first came to office.

As a hypothetical aside, for small or start-up businesses, it’s important to evaluate the time and cost required to manage and document the more elaborate schemes, and to plan for inevitable early or permanent losses as well as large gains. KISS, keep it simple, still applies.

That comment has already been skewered and barbecued by others, but it’s not quite cooked through.

As with fringe birthers and survivalists, there is a segment of the population that lives on barter. Proverbially, it’s popular in rural Vermont, New Hampshire, Oregon and Washington state. Often, that’s because there aren’t any jobs in those places: the lumber and fish are gone; the ski season is over; the fruit’s been picked.

People do what they can to get buy. Many would be happy to get a salary and have payroll and federal taxes deducted, if there was enough left at the end of the day to pay rent and buy food and clothes and heating oil. The idea that barter is a preferred economy for many people is a myth up there with Reagan’s Cadillac-driving welfare queen.

Another current one is that some people on unemployment or welfare drive BMW’s. Some do; they used to have jobs where that was a prudent choice. More often, they own them second or third hand because they are among the few cars still running well after 100,000 miles.

Capital gains benefits are indeed helpful for grandma, who has her lifetime’s savings in a 401(K). They are considerably more helpful, and shield vastly greater individual and collective sums, for the John Macks, the Bushes, the Gateses, for whom the bulk of their earnings are made via passive investments.

Those investments do not create jobs, except for brokers on Wall Street or in Rancho Santa Fe. My opinion is that, given our current economy and dysfunctional Congress, the lower tax rate for capital gains is dysfunctional.

The homeowner and the renter are both at the mercy of big banks. The owner has sometimes been tricked into buying rather than renting owing to false claims about ever upward housing prices and the stupendous benefits of the tax deductibility of interest. That the mortgage loan and loan servicing market is now corrupt and tax benefits aren’t helpful without a high-paying job isn’t discussed much.

Thanks to all that responded to my Q above.

I wanted to e-file it using the free services available, filled them out completely and got to the point where it was time to click “File Taxes” and STILL I saw no explanation for how to pay. I’m pretty sure that if you use a credit card (or a debit card I think, although less clear on that) that you are charged a processing fee of some sort. It’s a certain percentage I believe.

Oh well, guess I will just print them out and mail them in the old fashioned way. Again, thanks.

Oh, and to PP above. My father died in 2009, and as such, this was the first full year where she got all of his pensions and there were no longer two exemptions since now it’s just her. Yes, she’s well past 69, no, no dividends, but my father was a union organizer and she gets a very generous unions pension, which is mostly taxable because it was funded mostly by the union with a small contribution on his part.

Unions take care of their people. Which is, of course, why I find it so funny at how regular working folks can be so anti-union. Talk about being against your own self-interest, geez.

But see, we gotta raise the debt ceiling so we can funnel more money to Wall St. and afford to pay our corporate welfare bills to oil companies and Monsanto.
Then we get to pick up the tab for all of it while they keep cutting the legs out from under us.

Here’s a personal anecdote about the rich paying way less than the peasants. I was married to someone earning over half million. I made under 30K. For the first year of marriage, we filed separately.
This was 1993 I think. After all his write offs and bogus deductions, he sent federal gov’t about $100.
OTOH I wrote a check to the IRS for @ 2,800 and the state got about 800. So, there you go.

Those investments do not create jobs, except for brokers on Wall Street or in Rancho Santa Fe. My opinion is that, given our current economy and dysfunctional Congress, the lower tax rate for capital gains is dysfunctional.

Ding!
And those jobs they do ‘create’ involve even greater financialization of the economy. Which is kind of like watching a lake become more acidic: at some point, nothing in it will live.

On the topic of Rupert Murdoch, who is wealthier than Warren Buffett and controls of hundreds of media outlets in the world’s major economies, his effective tax rate ten years ago was 6%.

From Amy Goodman’s Democracy Now interview with Nicholas Shaxson, author of Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens, on Murdoch’s tax planning (emphasis mine):

[T]he last investigation into his [Murdoch's] tax affairs I’m aware of is one conducted by The Economist in, I think, 1998 or 1999, so we don’t have very updated data on him, but he had cut his tax rate down to six percent, when others were paying, you know, much higher rates. A recent Government Accountability Office report in 2008 estimated that News Corporation has 152 offshore subsidiaries, according to their definition of tax havens. So he is certainly a big player in the game….[H]e’s not the only—obviously not the only media player using offshore tax havens; it’s very widespread. But when you have big players in the game defending this, then you have a big problem from the media point of view, as well.

According to Shaxson, the top 2 tax havens are London and New York City. Among the hundreds of titles owned by Murdoch’s News Corporation are the top print and broadcast outlets in the UK, and Fox News and the Wall Street Journal here. They are highly influential in crafting the debate about tax policy and tax havens. That and his lobbying of both governments directly affect the taxes we collect and those we pay.

Be sure to attend the FDL Book Salon with Shaxson, hosted by Yves Smith, on April 30th at 2.00pm Pacific Time.

I call it the over-financialization of the economy.

Beyond the dominance of issues important to and lucrative for Wall Street, is that Wall Street’s management priorities and business models have slithered into non-financial businesses.

Principally, that involves demanding Barbarians at the Gate rates of return from going concerns, returns that a business can ordinarily only generate only by liquidating and carving itself up. That destroys a going concern because managers focus only on their bonuses and short-term costs. They no longer plan for growth or the long term, and ignore the long- and medium-term costs of their decisions.

Consider what happened to the Tribune Company newspaper group, and its LA Times and Chicago titles. It’s partly what led to GM and Delphi’s meltdowns and bankruptcies.

That investment banker management style and priorities have also crept into state and municipal finances. Privatizations are sold to cash-strapped governments as cure-alls. Politicians ignore and voters never learn about the fine print. Examples include the debacle of Chicago’s parking meters, the Indiana toll roads, and an infamous “financing” of an Alabama county’s water treatment facility. Originally forecast to cost the county on the order of a hundred million dollars, it will now cost several billion, paid for by those monthly water and sewer bills.

That’s the business model Wall Street has in mind when politicians talk about privatizing Social Security and Medicare.

It is amazing what financial information comes out only after marriages are over, or in the process of their dissolution. The level of greed of Jack Welch, a former CEO of General Electric, who was once considered a business god, came out only during his divorce.

The richer they are the greedier they are.
Their whole identity is their money.

All this time I thought it was our work.

Thanks, EOH. Pleasure to read your comments.
I did go watch that dn segment at the link that eCAHN left earlier in the thread and highly recommend that anyone landing on this thread take time to see that interview.

On that discussion of tax havens, Liechtenstein, nestled (or Nestle-ied) between Austria and Switzerland, is among them. Now, it seems you can rent the entire country. From the Independent:

It’s an attractive Alpine retreat, offering excellent skiing, a fairy-tale castle and a compact 62 square miles to explore. And now, the entire country of Liechtenstein is yours to hire (allegedly) for just £40,000 a night.

Minimum stay is two nights, pre-paid, booked at least 6 months in advance; only half the amount is refunded on cancellation.

Liechtenstein’s Information Office isn’t so sure. It denies knowledge of the deal, available for booking through an agency in San Francisco. Perhaps that’s just the standard response issued to foreign taxing authorities.

If you are an international company you use every countries weird laws to advantage.

If I have a UK profit to hide I start up a Dublin operation at the very least, and likely do some things through an island. Any EU or UK billionaire can be used to round trip money so as to generate useful accounting entries in the EU and the US (you can buy “expense” for pennies on the dollar – you can buy depreciation to use in the US – etc.)

You can move profit around until “it gets dropped in the ocean” – but the ones you talk about at meetings are the profit that got dropped in the ocean while you generated accounting entries to produce losses in the US so you need not pay US taxes. Back in the mid-90′s I was told that I had 13,000 rich families that via trusts and such could cut a check for a minimum of $5 billion so as to get the accounting entries going – they were always called “a rich Swiss gentlemen” in the proposals brought to my office. There were also semi-legitimate transactions – leases – depreciation deals – that are actual taught in B Schools that can get done for much smaller transaction costs.

I wrote up the data released on current taxation (much the same data as in the Businessweek and other articles in my diary – might be an interesting read for some.

I know JJ at 1 was a drive-by, but the refutations have all missed another point: income taxes aren’t the only taxes paid, there are also local taxes, the most obvious and direct being sales taxes. And if you’re poor, a far greater proportion of your income goes to sales taxes than if you’re rich. It’s freakin’ expensive to be poor.

Yup.

You mean create jobs -in India

There I fixed it for ya.

Oh and BS on the poor not paying taxes. We’ve been funding Halliburton’s ME escapade with poor people’s Social Security contributions and at this point there is little to no guarantee that they’ll ever see that money back since the rich would rather not pay those ious