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.
Tag Archives: Tax Scams
Paul Krugman: Donald Trump’s infrastructure plan is one big scam – Salon.com
Trump’s plan to rebuild the country’s infrastructure is really a scheme to enrich wealthy people…..
There is also the fact that private investors will have no interest in building infrastructure that can’t be turned into a profit center. Privatizing these public projects is a gratuitous hand out to select investors, who would be aquiring public assets for “just 18 cents on the dollar, with taxpayers picking up the rest of the tab.
Source: Paul Krugman: Donald Trump’s infrastructure plan is one big scam – Salon.com
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
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 World’s Favorite New Tax Haven Is the United States – Bloomberg
The U.S. “is effectively the biggest tax haven in the world” —Andrew Penney, Rothschild & Co.
Source: The World’s Favorite New Tax Haven Is the United States – Bloomberg
Massive leak reveals offshore accounts of world leaders | Center for Public Integrity
An investigation published today by the International Consortium of Investigative Journalists and its media partners reveals the hidden workings of a secretive industry that banks and lawyers use to hide the financial holdings and dealings of powerful clients, including prime ministers, parliamentarians, plutocrats and criminals, according to a trove of leaked documents.
The files, known as the Panama Papers, exposes the offshore holdings of 12 current and former world leaders and reveals how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies, according to the joint investigative project conducted by ICIJ, the German newspaper Süddeutsche Zeitung and more than 100 other news organizations around the globe. ICIJ is the international arm of the Center for Public Integrity.
The files — which total more than 11.5 million documents — contain new details about major scandals ranging from England’s most infamous gold heist in 1983, an unfolding political money laundering affair in Brazil and bribery allegations currently convulsing FIFA, the body that rules international soccer and is under investigation by the U.S. Justice Department.
Source: Massive leak reveals offshore accounts of world leaders | Center for Public Integrity
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….
WASHINGTON: Senate panel: Banks helped hedge funds skirt taxes | Economy | McClatchy DC.