Category Archives: Tax Policy

Corpo Tax Breaks Finally = Discretionary Spending

What that means is that all the money the govt has to spend exclusive of fixed costs is now equal to the amount of money in tax breaks given to corporations. Dig:

In 2013, the cost of tax breaks was equal to the entire U.S. discretionary budget [1]. However, the discretionary budget is subject to an annual appropriations process, where Congress debates the proposed spending. Tax breaks, on the other hand, remain on the books until lawmakers modify them. As a result, over a trillion dollars a year in lost revenue – more than 1.6 times the 2013 budget deficit – goes largely unnoticed.

tax-breaks

 

The cost of corporate tax breaks has trended upward in recent decades, totaling nearly $176 billion in fiscal 2013. In other words, the overall U.S. corporate tax bill was $176 billion lower than it would have been without the special deductions, credits, and exclusions written into our tax code. To put that in perspective, that’s about $1,328 per U.S. household. [2]

 

Which is bad news, right? Wrong! Look at that other box. That’s the deficit and it’s only 2/3 what the tax breaks are worth. So, when you get all frantic anxious about how the deficit is ruining the economy like FauxNews keeps telling you, just know that we can fix it in a single year by canceling some – not all, just some – of the tax breaks corporations that don’t actually need them have blackmailed the Congress into. See, easy!

Oh, who am I kidding? This will never happen. Case in point, a Republican named David Camp, Chair of the House Ways and Means Committee, and Paul Ryan at the House Budget Committee have both submitted Tax Reform bills intended to “reform” the tax code to varying degrees. What? Republicans reforming the tax code to eliminate corporate tax breaks? Has the world turned upside down?

All of them claim to “reform” a discredited cesspool of a tax code, of course, but they have also been submitted in an election year. The GOP, if it knows nothing else (and it doesn’t), knows how to get credit for proposing popular legislation they don’t actually want at a time when there is no chance whatever for it to pass.

It doesn’t matter how easy the fix is if the fix is anathema to the Congress’ owners.

Who Counts? Not You

OK, so you probably think that at least if you’re a dedicated cheerleader they won’t throw you under the bus even if you’re not their first priority. But you’re being naive.

Regardless of who wins the presidential election in November or what compromises Congress strikes in the lame-duck session to keep the economy from automatic tax increases and spending cuts, 160 million American wage earners will probably see their tax bills jump after Jan. 1.

That is when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.

You don’t matter. The “deficit” they created matters. It’s your job to pay it off. This was never a priority, it was just a temporary gimme for show.

Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.

But there is still little desire to make an extension part of the negotiations that are under way to avert the huge tax increases and across-the-board spending cuts, known as the fiscal cliff, that will start in January without a deal.

Nope. Nobody on either side gives a shit.

Many Republicans vehemently opposed its passage last year, as it would divert money from the Social Security program. Many Democrats fervently supported it last year but show no such enthusiasm now. Nancy Pelosi of California, the top House Democrat, has told reporters she thinks it should expire.

So don’t ever get your hopes up. No matter what happens, you’re never gonna be on anybody’s gift list.

The Problem With “Public”

Two hundred-plus years of dangerously liberal thinking have created a good deal of confusion in some weak minds. One of the most damaging of these confusions, one that you may still be harboring without realizing its deep and divisive nature, is the idea that there are such things as “public” facilities. Or, indeed, a “public good”. In fact, the very word “public” arises from a severe misunderstanding of what forms a “society”. Continue reading

Democrats Support Secret Trade Deal that Lets Corps Evade Taxes

The Bush’s truly rotten trade deal with Panama and the Democratic leadership that is hip-deep in the drive to make sure it passes.

David Sirota has another round-up of the latest on the secret trade deal the Democratic leadership is developing with Bush out of the range of cameras or witnesses – or its own rank and file. The deal as a whole involves Peru, Panama, South Korea and Columbia(sp) Colombia, with different provisions that apply to each country separately as well as a group of provisions they hold in common. Sirota lists half-a-dozen articles and they’re all disturbing but I want to key on the one that is most indefensible: the deal with Panama.

Economist and investment/globalization specialist Peter Riggs of the Tax Justice Network, which describes itself as an outfit devoted to “combating tax evasion by corporations and the rich”, took a good long look at the Panama trade deal. After noting that the Panama and Peru deals have been considered “relatively non-controversial and will probably pass”, he explains that the deal with Panama has nothing to do with trade.

Indeed, the proposed bilateral trade agreement with Panama has skated through without much attention at all. But the agreement with Panama is highly significant. The problem is, the trade agreement with Panama isn’t really about trade. It’s about foreign investor rights, money laundering, and tax dodging. And the United States should in no way reward this notorious offshore tax haven with a “gold star” Free Trade Agreement.

***

Panama has two major areas of “economic comparative advantage” in the region. One, obviously, is the Canal. But the other is much more insidious-and major U.S. corporations are hoping that no one draws any attention to it.

Panama’s other economic comparative advantages are in the area of tax and banking secrecy, and the ease with which U.S. companies can create subsidiaries in Panama for purposes of dodging taxes.

Panama is already home to a lot of U.S. corporate subsidiaries. How many? Tens of thousands of U.S. corporations have hung out a shingle-or should we say, set up an email box-in that country.

Panama boasts a total of 400,000 registered corporations-second only to Hong Kong as a home to corporations and corporate subsidiaries. Subsidiaries whose sole purpose, in many cases, is to help transnational companies avoid taxes.

(emphasis added)

In the last few years, Panama has been consistently condemned by the G-7’s Financial Action Task Force for “resisting international norms in combating tax evasion and money laundering.” The Clinton Administration several times “vigorously expressed its concern about loose corporate accountability standards in Panama, and the murkiness of the Panamanian banking sector.” But the Bush Administration’s deal with Panama – a deal the Democratic leadership is pushing hard – is not only enshrining those low standards and “murkiness” in law, it’s going one step further and allowing corporations to evade both trade laws and courts.

[W]ith the text of the Free Trade Agreement as it now stands, Panamanian investors would get new rights in the United States, with no new disclosure responsibilities at home. We have a situation where it is very, very easy to set up a business subsidiary in Panama. Panama’s “corporate” specialists advertise the country has having the most favorable and flexible incorporation laws in the world, in addition to some of the strictest banking secrecy laws available.

So the FTA will just encourage more U.S. businesses to pursue a strategy for tax purposes, designed solely to evade taxes in the United States. But then the text of the Panama agreement allows corporations and investors with a “substantial business presence” in Panama-that is, registered subsidiaries of multinational corporations-to use provisions found in Chapter 10 of the agreement to bring a claim against U.S. laws using an international investor tribunal. Panamanian-registered corporations would be able to bypass the U.S. courts system altogether in the case of an investment dispute involving the United States.

That’s right, Panamanian corporations – as well as Panamanian subsidiaries of U.S. corporations – would be able to bypass the U.S. legal system, and take their claims to an international investor tribunal. Historically, these tribunals have proven much more sympathetic to corporate interests than they have to public-interest regulation.

The case is heard before an ad-hoc panel of three international investment lawyers, working without a system of formal legal precedent. Panamanian investors would be empowered to challenge U.S. federal, state, or local laws, citing an “expropriation” of expected profits or a failure to provide Panamanian investors with a “minimum standard of treatment.”

(emphasis added)

Sirota explains what this means.

So, if U.S. federal, state, or local laws tried to close tax loopholes or prevent corporations from evading taxes through tax havens like Panama, those corporations could cite their subsidiaries in Panama and the Panama Free Trade Agreement as grounds to have an international tribunal strike those laws down. Such cases have already been brought under NAFTA by corporations seeking to strike down American environmental laws. But thanks to Panama’s tax haven status, the Panama deal would take such abuse to a whole new level.

Charlie Rangel has a long and distinguished history in the House, but his overt advocacy for and determination to pass the FTA is putting a blot on his reputation he’ll be hard-put to erase. He has publicly announced that he intends to see the FTA passed whether the rank-and-file like it or not, and that he will ram it through over their objections and the objections of its progressive opponents no matter what.

I never thought, a few years ago, that I would ever see Charlie Rangel pimping for corporate crooks but what else can you call this?

There is absolutely no way to explain away the Democratic leadership’s actions over this bill as anything other than a deliberate collusion with the Bush White House to clear the way for more corporate theft of the public Treasury by legalizing tax evasion for multinationals. There is no possible excuse that can be made for their rabid support of the Panama “trade” deal when its sole purpose is to enable corporate thievery. It can’t by any measure you like be rationally justified as an “accident”, incompetence, or electoral fear.

Would any of our Democratic apologists like to try explaining why we shouldn’t dump the Dems over this?

Democrats Support Secret Trade Deal that Lets Corps Evade Taxes

David Sirota has another round-up of the latest on the secret trade deal the Democratic leadership is developing with Bush out of the range of cameras or witnesses – or its own rank and file. The deal as a whole involves Peru, Panama, South Korea and Columbia, with different provisions that apply to each country separately as well as a group of provisions they hold in common. Sirota lists half-a-dozen articles and they’re all disturbing but I want to key on the one that is most indefensible: the deal with Panama.

Economist and investment/globalization specialist Peter Riggs of the Tax Justice Network, which describes itself as an outfit devoted to “combating tax evasion by corporations and the rich”, took a good long look at the Panama trade deal. After noting that the Panama and Peru deals have been considered “relatively non-controversial and will probably pass”, he explains that the deal with Panama has nothing to do with trade.

Indeed, the proposed bilateral trade agreement with Panama has skated through without much attention at all. But the agreement with Panama is highly significant. The problem is, the trade agreement with Panama isn’t really about trade. It’s about foreign investor rights, money laundering, and tax dodging. And the United States should in no way reward this notorious offshore tax haven with a “gold star” Free Trade Agreement.

***

Panama has two major areas of “economic comparative advantage” in the region. One, obviously, is the Canal. But the other is much more insidious-and major U.S. corporations are hoping that no one draws any attention to it.

Panama’s other economic comparative advantages are in the area of tax and banking secrecy, and the ease with which U.S. companies can create subsidiaries in Panama for purposes of dodging taxes.

Panama is already home to a lot of U.S. corporate subsidiaries. How many? Tens of thousands of U.S. corporations have hung out a shingle-or should we say, set up an email box-in that country.

Panama boasts a total of 400,000 registered corporations-second only to Hong Kong as a home to corporations and corporate subsidiaries. Subsidiaries whose sole purpose, in many cases, is to help transnational companies avoid taxes.

(emphasis added)

In the last few years, Panama has been consistently condemned by the G-7’s Financial Action Task Force for “resisting international norms in combating tax evasion and money laundering.” The Clinton Administration several times “vigorously expressed its concern about loose corporate accountability standards in Panama, and the murkiness of the Panamanian banking sector.” But the Bush Administration’s deal with Panama – a deal the Democratic leadership is pushing hard – is not only enshrining those low standards and “murkiness” in law, it’s going one step further and allowing corporations to evade both trade laws and courts.

Continue reading

Conservative Propaganda: The Trickle-Down Scam

For almost 100 years, from the moment the income tax was instituted, conservatives have insisted with increasing hysteria that taxes are what kill the economy. Not taxes on you or me, of course. They’re not much concerned with those, as they’ve proved time and again. No, they’re talking about the taxes on Bidness and the Rich. You know, the “trickle-down” theory, wherein there seems to be a hard-core, faith-based belief that if the rich get richer because they don’t have to pay taxes like the rest of us, why, they’ll “invest” that “extra” money to create more low-paying jobs, and thus a tiny portion of their wealth will “trickle down” to the lower economic strata.

There is zero evidence to suggest, let alone prove, that economies work this way, but that doesn’t stop Grover “The Toad” Norquist’s Bathtub Battalion from claiming otherwise at the tops of their lungs. Our so-called “president”, acting in his capacity as chief mouthpiece and corporate rip-off enabler, was out on the hustings yesterday saying the same old shit, decorated by his usual smirk.

“The message is unmistakable: America’s economy keeps growing, government revenues keep going up, the budget deficit keeps going down — and we’ve done it all without raising your taxes,” Bush said during a speech at the Eisenhower Executive Office Building, where he introduced two small-business owners, a member of the National Guard and the parents of eight children. He said they all racked up big savings thanks to the tax cuts.

“When you’ve got more money in your pockets to save, spend or invest, this causes the economy to grow,” Bush said, adding that “a growing economy has led to growing tax revenues. Because people are making more money, they’re also paying more taxes.”

Like everything else Bush says (“How do you know when Bush is lying? His lips are moving”), it isn’t true. In point of fact, the economy has been growing at pretty much the same 2-3%/yr pace that it did during the 90’s. There are a couple of big differences, alright, but they’re not in the rate of economic expansion, a fact that even faux-economists at the conservative propaganda unit, The American Enterprise Institute, have been forced to admit.

Continue reading

Low Taxes and Privatization: Failure Squared

Molly used to tell the story of her first day covering the Texas legislature for the Observer. She sat in the press box that morning watching the most powerful men in the state (they were all men in those days) enter the chamber, slap each other on the butt, and commence talking about what “a fine piece o’ tail” they had last night, you shoulda seen ‘er, some of them packing guns under their suit coats, and she thought, “This is going to be fun.” It was due to her reporting, at least in part, that the Texas legislature became a national joke.

It isn’t all that funny now. As one of the posters on a BBS forum I used to inhabit liked to point out, the agenda Bush brought with him to Washington originally was less a neocon agenda than the agenda of the Texas Republican Party, lifted from that quirky, ignorant, arrogant collection of blockheads, blind ideologues, batshit whackos, and corrupt “bidnissmen” to be transferred whole and unedited to the national stage like a small town minstrel show suddenly invading Broadway. That it has been an embarrassment to anyone who doesn’t piss in a box and a disgrace to what America used to stand for was, in hindsight, entirely predictable.

The two dumbest ideas Bush brought with him from Texas have to be a) the belief that you can slash taxes to the bone – especially corporate taxes – without hurting core social services like education and maintenance of the infrastructure, and b) the conviction that privatization of core govt responsibilities – like education and maintaining the infrastructure – would somehow be cheaper and more efficient despite the abysmal record of the corporatocracy in both areas, and despite the need to show massive profits to investors, a need the govt doesn’t have.

After nearly 7 years of untrammeled experimentation in both areas, what should have been clear from the beginning has now been proven beyond doubt: both these “policies” are dismal failures. Continue reading

Bloomberg Solves the Energy Crisis

The sometimes staggering greed of corporate America is matched only by its affection for simple solutions to complex problems. Bloomberg.com offers a perspective on energy policy that you may have missed.

President George W. Bush used his State of the Union address to lay out an ambitious energy policy that significantly expands a number of existing programs. The centerpiece of his plan will increase our reliance on biofuels by a factor of five. In other words, he announced a policy that makes no sense whatsoever.

Of all of the embarrassing corners of government policy, our approach to energy may be the most shamefully indefensible. And now the indefensible is going to get bigger.

Sounds OK so far, but where are they going with this? Continue reading

Where Greed Leads: Lodi’s Rip-Off

Lodi, California had a water pollution problem so severe that ‘the state’s Department of Toxic Substances Control had listed the heart of Lodi as a hazardous waste site’. The perps were known–‘ Two drycleaners, a manufacturer and the city’s own aging, leaky sewer lines’–and a deal had been struck to apportion responsibility: if the firms would pay to clean up the land, the city would pay to clean up the water. So far so good.

Actually, so far not good. The real problem wasn’t the pollution, it was in the word ‘pay’. Lodi is a conservative, Republican, anti-govt, anti-tax town proud of its ‘frugality’. It didn’t want to pay. The City Council knew that if it raised its tax rate to pay for the clean-up, it would be thrown out of office in the next election and be replaced by even harder-line tax-cutting radcons. Lodi was so cheap, it preferred poisoning itself slowly to paying a few extra $$ a year on their water bill–which had been a mere $10/month for years.

So when a high-priced corporate attorney suggested a legal scam to get outside insurers to pay for the clean-up instead, the Council jumped on his plan with both feet. Except for Susan Hitchcock, ‘who was derided by colleagues and threatened with censure when she was the only city official to oppose the plan.’

‘The plan’ was a complicated swindle that involved blackmailing the city’s insurance carriers with endless lawsuits and legal delays, tying them up in court for years until they agreed to settle even though the city had never bought insurance from them that covered this situation (it would have been ‘too expensive’). But the plan needed financing to cover legal costs until such time as the insurance companies paid up. Since going to the taxpayers was off the table, the lawyer who suggested the swindle, Michael C Donovan, went to Wall Street and brought in Lehman Bros.

The plan went like this: The city would borrow $16 million from Lehman at 25% interest to finance a barrage of lawsuits. Donovan and his firm would pursue the suits, billing at rates of up to $425 an hour. Courts would shift all the costs to insurance companies. In the end, Lodi would clean up the problem without having to pay for it.

Get out your calculator and figure 25% on $$16MIL$$–Lehman Bros had poached the Lodi City Council like they were eggs. Susan Hitchcock:

“Boy, were we duped. The more I learn, the more I realize it was about greed. There is no free lunch, and everyone knows that.”

Everyone but the rest of the Council, it seems. The result of their paticipation in this scheme was predictable.

Today, the strategy is a shambles, picked apart by state and federal courts and condemned by a federal judge as “environmental litigation for profit.”Donovan has been fired, along with the Lodi city attorney who pushed the plan. Lodi has sued Lehman, alleging the deal was illegal. Lehman has countersued to collect its debt — roughly $25 million to date, city officials say — pitting some of the country’s biggest law firms against a city that once made national news for banning silly string from its downtown parade.

Lodi’s financial future is in question. Interest is accumulating at $325,000 a month. The pollution has spread. And criminal investigations are underway.

This is a cautionary tale. The anti-tax brigade is willing to poison you tomorrow to keep a few bucks in their pockets today. They’re willing to sign onto complicated fraud schemes, engage in legal blackmail, and mortgage the city–your city–to big corporate bankers rather than spend a dime of their own to clean up a mess they helped make. They acknowledge no–NO–responsibility to the society which nurtured them, and no call that society might have on their purses, however legitimate. They would rather watch you die–that’s a price they’re willing to pay.

But you go ahead and vote for them again. Vote for the fantasy, vote for their charm and ‘optimism’. Vote for how good they look on tv and how easy they make everything sound. After all, life is just a reality tv show, and if yours gets cancelled, why, there’ll be another along in a minute to take its place.

Falling Falwell

Jerry Falwell has crossed the line with his open endorsement of Bush and the AUSCS wants his tax-exempt status revoked.

Hoping to send a warning to churches helping the Bush campaign turn out conservative voters, a liberal group has filed a complaint with the Internal Revenue Service charging that an organization run by the Rev. Jerry Falwell has violated the requirements of its tax-exempt status by endorsing Mr. Bush’s re-election.”For conservative people of faith, voting for principle this year means voting for the re-election of George W. Bush,” Mr. Falwell wrote in the July 1 issue of his e-mail newsletter “Falwell Confidential” and on his Web site, falwell.com. “The alternative, in my mind, is simply unthinkable. To the pro-life, pro-family, pro-traditional marriage, pro-America voters in this nation, we must determine that President Bush is the man with our interests at heart. It is that simple.”

He added: “I believe it is the responsibility of every political conservative, every evangelical Christian, every pro-life Catholic, every traditional Jew, every Reagan Democrat, and everyone in between to get serious about re-electing President Bush.”

Mr. Falwell, who helped lead conservative evangelical Protestants into politics 20 years ago as the founder of the Moral Majority, also asked for contributions to a political action committee run by the social conservative Gary Bauer. “It is the organization that I believe can have the greatest impact in re-electing Mr. Bush to the Oval Office,” he wrote.

Can’t get much more blatant than that. Falwell has spent his career skating along that very thin line between endorsement and support, between private and professional acts. This should have been done 30 years ago when he was using his church and his tv show to support Nixon; those were over the line, too. When he got away with it, it just got worse. The fact is that Falwell is a closet CR (Christian Reconstructionist) like Pat Robertson. Neither recognizes any validity in the church-state separation issue; on the contrary, both will do everything they can to erase it.

Yesterday, the Rev. Barry Lynn, executive director of Americans United for Separation of Church and State, argued in a letter to the I.R.S. that one of Mr. Falwell’s religious organizations, Jerry Falwell Ministries, had disseminated the message in violation of tax rules, which restrict tax-exempt religious groups and charitable organizations from engaging in politics.In an interview, Mr. Lynn said the complaint was also a response to the Bush campaign’s effort to enlist thousands of pastors and churchgoers to help get members of conservative congregations to the polls.

“I certainly hope that this sends a clear message that religious organizations have got to operate within federal tax laws restricting partisan politicking,” he said. “And I think the message is that the campaign has been reckless in its approach to churches, recklessly trying to lure them into political activities.”

The word ‘reckless’ is wrong. there’s nothing reckless about it. It’s a calculated ploy to pander to the Christian right and to identify Bush with Christianity, leaving Kerry with..what? The other day a local right-wing talk show host, Jay Severin, told a caller that the choice for voters was a Christian Bush or a ‘Marxist’ Kerry.

The Republican-controlled IRS is unlikely to move on this and court challenges will take years to be decided, but the publicity spawned by a centrist church organization finally, after all these years, protesting Falwell’s contemptuous disregard for the rules could be worth its weight in gold–or votes.

Grover Norquist: Reconstructing The Toad

I don’t usually call people names on this site but today I’m going to make an exeption.

Grover Norquist is a toad.

A right-wing wacko so far out on the fringes that if he takes one more step he’ll fall off the Cliffs of Sanity into the Void, Grover has been a GOP political op since his college days. He has never–NEVER–had a real job, never had to face any form of observable reality, never had to demonstrate that any of his loopy theories have even the most marginal real-world validity, and never to my knowledge said one thing that didn’t add evidence for the view that he’s clinically crazy as a bedbug.

  • “We will hunt [these liberal groups] down one by one and extinguish their funding sources.# My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.”
  • “I want to reduce the size of government in half as a percentage of GNP [gross national product] over the next 25 years. We want to reduce the number of people depending on government so there is more autonomy and more free citizens.”
  • “Every time you cut programs, you take away a person who has a vested interest in high taxes and you put him on the tax rolls and make him a taxpayer. A farmer on subsidies is part welfare bum, whereas a free-market farmer is a small businessman with a gun.”
  • “In the old days, George Wallace stood in the schoolhouse doorway and told children they could not come in. Today, the foes of school choice stand in the doorway and say to the grandchildren of George Wallace’s victims, ‘You cannot get out.'”

He is an extremist’s extremist, a radical conservative’s idea of radical. Continue reading

Latest FITE Newsletter

Newsletter #27

Re: corruption, taxes, and gas prices

Remember all those tax cuts that “benefited American families?” Most American families saved around $450. But the gains have been more than erased by the more than $500 extra paid annually for gasoline and heating oil. Then again, they were already erased by increases in local taxes and fees in the same time period.

We have explained in previous newsletters how Bush’s irresponsible tax cuts and profligate spending caused OPEC to increase oil prices. But the price of crude is only one part of the story. Refiners are making the biggest profits in a long time, and a lot of that has to do with the fact that the Bush administration allowed 33 refinery mergers after the refineries dumped $3.5 million into Bush campaign coffers. The mergers translate into less competition and higher prices.

The refinery-Bush love fest will get even “better” if Bush is reelected because the new energy bill, providing some $25 billion in tax breaks, will likely pass after a Bush win.

Democrats Urge Bush To Act on Gasoline Prices

Oil Company Profits Go Through the Roof–Arianna Huffington

At the same time car owners are having to consider taking out a second mortgage in order to fill up their tanks, oil companies are raking in record profits.ConocoPhillips, for example, the United States’ largest oil refiner, recently reported its largest first-quarter profits ever. And Exxon Mobil just posted its highest first-quarter refining earnings in 13 years.

Coincidentally, these companies and their oil and gas industry brethren have a highly profitable habit of greasing the receptive palms of their friend George Bush—doling out more than $3.5 million to his 2000 and 2004 presidential runs.

So for American consumers, payback is a bitch. And over two bucks a gallon at the gas pump.

NEW TAX CUT LAW USES GIMMICKS TO MASK COSTS;
ULTIMATE PRICE TAG LIKELY TO BE $800 BILLION TO $1 TRILLION
–Center on Budget and Policy Priorities

The tax-cut package the President signed into law May 28 carries an “official” cost of $350 billion through 2013, but does so only through the massive use of budget gimmicks. Every provision in the bill but one expires between the end of 2004 and the end of 2008, and most or all of these provisions are nearly certain to be extended. If the provisions are extended, the cost of the legislation through 2013 will be $807 billion to $1.06 trillion.[1]In addition, the bill is heavily tilted toward the upper end of the income scale, with households that make over $1 million a year receiving an average tax cut or $93,500 in 2003, while households in the middle of the income spectrum receive an average tax cut of $217. Some 36 percent of households will receive no tax cut at all; 53 percent will receive $100 or less. Because the bill provides the preponderance of its tax cuts to higher-income tax filers, a group more likely to save rather than spend its tax benefits than middle- or low-income households, the bill also is likely to be highly inefficient in boosting the economy in the near term.

Charles Palson

Tax Cuts Responsible for Gas Price Hike

FITE Newsletter #27

Re: corruption, taxes, and gas prices

Remember all those tax cuts that “benefited American families?” Most American families saved around $450. But the gains have been more than erased by the more than $500 extra paid annually for gasoline and heating oil. Then again, they were already erased by increases in local taxes and fees in the same time period.

We have explained in previous newsletters how Bush’s irresponsible tax cuts and profligate spending caused OPEC to increase oil prices. But the price of crude is only one part of the story. Refiners are making the biggest profits in a long time, and a lot of that has to do with the fact that the Bush administration allowed 33 refinery mergers after the refineries dumped $3.5 million into Bush campaign coffers. The mergers translate into less competition and higher prices.

The refinery-Bush love fest will get even “better” if Bush is reelected because the new energy bill, providing some $25 billion in tax breaks, will likely pass after a Bush win.

Democrats Urge Bush To Act on Gasoline Prices

Reduce Demand for Oil…Money

Political chemistry lesson number one: whether it’s Saudi Arabia, Nigeria, Texas or Washington, oil money and good government don’t mix. Arianna Huffington runs the numbers that reveal how our oil dependence is weakening our society and threatening our security—and comes out in favor of regime change here at home.

NEW TAX CUT LAW USES GIMMICKS TO MASK COSTS;

ULTIMATE PRICE TAG LIKELY TO BE $800 BILLION TO $1 TRILLION

Center on Budget and Policy Priorities

Charles Palson

—————————–

FITE’s Latest Newsletter

Newsletter #24

We wrote in newsletter #21 how the financial irresponsibility of the Republican controlled congress has helped push up prices. Record spending combined with record tax cuts have contributed to lowering the value of the dollar, so the Arab countries, who are paid in dollars, have raised the price of oil just to maintain their purchasing power on the world market.

You might think, then, that they would at least stop giving even more tax breaks to the super rich to stop this serious threat to our economy. Not a chance! They simply can’t stop giving breaks to their friends, the campaign contributors, to the tune of $170 BILLION. This includes:

* $8 million for makers of arrows. Yes, as in Robin Hood.

* $25 million for foreigners who gamble at US horse and dog races.

The list goes on and on. It’s a feeding frenzy of the super rich, out to wring the last drop out of our government before it goes bust.

Meanwhile, there’s still a shortage of body armor for the troops, our schools lack the funds to satisfy the “No child left behind” program, and local police departments still lack the funding they were promised for terrorist threats.

And Kerry? Not a mention of these problems on his web site!

Corporations Don’t Pay Taxes

FITE Newsletter #22

The big news is not just how the ultra rich – and their corporations – refuse to pay their taxes, but how much this is now mentioned in the media. The latest example is a widely covered investigation of this issue by the General Accounting Office (GAO) just out last week detailing how little corporations now pay in taxes. (Googling got us 12 pages of references to this study)

The findings are as graphic as any we have included in this newsletter. MOST corporations pay less than 5% of their total income in income tax. About 60% paid NO INCOME TAX. This is only another way to say what Warren Buffet said last week: if 550 of the top taxpayers paid the same taxes he himself pays, nobody else would have to pay any taxes at all this year.

Meanwhile, Rush Limbaugh continues to claim the ultra rich pay too much, casting doubt on his assertions that he is no longer a drug user.

[m-Note: For those of you in the Boston area who might want to participate or just wander over to meet the folks behind FITE:)

Join us:

FITE will be at the South Station Postal Annex Thursday night to underscore that we pay as much as we do to the IRS because the super rich are paying less and less. As the usual surprising number bring their tax returns at the last minute, we will provide a fun, pointed presence. Join us! We?re be there (the Annex is attached to South Station) between 10PM and 11:30PM.

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