Working Life http://www.workinglife.org Jonathan Tasini's Ruminations on Work, The Economy, and Politics Thu, 26 Mar 2015 03:00:49 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.1 BREAKING: WikiLeaks Leaks TPP Draft!!! http://www.workinglife.org/2015/03/25/breaking-wikileaks-leaks-tpp-draft/ http://www.workinglife.org/2015/03/25/breaking-wikileaks-leaks-tpp-draft/#comments Thu, 26 Mar 2015 00:30:14 +0000 http://www.workinglife.org/?p=9820 Here it is, for the world to see.

Per WikiLeaks:

This is an advanced January 2015 version of the confidential draft treaty chapter from the Investment group of the Trans Pacific Partnership (TPP) talks between the United States, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei Darussalam. The treaty is being negotiated in secret by delegations from each of these 12 countries, who together account for 40% of global GDP. The chapter covers agreements on investments from one TPP nation to another, including empowering foreign firms to “sue” other states’ governments, as well as regulations around investor-state dispute settlements and tribunals. This document was prepared by TPP investment chapter negotiators in advance of the informal round of negotiations held in New York City 26th January to 1st February, 2015

Global Trade Watch has just provided an analysis of the leaked text via email (and now on its website more details):

The TPP would grant foreign investors and firms operating here expansive new substantive and procedural rights and privileges not available to U.S. firms under U.S. law, allowing foreign firms to demand compensation for the costs of complying with U.S. policies, court orders and government actions that apply equally to domestic and foreign firms. This includes:§ Foreign investors would be empowered to challenge new policies that apply equally to domestic and foreign firms on the basis that they undermine foreign investors’  “expectations” of how they should be treated. This includes a right to claim damages for government actions (such as new environmental, health or financial policies) that reduce the value of a foreign firm’s investment (what the leaked text calls “indirect expropriation”) or that change the level of regulation a foreign investor experienced under a previous government (a violation of what the text calls a “minimum standard of treatment” for foreign investors).

§ The leaked TPP text largely replicates the “minimum standard of treatment” language found in previous U.S. pacts that tribunals have used to issue some of the most alarming ISDS rulings. Tribunals often have broadly interpreted this vague “right” to fabricate new obligations for governments that do not actually exist in the texts of ISDS-enforced pacts, such as “not to alter the legal and business environment in which the investment has been made.” Due to such expansive interpretations, the “minimum standard of treatment” obligation has been the basis for three of every four ISDS cases “won” by the foreign investor under U.S. pacts.

The text allows foreign investors to demand compensation for claims of “indirect expropriation” that apply to much wider categories of property than those to which similar rights apply in U.S. law. To the limited extent that “indirect expropriation” compensation is permitted in U.S. law, it is generally available only for government actions affecting real property (i.e. land). But the leaked text would allow foreign investors to claim “indirect expropriation” if government regulations implicate their personal property, intellectual property rights, financial instruments, government permits, money, minority shareholdings or other forms of non-real-estate property.

·       Foreign corporations could demand compensation for capital controls and other macro-prudential financial regulations that promote financial stability. This obligation restricts the use of capital controls or financial transaction taxes, even as the International Monetary Fund has shifted from opposing capital controls to officially endorsing them as legitimate policy tools for preventing or mitigating financial crises. Proposed provisions touted as “temporary safeguards” for capital controls would fail to protect many standard forms of capital controls, including those successfully used by TPP governments in the past to ward off financial crises.

·       The leaked text could newly allow pharmaceutical firms to use TPP ISDS tribunals to demand cash compensation for claimed violations of the World Trade Organization’s (WTO) rules regarding the creation, limitation or revocation of intellectual property rights. Currently, WTO rules are not privately enforceable by investors. But the leaked TPP investment text could empower individual foreign investors to directly challenge governments over policies to ensure access to affordable medicines, claiming that they constitute TPP-prohibited “expropriations” of intellectual property rights if ISDS tribunals deem them to violate WTO rules.

·       There are no new safeguards that limit ISDS tribunals’ discretion to create ever-expanding interpretations of governments’ obligations to foreign investors and order compensation on that basis. The leaked text reveals the same “safeguard” terms that have been included in U.S. pacts since the 2005 Central America Free Trade Agreement (CAFTA). CAFTA tribunals have simply ignored the “safeguard” provisions that the leaked text replicates for the TPP, and have continued to rule against governments based on concocted obligations to which governments never agreed. The leaked text also abandons a safeguard proposed in the 2012 leaked TPP investment text, which excluded public interest regulations from indirect expropriation claims, stating, “non-discriminatory regulatory actions … that are designed and applied to achieve legitimate public welfare objectives, such as the protection of public health, safety and the environment do not constitute indirect expropriation.” Today’s leaked text eviscerates that clause by adding a fatal loophole that has been found in past U.S. pacts.

·       Most TPP countries, including the United States, have decided to expose decisions regarding the approval of foreign investments to ISDS challenge. Australia, Canada, Mexico and New Zealand have reserved the right to pre-approve foreign investors. But the United States took no exception for reviews by the Committee on Foreign Investment in the United States of planned foreign investments to determine whether they pose threats to national security.

·       The amount that an ISDS tribunal would order a government to pay to a foreign investor as compensation would be based on the “expected future profits” the tribunal surmises that the investor would have earned in the absence of the public policy it is attacking as violating the substantive investor rights granted by the TPP.

·       The text would submit the U.S. government to the jurisdiction of World Bank and United Nations tribunals. All TPP nations have agreed to be so bound with the potential exception of Australia, which has indicated that it might do the same, “subject to certain conditions.”

·       None of the structural biases or conflicts of interest inherent in the ISDS system would be remedied. TPP ISDS tribunals would be staffed by highly paid corporate lawyers unaccountable to any electorate or system of legal precedent. They still would be allowed to rotate between acting as “judges” and advocates for the investors launching cases against governments. Corporations launching cases would still directly select one of the “judges.” The text includes no requirements for tribunal members to be impartial, reveal conflicts of interest or recuse themselves in instances of direct conflict. There is no internal or external mechanism to appeal the tribunal members’ decisions on the merits, and claims of procedural errors would be decided by another tribunal of corporate lawyers. The leaked text provides tribunals with discretion to determine the amount of compensation governments must pay investors and the allocation of costs, such as the tribunal members’ fees. A proposal that appeared in the 2012 leak of the text to standardize hourly fees for tribunal members at the lower end of the range of fees currently paid (about $375 per hour, compared to the $700 per hour that some tribunal members receive) has been eliminated.

·       An overreaching definition of “investment” would extend the coverage of the TPP’s expansive substantive investor rights far beyond “real property,” permitting ISDS attacks over government actions and policies related to financial instruments, intellectual property, regulatory permits and more. Proposals in the 2012 leak of the text that would have narrowed the definition of “investment,” and thus the scope of policies subject to challenge, have been eliminated. Also omitted is a proposal from the earlier leaked version that would not have allowed ISDS cases related to government procurement, subsidies or government grants.

·        An overreaching definition of “investor” would allow firms from non-TPP countries and firms with no real investments to exploit the extraordinary privileges the TPP would establish for foreign investors. Thus, for instance, one of the many Chinese state-owned corporations in Vietnam could “sue” the U.S. government in a foreign tribunal to demand compensation under this text.

·       The leaked text reveals that U.S. negotiators are still pushing, over the objection of most other TPP nations, to empower foreign investors to bring to TPP ISDS tribunals their contract disputes with TPP signatory governments relating to natural resource concessions on federal lands, government procurement of construction for infrastructure projects, as well as contracts relating to the operation of utilities. (In the leaked chapter, text that is not yet agreed upon appears in square brackets; Public Citizen has seen a version of the text that lists which countries support various proposals.)

More from Global Trade Watch:

The leaked text provides stark warnings about the dangers of “trade” negotiations occurring without press, public or policymaker oversight. It reveals that TPP negotiators already have agreed to many radical terms that would give foreign investors expansive new substantive and procedural rights and privileges not available to domestic firms under domestic law.The leaked text would empower foreign firms to directly “sue” signatory governments
in extrajudicial investor-state dispute settlement (ISDS) tribunals over domestic policies
that apply equally to domestic and foreign firms that foreign firms claim violate their new substantive investor rights. There they could demand taxpayer compensation for domestic financial, health, environmental, land use and other policies and government actions they claim undermine TPP foreign investor privileges, such as the “right” to a regulatory framework that conforms to their “expectations.”

The leaked text reveals the TPP would expand the parallel ISDS legal system by
elevating tens of thousands of foreign- owned firms to the same status as sovereign governments, empowering them to privately enforce a public treaty by skirting domestic courts and laws to directly challenge TPP governments i n foreign tribunals.

And remember why this is important:

Foreign corporations have used these claims to attack tobacco, climate, financial, mining, medicine, energy, pollution, water, labor, toxins, development and other non-trade domestic policies. Under U.S. “free trade” agreements (FTAs) alone, foreign firms have already pocketed more than $440 million in taxpayer money via investor-state cases. This includes cases against natural resource policies, environmental protections, health and safety measures and more. ISDS tribunals have ordered more than $3.6 billion in compensation to investors under all U.S. FTAs and Bilateral Investment Treaties
(BITs). More than $38 billion remains in pending ISDS claims under these pacts, nearly
all of which relate to environmental, energy, financial regulation, public health, land use and transportation policies. Even when governments win cases, they are often ordered to pay for a share of the tribunal’s costs. Given that the costs just for defending a challenged policy in an ISDS case total $8 million on average, the mere filing of a case can create a chilling effect on government policymaking, even if the government expects to win. [emphasis added]

By the way, the screams and groans you just heard are coming from the White House and TPP supporters because when the elite New York Times–which has always flogged so-called “free trade” and treated opponents of such deals as backward people–writes this, this deal is sinking fast:

An ambitious 12-nation trade accord pushed by President Obama would allow foreign corporations to sue the United States government for actions that undermine their investment “expectations” and hurts their business, according to a classified document.The Trans-Pacific Partnership — a cornerstone of Mr. Obama’s remaining economic agenda — would grant broad powers to multinational companies operating in North America, South America and Asia. Under the accord, still under negotiation but nearing completion, companies and investors would be empowered to challenge regulations, rules, government actions and court rulings — federal, state or local — before tribunals organized under the World Bank or the United Nations.

Backers of the emerging trade accord, which is supported by a wide variety of business groups and favored by most Republicans, say that it is in line with previous agreements that contain similar provisions. But critics, including many Democrats in Congress, argue that the planned deal widens the opening for multinationals to sue in the United States and elsewhere, giving greater priority to protecting corporate interests than promoting free trade and competition that benefits consumers.

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Actors Not On Same Script Over Theater Pay http://www.workinglife.org/2015/03/24/actors-not-on-same-script-over-theater-pay/ http://www.workinglife.org/2015/03/24/actors-not-on-same-script-over-theater-pay/#comments Tue, 24 Mar 2015 18:19:56 +0000 http://www.workinglife.org/?p=9817 Having worked with creative unions and, particularly, actors’ unions, I can reveal a shocking thing: it’s a contentious world. I know, this rates right up there with shocking news that, say, the Clintons are happy to take money from dictators or whoever is willing to write a check. Tomorrow, ballots go out on an advisory referendum that has roiled the ranks of Actors Equity.

The issue is straightforward: should there be a pay increase for actors performing in small, 99-seat theaters. Those theaters–similar to low-budget films–have always had a different, more accommodating contract with actors than the larger theaters.

Equity says:

Actors’ Equity Association, the actors’ union headquartered in New York, recently put forth a proposed new contract that would guarantee better pay for performers at these tiny houses. The measure has been met with considerable opposition. But in a twist, much of the blowback to the pay hike is coming not from producers (though they are not happy about it either) but from the local members of Equity themselves.L.A. has more than more fifty 99-seat membership companies. A significant portion of the city’s creative stage activity takes place inside these miniscule incubators. But no one’s getting rich doing it. Under the prevailing Equity code that governs the theatres, actors receive $7 to $15 a performance, and no pay at all for rehearsals. The new proposal would raise pay to the current California minimum wage of $9 an hour for performances. It would also ensure pay for rehearsals.

Explaining the thinking behind proposed raise, Equity’s executive director, Mary McColl said, “Some actors say to us, ‘I can’t even get to participate in what seems to be the largest part of L.A. theatre because I don’t make enough to pay my babysitter.’”[emphasis added]

You wouldn’t be surprised to hear that the theater owners are not happy. But, the more interesting opposition has come from the ranks of actors who have been led by, among others, Frances Fisher who is quite the political activist. As Fisher says:

One of the protest organizers, Frances Fisher, who served on SAG’s board for 10 years, told Deadline that the 99-seat waiver is akin to SAG’s low-budget agreement. Even that contract, however, pays more than minimum wage. “This is not the issue,” she said. “The 99-seat plan was never created to do that. We all want to be paid, but this is not the way to do it.”

The opposition’s views:

Why would actors oppose making more money?We don’t oppose making more money. We oppose the union taking away our ability to practice our craft in a non-commercial setting. The bulk of the work available to actors in Los Angeles is in film and television, yet the city is home to more than 6,500 Equity members. Nonprofit intimate theaters are where we go to keep our skills sharp, and find creative fulfillment by doing work that is not available to us elsewhere.

Actors’ Equity is a labor union. Isn’t it their job to help members earn money?

Los Angeles’ small theaters are home to some of the most innovative and exciting work in the country. More than 70 productions have moved from small LA theaters to larger venues with paying Equity contracts, often bringing members of the original cast with them to Broadway and beyond. Many famous actors got their start in intimate LA theater. And countless more have developed their talent, built relationships which led to paid employment, and sustained themselves creatively by lending their talents to these theaters. The current AEA 99 Seat Plan has helped create thousands of contract jobs for AEA members.

When Equity actors choose to volunteer in small theaters, does it make it harder for other Equity actors to earn money?

No. No Equity actor in LA has ever lost a paying job because another Equity actor offered to do it for free. But if this new proposal passes, producers will be able to choose between casting an Equity actor for hundreds of dollars per week – or casting a non-Equity actor for free. Common sense tells us that doesn’t help Equity actors make money.

Has I Love 99 presented alternatives to Equity’s proposal?

Yes. While we have not been given an opportunity to formally present alternatives, many LA Equity members have offered Equity executives and National Councilors specific alternatives to the current proposal. This referendum vote however, is not a choice between many proposals. If you want a choice, you must VOTE NO!

It’s interesting. In today’s environment, given the debate over raising the minimum wage and inequality, the notion of being paid at least the state minimum wage should be a fairly straightforward idea. That said, you have actors opposing the raise as its currently proposed–not opposing a raise in principle–because it might encourage scabs and undermine a place for actors to hone their craft. This mirrors a bit the debate over writing for the web for free.

Thoughts?

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TPP Exports Smoke-And-Mirrors…Or Are Those Lies? http://www.workinglife.org/2015/03/23/tpp-exports-smoke-and-mirrors-or-are-those-lies/ http://www.workinglife.org/2015/03/23/tpp-exports-smoke-and-mirrors-or-are-those-lies/#comments Mon, 23 Mar 2015 14:38:05 +0000 http://www.workinglife.org/?p=9809 Back in the day when I, reluctantly, took statistics (barely passing, is my recollection), the favorite cliche making the rounds was, “There are three kinds of lies: lies, damned lies, and statistics.” (as an aside, there is some dispute about whether Mark Twain correctly attributed the saying to British Prime Minister Benjamin Disraeli but whatever). This comes to mind when reading, time after time, the weak arguments for the Trans Pacific Partnership–which perhaps warrants an updated version of the cliche: “There are three kinds of lies: lies, damned lies and rubbish from the U.S. Trade Representative/White House”.

I previously wrote about the Four Pinocchios awarded the president for his fibbing about the wondrous job benefits of the TPP and the ten biggest White House lies about the TPP.

In fairness to this president, fibbing on trade deals has a long history: every rancid NAFTA-type so-called “free trade” agreement that gets served up by Republican and Democratic Administrations has to be sold with a hefty pile of lies–or, in the case of NAFTA, Bill Clinton had to actually go out and seduce members of Congress with a variety of promises of goodies he’d deliver to their respective districts. Otherwise, people don’t want to buy the smoldering pile of dung a NAFTA-style deal represents.

Today, it’s exports. Oh my god, this is like hitting a softball off a tee (in a bow to the sweet arrival of spring training). Courtesy of Global Trade Watch, we have a sometimes funny litany of the way in which the White House, via the United States Trade Representative Michael Froman, is trying to sell the TPP–with, uh, fibbing on the benefits TPP will bring via increased exports.

GTW, in an email:

U.S. Trade Representative Michael Froman says that the United States has a trade surplus with its 20 Free Trade Agreement (FTA) partner countries. This claim is at the center of the administration’s efforts to convince Congress to delegate Fast Track authority for the Trans-Pacific Partnership, which is modeled on the past FTAs. Yet, if one reviews the U.S. government trade data available to all on the U.S. International Trade Commission (USITC) website, in fact in 2014 we had a $177.5 billion goods trade deficit with the FTA nations. Typically our services surplus with FTA partners is in the $75-80 billion range. That means we have a large overall trade deficit with our FTA partners. So, how can the Office of the U.S. Trade Representative (USTR) claim we have a surplus? To make the data support their political message, USTR either cobbles together broad sectors in which we have trade deficits (e.g. what they call “energy”) and simply excludes them, and/or artificially inflates export levels by counting foreign-made goods as U.S. exports.[emphasis added]

My favorite:

USTR Claim: “If you buy something from Canada for 100 dollars and sell it to Mexico for 200 dollars, you aren’t losing a 100 dollars”[sic]FACT: USTR tries to explain why it counts foreign-made products as “U.S exports,” which is how USTR artificially inflates U.S. export figures and deflates U.S. trade deficits with FTA partners. “Foreign exports” (also known as “re-exports”) are goods made abroad, imported into the United States, and then re-exported again without undergoing any alteration in the United States. (That is the U.S. Census Bureau definition.) USTR’s numbers count as “U.S. exports,” for example, goods manufactured entirely in China that enter the San Diego port and do nothing but sit in a warehouse before being trucked 18 miles south and re-exported to Mexico. In order to get the numbers necessary to support its claim that we have a trade surplus with our FTA partners, USTR counts these as U.S. exports even though the goods were not produced here, nor did they support a single U.S. production job. While USTR is correct that a firm – say, Walmart – does not lose money by landing cases of Canadian grown and processed canola oil at a southern California port, and then shipping it by truck for sale in Mexico at a marked up price – this is unrelated to the fact that these Canadian goods should not be counted as U.S. exports.

So, be clear: this is cooking the books. The president and his minions want people to think that manufacturing jobs will increase in any significant way–and increased manufacturing jobs is what these jokers are arguing TPP will bring–because we act, essentially, as a way station for something coming from China on a ship and ending up in Mexico via a truck.This is the strategy used each time–even when the evidence piles up that none of these so-called “Free trade” deals increase exports. Most of the nonsense about the Korean Free Trade Agreement was claptrap, and TPP marketing promises rolled out by this White House are a continuation of the NAFTA-era promises made by the first President Bush and pushed forward enthusiastically by Bill Clinton and Robert Reich.

They were false back then and are false now. And in the same way that the lies about NAFTA (I use the word “lies” here because some of the bogus claims were so outlandish that they had to be just plain lies) were exposed by people who were, then, dismissed as “protectionists” who were just afraid to embrace the wondrous future promised by a great global era of trade, so, too, the people who are exposing the nonsense and danger of the TPP are being branded as anti-trade. Except for…reality when the anniversary of the Korean deal rolled around and, opppssss, the promises proved to be bogus in the real world.

I mean, really, you do think we’re stupid, don’t you? It’s more than that: it’s pathetically cynical–you have many workers still not being able to find decent work and what you are trying to do is sell them hope by making this shit up? Shame on the president.

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The Looming Job Killer Isn’t Regulation/BlahBlah…It’s The Federal Reserve Board http://www.workinglife.org/2015/03/18/the-looming-job-killer-isnt-regulationblahblah-its-the-federal-reserve-board/ http://www.workinglife.org/2015/03/18/the-looming-job-killer-isnt-regulationblahblah-its-the-federal-reserve-board/#comments Wed, 18 Mar 2015 15:42:08 +0000 http://www.workinglife.org/?p=9807 Putting aside the noise that rumbles from the Boehner-McConnell-Fill-In-The-Blank Republican divorced-from-reality view of the economy, who rail about job-killing taxes/regulation/voodoo, the far bigger threat to jobs right now hails from the halls of the Federal Reserve Board. It could, within weeks or months, guarantee that hundreds of thousands of people won’t have a job, and reawaken the deficit-mongering crowd’s call for cuts in government that will hurt millions more.

All of this could happen because of the signals the Fed is sending about raising interests rates. As Dean Baker explains:

The Fed’s plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fed’s current 2.0 percent target if the Fed doesn’t slow the economy with higher interest rates.Higher interest rates slow the economy by discouraging people from borrowing to buy homes or cars. They will also have some effect in discouraging businesses from investing. With reduced demand from these sectors, businesses will hire fewer workers. This will weaken the labor market, which means workers have less bargaining power. If workers have less bargaining power, they will be less well-situated to get pay increases. And if wages are not rising there will be less inflationary pressure in the economy.

The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fed’s rate hikes would have cost the economy more than 200,000 jobs in this scenario.[emphasis added]

It could be worse, Dean says:

In fact, the impact of Fed interest rate hikes on jobs can easily be far larger than this 200,000 number. If the Fed decides that the unemployment rate should not fall below a certain level (5.4 percent is a number is often used), then it could be costing the economy millions of jobs if the economy could actually sustain a considerably lower level of unemployment as it did in the late 1990s.

In a more detailed paper on the topic of how higher interests rates will hurt the budget, Dean says:

  • The budget surpluses of the Clinton years were only possible because the Fed allowed the unemployment rate to fall far below the level most economists thought was sustainable. If the Fed had raised interest rates enough to keep the unemployment rate from falling below 6.0 percent (as projected by CBO), the federal government would have run a large deficit in 2000, instead of a large surplus.
  • Higher interest rates will directly lead to larger budget deficits. If the Fed were to keep
    interest rates near their current levels, so that the ratio of interest payments to debt did not change, the government would save $2.868 trillion on interest over the 10-year budget horizon. This is a bit less than four times what the federal government is projected to spend on the Supplemental Nutrition Assistance Program (food stamps) over this period. If the Fed adopted a middle course, so the ratio of interest to debt rose to half way between the 2015 and the projected baseline levels, the government would save $1.481 trillion on interest over this 10- year period.
  • The federal budget also benefits from the interest payments that the Fed refunds from the Treasury bonds and mortgage-backed securities it holds as part of its quantitative easing (QE) program. If the Fed were to hold enough bonds so that the amount of interest it refunded to the Treasury Department each year remained at its 2015 level, the cumulative budget savings over the 10-year horizon would be $617 billion. In a middle scenario, in The Budgetary Implications of Higher Federal Reserve Board Interest Rates which annual interest payments were halfway between the 2015 level and the projected baseline, the savings would be $309 billion.
  • If the Fed were to allow the unemployment rate to fall to 4.0 percent and remain at that
    level, it would lead to substantially higher tax revenue and reduced payments for unemployment benefits and other transfer programs. The cumulative difference over the 10-year budget horizon is nearly $1.9 trillion, over two and a half times the projected cost of the food stamp program.
  • The Fed’s interest rate policy would also have large impacts on state and local budgets. If the unemployment rate were to remain at 4.0 percent instead of the 5.4
    percent baseline, states could anticipate roughly 2.8 percent more revenue each year. In addition, they would see their annual payments for unemployment insurance fall by roughly 25 percent. The implied savings are substantial. In the case of California
    , for example, the combined benefit to the budget in 2016 would be more than $6.3
    billion. In Illinois it would be almost $2 billion.

I make a special note about the first point he makes: The miracle that Bill Clinton runs around talking about–what a wonderful economic steward he was–is bullshit (more on that another day). It sticks in my throat to even say this but Alan Greenspan, who mostly is the spawn of the devil, did the right thing by not pushing interest rates up…and Clinton’s budget surpluses had almost very little to do with the fantasy he spins out about the “good times” of the Clinton years (true, he should get “credit” for cutting aid to dependent children and other welfare payments…).

But, to return to the main point: the Fed has in its power to destroy the future for hundreds of thousands of people, all in service to the bond markets. Inflation is dead in the water–and will likely continue to remain that way, largely because oil prices are plummeting for the foreseeable future.

The Fed’s denizens–particularly those who sit on the Fed’s Open Market Committee (FOMC) which determines interest rates–just don’t have the concerns regular people have, as Dean rightly says:

It is likely that the members of the FOMC, who largely come from the financial industry, are much more concerned about inflation than the population as a whole. They are also likely to be less concerned about unemployment. These are people who tend to read about unemployment in the data, not to see it themselves or among their friends and family members.[emphasis added]

We should not be silent and let this happen.

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A “House of Cards” Tax Scam…By Netflix Producers of “House of Cards” http://www.workinglife.org/2015/03/16/a-house-of-cards-tax-scam-by-netflix-producers-of-house-of-cards/ http://www.workinglife.org/2015/03/16/a-house-of-cards-tax-scam-by-netflix-producers-of-house-of-cards/#comments Mon, 16 Mar 2015 14:24:32 +0000 http://www.workinglife.org/?p=9803 Full disclosure: I’ve made my contribution to the popularity of “House of Cards” by watching all three seasons (FWIW, I thought the third season was stilted, pretty boring in many parts and, basically, a slightly edgier version of “The West Wing” and that’s not meant as a positive…). That said, this doesn’t surprise me because no corporation is immune from trying to take advantage of our dumb tax system that consistently rewards corporations for no good reason at the expense of taxpayers.

Citizens for Tax Justice tells us the seamy side of the real-life series:

While the show follows the shadowy manipulations of Frank Underwood, the company and producers behind the show have done some manipulating of their own to get millions in generous tax breaks from the state of Maryland for the production of its third season.Last year, the producers of House of Cards played hardball with Maryland lawmakers by threatening to “break down our stage, sets and offices and set up in another state” if they did not receive millions more in tax credits. Pairing this stick with a carrot, the House of Cards producers brought in Kevin Spacey to meet with “star-struck” lawmakers and push for the passage of more tax breaks for the TV series.

The trouble for Maryland lawmakers is and continues to be that the film tax credit program lavishing House of Cards with millions in tax breaks provides very little economic benefit to Maryland taxpayers—in fact, the entire program has cost the state $62.5 million since 2012. A recent study by the Maryland Department of Legislative Services found that the film tax credit in Maryland only brings in 10 cents for every dollar that it provides in economic benefits.

It is absolutely true that these tax breaks get put into place by dumb-ass legislators who should be voted out of office for turning over hard-earned money workers pay in taxes that ends up in the bottom line of corporations. This is a decades-old problem.But, it’s still a scam. As CTJ sums it up:

The tax swindle that Netflix is running with the production of House of Cards would be enough to make Frank Underwood proud.

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Sometimes A Name Says It All http://www.workinglife.org/2015/03/13/sometimes-a-name-says-it-all/ http://www.workinglife.org/2015/03/13/sometimes-a-name-says-it-all/#comments Fri, 13 Mar 2015 19:13:30 +0000 http://www.workinglife.org/?p=9785 Laffer. You know, the guy who came up with the most discredited economic theory in modern times that just makes you want to…laugh. It’s a joke but not everyone gets it.

Citizens for Tax Justice nails it:

The theory that tax cuts for the affluent will eventually trickle down to everyone else is shopworn, yet supply-side adherents keep promising the public that the rich can have their tax cuts and the rest of us will eat cake too.

Despite 35 years of data showing this to be false, the notion has seduced enough policymakers to keep the lights on at Art Laffer’s house.

At least 10 states have tax cut proposals in motion that, unlike the tax shifts we reviewed previously, will not offset cuts by raising other taxes but by raiding surpluses or reducing spending. The overwhelming majority of these proposals will reduce taxes for the best off while doing nothing or little for everyone else, making a regressive tax landscape worse.  Gov. Asa Hutchinson’s overhaul of his state’s income tax and Mississippi Gov. Phil Bryant’s proposal to introduce a state Earned Income Tax Credit (EITC) would actually benefit low- and moderate-income families, but most of the other proposals would lead mainly to benefits for the wealthy.

Over time such tax cuts exacerbate income inequality and stymie opportunity for the masses. Taxes and spending are on a balance scale. Top-heavy tax cuts and their purported economic benefits do not trickle down a rolling hill; they tip the scale in favor of the rich while depriving states of necessary revenue to adequately fund basic services, including education, public safety, infrastructure health and other priorities.

And CTJ gives us a list of the idiotic proposals that would make you laugh if it doesn’t make you cry.

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Podemos Could Be Next http://www.workinglife.org/2015/03/12/podemos-could-be-next/ http://www.workinglife.org/2015/03/12/podemos-could-be-next/#comments Thu, 12 Mar 2015 13:59:49 +0000 http://www.workinglife.org/?p=9783 You’ve probably read about the remarkable political rise of Syriza in Greece, in an election that was a rebuke of the European austerity model led by Germany. Next up: Spain.

Mark Weisbrot, co-director of the Center for Economic and Policy Research, has this in Fortune:

The new alternative is a political party called Podemos (“we can”), which was born in January 2014 and within four months surprised everyone by winning 8 percent of the vote in the European parliamentary elections. The organizations that had presided over Spain’s heretofore two-party system – the PSOE (center-left Socialist Workers’ Party) and the PP (right-wing Popular Party) – took less than half of the vote, as compared to 81 percent in the prior (2009) election. By November of last year, Podemos was leading all other parties in the polls. It was truly a seismic political shift – for comparison, imagine a third party in the U.S. pulling ahead of Republicans and Democrats less than a year after its founding.

The whole thing is here.

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Labor: Vote Against TPP-Fast Track, Or Forget About Campaign Checks. About F-ing Time http://www.workinglife.org/2015/03/11/labor-vote-against-tpp-fast-track-or-forget-about-campaign-checks-about-f-ing-time/ http://www.workinglife.org/2015/03/11/labor-vote-against-tpp-fast-track-or-forget-about-campaign-checks-about-f-ing-time/#comments Wed, 11 Mar 2015 13:33:12 +0000 http://www.workinglife.org/?p=9777 Well, a tip of the hat to some people in labor for reaching down and remembering they have a few cojones left–or maybe it was reaching deep into their pockets and remembering that they have the money, and there are a lot of people (read: politicians) who will do just about anything to get a check. Like vote against fast-track and the Trans Pacific Partnership.

I had heard a bit about this recently. And here we go–the spigot is off, via The Wall Street Journal:

Dozens of major labor unions plan to freeze campaign contributions to members of Congress to pressure them to oppose fast-track trade legislation sought by President Barack Obama , according to labor officials.The move is part of the unions’ campaign against the Trans-Pacific Partnership, or TPP, which the Obama administration is negotiating with 11 nations around the Pacific Ocean. The unions worry the trade agreement could send more jobs to low-wage countries, including Vietnam and Malaysia.

Unions have opposed the TPP through demonstrations, letters to lawmakers and political ads, but withholding political contributions is a more forceful way of flexing their muscle. In the 2014 midterm elections, unions—the lifeblood of the Democratic Party—contributed about $65 million from their political-action committee, or PACs, to candidates, nearly all Democrats.

“Every single union in the AFL-CIO has agreed to join together to send Congress a message that if you mess with one of us you mess with all of us,” Harold Schaitberger, president of the International Association of Fire Fighters, said Monday at the union’s legislative conference in Washington. “We need to cut the spigot off.”

The firefighters spearheaded the effort by challenging other union presidents to follow suit at an AFL-CIO executive council meeting in Atlanta last month. The union said it took the lead because fast track would create job losses, which would hurt communities’ tax bases and their ability to fund public services.[emphasis added]

I do have to give particular credit to Schaitberger who has been pretty relentless about pushing the view that labor should punish members of Congress–mainly, we’re talking about Democrats–who vote against the interests of unions members and working people. A decade ago (my god, how time flies), I argued that every single one of those Democrats–15–who had voted for the Central American Free Trade Agreement (CAFTA) should be punished, with primary opponents and, certainly, not giving those traitorous 15 a single dollar, dollars raised from the hard-working members of unions. (as an aside, I took special pride in being attacked for that particular blog post by none-other-than The New York Times editorial board–one of the most shameless traditional media promoters of so-called “free trade”).

At the time, Schaitberger, again, to his credit, took up the call against CAFTA, organizing a letter to Nancy Pelosi, expressing outrage that any Democrat would consider voting for CAFTA. As I wrote back then, what burned Schaitberger most was that he and a few other union leaders had just hosted a fundraiser for some of the most vulnerable Democratic members (the so-called “Frontline Candidates”). When I spoke to him at the time, he said:

“We had just, a week ago, a very few of us initiated a major fundraising effort to raise money specifically for these ten, highly targeted members that the leadership has asked us to afford special attention and support. We raised $300,000, we maxed out on every one of those members. And, then we find out three days later that two of them appears have indicated are for CAFTA.” “I said no way. They have the right to cast a vote and make a political decision but the leadership doesn’t have the right to put them in a special category and then ask us for a special effort on our behalf and, then, they are going to go against a core issue of the labor movement. We can no longer give a pass on these issues.”

“A Democrat who votes for CAFTA, if we haven’t already given them money, will not get a dollar from us. We have to decide how egregious the [behavior is]. I point out Melissa’s (Bean) position, she would not be in this Congress if it were not for the labor movement. And, then, to potentially cast such a crucial vote I think is unconscionable. And I would be able to do whatever it takes to hold them accountable. This is a bright line issue for labor. ”

In particular, Schaitberger should be praised because he could fall for the usual nonsense that trade votes don’t hurt public sector workers–but he didn’t. Not back then, and not now.

I detail this at length because, in my opinion, had the labor movement taken out some of those who voted for CAFTA–which passed by only TWO VOTES–we might not be facing the votes we face now on fast-track and the TPP. Not to mention had unions went after the Democrats who took Bill Clinton and Robert Reich’s bribes back during the NAFTA vote, we might have avoided CAFTA as well (I mean “bribes” in the sense that it has been well-documented that Clinton-Reich bought votes with promises of a variety of appropriations and goodies and phony retraining programs to get votes).

Of course, the real question will be: when the vote comes, what does labor do to those who actually vote for these putrid bills? That will be telling.

But, for now, kudos to Trumka, Schaitberger and the other union presidents.

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A Bit Of Justice: Hollywood Director Gets 10-Year Sentence In Sarah Jones Death http://www.workinglife.org/2015/03/09/a-bit-of-justice-hollywood-director-gets-10-year-sentence-in-sarah-jones-death/ http://www.workinglife.org/2015/03/09/a-bit-of-justice-hollywood-director-gets-10-year-sentence-in-sarah-jones-death/#comments Mon, 09 Mar 2015 22:53:36 +0000 http://www.workinglife.org/?p=9766 Workers get killed and injured every day on the job: just the daily toll the “free market” exacts for the glory of CEOs and their enrichment. Mostly, no one goes to jail–sound familiar?–because the laws of the country make it virtually impossible to hold anyone criminally liable when a worker dies. Today, a small tiny bit of justice was done in the case of Sarah Jones.

Sarah was a camera assistant on the production of “Midnight Rider”, a biopic of the musician Gregg Allman. On February 20th 2014, she was killed when she was struck by a train during a movie shoot on a trestle over the Altamaha River in Wayne County, Georgia. What was different about her death is that a local prosecutor filed charges against the director and several others for involuntary manslaughter and criminal trespassing charges, claiming she died because they filmed a scene despite not having obtained permission.

How it happened, in brief:

Pre-shooting was originally intended for camera tests and one-off shots like establishing vistas, but is now commonly used to extend shooting schedules and curb costs. The railroad line on which the production set up for shooting that afternoon is one of the busiest freight lines in Georgia. The crew was on a narrow walkway meant only for maintenance workers. As setup began, the crew was warned they would have a minute to clear the tracks should a train come. In fact they had less time than that when the train sounded its whistle, and were unable to clear the bed from the tracks, and many did not have time to get off the bridge to safety.The train hit the metal hospital bed, shattering it, and flying debris hit several crew members. One piece hit Jones and knocked her toward the train, which struck and killed her. Other crew members were also injured by debris, some seriously.

The Hollywood Reporter has a much longer, very good investigation here.

Today, the director copped a plea:

The director of a movie about musician Gregg Allman pleaded guilty Monday in a train crash that killed a camera assistant and injured six film workers, and prosecutors in exchange dropped charges against his wife and business partner.As part of the plea deal, Director Randall Miller will spend two years in the county jail and another eight on probation on involuntary manslaughter and criminal trespassing charges. He also will pay a $20,000 fine.

Enormous credit goes to Sarah’s parents who, in their grief, continued to push, in conjunction with film industry unions, to use the loss of their daughter to improve safety on movie sets. In a statement today, her father said:

“I do not seek revenge, but rather I seek healing from all those involved, including those responsible for my daughter’s death. At the same time, we cannot send a signal to the film industry that it is ok to disrespect life, to commit such selfish, dangerous acts for the sake of so called cinematic immunity,” said her father.“There needs to be accountability. It’s not about payback, it’s about drawing boundaries. It’s about not giving permission to the film industry to be so careless with the safety and lives of their cast and crew,” he continued.

Check out Safety for Sarah.

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The $2.1 Trillion Corporate Tax Dodge Just Grows, With Apple/High Tech Leading The Way http://www.workinglife.org/2015/03/09/the-2-1-trillion-corporate-tax-dodge-just-grows-with-applehigh-tech-leading-the-way/ http://www.workinglife.org/2015/03/09/the-2-1-trillion-corporate-tax-dodge-just-grows-with-applehigh-tech-leading-the-way/#comments Mon, 09 Mar 2015 15:31:02 +0000 http://www.workinglife.org/?p=9764 Not to be holier than though, I’m writing this on a Mac Air…and the IPad is on the desk along with the Iphone. But, it did make me think: how many of my dollars did Apple find a way of stashing overseas in its $69.7 billion hoard that sits out of reach of the U.S. government? Not to wag a finger just at Apple, it’s a bunch of other tech companies that lead the way on stashing overseas $2.1 trillion in corporate taxes–and the number just swells.

From Bloomberg:

Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.

This is slightly higher than when I wrote about this last year. What Bloomberg does nicely is chart out every single company with major holdings and makes the point:

Microsoft, Apple and Google each boosted their accumulated foreign profits by more than 20 percent over the year, the largest increases by any of the 34 companies with at least $16 billion outside the U.S. International Business Machines Corp., Cisco Systems Inc., Oracle, Qualcomm Inc. and Hewlett-Packard Co. each added at least $4 billion.The profits added by the eight technology companies accounted for 45 percent of the net gain in overseas funds among the corporations surveyed. At the same time, firms in some other industries felt enough pressure to meet domestic needs that they chose to take the tax hit by bringing money home.

Why?:

It’s a measure of accumulated profits, including those reinvested in active businesses and factories. The companies say they won’t repatriate these profits, and they haven’t assumed that they will pay future U.S. taxes that would be owed if they did.“One of the reasons that they’re holding the hoards of cash abroad is they don’t want to pay the repatriation tax when they bring it back,” said Rosanne Altshuler, a Rutgers University economist who studies international taxation.

The analysis starts with corporations in the Standard & Poor’s 500 Index and excludes purely domestic firms, real estate investment trusts and companies with headquarters outside the U.S. It includes each company’s most recent annual report, many of which were filed over the past month.

The companies owe taxes at the full U.S. corporate tax rate of 35 percent on profits they earn around the world. They get tax credits for payments to foreign governments and don’t have to pay the residual U.S. tax until they bring the money home.[emphasis added]

Oh, paying taxes…that’s just for the little guy.

Ok, this isn’t going to be easy to stop. But, in the meantime, an easy move would be to simply say: you wanna shift a huge piece of your profits abroad? Well, fuck you, don’t come knocking on the door of the taxpayers looking for federal contracts. That’s what a few members of Congress proposed last year, as I wrote here.

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Fast Food Wage Theft Is A “Crime Wave” http://www.workinglife.org/2015/03/05/fast-food-wage-theft-is-a-crime-wave/ http://www.workinglife.org/2015/03/05/fast-food-wage-theft-is-a-crime-wave/#comments Thu, 05 Mar 2015 21:14:08 +0000 http://www.workinglife.org/?p=9762 It’s a good thing when we use real words to describe the truth. When bankers rip off people with mortgage scams, it’s robbery–even if they get away with it because we have a government unwillingness to jail them. And, once and a while, a politician gets it right.

Kudos to NY Attorney General Eric Schneiderman for calling the wage theft of fast food workers what it is. A crime. No, a crime wave:

At a press conference at his lower Manhattan office, Mr. Schneiderman, a Democrat, linked the recent decision against Ronald Johnson of New Majority Holdings, LLC—who a judge found had rounded down workers’ hours, paid below minimum wage and failed to reimburse upkeep costs of delivery vehicles—as part of a larger string of abuses his office has uncovered. The attorney general highlighted underpayment at 21 other fast food restaurants citywide—at franchises like Domino’s Pizza and McDonald’s—affecting 16,000 workers and for which has reaped $19 million in recovered wages.“There is an effort by thousands of businesses, unfortunately, to underpay workers what they are legally owed. And we have to go after them and treat it like a crime wave, which is what it is. It’s a crime wave. We’re talking about millions and millions, even hundreds of millions of dollars,” Mr. Schneiderman said. “If this money was just being stolen, by some organized gang of crooks,  you bet everyone would know about it and be on it. This is something we treat just as seriously.”[emphasis added]

His point is that this goes way beyond one particular fine. It’s broad, it’s deep, it’s persistent.It’s a crime.

Maybe he needs to school the people at the Justice Department about what a crime is. And to call it like it is.

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Goldman Sachs’ Tax Scam http://www.workinglife.org/2015/03/02/goldman-sachs-tax-scam/ http://www.workinglife.org/2015/03/02/goldman-sachs-tax-scam/#comments Mon, 02 Mar 2015 18:13:41 +0000 http://www.workinglife.org/?p=9760 It’s not enough that Goldman Sachs is a “ financial snake pit rife with greed, conflicts of interest, and wrongdoing.” The company has to dodge paying a fair share of taxes, too.

Per Citizens for Tax Justice:

Goldman Sachs’s latest financial report shows that the company avoided paying federal income taxes on almost half its United States profits in 2014. In fact, the company paid an effective tax rate of just 18.6 percent on $6.8 billion in U.S. profits.

Most of Goldman’s low tax rate (about half the statutory rate of 35 percent) can be attributed to a tax break that allows corporations to write off the so-called cost of issuing stock options to their executives in lieu of salaries. Goldman disclosed saving a whopping $782 million in income taxes through this break in 2014.

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Oink, Oink, Oink: Blackstone CEO Takes Home $690 million in 2014 http://www.workinglife.org/2015/02/27/oink-oink-oink-blackstone-ceo-takes-home-690-million-in-2014/ http://www.workinglife.org/2015/02/27/oink-oink-oink-blackstone-ceo-takes-home-690-million-in-2014/#comments Sat, 28 Feb 2015 01:26:13 +0000 http://www.workinglife.org/?p=9758 Just in case you wondered if the pigs weren’t still at the trough looking to take every dollar they could.

Oink, oink, oink per the WSJ:

Blackstone Group LP co-founder and Chief Executive Stephen Schwarzman collected about $690 million in dividends, compensation and fund payouts for 2014, according to a Friday regulatory filing, the highest annual payout ever notched by a founder of a publicly traded private-equity firm.The amount represents a nearly 50% increase over Mr. Schwarzman’s 2013 figure and also tops the $546 million received in 2013 by Leon Black, who co-founded Apollo Global Management LLC. The tallies are according to a Wall Street Journal analysis of securities filings. For 2014, Mr. Black received $330.6 million, mostly in dividends, according to a filing from his firm Friday.

By the way, this is the same guy who has a massive portrait of himself hanging in his home:

Short, grey-haired and softly-spoken, he is renowned for his exotic parties. His Christmas event was themed on 007, with Bond girls sashaying around with trays of nibbles. Then in February, he spent an estimated $3m on a birthday bash featuring private performances by Rod Stewart and Patti LaBelle at a regimental armoury on Manhattan’s upper east side. The venue was decorated to look like Schwarzman’s own living room, complete with a huge portrait of the host himself. Guests included Colin Powell, Donald Trump and mayor Michael Bloomberg.

Just guessing but this guy has a problem with size.

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Elizabeth Warren Opposing TPP, Because Deal Would “gut U.S. regulations” http://www.workinglife.org/2015/02/27/elizabeth-warren-opposing-tpp-because-deal-would-gut-u-s-regulations/ http://www.workinglife.org/2015/02/27/elizabeth-warren-opposing-tpp-because-deal-would-gut-u-s-regulations/#comments Fri, 27 Feb 2015 13:56:40 +0000 http://www.workinglife.org/?p=9756 Good to see Elizabeth Warren taking on the Trans Pacific Partnership. Aside from her terrific leadership opposing Wall Street, her views on other issues (for example, her fairly mainstream blindly pro-Israel views) have been less clearly progressive. But kudos on this.

Speaking out:

The Massachusetts senator is stepping up her criticism of the administration’s proposed Trans-Pacific Partnership, a centerpiece of the president’s second-term agenda, saying it could allow multinational corporations to gut U.S. regulations and win big settlements funded by U.S. taxpayers but decided by an international tribunal.“This deal would give protections to international corporations that are not available to United States environmental and labor groups,” Warren said in an interview with POLITICO. “Multinational corporations are increasingly realizing this is an opportunity to gut U.S. regulations they don’t like.”

And:

Opponents of Obama’s trade agenda seized on Warren’s new comments and said they raised the profile of the opposition and made defeating the deals more likely. The administration is asking Congress for “fast-track” status for the TPP, meaning that lawmakers wouldn’t be able to amend the deal, only vote up or down on what the administration negotiates.“Having a champion for working families and the environment speaking up like this against parts of TPP sends a real signal to the rest of Congress,” said Ilana Solomon, director for The Sierra Club’s “Responsible Trade” program. “If you are on the side of helping the environment and working families and taking a stand against corporate power, you have to be against fast-track and TPP as well.” Solomon added that Warren was moving strategically to “elevate these issues at a critical moment when fast track and other trade agreements are coming to a head in Congress.”

Her opposition focuses primarily on the investor-state dispute settlement (ISDS) provisions, which I wrote about here.

Truthfully, I don’t believe that this will have much effect in blocking “fast track” or TPP in the Senate, which has been, on the whole, much more friendly in a bi-partisan way to NAFTA-style so-called “free trade” and “fast track” (which allows a trade deal to be presented to Congress for an up-or-down vote, blocking any ability to offer amendments). But, obviously, her voice carries weight with the larger progressive message and could influence votes in the House where, in my opinion, there is a stronger chance TPP can be blocked because of the opposition of a majority of Democrats and a number of Republicans.

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Until Bankers Go To Jail, I’m Not Paying My Taxes: Splendid Idea, Greg Wise and Emma Thompson http://www.workinglife.org/2015/02/26/until-bankers-go-to-jail-im-not-paying-my-taxes-splendid-idea-greg-wise-and-emma-thompson/ http://www.workinglife.org/2015/02/26/until-bankers-go-to-jail-im-not-paying-my-taxes-splendid-idea-greg-wise-and-emma-thompson/#comments Thu, 26 Feb 2015 17:10:47 +0000 http://www.workinglife.org/?p=9754

Let me give credit, up front, to a splendid idea from the actors Greg Wise and Emma Thompson that clarified my own outrage at a simple reality: the bankers destroyed the economy with their greed and incompetence, the Obama Administration lets each bank CEO off the hook with a negotiated deal for a fine that the institution, not the banker pays, and with no jail time for a single high-ranking Wall Streeter and WE PAY FOR THIS.

That’s right: each one of us, with our taxes, pays for this sleazy deal with the financial elite.

So, first, what did Wise and Thompson just declare:

Greg Wise, the actor married to Emma Thompson, has announced that he and his wife will refuse to pay tax until those involved in the HSBC tax avoidance scandal go to prison.Wise spoke of his anger at HM Revenue and Customs (HMRC) and the bank after details of 100,000 accounts held by HSBC’s Swiss arm revealed how the bank had helped some customers dodge taxes.

“I have actively loved paying tax, because I am a profound f**ing socialist and I believe we are all in it together. But I am disgusted with the HMRC. I am disgusted with HSBC. And I’m not paying a penny more until those evil b**ds got to prison,” he told The Evening Standard.

Speaking of the opinions of his Oscar-winning wife, he said: “Em’s on board. She agrees. We’re going to get a load of us together. A movement. They can’t send everyone to prison. But we’ll go to prison if necessary. I mean it, it’s going to be like 1948 all over again.”

What Wise didn’t do–no criticism intended and it’s possible he simply wasn’t quoted extensively enough–was connect the fines to taxes everyone of us pay.I’ve made this point numerous times: the fines are either paid for in higher fees to customers AND/OR by every taxpayer because the fines are deductible.

Take this:

At the Justice Department, senior officials like to congratulate themselves on the headline-making, big bucks settlements they have imposed upon banks and lenders for their part in causing the 2008 mortgage meltdown that sparked the biggest American financial crisis since the Great Depression.But wait a moment. Those settlement figures are not quite what they seem. Buried deep in the announcements of the astronomical sums that Wall Street banks are being forced to pay is a dirty secret: A big chunk of the hundreds of billions of dollars banks have paid in settlements to various federal agencies and regulators since 2010 is deductible from the taxes banks and lenders pay.

When is a fine not a fine? When it can be put against your tax bill.

Because settlements can be deducted from tax liabilities, for nearly every dollar a bank or lender has pledged to pay in cash or pony up in other ways—such as through buying back soured mortgage-backed securities, extending cheaper loans or forgiving failed loans held by struggling homeowners—up to 35 cents will find its way back into bank coffers, a reflection of the 35 percent federal corporate tax rate.

Deep in the legalese weeds of the settlement documents lies buried treasure. Big banks such as Bank of America and JPMorgan Chase will receive deductions against the corporate tax that will amount to between half and nearly three-quarters of their multibillion-dollar settlements, at least. Meanwhile, midsized banks and nonbank lenders generally get to deduct the whole shebang. [emphasis added]

And the greedy fucks at Bank of America (I wrote about their cushy deal here):
Bank of America will pay roughly $4 billion less to the government after-tax than the $16.65 billion it agreed to in a settlement over soured mortgage securities, because parts of the settlement will be tax deductible, the bank said Thursday.[emphasis added]And:

That means that up to $11.63 billion of the settlement would be deductible, depending on how much the bank incurs in costs associated with the consumer relief. With a corporate tax rate of 35%, that suggests savings of $4.07 billion. Bank of America said last month that it expects an effective tax rate of about 31% for the second half of 2014, absent any unusual items, and that would suggest savings of about $3.6 billion.[emphasis added]

J.P. Morgan’s get-out-of-jail deal (I wrote about that sweetheart kiss to Jamie Dimon here):

The majority of the $13 billion settlement JPMorgan struck with the government Tuesday is likely to be tax deductible, reducing the bank’s financial hit.Here’s why: Many of the costs associated with corporate legal cases are treated as deductible under the tax code, in much the same way that a company’s wages or equipment expenses are.

That means JPMorgan will be able to reduce its tax bill because of many of the settlement payments that it must make. [emphasis added]

Understand why YOU and every regular person essentially pays for this: every tax dollar the banks can deduct from these settlements is a tax dollar not given to the Treasury, which means someone else has to pay for the services we need as a decent society. That means YOU pay for their get-out-of-jail deals.And you’ve already paid enough. The crashed economy, the obliteration of trillions of dollars in wealth, the loss of millions of jobs around the world, of pensions that can never be recovered in full…all for their greed and power.

And they have not paid a price. The opposite: Dimon and his band of miscreants throughout Wall Street still rake in a king’s ransom in salary, bonuses and first-class benefits.

Of course, this is tough one: how does one resist the taxman? But, Wise has a point: if tens of thousands of people refused to pay their taxes until bankers went to jail…

At least, the point can be made.

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Simple Choice: 25 Million Kids OR More Useless Tax Cuts For Business? http://www.workinglife.org/2015/02/25/simple-choice-25-million-kids-or-more-useless-tax-cuts-for-business/ http://www.workinglife.org/2015/02/25/simple-choice-25-million-kids-or-more-useless-tax-cuts-for-business/#comments Wed, 25 Feb 2015 15:01:12 +0000 http://www.workinglife.org/?p=9752

We’ve never had a problem with finding money in the federal budget. Iraq War/Afghanistan/Drones? Pfft…a few trillion, no problem. Tax cuts for the rich? Here, take hundreds of billions of dollars. The problem is PRIORITIES and MORALITY.

Today, the question boils down to: does the Congress want to help 25 million kids and their families have a few dollars more in the household budget–to buy food, clothes and pay for heating–OR would the Congress rather give billions of dollars in useless, wasteful tax cuts to business?

When the American Recovery and Reinvestment Act passed in 2009 (at $840 billion, the “stimulus” bill was too puny, in my humble opinion to deal with the crisis at hand…but I digress), one of the things that it did was to expand the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).

As Citizens for Tax Justice points out:

The ARRA expansion of the Earned Income Tax Credit:    Boosted benefits for families with more than two children. Previously families with more than two children received the credit at the same rate as families with two children– 40 percent–but under the expansion these families receive a credit rate of 45 percent. For example, under the expansion the maximum credit for a married couple with three or more children is $6,242. Without the improvement, the maximum credit would be $5,548, the same amount a married couple with two children receives.
Reduced marriage penalties. The expansion increased the income amount at which the EITC phases out for married couples, thus allowing married couples to receive a small benefit boost at higher income levels.

The ARRA expansion of the Child Tax Credit:

Lowered the refundability threshold. The ARRA expansion lowered the income threshold above which a taxpayer can receive a tax credit at a rate of 15 percent of earnings to $3,000, compared to around the threshold of $13,850 it would otherwise have been in 2015. This means taxpayers that even more lower-income families can receive this credit.

Those changes will expire at the end of 2017–and, if they do, will deprive 13 million families–with 25 million kids–of some badly needed money.

Here’s the table that shows what the effect is:

CTJ pegs the cost of making these benefits permanent at $14 billion in 2018, a trivial number, a rounding error in the scheme of things.

But, the PRIORITIES and MORALITY of the people running the show on Capitol Hill prefer to piss away billions of dollars on tax cuts for business that don’t do jack for the economy  and, certainly not for 25 million kids.

A year ago, I wrote about Congress’ vote–including Democrats–to flush billions of dollars down the drain through the continuation of “Tax extenders”. Quoting from that post, courtesy of CTJ:

Most of the tax breaks fail to achieve any desirable policy goals. For example, they include bonus depreciation breaks for investments in equipment that the Congressional Research Service have found to be a “relatively ineffective tool for stimulating the economy, a tax credit for research defined so loosely that it includes the work soft drink companies put into developing new flavors,and a tax break that allows General Electric to do financial business offshore without paying U.S. taxes on the profits.■ The tax breaks cannot possibly be effective in encouraging businesses to do anything because they are almost entirely retroactive. The tax breaks actually expired at the end of 2013 and this bill will extend them (almost entirely retroactively) through 2014. These tax provisions are supposedly justified as incentives for companies to do things Congress thinks are desirable, like investing in equipment or research, but that justification makes no sense when tax breaks are provided to businesses for things they have done in the past.

■ The bill increases the deficit by $42 billion to provide tax breaks that mostly benefit businesses, even after members of Congress have refused to enact any measure that helps working people unless the costs are offset. The measures that Congress refused to enact without offsets include everything from creating jobs by funding highway projects to extending emergency unemployment benefits.[emphasis added]

And the price tax for continuing “tax extenders” is going to get steeper in 2018: to the tune of $73 billion.

So, this is a pretty clear choice: spend a paltry $14 billion to help 25 million kids OR hand over $73 billion to corporations that don’t help anyone but the CEOs looking to fatten up bottom lines and boost share prices so they can make more dough.

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