Higher than any other president since WWII & twice as high as under Reagan.
Higher than any other president since WWII & twice as high as under Reagan.
As Bloomberg News reported Wednesday, Goldman finished the year with a flurry of regulatory filings revealing that 10 top executives, including CEO and Chairman Lloyd Blankfein and President and COO Gary Cohn would be paid a total of $65 million in restricted stock award 2012—ahead of schedule—enabling them to avoid higher tax rates in 2013. Goldman spokesman Michael DuVally declined to comment. And remember the eleventh hour deal struck by Congress to avoid the fiscal cliff? Goldman will indirectly get a piece of that as well. Section 328 of the bill extends tax-exempt financing for the ‘New York Liberty Zone,’ which includes the area around Goldman’ shiny new headquarters at 200 West St. Goldman already got $1.5 billion in ‘Liberty Bonds’ to help pay for the construction of its headquarters, according to this Bloomberg News investigation, and now it can be sure developers will have every incentive to build more fancy high rises to house Goldman’s workaholics as close to the office as possible. Not that they needed such incentives. Meanwhile, Congress couldn’t find the time to approve a $60.4 billion package to help genuinely distressed coastal neighborhoods in New York and New Jersey that have been wiped out by Hurricane Sandy.
Still doing “God’s work” at Goldman Sachs.
Oh, thank god. I was hoping that in all the fiscal cliff hysteria someone would be looking out for the little guy:
General Electric, Citigroup, and other giant U.S. multinational financial companies are breathing a sigh of relief after Congress extended a key tax break though 2013 following the resolution of the Congressional budget battle that was resolved late Tuesday.
Known as the “active financing exception,” the provision allows U.S. financial multinationals to avoid paying taxes on interest income earned by foreign subsidiaries unless the income is repatriated into the U.S.
General Electric and Citigroup are among the top beneficiaries of the tax deal, since they are among the more active overseas lenders among U.S. companies. The provision saved GE about $3 billion in taxes in 2011, and it saved Citigroup about $1 billion each in 2010 and 2011.
The provision by itself should allow GE, Citigroup and other companies to keep their tax rate well below the statutory rate of 35 percent, according to corporate tax consultant Robert Willens, head of Robert Willens LLC.
A Citigroup spokeswoman declined to comment on the extension of the loophole. A General Electric spokesman declined to comment.
“This is a load off the shoulders of multinational financial organizations, particularly GE, since it gives rise to a substantial reduction in these companies effective tax rates,” Willens says.
… [W]ithout further ado, here are eight corporate subsidies in the fiscal cliff bill that you haven’t heard of.
1) Help out NASCAR - Sec 312 extends the “seven year recovery period for motorsports entertainment complex property”, which is to say it allows anyone who builds a racetrack and associated facilities to get tax breaks on it. This one was projected to cost $43 million over two years.
2) A hundred million or so for Railroads - Sec. 306 provides tax credits to certain railroads for maintaining their tracks. It’s unclear why private businesses should be compensated for their costs of doing business. This is worth roughly $165 million a year.
3) Disney’s Gotta Eat - Sec. 317 is “Extension of special expensing rules for certain film and television productions”. It’s a relatively straightforward subsidy to Hollywood studios, and according to the Joint Tax Committee, was projected to cost $150m for 2010 and 2011.
4) Help a brother mining company out – Sec. 307 and Sec. 316 offer tax incentives for miners to buy safety equipment and train their employees on mine safety. Taxpayers shouldn’t have to bribe mining companies to not kill their workers.
5) Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.
6) $9B Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.”
7) Tax credits for foreign subsidiaries – Sec. 323 is an extension of the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This gibberish sounding provision cost $1.5 billion from 2010 and 2011, and the US Chamber loves it. It’s a provision that allows US multinationals to not pay taxes on income earned by companies they own abroad.
8) Bonus Depreciation, R&D Tax Credit – These are well-known corporate boondoggles. The research tax credit was projected to cost $8B for 2010 and 2011, and the depreciation provisions were projected to cost about $110B for those two years, with some of that made up in later years.
Conveniently, the Joint Committee on Taxation in 2010 did an analysis of what many of these extenders cost. You can find that report here.
When the legislation that became known as “Obamacare” was first drafted, the key legislator was the Democratic Chairman of the Senate Finance Committee, Max Baucus, whose committee took the lead in drafting the legislation. As Baucus himself repeatedly boasted, the architect of that legislation was Elizabeth Folwer, his chief health policy counsel; indeed, as Marcy Wheeler discovered, it was Fowler who actually drafted it. As Politico put it at the time: “If you drew an organizational chart of major players in the Senate health care negotiations, Fowler would be the chief operating officer.”
What was most amazing about all of that was that, before joining Baucus’ office as the point person for the health care bill, Fowler was the Vice President for Public Policy and External Affairs (i.e. informal lobbying) at WellPoint, the nation’s largest health insurance provider (before going to WellPoint, as well as after, Folwer had worked as Baucus’ top health care aide). And when that health care bill was drafted, the person whom Fowler replaced as chief health counsel in Baucus’ office, Michelle Easton, was lobbying for WellPoint as a principal at Tarplin, Downs, and Young.
Whatever one’s views on Obamacare were and are: the bill’s mandate that everyone purchase the products of the private health insurance industry, unaccompanied by any public alternative, was a huge gift to that industry; as Wheeler wrote at the time: “to the extent that Liz Fowler is the author of this document, we might as well consider WellPoint its author as well.”
[…] More amazingly still, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it chose … Liz Fowler. That the White House would put a former health insurance industry executive in charge of implementation of its new massive health care law was roundly condemned by good government groups as at least a violation of the “spirit” of governing ethics rules and even “gross”, but those objections were, of course, brushed aside by the White House. She then became Special Assistant to the President for Healthcare and Economic Policy at the National Economic Council.
Now, as Politico’s “Influence” column briefly noted on Tuesday, Fowler is once again passing through the deeply corrupting revolving door as she leaves the Obama administration to return to the loving and lucrative arms of the private health care industry:
“Elizabeth Fowler is leaving the White House for a senior-level position leading ‘global health policy’ at Johnson & Johnson’s government affairs and policy group.”
The pharmaceutical giant that just hired Fowler actively supported the passage of Obamacare through its membership in the Pharmaceutical Researchers and Manufacturers of America (PhRMA) lobby. Indeed, PhRMA was one of the most aggressive supporters - and most lavish beneficiaries - of the health care bill drafted by Fowler. Mother Jones’ James Ridgeway proclaimed “Big Pharma” the “big winner” in the health care bill. And now, Fowler will receive ample rewards from that same industry as she peddles her influence in government and exploits her experience with its inner workings to work on that industry’s behalf, all of which has been made perfectly legal by the same insular, Versailles-like Washington culture that so lavishly benefits from all of this.
Despite paying $4.5 billion, including a record $1.26 billion criminal fine, BP will not be prohibited from receiving future government contracts because it is too big to debar. Federal contractors of a certain size get a pass on fraudulent or even criminal actions because the government relies so heavily on their services. Read more at Bloomberg Businessweek.
Ahead of negotiations over the so-called ‘fiscal cliff’ and what promises to be another fight over raising the debt ceiling, 63 CEOs representing the largest U.S. corporations, including several Wall Street firms, launched a campaign to supposedly ‘fix the debt.’ However, this campaign calls for additional corporate tax cuts by switching the U.S. to what’s known as a ‘territorial’ corporate tax system, along the lines of that proposed by Mitt Romney. According to a report by Institute for Policy Studies, the corporations involved could gain up to $134 billion in windfalls if Congress approves such a system, which exempts foreign earnings from the U.S. corporate income tax.
A territorial tax system actually rewards businesses that offshore jobs and investments. Corporate tax rates are already at a 40-year low of just 12.1 percent. Revenue from corporate taxes has plunged, despite a 60-year high in corporate profits.
There’s one big, but overlooked, development from the election last night: In Montana, a referendum to state that corporations don’t have constitutional rights has unofficially passed by a 75 percent to 25 percent margin. Initiative number 166 stated that “corporations are not entitled to constitutional rights because they are not human beings,” and thus is a blow to the Citizen’s United ruling that helped make this presidential election the most expensive one ever.
Montana quietly passed a measure that says corporations aren’t humans | Derek Mead | Mother Board
The New York Times has revealed a top Obama campaign strategist has played a major role in advising corporations lobbying the federal government on polices and regulations. Anita Dunn has emerged as one of President Obama’s top advisers while still running the consulting firm SKDKnickerbocker. SKDK’s client list includes TransCanada, the Canadian company seeking Obama’s approval of the Keystone XL oil pipeline; as well as General Electric, AT&T, Time Warner, and the military contractor Pratt & Whitney. The firm also represents a number of business coalitions, including one seeking to reduce tax rates on around $1 trillion in offshore profits. An SKDK partner was reportedly able to learn of the White House’s opposition to the tax proposal in a private conversation with a top adviser to Treasury Secretary Timothy Geithner. Despite working for top corporations lobbying the government, Dunn’s role has escaped scrutiny under ethics rules that subject consultants to less oversight than lobbyists.
Blah blah blah you can believe in.
That could soon be the law of the land in Pennsylvania, where the state legislature has passed a bill that would, as Philadelphia City Paper blogger Daniel Denvir describes it, “allow companies that hire at least 250 new workers in the state to keep 95-percent of the workers’ withheld income tax.” These workers will essentially be paying their employers for the privilege of having a job. Some have called this “corporate socialism,” but it also calls to mind an even older economic model that was once popular in Europe – except back then, the bosses were called lords. It’s a more modern innovation in the U.S., but combined with increased political pressure from employers and a crackdown on workers’ rights, it all adds up to feudalism, American-style.
The Pennsylvania bill is just the most recent example of state income taxes being turned into employer subsidies. It’s already the law of the land in one form or another in 19 states, and according to Good Jobs First, it’s taking $684 million a year out of the public coffers. The theory is that this will boost job creation. But the authors of the Good Jobs First report note, “payments often go to firms that simply move existing jobs from one state to another, or to ones that threaten to move unless they get paid to stay put.” In other words, it’s more like extortion than stimulus. With state governments facing a projected $4 trillion budget shortfall and continuing to cut social services and public sector jobs, they can hardly afford to be wasting money on companies that already have plenty and have no intention of putting it to good use. And the more governments turn over their privileges to businesses, the more the distinction between the two becomes blurred.
But if corporations have state governments over a barrel, they have their employees stuffed inside the barrel and ready to plunge down the waterfall. As I’ve noted before, some conservatives view all taxation as theft, but there’s surely no better term for what happens when employers promise their workers a certain wage or salary and then pocket some of the money for themselves. When you pay taxes to the government, you get something in return, whether it’s a school for your kids or a road to drive on or a firefighter to rescue you from a burning building. When you pay taxes to your boss, you… well, you give your boss your money. Your only reward is that you get to continue to “work the land,” so to speak. The lords didn’t consult with the peasants on which tapestries they should buy with the money they collected from them.
The US supreme court just consecrated one of the most corrupt acts of the US government over the past decade: its vesting of retroactive legal immunity in the nation’s telecom giants after they had been caught red-handed violating multiple US eavesdropping laws. Just as the Obama DOJ forever precluded any legal accountability for Bush-era torturers, the supreme court on Tuesday forever precluded any legal accountability for AT&T, Verizon, Sprint and other telecoms for their crucial participation in the illegal Bush NSA warrantless eavesdropping program (the Obama DOJ, needless to say, supported the position of the telecoms). … So congratulations are once again in order for AT&T, Verizon, Sprint and the other national telecom giants. In a country that imprisons more of its ordinary citizens than any other on the planet by far, and that imposes more unforgiving punishments than any other western nation, our most powerful corporate actors once again find total impunity even for the most serious of lawbreaking.
US supreme court finalizes gift of immunity to the telecom giants
In any sensible world, when researchers are conducting trials on a new tablet for a drug company, for example, we’d expect universal contracts, making it clear that all researchers are obliged to publish their results, and that industry sponsors – which have a huge interest in positive results – must have no control over the data. But, despite everything we know about industry-funded research being systematically biased, this does not happen. In fact, the opposite is true: it is entirely normal for researchers and academics conducting industry-funded trials to sign contracts subjecting them to gagging clauses that forbid them to publish, discuss or analyse data from their trials without the permission of the funder.
Ben Goldacre, The drugs don’t work: a modern medical scandal (via ronmarks)