Why cities should stop fighting big banks and create their own – Salon.com

Frack-happy, Trump-supporting North Dakota probably isn’t the first place you would expect to find a working model, but since 1919, the state has used the Bank of North Dakota to finance everything from student loans to sewer upgrades and small business loans. The bank just posted its thirteenth consecutive year of record profits, earning more than $136 million in 2016. And unlike at a big private bank, that money goes right back into investing in the people, rather than into investors’ pockets.

Source: Why cities should stop fighting big banks and create their own – Salon.com

Three Reasons Trickle-Down Tax Cuts Don’t Work

History shows that bad economic ideas almost never die, especially when they serve the wealthy and powerful. There’s no better example of this truth than trickle-down tax cuts. As we write this, the Trump administration is teeing up a tax plan that slashes taxes for the wealthy and the corporate sector, does little for everyone else (repealing the Affordable Care Act actually raises taxes on some with low and moderate incomes), and stiffs the U.S. Treasury to the tune of $6.2 trillion, according to the Tax Policy Center’s estimates.

Source: Three Reasons Trickle-Down Tax Cuts Don’t Work

Canada willingly makes tax deals with tax havens | Toronto Star

Billions of dollars are moving out of Canada – nearly all tax free – with 92 tax treaties signed.

“I think those of us who warned, 35 years ago, that one of the consequences of this would be, ‘those who have the most would end up paying the least and those with the least would end up paying the most’ — we’ve been proven right. ”

Source: Canada willingly makes tax deals with tax havens | Toronto Star

The Massachusetts Supreme Court Will Decide on a Religion-Related Tax Exemption for the Attleboro Catholic Shrine – The Atlantic

The Massachusetts Supreme Court will decide whether a local shrine should be tax-exempt—a decision that could have broad implications for faith organizations in America.

Source: The Massachusetts Supreme Court Will Decide on a Religion-Related Tax Exemption for the Attleboro Catholic Shrine – The Atlantic

Top 50 US Companies Stash a Trillion Dollars Offshore While Benefitting from Trillions in Government Support | Oxfam America

The 50 biggest US companies, including global brands such Pfizer, Goldman Sachs, Dow Chemical, Chevron, Walmart, IBM, and Procter & Gamble, have stashed more than a trillion dollars offshore and used more than 1,600 subsidiaries in tax havens to avoid billions of dollars in tax each year, according to Oxfam America. In a new report released today ahead of Tax Day, Oxfam outlines how corporate tax dodging costs the US an estimated $100 billion each year, a gap that the average American taxpayer would have to shell out an extra $760 to cover…..

…..The report reveals that the same companies are among the largest beneficiaries of US taxpayer funded support, receiving a staggering $11 trillion in federal loans, loan guarantees and bailout assistance from 2008-2014 even as they avoided hundreds of billions of dollars in taxes over the same period.

Oxfam calculated that during this period, these 50 companies collectively received approximately $27 in loan support for every $1 they paid in federal taxes.“…..

The companies, which made nearly $4 trillion in profits globally between 2008 and 2014, paid an average effective tax rate of just 26.5% – well below the statutory tax rate of 35% in the US and well below the tax rate of an average US worker of 31.5%…..

“For every $1 spent on lobbying, the largest 50 companies received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,”…..

Source: Top 50 US Companies Stash a Trillion Dollars Offshore While Benefitting from Trillions in Government Support | Oxfam America

Panama papers: “an old tradition of English piracy” | openDemocracy

Looking at the documents leaked from Mossack Fonseca and one thing is clear: Britain’s network is once again at the core. More than half of the companies listed in the documents are registered in the UK or its Overseas Territories, and Hong Kong plays a huge role.

Of course, this shouldn’t be surprising. Britain has for for a while now been thought to be the global capital for money laundering. And it’s no shock that nothing has been done about it. In 2010, two years after they crashed the global economy, the City paid for more than half of the Conservative party’s election campaign, helping (along with the aforementioned Lord Ashcroft) them limp them over the line, with a Lib Dem shaped crotch. Though, of course, Labour did little to regulate in the previous 13 years.

If we want to understand modern Britain, first we need to realise that our primary economic function in the world is probably our network of tax havens. After all, around $21tn is estimated to sit in offshore accounts, of which Britain’s territories are said to make up by far the biggest part. Our own GDP is only around $3tn.

Second, we need to get to grips with the serious claims about our role as the global money laundering capital: a function which pushes up the price of the pound, making other exports unaffordable (bye bye steel), and drives up the cost of houses in London and the South East, fuelling a vast speculative bubble which sucks investment out of the rest of the economy.

And third, we need to think about how this gradually dawning economic reality interacts with our politics: not through the obvious corruption of direct bribery, but through revolving doors between government and civil service, through old boy’s networks and friendship groups, through perfectly legal election donations and media domination.

Source: Panama papers: “an old tradition of English piracy” | openDemocracy

The Five Worst Supreme Court Justices In American History, Ranked | ThinkProgress

“the justices of the Supreme Court have shaped a nation where children toiled in coal mines, where Americans could be forced into camps because of their race, and where a woman could be sterilized against her will by state law. The Court was the midwife of Jim Crow, the right hand of union busters, and the dead hand of the Confederacy. Nor is the modern Court a vast improvement, with its incursions on voting rights and its willingness to place elections for sale.”

Even amidst this dark history, certain justices stand out as particularly mean-spirited, ideological or unconcerned about their duty to follow the text of the Constitution. Based on my review of over 150 years of Supreme Court history in Injustices, here are the five jurists who stand out as the worst justices in American history:

The Five Worst Supreme Court Justices In American History, Ranked | ThinkProgress.

Congressional Budget Plans Get Two-Thirds of Cuts From Programs for People With Low or Moderate Incomes

Imagine what it would be like if these people weren’t “christian”?

Congressional Budget Plans Get Two-Thirds of Cuts From Programs for People With Low or Moderate Incomes, by Richard Kogan and Isaac Shapiro, CBPP: The budgets adopted on March 19 by the House Budget Committee and the Senate Budget Committee each cut more than $3 trillion over ten years (2016-2025) from programs that serve people of limited means. These deep reductions amount to 69 percent of the cuts to non-defense spending in both the House and Senate plans.

via Economist’s View

NYC: Real Estate Tax Breaks for Oligarchs

How nauseating: NYC provides tax support to billionaires:

New York City’s method of assessing property values is so out of whack that the buyer of the most expensive apartment ever sold — a $100 million duplex overlooking Central Park — pays taxes as if the place were worth just $6.5 million.

With controversial tax breaks granted to the One57 condo tower, the total property tax bill for the spectacular penthouse is just $17,268, an effective rate of 0.017 percent of its sale price.

By contrast, the owner of a nearby condo at 224 E. 52nd St. that recently sold for $1.02 million is paying an effective rate of 2.38 percent, or $24,279, according to data compiled for The Post by the Revaluate.com real-estate information website.

(via ZeroHedge)         

 Tax Breaks for Oligarchs: The $100 Million NY Apartment With A Property Tax Rate of o.017%

The Obscure Rule Change That Would Make It Easier For Republicans To Pass Massive Tax Cuts | ThinkProgress

Republicans prepare to cook-the-books to justify tax cuts. Most likely, they will simply increase the deficit and then try (yet again) to use that as an excuse to cut social services.

Individual states repeatedly cooked-the-books on pension obligations assuming unrealistic investment returns creating huge unfunded obligations and credit downgrades (New Jersey’s pension problems contributed to that state having the second-lowest credit rating of any State, beaten only by Illinois which also has tremendous unfunded pension obligations.)

The Bush and Reagan tax cuts didn’t spur economic growth and Gov. Brownback has devastated the Kansas budget with tax cuts without growth (and surprise, surprise now proposes cuts in social services). Now the Republicans are preparing to do the same on the Federal level.

For example, last year the JCT estimated that Rep. Dave Camp’s (R-MI) tax bill could generate between $50 billion and $700 billion in additional revenue over a decade thanks to faster growth, but the bigger number included the assumption of large spending cuts that weren’t in his bill. The estimate also didn’t take into account any negative impacts that might arise from those steep cuts. As Chye-Ching Huang and Paul N. Van de Water at the Center for Budget and Policy Priorities write, “If highly optimistic economic and fiscal assumptions like these are included in official cost estimates but then fail to materialize, the result will be higher deficits and debt.”

This is particularly true because there’s little evidence that steep tax cuts will lead to higher economic growth, especially if they end up increasing the deficit. A recent paper from the Brookings Institution found that while tax cuts can have the impact of encouraging people to work, save, and invest, which can generate growth, “if the tax cuts are not financed by immediate spending cuts they will likely also result in an increased federal budget deficit.” For example, it doesn’t find evidence that the Bush tax cuts in 2001 and 2003 led to economic growth. Multiple studies have come to the same conclusion of President Regan’s 1986 tax cuts.

via The Obscure Rule Change That Would Make It Easier For Republicans To Pass Massive Tax Cuts | ThinkProgress.

How Asset Building Tax Subsidies Miss Their Targets

How Asset Building Tax Subsidies Miss Their Targets

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

– See more at: http://taxvox.taxpolicycenter.org/2014/10/07/asset-building-tax-subsidies-miss-targets/#sthash.MFAItClc.dpuf

How Asset Building Tax Subsidies Miss Their Targets

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

– See more at: http://taxvox.taxpolicycenter.org/2014/10/07/asset-building-tax-subsidies-miss-targets/#sthash.MFAItClc.dpuf

| Posted on October 7, 2014, 4:40 pm

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

See more at TaxVox.TaxPolicy.org : Tax subsides for asset building fall short.

Abolish the Corporate Tax?

An interesting paper by Eric Toder of the Urban-Brookings Tax Policy Center and Alan D. Viard of the American Enterprise Institute on replacement of the corporate tax with a shareholder oriented accrual tax program. (Via Martin A. Sullivan at The Tax Analysts Blog.)

The second option, which could be adopted unilaterally by the United States, would replace the corporate income tax with increased taxation of shareholders. American shareholders of publicly traded companies would be taxed on both dividends and capital gains at ordinary income tax rates and capital gains would be taxed upon accrual. The option would ensure that American shareholders in both U.S. and foreign based   multinational corporations pay tax on their worldwide income, while improving incentives for both domestic and foreign corporations to invest in the United States and increasing the competitiveness of U.S.- resident MNCs. It would also curtail a host of closed-economy distortions, including the current system’s biases against corporate equity‐financed investment, dividend payments, the sale of appreciated assets, and specific industries and types of capital. But it would face a number of design challenges and would reduce federal revenue. It would also confront severe political obstacles because it would be perceived as a giveaway to corporations, it would tax accrued gains that many shareholders do not consider to be income, and it would require other tax increases or spending cuts.

Major Surgery Needed: A Call for Structural Reform of the U.S. Corporate Income Tax

 

Banks Helped Hedge Funds Skirt Taxes

Two giant global banks helped at least a dozen hedge funds skirt full tax payment on more than $100 billion worth of stock trades, according to a new congressional investigation made public Monday.

The probe by the Senate Permanent Subcommittee on Investigations will be the subject of a daylong hearing on Tuesday and also spells more trouble for the embattled Internal Revenue Service.

At issue is whether complex financial deals arranged by London-based Barclays Bank PLC and Germany’s Deutsche Bank AG deliberately helped hedge funds skirt U.S. tax laws for financial advantage and bend rules designed to protect the financial system from excessive borrowing to finance speculative bets.

The IRS in 2010 issued a warning against the financial instruments at question in the Senate probe, but roughly four years later, no additional tax money has been collected from the hedge funds involved, Senate investigators said…

The Senate report alleges that Deutsche Bank and Barclays conspired with the hedge funds to create a complex investment vehicle that gave the appearance of being a brokerage account like those used by ordinary Americans who play the stock market.

The difference, however, is that these accounts, called “basket options,” involved billions of dollars in rapid and constant computerized trading. The hedge funds, the report said, were taking short-term profits but being taxed as if they were ordinary investors holding stocks for a year or longer. They were taxed at a rate of 15 percent to 20 percent instead of the rate of ordinary income, which is as high as 39 percent….

Read more here: http://www.mcclatchydc.com/2014/07/21/233975/senate-panel-banks-helped-hedge.html#storylink=cpy

WASHINGTON: Senate panel: Banks helped hedge funds skirt taxes | Economy | McClatchy DC.

How the Government Subsidizes Wealth Inequality

These two subsidies will cost the U.S. federal government about $2 trillion over the next 10 years, almost all of which will go to the wealthiest Americans. Past Congresses have repealed both of these subsidies at different points in time, though they were later revived by subsequent legislation.

How the Government Subsidizes Wealth Inequality | Center for American Progress.