Published: Monday 27 May 2013

Presently both the House of Representatives and the Senate command America’s attention for all the wrong reasons; and the cynicism of the GOP is astounding as they compare Obama to Nixon, the IRS and Benghazi scandals to Watergate, and are calling for the President’s impeachment.

By the way, this is the same party that impeached Bill Clinton (an exemplary leader) from the White House, and even Newt Gingrich, who was the leading advocate in the House for Clinton’s impeachment in 1998, acknowledges Congress's overreach in the process.

Anyway, drifting back to the present, they've been endless hearings on Benghazi as the GOP desperately tries to uncover any lapse in leadership within the Obama administration; and with a greater intent in targeting Hillary Clinton - who served as Obama’s Secretary of State during the attack on the American consulate in Benghazi, and who is almost certain to be the Democratic Presidential nomination in 2016.

Instead of the current blame-game the GOP is pushing in the political arena, why aren't they primarily concerned with ensuring greater safety for American diplomats stationed around the world? And why haven’t they dedicated their attention to finding the perpetrators in Benghazi and bringing them to justice?

Next considering the IRS scandal, we can safely accept it as another flamboyant display of GOP malarkey, as investigations in the House continue to pour more time and resources in attempts to tie this scandal to President Obama.

To begin with, 501(c) (4) tax exempt organizations are improperly defined under our current tax code, and if anything, Congress should implement clearer and stricter laws for anyone who abuses the system.

Published: Sunday 16 December 2012
“The DGA and RGA have devised national strategies for collecting unlimited funds from unions, corporations, and wealthy individuals, and funneling the money into state races.”

Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Overall, Democrats won seven of this year's 11 contests, but the GOP still managed to pick up one seat in North Carolina, long held by Democrats.

The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the ...

Published: Monday 26 November 2012
“The average effective tax rate fell for all income groups above $500,000, continuing a drop that has occurred for years.”

 

With debate in Washington focused on the taxes paid by the wealthiest Americans, new data from the Internal Revenue Service shows that the effective tax rates for America’s top earners fell even lower in 2010.

The average effective tax rate fell for all income groups above $500,000, continuing a drop that has occurred for years. For incomes above $10 million, the average rate fell from 22.4 percent in 2009 to 20.7 percent in 2010. The reason for the continual drop is clear: the 2003 high-income Bush tax cuts lowered the rate on investment income, and wealthy Americans are deriving more income from investments than they ever have, the Wall Street Journal reports:

The reason for the drop in average tax rates is no secret: It’s the special 15% top rates for capital gains and dividends that President George W. Bush pushed through. In 2009, taxpayers with incomes exceeding $10 million reported 35.8% of their income as capital gains and dividends. That rose to 48.5% for 2010.

Low capital gains rates have helped the wealthy pay lower and lower tax rates even as their incomes have skyrocketed. And while capital gains income makes up almost half of the incomes of the wealthiest Americans, it accounts for 2.2 percent or less for earners under $200,000. Half of all capital gains income goes to just to the richest 0.1 percent of Americans.

The capital gains rate has been steadily eroded since President Ronald Reagan taxed such income equal to wages in the 1980s, and the result has ...

Published: Friday 2 November 2012
An IRS document obtained by the Center for Public Integrity indicates one of its early donors was a nonprofit 501(c)(4) called Coloradans for Economic Growth, which spent millions of dollars from undisclosed sources to support a failed 2008 ballot initiative that would have made Colorado a “right-to-work” state.

 

A secretive nonprofit group that wants to nullify Montana’s campaign finance laws received a $300,000 donation from an anti-union organization aligned with a Colorado furniture executive, an Internal Revenue Service document shows.

American Tradition Partnership, a pro-energy group known for successfully suing Montana to force it to abide by the U.S. Supreme Court’s Citizens United ruling, has also sued the state to protect the identity of its donors — who have funded the ATP’s attack mailers in state races.

An IRS document obtained by the Center for Public Integrity indicates one of its early donors was a nonprofit 501(c)(4) called Coloradans for Economic Growth, which spent millions of dollars from undisclosed sources to support a failed 2008 ballot initiative that would have made Colorado a “right-to-work” state.

Among the initiative’s supporters was Jacob Jabs, president and CEO of American Furniture Warehouse. A 2008 letter to the IRS signed by former ATP employee Athena Dalton said Jabs was the “primary donor” and had promised to give $300,000 to ATP, but only if the IRS expedited its approval of ATP’s application for tax-exempt status.

Jabs has denied knowing anything about the group or giving it any money.

The appeal apparently worked. Three days later, the IRS approved the application.

ATP’s 2008 donors list shows a $300,000 contribution from Coloradans for Economic Growth, but makes no mention of any donation from Jabs.

Dalton did not return numerous calls. According to a report by ProPublica, a nonprofit news organization, Jabs said ...

Published: Wednesday 31 October 2012
“The names of their top donors are revealed to the IRS — but not to the public.”

In the 2012 election, nonprofits have been the preferred vehicle for donors who prefer to keep their identities secret. But with the right lawyers, super PACs, which are supposedly transparent about their donors, can accomplish the same feat.

Social welfare nonprofits, known as 501(c)(4)s by the Internal Revenue Service, file tax returns with the IRS. The names of their top donors are revealed to the IRS — but not to the public.

Super PACs, on the other hand, do report their donors. In some instances, though, those donors are nonprofits. Or the funds might come from shell corporations, which have passed through millions of dollars to the political organizations from unidentified donors in this election.

Aetna’s oops

Occasionally, the veil is lifted on the secrecy of these groups, sometimes inadvertently.

Insurance giant Aetna accidentally disclosed to insurance regulators earlier this year that in 2011, it had contributed $3 million to the American Action Network, a 501(c)(4) group that has spent $11 million targeting mostly Democratic candidates for Congress.

The company later scrubbed the disclosure from its filing and declined to elaborate on it despite demands from institutional shareholders for an explanation.

Last week, the American Energy Opportunity Fund, a 501(c)(4) group led by two executives at an oil and gas company, revealed it had paid for nearly $800,000 in radio ads targeting President Barack Obama on his energy policy and the funds came thanks to a donation from Las Vegas casino titan

Published: Saturday 27 October 2012
In a document filed with the Internal Revenue Service, the group claimed Jacob Jabs as its “primary donor” who had “agreed to provide $300,000” to get the group rolling in 2008.

 

The origin story of the secretive nonprofit that is leading efforts to invalidate Montana’s campaign finance laws keeps getting murkier.

In a document filed with the Internal Revenue Service, the group claimed Jacob Jabs as its “primary donor” who had “agreed to provide $300,000” to get the group rolling in 2008.

It appears the group was referring to Jacob Jabs, the president and CEO of American Furniture Warehouse, based in Colorado, where ATP was created.

But a spokeswoman for Jabs said he's never heard of the group. ATP’s current executive director says he wasn’t with the organization at the time. The woman who signed the document would not return calls from the Center for Public Integrity.

“Someone is not coming clean,” said Marcus Owens, the former director of the division that handles nonprofit corporations at the IRS. “A knowing effort to mislead the IRS is a crime and people go to jail for that.”

Jabs has been a major supporter of Republican candidates and causes. He gave heavily to an anti-union ballot initiative in Colorado in 2008, and is a donor to Mitt Romney.

As for the gift to ATP, Jabs claims it didn’t happen.

“Mr. Jabs has not heard of this group, nor did he give them money,” said Charlie Saulis, Jabs’ spokeswoman.

Athena Dalton signed the September 2008 letter to the IRS which referenced a communication with the furniture magnate, during which Jabs “assured us that he will no longer contribute” if ATP did not ...

Published: Monday 22 October 2012
“Social welfare nonprofits — also called dark money groups because they are not required to identify their donors — have poured tens of millions of dollars into state and federal elections in recent years.”

 

A western nonprofit that played a key role in freeing corporate spending on elections nationwide appears to have misled the IRS when it applied for the tax-exempt status that shields its donors from being publicly disclosed.

Documents obtained by ProPublica and Frontline show that Western Tradition Partnership, now known as American Tradition Partnership, said it would not attempt to sway elections when it asked the IRS to recognize it as a tax-exempt social welfare organization in late 2008.

Shortly before submitting the application, however, Western Tradition Partnership, which bills itself as a "grassroots lobbying" organization dedicated to fighting radical environmentalists, and a related political committee sent out fliers weighing in on candidates for Montana state office. The mailers blitzed districts in Montana days before the Republican primary.

Donny Ferguson, listed as the national director of media of American Tradition Partnership on the group's website, did not return a call or an email for comment.

Social welfare nonprofits — also called dark money groups because they are not required to identify their donors — have poured tens of millions of dollars into state and federal elections in recent years.

As spelled out in the tax code, the primary purpose of such groups is not supposed to be political. Yet a ProPublica story published in August showed that dozens of social welfare nonprofits, some formed in the run-up to the 2010 election, had underreported the extent of their political spending and activities to the IRS.

Western Tradition Partnership, though little-known outside Montana and Colorado, is not just any ...

Published: Saturday 20 October 2012
“Ordinarily if I’ve overpaid my local tax, for example by paying too much in the four required estimated tax payments, the township simply applies the overpayment to my next tax year’s estimated payment. Not so this year.”

 

I went into my local township building Monday to settle up my local income tax bill. I had filed for an extension of my federal and state taxes back in April (call it my "Romney extension), because of my father’s unexpected death a few weeks before the tax filing date and the need to deal with his funeral and with arranging for care for my widowed mother, who has Alzheimer’s, had taken up all my time.

I paid my local tax bill on time though, because at 1 percent of income it is a relatively small amount and was easy to get out of the way. I just made a rough estimate and dropped a check with the one-page form in the mail, figuring I’d settle the amount due after my federal taxes were completed. So, after finally getting my federal and state taxes done, I went to the town hall to settle up. It turned out I’d overpaid my local taxes by $165.

Ordinarily if I’ve overpaid my local tax, for example by paying too much in the four required estimated tax payments, the township simply applies the overpayment to my next tax year’s estimated payment. Not so this year. I was told that the collection of taxes by all the townships in Montgomery County had been privatized -- taken over by a private accountancy firm called Berkheimer Tax Administrator, a company expressly created to bid for outsourced collection operations of local towns, school districts and counties, for a fee.

The immediate problem for me resulting from this astonishing privatization of a fundamental local government activity -- the collection of taxes -- was that the local township office said they could not credit my overpayment as before. “Berkheimer is in charge of the money,” a township official told me, “and they will send you a check for the overpayment.”

“But that means I will be late in filing the first two quarterly estimated payments for 2012,” I said, adding, “but I’m ...

Published: Friday 12 October 2012
Officials there have criticized President Barack Obama’s “eagerness to speed our progression to a low-carbon economy” and argued that the administration is “regulating coal out of existence.”

 

“Environmentalists punish companies without protecting people” is the headline of a column that appeared on the website of the American Action Forum a year ago.

The group has called for increased domestic production of oil, coal and natural gas. Officials there have criticized President Barack Obama’s “eagerness to speed our progression to a low-carbon economy” and argued that the administration is “regulating coal out of existence.”

The American Action Forum is also connected with a nonprofit and a super PAC that have spent millions of dollars on ads backing anti-regulation Republican candidates since 2010.

So why did the Energy Foundation, a San Francisco-based organization that funds the Sierra Club, the National Resources Defense Council, the Environmental Defense Fund and Earth justice give the conservative nonprofit a six-figure donation last year?

Records obtained by the Center for Public Integrity show that the Energy Foundation, touted as the “leading funder of projects that address climate change,” awarded the American Action Forum a $125,000 grant in 2011 for “high-level outreach and communications around carbon policy.”

Jenny Coyle, a spokeswoman for the Energy Foundation, says her organization is “proud to fund a wide variety of organizations whether they are viewed as progressive or conservative.”

“Clean energy is not a partisan issue,” Coyle ...

Published: Friday 5 October 2012
“Under the tax code, social welfare nonprofits may not have political campaign activity as their primary purpose, though exactly what that means is a subject of much debate.”

 

A dark money nonprofit group that has run more than $1 million in ads in the Ohio race for U.S. Senate told the IRS last year it did not plan to spend any money to influence elections when it applied for recognition of its tax-exempt status. 

ProPublica first reported on the group, the Government Integrity Fund, after information from television station political ad files became available online (see our Free the Files project), showing extensive spending by the Fund.

The group’s filings with the IRS  illustrate how “social welfare” nonprofits, also known as 501(c)(4)s, are playing an aggressive role in this election, pouring tens of millions of dollars into races around the country, while taking advantage of the donor anonymity their tax status provides.

The Fund applied for IRS recognition last December and received the IRS’ approval less than two months later.

Question 15 on the application asks, “Has the organization spent or does it plan to spend any money attempting to influence the selection, nomination, election, or appointment of any person to any Federal, state, or local public office or to an office in a political organization?”

Much hinges on this: Under the tax code, social welfare nonprofits may not have ...

Published: Sunday 16 September 2012
Following Birkenfeld’s release last month, on Tuesday the IRS vindicated his actions with the largest amount ever awarded under its whistleblower program.

The IRS has announced a record $104 million reward to a whistleblower who exposed the largest tax evasion scheme in U.S. history. Former UBS AG banker Brad Birkenfeld first reported in 2007 that he and his colleagues had encouraged rich Americans to store more than $20 billion in offshore Swiss bank accounts and cheat the IRS. But after coming forward, Birkenfeld was prosecuted and convicted of conspiracy and sentenced to prison. Following Birkenfeld’s release last month, on Tuesday the IRS vindicated his actions with the largest amount ever awarded under its whistleblower program. We’re joined by Stephen Kohn, an attorney for Birkenfeld and executive director of the National Whistleblowers ...

Published: Thursday 13 September 2012
I’m a reporter, and it’s not my job to preserve Democrats. But preserving democracy, with that fragile little d, that means something to me.

The following is an excerpt from Greg Palast's upcoming book "Billionaires & Ballot Bandits." Stay tuned to NationofChange for updates on the book's release.  

Why Obama Is Likely to Lose in 2012” is the title of a column Karl Rove wrote in the Wall Street Journal in June 2011.

It’s not Rove’s prediction: this is his plan to make sure Obama will lose. That’s fine with me—if Rove prefers vanilla to chocolate, hey, it’s a free country. But how Rove plans to take Obama down is contained in the subhead, and it gives me the chills:

“even a small drop in the share of black voters would wipe out [Obama’s] winning margin in North Carolina.”

Here, Rove is not talking about winning by convincing black voters to vote Republican. The key to victory is preventing the black vote. Period. Rove suggests, with a wink and nudge, the Game Plan:

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Published: Monday 27 August 2012
“The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion.”

 

Conservatives force the deficit issue, ignoring job creation, and insisting that tax increases on the rich wouldn't generate enough revenue to balance the budget. They're way off. But it takes a little arithmetic to put it all together. In the following analysis, data has been taken from a variety of sources, some of which may overlap or slightly disagree, but all of which lead to the conclusion that withheld revenue, not excessive spending, is the problem. 

 

1. Individual and small business tax avoidance costs us $450 billion.

 

The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion. In way of confirmation, an independent review of IRS data reveals that the richest 10 percent of Americans paid less than 19% on $3.8 trillion of income in 2006, nearly $450 billion short of a more legitimate 30% tax rate. It has also been estimated that two-thirds of the annual $1.3 trillion in "tax expenditures" (tax subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes) goes to the top quintile of taxpayers. Based on IRS apportionments, this calculates out to more than $450 billion for the richest 10 percent of Americans. 

 

 

2. Corporate tax avoidance is ...

Published: Friday 24 August 2012
“To understand how all this happened, it’s worth returning to Justice Anthony Kennedy’s opinion in Citizens United, and the political system the court envisioned.”

 

The emergence of nonprofits as the leading conduit for anonymous spending in this year's presidential campaign is often attributed to the Supreme Court's 2010 Citizens United ruling, which opened the money spigot, allowing corporations and unions to buy ads urging people to vote for or against specific candidates.

But a closer look shows that there are several reasons that tens of millions of dollars of secret money are flooding this year's campaign. Actions — and inaction — by both the Federal Election Commission and the Internal Revenue Service have contributed just as much to the flood of tens of millions of dollars of secret money into the 2012 campaign. Congress did not act on a bill that would have required disclosure after Citizens United and other court rulings opened the door to secret political spending.

To understand how all this happened, it's worth returning to Justice Anthony Kennedy's opinion in Citizens United, and the political system the court envisioned. In the decision's key finding, Kennedy and four other justices said the First Amendment entitled corporations and unions to the same unlimited rights of political speech and spending as any citizen.

But in a less-noticed portion of the ruling, Kennedy and seven of his colleagues upheld ...

Published: Wednesday 22 August 2012
“Eighteen of 106 social-welfare nonprofits that we identified as having spent money on elections in 2010 would not provide us with these documents, despite repeated requests and reminders that they were legally obligated to do so.”

It was mid-July and I had come to Hilltop Public Solutions because Jessie Bradley, a partner with the consulting firm, appeared to run two social-welfare nonprofits out of its Washington, D.C., office.

ProPublica was preparing a story about how such groups – also known as 501(c)(4)s for their section of the tax code – were pouring money into elections. The nonprofits run by Bradley, Economy Forward and the Citizens for Strength and Security Action Fund, or CSS Action Fund, had spent more than $3 million supporting Democrats in 2010, records showed.

I wanted the groups’ tax returns and the applications they had submitted to get IRS recognition of their tax-exempt status. The law requires 501(c)(4)s to make these forms available for inspection immediately if someone requests them in person or to provide them by mail within 30 days.

When I reached the office suite listed as Hilltop’s headquarters, however, it turned out to be a law firm.

The firm’s receptionist said Hilltop was located in an inaccessible area of the building and called Bradley to convey my request. 

Bradley said she was busy.

The receptionist asked if I could meet with someone else. “She hung up on me,” the secretary said, putting down the phone.

Bradley wasn’t the only one who refused to provide ProPublica with

Published: Tuesday 21 August 2012
Did Romney use a 2009 IRS tax amnesty to escape being caught in a giant multi-year tax fraud? The 2009 tax return he won't release has the answer.

 

A lot of theories have been put forward to try and explain why Romney has allowed his campaign to become bedeviled by charges of tax dodging, but what if what he is hiding is felonious tax fraud?

Okay, so he's taken the legal option of delaying filing his 2011 taxes, which every taxpayer is entitled to do without penalty and without having to give any explanation until October 15 this year (I agree it's a little weird when a super-rich guy who pays accountants by the dozen does this, but hey). The nagging question though is why he hasn't just responded to the demand that he release two years of tax returns like John McCain did in 2008 by simply releasing his 2009 tax filing, along with the 2010 return he already released?

The answer may well be that 2009 was the year that the Treasury Department decided to offer an amnesty from prosecution for tax fraud to any of the tens of thousands of millionaires who were known or suspected to have illegally hidden income abroad in the Cayman Islands or in Swiss banks -- a felony, but one that people thought they'd never be caught at.

That year alone, some nearly 30,000 people, many of them no doubt prominent in society, politics and business, and customers of the finest accounting firms, reportedly voluntarily came forward to the IRS to admit that they had hidden some of the estimated $100 billion in income that crooked rich Americans have for years been secreting away in banks overseas. Under the terms of the program, they were able to just report their fraud, pay the taxes, penalties and interest on the money and then walk away scott free, with no charges and with their returns kept confidential by the agency.

That is, ...

Published: Monday 20 August 2012
Published: Sunday 12 August 2012
Is Mitt doing more than honoring our national legacy of shrewd thrift, plus fierce resistance to centralized authority? 

Full disclosure: rest assured nothing in this tax defense of the grievously-assaulted GOP entrant reflects my father’s 40 year CPA career. I did however, inherit, his honest tax credo: declare all income (certainly with paper trails), only deduct what's defensible by logic or statute, and hire the best tax wizards you can afford. Ask Mitt Romney, who’s mastered the art of spending a few hundred thousand dollars on good advice to save multimillions – perhaps all above board, as far as we know. Sure. I put aside whether fewer, highly-suspicious tax technicalities, even millions buried offshore, wouldn’t have better served Mitt’s thin presidential resume. No one's perfect and wealth outlasts losing.    

  

Nevertheless, let us not throw the not quite born candidate out with the tax water, as Harry Reid’s outlandish, obvious charade attempts. Is Mitt doing more than honoring our national legacy of shrewd thrift, plus fierce resistance to centralized authority?  That belief system arrived with our Pilgrim Parents, then cemented by that most frugal spendthrift-Founding Father, Ben Franklin. He codified that unquenchable Yankee credo: a hard-earned coin saved (that is, from gov’mint takeover) is twice as good as any money earned (especially if taxable).  

  

Tax Avoidance: Double Winner 

 

First, the owner freely spends it all, doubtlessly founding an array of job-creating enterprises. Second, that infamous carryover from prehistoric times, the government, can’t give it away fast enough to the wastrels, equal to tossing dollars down the toilet. If any of us committed that literal federal crime (destroying money), we’d not only have wet, grimy, sullied greenbacks in inaccessible piping, but a huge plumbing bill and screaming ...

Published: Friday 3 August 2012
Published: Friday 13 July 2012
Published: Tuesday 3 July 2012
“The penalty-tax that the individual mandate imposes will soon constitute one of the most regressive taxes in the United States.”

Last Thursday the Supreme Court upheld President Obama’s signature domestic policy –the Affordable Health Care Act –by arguing that its individual mandate falls under Congress’s jurisdiction to levy taxes. Chief Justice Roberts wrote in his majority opinion that the Affordable Care Act’s mandate to purchase health insurance may “reasonably be characterized as a tax [and because] the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” 

Meanwhile, the Obama administration has long asserted that the mandate—the bill’s fulcrum, really—is necessary to ensure that other provisions of the law function smoothly. That is, supporters view the mandate as essential to market based reform; without it, they argue, many healthy people would remain without insurance coverage, premiums for individuals and employers would accelerate, and insurance markets could become unstable. When the uninsured who can afford premiums do become ill, unaffordable health care costs are often absorbed by the rest of the population.

Unfortunately, the penalty-tax that the individual mandate imposes will soon constitute one of the most regressive taxes in the United States. (The terms “penalty” and “tax” here are effectively fungible. Whatever the nomenclature, it’s the functional equivalent of a tax.) The penalty-tax structure authorized by this law inherently disadvantages low income earners who, in effect, pay proportionally more on fewer dollars. Taxes imposed here are uncannily akin to the regression rates of sales and social security taxes. Take a look at the scatter chart below:

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Published: Thursday 28 June 2012
“The ruling hands Obama a campaign-season victory in rejecting arguments that Congress went too far in approving the plan.”

The Supreme Court on Thursday upheld virtually all of President Barack Obama's historic health care overhaul, including the hotly debated core requirement that nearly every American have health insurance.

The 5-4 decision meant the huge overhaul, still taking effect, could proceed and pick up momentum over the next several years, affecting the way that countless Americans receive and pay for their personal medical care.

The ruling hands Obama a campaign-season victory in rejecting arguments that Congress went too far in approving the plan. However, Republicans quickly indicated they will try to use the decision to rally their supporters against what they call "Obamacare," arguing that the ruling characterized the penalty against people who refuse to get insurance as a tax.

Breaking with the court's other conservative justices, Chief Justice John Roberts announced the judgment that allows the law to go forward with its aim of covering more than 30 million uninsured Americans. Roberts explained at length the court's view of the mandate as a valid exercise of Congress' authority to "lay and collect taxes." The administration estimates that roughly 4 million people will pay the penalty rather than buy insurance.

Even though Congress called it a penalty, not a tax, Roberts said, "The payment is collected solely by the IRS through the normal means of taxation."

Roberts also made plain the court's rejection of the administration's claim that Congress had the power under the Constitution's commerce clause to put the mandate in place. The power to regulate interstate commerce power, he said, "does not authorize the mandate. "

GOP presidential candidate Mitt Romney renewed his criticism of the overhaul, calling it "bad law" and promising to work to repeal it if elected in November.

Stocks of hospital companies rose sharply, and insurance companies ...

Published: Monday 25 June 2012
The wealthiest Americans have a long-held delusion, passed along through their media outlets to the rest of us, that they pick up the bill for most of our country's needs, and that middle-class public workers and unions benefit from their generosity.

 

 

The wealthiest Americans have a long-held delusion, passed along through their media outlets to the rest of us, that they pick up the bill for most of our country's needs, and that middle-class public workers and unions benefit from their generosity. But facts, not emotions, are needed to provide the truth. And there are plenty of eye-opening facts that refute the far-right claims.

 

 

Fact #1: Government employees make up 16.7% of U.S. employees and receive 17.6% of the pay.

 

The public vs. private "who gets higher pay?" battle has convincing arguments on both sides. Yet a careful analysis of Census Department data confirms that government employees earn less than 1% more than private sector employees. Recent (2009) compensation figures reveal that:

 

- 107 million private sector workers earned $4,829 billion, an average of $45,000

- 2.8 million federal government workers earned $192 billion, an average of $68,000

- 4.6 million state government workers earned $226 billion, an average of $48,700

- 14 million local government workers earned $612 billion, an average of $43,000

 

With all benefits included, the 21.4 million government employees make up 16.7% of U.S. employees and receive 20% of the total compensation. The higher benefits exist mainly at the federal level. For the states, government employees make up 3.6% of the U.S. workforce and receive 3.9% of the total compensation.

 

The federal pay advantage is largely due to higher education levels and more advanced professional skills. The Economic Policy Institute, Bureau of Economic Analysis, and Congressional Budget Office all acknowledge this. 44% of federal ...

Published: Tuesday 19 June 2012
“Since their creation in 2010, the Center for Public Integrity and Center for Responsive Politics found that about 15 percent of super PAC spending has been done by groups that have reported receiving contributions from a 501(c)(4) or a 501(c)(6).”

 

While super PACs were cast as the big, bad wolves during the last election, the groups were outspent by “social welfare” organizations by a 3-2 margin, a trend that may continue amid reports that major donors are giving tens of millions of dollars to the secretive nonprofit groups.

A joint investigation by the Center for Public Integrity and the Center for Responsive Politics has found that more than 100 nonprofits organized under section 501(c)(4) of the U.S. tax code spent roughly $95 million on political expenditures in the 2010 election compared with $65 million by super PACs.

Nearly 90 percent of the spending by these nonprofits — more than $84 million — came from groups that never publicly disclosed their funders, the joint analysis of Federal Election Commission data found. Another $8 million came from groups that only partially revealed their donors.

Unlike the nonprofits, super PACs are required to release the names of their contributors.

In terms of party allegiance, ...

Published: Wednesday 13 June 2012
Published: Wednesday 6 June 2012
“The debt is growing because of obligations entered into long ago, many under George W. Bush – including two giant tax cuts that went mostly to the very wealthy that were supposed to be temporary and which are still going, courtesy of Republican blackmail over raising the debt limit.”

 

JP Morgan Chase,  Goldman Sachs, BP, Chevron, WalMart, and billionaires Charles and David Koch are launching a multi-million dollar TV ad buy Tuesday blasting President Obama over the national debt.

Actually, I don’t know who’s behind this ad because there’s no way to know. And that’s a big problem.

The front group for the ad is Crossroads GPS, the sister organization to the super PAC American Crossroads run by Republican political operative Karl Rove.

Because Crossroads GPS is a tax-exempt nonprofit group, it can spend unlimited money on politics — and it doesn’t have to reveal where it gets the dough.

By law, all it has to do is spent most of the money on policy “issues,” which is a fig leaf for partisan politics.

Here’s what counts as an issue ad, as opposed to a partisan one. The narrator in the ad Crossroads GPS is launching solemnly intones: “In 2008, Barack Obama said, ‘We can’t mortgage our children’s future on a mountain of debt.’ Now he’s adding $4 billion in debt every day, borrowing from China for his spending. Every second, growing our debt faster than our economy,” he continues. “Tell Obama, stop the spending.”

This is a bald face lie, by the way.

Obama isn’t adding to the debt every day. The debt is growing because of obligations entered into long ago, many under George W. Bush – including two giant tax cuts that went mostly to the very wealthy that were supposed to be temporary and which are still going, courtesy of Republican blackmail over raising the debt limit.

In realty, government spending as a portion of GDP keeps dropping.

As I said, I don’t know who’s financing this big lie but there’s good reason to think it’s some combination of Wall Street, big corporations, and the billionaire Koch brothers.

According ...

Published: Monday 4 June 2012
Local government payrolls bring the total up to about $1 trillion, still less than the total amount of cash being held by non-financial corporations.

 

Half of America has been deceived into believing that union employees and government workers are the problem in our country. The following five facts all send the same message to voters: wealthy individuals and corporations, not middle-class wage earners, have taken your money.

 

(1) $430 billion: The total payroll for federal and state employees in 2010. This is less than the amount of untaxed cash being held overseas by non-financial corporations. Local government payrolls bring the total up to about $1 trillion, still less than the total amount of cash being held by non-financial corporations.

 

(2) $800 billion: The total earnings of unionized employees in 2011. Even though union members make up about 12% of the workforce, their total pay amounts to just 10% of adjusted gross income as reported to the IRS.

 

(3) $900 billion: The total salaries of corporate executives and financial industry employees. CEOs and managers and finance workers made more than ALL 16 million unionized employees in the United States. They made almost as much as ALL 17.5 million full-time government workers in the United States.

 

(4) $1 trillion: The 30-year redistribution of income to the rich. Since 1980 our country's productivity has steadily risen, with total income doubling approximately every 10 years. If the bottom 90% of America had shared in this prosperity at a level consistent with 1980 incomes, they would be making $45,000 a year instead of $35,000. Instead, the richest 1% TRIPLED their share. That's an extra trillion dollars a year.

 

(5) 22 cents: What corporations are willing to pay to support government. For every dollar of workers' payroll tax paid in the 1950s, corporations paid three dollars in income taxes. Now it's 22 cents. ...

Published: Thursday 31 May 2012
“African-American churches, historically at the forefront of the nation's civil and voting rights efforts, are grappling this election year with how to navigate through the wave of new voting-access laws approved in many Republican-controlled states, laws that many African-Americans believe were implemented to suppress the votes of minorities and others.”

Attorney General Eric Holder spoke to attendees at a summit of the Congressional Black Caucus and the Conference of National Black Churches about the importance of voting as well as the significance of new voter ID laws, which disproportionately affect minorities. The summit was designed, in part, to help black leaders learn about the new laws -- yet Rush Limbaugh and a Fox News contributor attacked Holder's appearance as “reprehensible” and “unseemly.”

C-SPAN: “Attorney General Eric Holder Delivers The Keynote Address At A Meeting Of The Congressional Black Caucus And The Conference Of National Black Churches.” From C-SPAN.org:

Attorney General Eric Holder delivered the keynote address at a meeting of the Congressional Black Caucus and the Conference of National Black Churches.

The day also features panels on the state of voting rights, protecting a church's non-profit status, and energizing constituents and congregants to vote.

The Attorney General has announced that he will vigorously defend the Voting Rights Act of 1965, including the Section 5 provision that Southern states or those that have historically disenfranchised black voters must clear any changes to voting law or electoral systems with the Justice Department. [C-SPAN.org, 5/30/12]

McClatchy: Summit Was Planned To “Discuss The New Laws, Their Potential Impact On African-American Voters And How Churches Can Educate Parishioners.” From McClatchy:

African-American churches, historically at the forefront of the nation's civil and voting rights efforts, are grappling this election year with how to navigate through the wave of new voting-access laws approved in ...

Published: Tuesday 8 May 2012
Published: Sunday 6 May 2012
“From Manhattan to Monaco, the world’s super rich are fashioning themselves into a new global tribe of footloose and stateless. The rest of us get to gawk — and foot the ultimate bill.”

Back in 1863, in the middle of the Civil War, a short story took the American reading public by storm. Edward Everett Hale’s “The Man Without a Country” told the tale of a poor treasonous soul sentenced to spend the rest of his life endlessly sailing the seven seas, in perpetual exile, as a prisoner aboard Navy warships.

How sad, sighed 19th-century Americans.

How quaint, muse many of our 21st-century super rich. These awesomely affluent simply do not see statelessness as a penalty. They see statelessness as a goal.

And the ranks of our contemporary “men without a country” are increasing. The number of Americans who’ve formally renounced their U.S. citizenship has jumped by over seven-fold, from 235 in 2008 to 1,780 last year.

The spark for this surge in statelessness? Since 2008, U.S. tax officials have been endeavoring to clamp down more firmly on overseas tax evasion. Swiss private banks, for instance, have come under new pressure to divulge data on the millions wealthy Americans have stuffed in secret accounts.

That pressure has some of those wealthy irritated enough to renounce their ties to Uncle Sam. The cost to renounce: a $450 paperwork fee and an “exit tax” on unrealized ...

Published: Monday 30 April 2012
“We hear these claims often, even though they’re entirely false. An analysis of the facts should make that clear.”

We hear these claims often, even though they're entirely false. An analysis of the facts should make that clear.

(1) The Rich Pay Almost All the Taxes

That's simply not true. The percentage of total taxes paid by the very rich (the top 1%) is approximately the same as the percentage paid by middle class Americans (the 4th quintile, average income $68,700). Here are the details:

Internal Revenue Service figures show that the very rich paid 23% of their incomes in federal income taxes in 2006. The middle class paid about 8% of their incomes in federal income taxes. Based on U.S. Congressional Budget Office figures, the very rich pay just under 2% of their incomes toward social security, while the middle class pays just under 10%. According to a study by The Institute on Taxation and Economic Policy, the very rich pay about 7% of their incomes in state and sales and property and excise taxes, while the middle class pays approximately 10%. Another year of Bush tax cuts will reduce the taxes of the very rich by at least 3% more than the middle class.

So total taxes for the very rich are 29% of their incomes (23% + 2% + 7% - 3%). Total taxes for the middle class are 28% of their incomes (8% + 10% + 10%). These figures agree with CTJ's 2011 estimate of total taxes paid.

(2) Tax Rates Are Too High

In 2009, the United States ranked 26th out of 28 OECD countries in total federal, state, and local taxes as a percent of GDP. Only Chile and Mexico had lower tax rates.

According to the Center on Budget and Policy Priorities, "federal taxes on middle-income Americans are near historic lows." For taxpayers in the top 1%, the tax burden has fallen dramatically in recent years.

At very high income levels, beginning at about the million dollar range, federal income tax actually becomes regressive. Effective tax rates level off at about 25%, and then go down from there. This is because all incomes over ...

Published: Wednesday 25 April 2012
“Facing an IRS complaint filed by Common Cause, one of the leading advocacy groups working to expose the corporate-funded bill mill, ALEC has also launched an assault on renewable energy legislation, according to a well-documented report written by Bloomberg News”

The American Legislative Exchange Council (ALEC), as covered previously by DeSmogBlog, is the “Trojan Horse” behind mandating that climate change denial (“skepticism,” or “balance,” in its words) be taught in K-12 classrooms.

Well, ALEC is at it again, it appears. Facing an IRS complaint filed by Common Cause, one of the leading advocacy groups working to expose the corporate-funded bill mill, ALEC has also launched an assault on renewable energy legislation, according to a well-documented report written by Bloomberg News.

The two developments are worth unpacking.

Common Cause IRS Complaint

The Washington Post reported that on April 23, Common Cause “had filed an IRS complaint accusing ALEC of masquerading as a public charity…while doing widespread lobbying.”

ALEC is trying to brush aside this complaint, but Common Cause presents a compelling case.

“It tells the IRS in its tax returns that it does no lobbying, yet it exists to pass profit-driven legislation in statehouses all over the country that benefits its corporate members,” 

Published: Sunday 22 April 2012
“The annual federal income tax filing deadline came and went with America’s super rich once again stiffing Uncle Sam for hundreds of billions of dollars in taxes due.”

Every once in a while, our plutocrats drop all democratic pretense and arrogantly offer up a raw display of their ample political might. One such display came last week. On Monday, a proposal to fix a minimum tax on America's rich — the “Buffett rule” — went nowhere in the U.S. Senate.

The Buffett rule proposal needed 60 votes to beat back a filibuster. The actual votes the proposal received: just 51.

But last week's most impressive show of plutocratic power actually came the next day — and made no headlines. On Tuesday, the annual federal income tax filing deadline came and went with America’s super rich once again stiffing Uncle Sam for hundreds of billions of dollars in taxes due.

We're not talking loopholes here, those entirely legal tax code provisions — like lower tax rates for capital gains — that give the rich preferential treatment at tax time. We're talking outright tax evasion, the willful misreporting of income.

The IRS periodically tries to measure how much of this cheating goes on. The latest estimate, released this past January and covering 2006, puts the tax gap — the difference between taxes owed but not paid on time — at $385 billion.

Some of this gap represents “innocent” tax return mistakes, the rest outright fraud. Taxpayers at all income levels, of course, cheat. But the only fiscally consequential cheating comes from the super rich. They both cheat at a higher rate than Americans of modest means and — given the enormity of their incomes — deny Uncle Sam far more tax dollars when they do cheat.

Why can't Uncle Sam get at those lost tax dollars? Have the super rich and their ...

Published: Sunday 22 April 2012
“At such a sensitive time, it is no surprise to hear politicians pitching the idea of “tax reform” – suggesting that they can simplify the system, close loopholes, and use the proceeds to reduce tax rates.”

Tax time in the United States – the dreaded mid-April deadline for filing annual income-tax forms – has come and gone. The system, Americans have been reminded, has become painfully complex, with many a loophole through which one might try to squeeze. The fear of an audit by the Internal Revenue Service lurks in homes across the country.

At such a sensitive time, it is no surprise to hear politicians pitching the idea of “tax reform” – suggesting that they can simplify the system, close loopholes, and use the proceeds to reduce tax rates. The allure of such appeals is that a crackdown on others’ tax avoidance will mean that you personally will pay less in taxes.

 

Follow Project Syndicate on Facebook or Twitter. For more from Simon Johnson, click here.

In the policy jargon increasingly heard in today’s political discourse, tax reform will be “revenue neutral” – meaning that it will not worsen the budget deficit or drive up the national debt. The broader subliminal message is that you can have whatever you currently expect in terms of government services for less than it costs you now.

The problem with this vision of tax reform is that it is magical – an attractive illusion with no basis in reality. Consider the recent pronouncements of Mitt Romney – now the presumptive Republican candidate to challenge President Barack Obama in November. Romney wants to cut tax rates, mainly benefiting those at the upper end of the income distribution. He also wants to close loopholes, but none of the details that he has offered add up to much. His boldest proposal – eliminating deductions for interest paid on mortgages on ...

Published: Saturday 21 April 2012
“This year’s Institute for Policy Studies Executive Excess report, our 18th annual, explores the intersection between CEO pay and aggressive corporate tax dodging.”

Guns don't kill people, the old saw goes. People do.

By the same token, corporations don't dodge taxes. People do. The people who run corporations. And these people — America's CEOs — are reaping awesomely lavish rewards for the tax dodging they have their corporations do.

In fact, corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes.

This year's Institute for Policy Studies Executive Excess report, our 18th annual, explores the intersection between CEO pay and aggressive corporate tax dodging.

We researched the 100 U.S. corporations that shelled out the most last year in CEO compensation. At 25 of these corporate giants, we found, the bill for chief executive compensation actually ran higher than the company's entire federal corporate income tax bill.

Corporate outlays for CEO compensation — despite the lingering Great Recession — are rising. Employment levels have barely rebounded from their recessionary lows. Top executive pay levels, by contrast, have rebounded nearly all the way back from their pre-recession levels.

This contrast shows up starkly in the 2010 ratio between average worker and average CEO compensation. In 2009, we calculate, major corporate CEOs took home 263 times the pay of America's average workers. Last year, this gap leaped to 325-to-1.

Among the nation's top firms, the S&P 500, CEO pay last year averaged $10,762,304, up 27.8 percent over 2009. Average worker pay in 2010? That finished up at $33,121, up just 3.3 percent over the year before.

What are America's CEOs doing to deserve their latest bountiful rewards? We have no evidence that CEOs are fashioning, with their executive leadership, more effective and efficient enterprises. On the other hand, ample evidence suggests that CEOs and their ...

Published: Saturday 21 April 2012
For most Americans, April is a month marked by terrible stress, paper pushing and a last minute mad dash to get the taxes finished before April 15 (or the 17th, this year).

I am big fan of the post office in general and of my local post office in particular. I go there as often as I can (honestly, I do). But, when I needed stamps on Monday, I was not prepared for the line snaking out the door. I had completely forgotten about tax day! I girded myself for a long wait, but the clerks were the very picture of efficiency and I was in and out and all stocked up on bonsai stamps in ten minutes.

While I stood in line, I thought about the peculiarity of our tax system. For most Americans, April is a month marked by terrible stress, paper pushing and a last minute mad dash to get the taxes finished before April 15 (or the 17th, this year). People plan and pine and worry and most pay a sizable percentage (16-20 percent even for people of lower income brackets) of their annual income in taxes.

Corporations?  Not so much. The New York Times reported last March that for 2010, General Electric paid no taxes on $5.1 billion in U.S.-based profits. Behemoth Bank of America made $4.4 billion in 2009 and got back a very tidy tax return from the federal government — $2.3 billion. Most Americans are lucky if they can pay off an overdue credit card bill (probably from Bank of America) or treat themselves to a nice dinner out or weekend away with their tax returns. Verizon (can you hear me now?) “earned” 

Published: Friday 20 April 2012
As a nonprofit, the group is not required to publicly name its donors, except if they give “for the purpose of furthering” a political advertisement.

Sixty-two percent of funds raised by two conservative groups associated with former Bush adviser Karl Rove have come from mystery donors, a statistic that shows the increasingly important role being played by nonprofits in a post-Citizens United political world.

American Crossroads, a super PAC, and Crossroads Grassroots Policy Strategies, a nonprofit, were founded in 2010 by Rove and another former Bush adviser, Ed Gillespie. Together, they raised $123 million through the end of 2011, according to an iWatch News review of Federal Election Commission data and Internal Revenue Service filings.

Of that sum, $76.8 million, or 62 percent, went to Crossroads GPS, which is a nonprofit, “social welfare” group organized under section 501(c)(4) of the U.S. tax code. Like American Crossroads, Crossroads GPS can pay for advertising that attacks political opponents by name and urges viewers to vote against them.

But unlike the super PAC, GPS is prohibited from making politics its “primary purpose,” according to the IRS, a rule that these politically active nonprofits have interpreted to mean they can spend up to 49 percent of their funds on such advertising.

As a nonprofit, the group is not required to publicly name its donors, except if they give "for the purpose of furthering” a political advertisement. (GPS has told the FEC that it has not “solicited or received” contributions earmarked for such expenditures.)

Jonathan Collegio, the communications director of Crossroads GPS, said that the group’s unnamed donors, which number fewer than 100, are “individuals and businesses that support its vision of lower taxes and smaller government.”

Election law expert Rick Hasen, a professor at the University of California-Irvine law school, told iWatch ...

Published: Monday 16 April 2012
Tax authorities worldwide, notably in the U.S. and U.K., are under mounting pressure to show that large companies are shouldering their share of the tax burden as part of a broader political debate about fairness and corporate social responsibility.

In November 2001, Bank of New York, a mid-tier U.S. bank, transferred nearly $8 billion of its own assets to a trust in the small, business-friendly state of Delaware through several layers of newly created companies.

A mixture of home mortgages, shares and other securities, the transferred assets made up almost 10 percent of the bank’s total assets at the time. Yet, the transaction was not discussed with BNY’s regulators; nor was it noted in the bank’s financial statements or annual report. It had little practical effect on the lender’s day-to-day operations — the assets continued to be managed and serviced by the same employees in New York.

But it was a critical first step in setting up a complex structure known as STARS — structured trust advantaged repackaged securities — which U.S. tax authorities claim was used by several American banks as an abusive tax shelter that has cost the government more than $1 billion in tax revenue in the past decade.

This week, BNY will square off against the Internal Revenue Service in U.S. Tax Court in New York over STARS and the tax benefits tit triggered for the U.S. bank and U.K.-based Barclays, its counterpart in the deal. At issue is whether STARS was set up primarily to generate artificial foreign-tax credits, as the IRS contends; or was a legal way for BNY to obtain financing at rock-bottom rates.

The arguments heard this week will pose a crucial test of the U.S. government’s resolve to rein in sophisticated corporate tax planning that has sapped vast amounts of potential revenue. Tax authorities worldwide, notably in the U.S. and U.K., are under mounting pressure to show that large companies are shouldering their share of the tax burden as part of a broader political debate about fairness and corporate social responsibility.

“We are upping our game in the large business area, particularly as it relates to international tax ...

Published: Tuesday 27 March 2012
The 90-minute health-care argument Monday morning had little to do with the merits or even the substance of the 2,700-page health-care law passed by congressional Democrats in 2010, but instead, opening-day arguments centered on whether lawsuits challenging the case are premature.

Supreme Court justices on Tuesday will enter the second and most crucial day of historic, closely watched arguments that could determine whether most Americans will have to buy health care coverage or pay penalties.

The legal and political world will be watching closely. Monday was a preview _ while justices heard arguments on a tax-related case in chambers, lawyers, politicians and protesters gathered outside, arguing their own cases. And to add punctuation, Republican presidential candidate Rick

Santorum stopped by, using the forum to tout his staunch opposition to the health care mandate.

Inside, Chief Justice John Roberts offered a signal of his own.

"We cannot avoid a decision simply because the case has political implications," he said on Monday morning, while summarizing an unrelated decision.

The 90-minute health-care argument Monday morning had little to do with the merits or even the substance of the 2,700-page health-care law passed by congressional Democrats in 2010. Instead, opening-day arguments centered on whether lawsuits challenging the case are premature.

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Published: Sunday 25 March 2012
Tax experts say it’s possible that businesses are using an aggressive interpretation of the law to wring a tax advantage out of their donations to these groups.

The Supreme Court’s 2010 Citizens United decision opened the way for unlimited corporate spending on politics and has led to the proliferation of nonprofit political groups that do not have to disclose the identities of their donors.  But corporations may be getting another benefit from anonymous donations to these groups: a break on their taxes.

It all starts with the so-called social welfare groups that have become bigger players in the political world in the wake of Citizens United, which knocked down restrictions on campaign activity by such groups.  Tax experts say it's possible that businesses are using an aggressive interpretation of the law to wring a tax advantage out of their donations to these groups.

It’s almost impossible to know whether that’s happening, partly because the groups — also known by their IRS designation as 501(c)(4) s — aren’t required to disclose their donors.  (That’s why the contributions have been dubbed “dark money.”)

This state of affairs is not entirely new; social welfare groups have long been involved in politics.  In 2000, for example, the NAACP National Voter Fund, which is a social welfare group, ran hard-hitting ads just days before the election criticizing George W. Bush for his opposition to hate-crime legislation.  What’s new is the scale of such groups' election involvement, which has expanded dramatically in the wake of Citizens United and helped feed the increasing flood of money in ...

Published: Monday 12 March 2012
In 2011 the super PAC Freedom Works for America received almost half of its $2.7 million from the nonprofit, a legal transfer that skirts disclosure requirements.

Super PACs are the perceived demons of the 2012 campaign, with the law allowing them to raise and spend unlimited amounts of dough. But a shadowy sideshow that's gone largely unnoticed is the set of nonprofits affiliated with them, which often provide money to the cash cows — and they don't have to publicly disclose their donors (as super PACs must).

"The undisclosed money is far more troubling for the system," says campaign finance lawyer Kenneth Gross.

Freedom Works for America is a case in point. The group, which has attacked GOP pols it finds insufficiently conservative, is located three blocks north of the Capitol. At the same address, sharing the same suite and even some staff, is the headquarters of the similarly named FreedomWorks Inc., a nonprofit (or 501[c][4] group).

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Published: Tuesday 28 February 2012
“PhRMA gives largest chunk of $4.5 million to conservative group, American Action Network”

The drug lobby's trade association was a multimillion-dollar donor to nonprofit groups that were actively working to elect federal candidates during the 2010 election, an iWatch News analysis of documents filed with the Internal Revenue Service reveals.

The Pharmaceutical Research and Manufacturers of America, better known as PhRMA, doled out $9.4 million to 501(c)(4) “social welfare” nonprofit groups, some of which paid for ads that influenced races in the 2010 midterm election, records show.

In 2010, PhRMA gave about $20 million in “grants and other assistance” to more than 200 nonprofit organizations, including five politically active 501(c)(4) nonprofits, both liberal and conservative, which together received nearly half of the funds.

The groups were: the American Action Network, the American Future Fund, Americans for Tax Reform, America’s Families First, Inc. and the Citizens for Strength and Security Action Fund.

PhRMA's largest gift in 2010 was a $4.5 million contribution to the American Action Network, a conservative 501(c)(4) that spent big money on a half-dozen high-profile U.S. Senate races and more than two dozen U.S. House races.

In 2010, American Action reported spending more than $26 million on ads to the Federal Election Commission. That was more than any other politically active nonprofit group, with the exception of the U.S. Chamber of Commerce, according to the Center for Responsive Politics.

Overall, the American Action Network reportedly raised more than $30 million in 2010, meaning PhRMA alone was responsible for close to 15 percent of the group's ...

Published: Monday 20 February 2012
“Governor Walker’s defenders[...] will surely suggest that the billionaire is merely expressing his right to fund independent activities that just happen to be ‘helping’ Walker.”

 

Billionaire campaign donor David Koch, heir to a fortune and a political legacy created by one of the driving forces behind the John Birch Society, makes no secret of his enthusiasm for Wisconsin Governor Scott Walker.

“What Scott Walker is doing with the public unions in Wisconsin is critically important. He’s an impressive guy and he’s very courageous,” Koch explained in a recent conversation reported by the Palm Beach Post. “If the unions win the recall, there will be no stopping union power.”

That’s no surprise. What is surprising is that Koch is now appears to be bragging about how he and his brother Charles are using their vast fortune to fund an independent campaign aimed at “helping” Walker. Even in an era when billionaires such as the Kochs are emerging as key financiers of Super PACS and other campaigning vehicles Koch’s admission will raise ...

Published: Thursday 16 February 2012
“How the Politics of the Super Rich Became American Politics.”

At a time when it’s become a cliché to say that Occupy Wall Street has changed the nation’s political conversation -- drawing long overdue attention to the struggles of the 99% -- electoral politics and the 2012 presidential election have become almost exclusively defined by the 1%. Or, to be more precise, the .0000063%. Those are the 196 individual donors who have provided nearly 80% of the money raised by super PACs in 2011 by giving $100,000 or more each.

These political action committees, spawned by the Supreme Court’s 5-4Citizens United decision in January 2010, can raise unlimited amounts of money from individuals, corporations, or unions for the purpose of supporting or opposing a political candidate. In theory, super PACs are legally prohibited from coordinating directly with a candidate, though in practice they’re just a murkier extension of political campaigns, performing all the functions of a traditional campaign without any of the corresponding accountability.

If 2008 was ...

Published: Tuesday 14 February 2012
“But to have both unlimited and undisclosed donations, Hoersting noted, activists can form a so-called 501(c)4, named for the section of the Internal Revenue Service code on social-welfare nonprofits.”

The big Republican names were all at the Conservative Political Action Conference in Washington, D.C., last week: Mitt Romney, Rick Santorum, Newt Gingrich, Ron Paul, Herman Cain, Michele Bachmann, Rick Perry and Sarah Palin.

The three-day conference, known as CPAC and hosted by the American Conservative Union, drew about 11,000 participants and 1,300 journalists, who crammed into the Marriott's ballroom for the big speeches.

While most attention focused on Republican presidential hopefuls and other party luminaries, we opted to take a spin around panels and events devoted to fundraising. They were a window into how money might be raised this election cycle, through new-fangled super PACs and their even more opaque nonprofit sidekicks, as well as through more old-fashioned tactics.

One conference panel -- "What's Up With Campaign Finance?" -- featured some of the lawyers who helped win the recent court decisions, such as Citizens United, that cleared the way for the new, more free-wheeling campaign-finance landscape.

At one point, moderator and lawyer Dan Backer predicted the eventual overhaul of the Federal Election Campaign Act of the 1970s, which he crowed "has been brutalized and made Swiss cheese by the courts, thanks to the folks on this panel."

At another point, panelist Benjamin Barr, a constitutional lawyer, joked about the hoopla over Citizens United and the worry that it would lead to a campaign-finance "apocalypse."

"If there's an apocalypse upon us, I suppose we have the four ...

Published: Friday 10 February 2012
“Even at the state level, ‘enough’ has gone mainstream, as New York Gov. Andrew Cuomo (D) just signed an executive order barring state contracts from going to firms that pay executives more than $199,000 a year.”

Of all the no-no's in contemporary America — and there are many — none has proven more taboo than the ancient doctrine of dayenu. Translated from the original Hebrew, the word roughly means "It would have been enough." The principle is that a certain amount of a finite resource should satisfy even the gluttons among us.

I know, I know — to even mention that notion is jarring in a nation whose consumer, epicurean and economic cultures have been respectively defined by the megastore, the Big Mac and the worship of the billionaire. Considering that, it's amazing the word "enough" still exists in the American vernacular at all. But exist it does, and more than that — the term's morality is actually starting to suffuse the highest-profile debates in the public square.

After the financial meltdown, for example, Congress witnessed an unexpectedly spirited fight over enacting pay caps at bailed-out financial institutions. Beneath the overheated rhetoric, the brawl revolved around determining how much is enough to compensate Wall Street's government-subsidized scam artists.

Today, that conflict has metastasized into a battle over taxes. Marked by mind-numbing arguments over Mitt Romney's IRS returns and esoteric catchphrases like "Buffet Rule," the skirmish is really just a proxy war over how much individual income we are going to collectively deem "enough" before the next dollar of income is subjected to a less preferential levy.

Even at the state level, "enough" has gone mainstream, as New York Gov. Andrew Cuomo (D) just signed an executive order barring state contracts from going to firms that pay executives more than $199,000 a year. Again, the idea is that such a salary is more than enough to attract skilled workers to taxpayer-funded firms.

Academia, by contrast, is playing host to the flip side of this long-overdue discussion, as tuition ...

Published: Wednesday 8 February 2012
“The stock market has grown much faster than the GDP over the past century, which means that this special tax rate is being given to people who already own most of the unearned income that keeps expanding faster than the productiveness of real workers.”

Actually, the richest 10% don't own ALL the stocks. But they own over 80% of the stock market, while the richest 20% of Americans own 93% of our country's financial wealth.

Many of the rest of us own SOME stocks, and would certainly like to own more. But given that we don't, we would at least like to know that the happy owners of stock market wealth don't have an unfair advantage over us.

But they do. Do they ever.

Wealthy America is made wealthier by the 15% capital gains tax, which allows millionaires, as famously observed by Warren Buffett, to pay a smaller percentage in taxes than their secretaries. IRS data shows that only 19% of 2008 income reported by the 13,480 individuals or families making over $10 million came from wages and salaries. Thanks in good part to capital gains, the richest 400 taxpayers DOUBLED their income and nearly HALVED their tax rates in just seven years (2001-2007). So dramatic is the change that anyone making more than $34,500 a year in salary and wages is taxed at a higher rate than an individual with millions in capital gains.

A particularly insidious form of capital gain is "carried interest," a name given to income by private-equity and hedge fund managers to help them avoid taxes. In just one year a single hedge fund manager made enough money to hire 100,000 new teachers while ...

Published: Monday 6 February 2012
“Despite the new presence of a Sarah Palin-endorsed anti-choice politician as its Public Policy Director, and despite new revelations that it quietly stopped funding stem cell research, the Komen Foundation continues to insist this isn’t a politically motivated move.”

The Susan G. Komen foundation has reversed its defunding of Planned Parenthood, at least temporarily, but the falsehoods and hypocrisy haven't ended. An investigation has revealed that at least four other organizations have received Komen money while under Federal investigation, while others have been the subjects of recent investigations, and a lot of the money Komen hands out was provided by sponsors who were also being investigated.

The Komen foundation hasn't been leveling with the public. Even its apology was disingenous.

The organization is behaving more like Bank of America, one of its most prominent sponsors. Like a Wall Street bank, its using its monopoly power to crush competitors, dictate its terms to the public, and to speak both disingenously and hypocritically to the American people. The Susan G. Komen organization has become "too big to fail."

"Our original desire was to fulfill our fiduciary duty to our donors by not funding grant applications made by organizations under investigation," said a 

Published: Tuesday 24 January 2012
“The more obvious route is to develop alternatives to copyrights for funding creative and artistic work.”

The popular rebellion against the Stop Online Piracy Act (SOPA) was an impressive display of democracy in action. The opponents of the bill were able to use the web and various social media venues to educate the public about the specifics of the bill. The resulting flood of e-mails, phone calls and letters caused the bill’s congressional sponsors to cut and run.

While this revolt against the entertainment industry’s effort to rein in the web was inspiring, there is a real issue at stake. It is getting ever harder for creative workers to get paid for their work.

This is seen most clearly in the music industry. Sales of recorded music in the United States dropped from $14.6 billion in 1999 to $7.7 billion last year. If sales had kept pace with inflation and the growth of the economy they would be over $23 billion today.

Furthermore, the overwhelming majority of this money stems from the work of small number of performers who are promoted by the major entertainment companies. The vast majority of singers and musicians get almost nothing from copyright protection.

However the answer to this problem can’t be the SOPA route of closing off the web. The more obvious route is to develop alternatives to copyrights for funding creative and artistic work.

The idea of alternatives to copyright should not sound strange. There already is a vast amount of work supported through universities, private foundations and different levels of government. While the existing channels of funding are not sufficient to replace copyright-supported work, they can be expanded to fill the gap.

One route would be to allow individuals a modest refundable tax credit – an artistic freedom voucher (AFV) – that would allow them to give $75- $100 a year to support creative work. This money could either ...

Published: Monday 2 January 2012
How one loophole helps wealthy Americans pay less taxes.

Todd Dagres, a prominent venture capitalist and independent movie producer, earned $3.5 million in 2003, and paid not a cent in federal income tax.

The IRS challenged the math, and sent Dagres a bill for $981,980 in back taxes, plus $196,369 in penalties.

So Dagres lawyered up. His attorneys waived one lucrative tax break to exploit an even better one, and claimed victory in the case in March.

In the course of the dispute, Dagres offered five years of his tax returns as evidence in U.S. Tax Court. His testimony, tax forms and other documents offer a rare glimpse of how wealthy Americans work the angles to keep from paying taxes.

Dagres earned $58.5 million over those five years — ranking him among the richest 0.1 percent of Americans. During that stretch, the statutory rate for taxpayers in his income bracket was as high as 39.6 percent. But because of an array of tax breaks, Dagres paid 20 percent of his total income.

Dagres, 51, is not alone. While American working families earning under $100,000 pay, on average, about 35 percent of their taxable income in ...

Published: Saturday 17 December 2011
In 1997, Gingrich became the only speaker in history to be reprimanded by the House of Representatives.

For a man who likes to tout his expertise as a historian, Republican presidential candidate Newt Gingrich has a decidedly revisionist approach when it comes to his own history.

In 1997, Gingrich became the only speaker in history to be reprimanded by the House of Representatives. He agreed to pay $300,000 to settle the matter, which involved using charitable groups to promote his political views and submitting misleading documents to the House ethics committee.

 

The ethics charges sound like ancient history. They involve dreary matters of tax law. But the episode is worth revisiting because it offers insights into Gingrich’s bombastic, push-the-boundaries style. More troubling, in recent days, Gingrich has been blatantly dishonest in his self-interested rewriting of this history, dismissing the ethics sanction as the action of “a very partisan political committee.”

As Gingrich relates the story, “The Democrats filed 84 charges against me; 83 were dismissed. The only one which survived was the fact that my lawyers had written a letter inaccurately and I signed it.”

Referring to California Democrat Nancy Pelosi, who served on the panel, Gingrich

Published: Friday 9 December 2011
“Evenly split between Democrats and Republicans, the ethics panel voted 7-1 to recommend that Gingrich be reprimanded and ordered to reimburse the House for the cost of the investigation.”

Newt Gingrich falsely claimed the House ethics panel that voted to reprimand him in 1997 was “a very partisan political committee.” He was also off base when he said the inquiry was “a Pelosi-driven effort.”

In fact, the House Committee on Ethics is the only House panel evenly divided by party. And Pelosi was a relatively junior House member and not in a leadership position at the time. It’s true she was one of four members on the subcommittee that conducted the investigation, but she was just one of eight members on the full committee — which dismissed 83 of the charges that other Democrats brought against Gingrich.

The ethics panel was far from a “partisan” committee. Three of the panel’s Republican members joined all four Democrats in the 7-1 vote to recommend that the full House reprimand Gingrich — on a single charge of misleading the committee. On the day the committee released its final report, the Republican chairwoman praised Pelosi and other subcommittee members for working “in a collegial, nonpartisan manner in a difficult environment.”

And far from being “driven” by Pelosi, the ...

Published: Monday 28 November 2011
“Doting on the financial interests Coca Cola, ConAgra, and Del Monte instead of America’s school kids isn’t going to get the approval rating for Congress recover from an all-time low.”

How small-minded is Congress? How tangled-up in a right-wing ideological knot is it? How subservient to corporate lobbyists is it?

The answers to these three questions are: pizza, tomato paste, and spuds.

 

At a time when doctors and nutritionists are sounding a national alarm about a diabetes epidemic caused by gross obesity, including in children, the Congress of the United States of America, in all its majesty, has killed an effort by the Agriculture Department to make school lunches healthier. Why?

Three reasons:

One, Congress is incapable of meeting America's big needs, so it's rationalizing its existence by messing with the small stuff. Two, the right-wing ideologues in Congress are so batty that they even oppose federal rules to improve our children's health. Three — and most significantly — the French fry lobby, tomato paste lobby, and frozen pizza lobby put big bucks into congressional campaigns, and they pulled the strings of our lawmakers.

So the financial interests of corporate powers — including Coca Cola, ConAgra, and Del Monte — have overridden the interest of ...

Published: Friday 18 November 2011
“Republican lawmakers continue to aid and abet corporate tax avoidance by protecting offshore profit deferral, which allows corporations to claim domestic tax credits for profits they earn overseas.”

With income inequality in the U.S. at its highest level since the Great Depression, Americans from every end of the income spectrum are clamoring for corporations and the wealthy to pay their fair share in taxes. But because of the numerous tax loopholes and credits worked into the tax code, corporate taxes are at historical lows.

Bank of America paid nothing in federal taxes in 2009. While earning billions in profit, companies like Boeing, Exxon-Mobil, and Wells Fargo also paid nothing in recent years. Other corporations, like Google and Pfizer, dramatically lower their tax rates by deferring profits they make overseas. After making more than $14 billion in profits last year, General Electric not only got a pass on paying any corporate income ...

Published: Saturday 5 November 2011
All five financial institutions named were profitable, but still received funds in the form of stock purchases from the Treasury Department’s Troubled Asset Relief Program.

Five banks that received federal bailout funds during the financial crisis didn't pay income taxes for one or more years between 2008 and 2010, according to an iWatch News analysis of a new study  of tax dodgers.

Wells Fargo & Co., Goldman Sachs Group, PNC Financial Services Group, Capital One Financial Inc. and State Street Corp. were among 78 of America’s largest and most profitable corporations that managed to avoid paying income tax in at least one of those years.

Researchers looked at 280 corporations that reported total pretax U.S. profits of $1.4 trillion. The federal corporate tax code “ostensibly requires big corporations to pay a 35 percent corporate income tax rate, on average, the 280 corporations in our study paid only about half that amount.”

The study was released Thursday by nonpartisan advocacy groups Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

All five financial institutions named were profitable, but still received funds in the form of stock purchases from the Treasury Department’s Troubled Asset Relief Program.

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Published: Sunday 16 October 2011
“Today, conservative politicians and pundits complain that some people, namely those too poor to owe federal income taxes, aren’t paying enough.”

From the tea parties to the corporate boardrooms to the presidential debate platforms, we hear a familiar droning whine about taxes — except the angry message is no longer simply that taxes are too high. Today, conservative politicians and pundits complain instead that some people, namely those too poor to owe federal  READ FULL POST 10 COMMENTS

Published: Sunday 9 October 2011
Republican mayoral candidate Scott Stone, who’s running against incumbent Democrat Anthony Foxx, founded the North Carolina Heroes Fund in 2007 to make grants to veterans in financial straits.

Democrats are blasting Republican mayoral candidate Scott Stone over a charity he founded for military families that records show has spent more money on fundraising than on helping veterans.

Stone acknowledges the disparity, but he - and some nonprofit experts - said that's not unusual for relatively new charities.

Stone, who's running against incumbent Democrat Anthony Foxx, founded the North Carolina Heroes Fund in 2007 to make grants to veterans in financial straits.

The fund raised $129,697 from 2007 to 2009, according to its three most recent IRS tax filings. It gave out just under $40,000 in grants to military families, according to the tax forms. Those grants were about 30 percent of what the fund collected in donations.

More recent figures show the group handed out about 53 percent of what it took in. Experts say a benchmark for charities is 65 percent.

WSOC-TV first reported about the charity's expenses Thursday.

"The issues surrounding Scott Stone's charity raise some troubling questions about his ability to be a good steward of taxpayer dollars," Walton Robinson, the state Democratic Party spokesman, said in a statement. "When (most) of the money...goes to expenses other than the stated purpose of helping military families, there is something seriously wrong."

Foxx campaign spokesman Michael Halle declined comment Friday.

Stone, who has repeatedly asked Foxx for more debates, said the mayor's campaign was behind the story about the Heroes Fund. "Clearly this was a story planted by the Foxx campaign," he said, "because they don't want to talk about the real issues."

Stone said Friday the Foxx campaign had recently done a "push poll" on the issue, telephoning voters to ask them their opinion about the charity. Halle denied that.

Stone said his organization has had to spend money to raise money.

"The ...

Published: Thursday 29 September 2011
Groups like Crossroads GPS have been spending money year-round on advertising and other efforts to promote their views on issues, rather than candidates.

Last year, as the Karl Rove-backed group Crossroads GPS dumped more than $17 million into helping elect Republicans in congressional districts across the country, a duo of campaign finance reform advocates asked the IRS to investigate the special tax status claimed by Rove's group.

As a self-styled "social welfare" group, Crossroads was able to accept unlimited anonymous donations and used the money to air advertisements supporting or opposing candidates.

Today, those same reform advocates have gone back to the IRS with a new complaint aimed not just at Rove's group, but at three others, including one group that was started last spring by former Obama aides.

In a letter sent to the IRS on Wednesday, Democracy 21 and the Campaign Legal Center challenged the social welfare tax status claimed by Crossroads GPS, American Action Network, Priorities USA and Americans Elect.

"The idea that these organizations are social welfare groups is nonsense," said Fred Wertheimer, president of Democracy 21. "The overriding purpose of these groups is to participate in and influence elections, which makes them ineligible for tax exempt status."

Jim Landry, a spokesman for American Action Network - a group that spent $26 million on election advertising in 2010 - called the IRS petition "a baseless complaint."

"The American Action Network takes its legal responsibilities seriously and complies with all of them," Landry said.

The social welfare designation is generally intended for local cultural preservation committees or community associations. IRS guidelines stipulate that a social welfare group "may engage in some political activities, so long as that is not its primary activity."

To meet this test, groups like Crossroads GPS have been spending money year-round on advertising and other efforts to promote their views on issues, rather than ...

Published: Thursday 29 September 2011
Such secretive donations to help federal candidates have mushroomed since the January 2010 Supreme Court ruling that gutted campaign finance restrictions.

Citizens for a Greater America, a group newly launched by allies of GOP presidential candidate Rick Perry, has organized under IRS rules as a 501(c)(4) permitting donors to give unlimited contributions and remain secret.

The mission of the new group is officially to “promote conservative leadership and values and to educate the public and policy makers about conservative issues and principles,” according to a fact sheet obtained by iWatch News from a Perry fundraiser.

The fundraiser, who also has been raising money for the Super PAC backing Perry, Make Us Great Again, said he received the fact sheet from Mike Toomey, a founder of the PAC. The fundraiser was seeking information about whether Make Us Great Again had a 501(c)(4) arm for people who wanted to remain anonymous.

Such secretive donations to help federal candidates have mushroomed since the January 2010 Supreme Court ruling that gutted campaign finance restrictions.

Toomey, a high-powered Austin lobbyist who used to be Perry’s chief of staff, in July co-founded Make Us Great Again, which also can accept unlimited donations but has to disclose its donors names publicly. Toomey's group hopes to raise $55 million, according to an MSNBC report.

The new 501(c)(4) tax exempt group is in addition to at least five Super PACs backing Perry that can accept unlimited checks. But Citizens for a Greater America is the first of Perry’s many money pockets that doesn’t have to reveal its donors.

Published: Saturday 17 September 2011
Neither party’s presidential candidate will propose to tame CEO pay, create more tax brackets at the top and raise the highest marginal rates back to their levels in the 1950s and 1960s (that is, 70 to 90 percent), and match the capital-gains rate with ordinary income.

We’re on the cusp of the 2012 election. What will it be about? It seems reasonably certain President Obama will be confronted by a putative Republican candidate who:

Believes corporations are people, wants to cut the top corporate rate to 25% (from the current 35%) and no longer require they pay tax on foreign income, who will eliminate capital gains and dividend taxes on anyone earning less than $250,000 a year, raise the retirement age for Social Security and turn Medicaid into block grants to states, seek a balanced-budged amendment to the Constitution, require any regulatory agency issuing a new regulation repeal another regulation of equal cost (regardless of the benefits), and seek repeal of Obama’s healthcare plan.

Or one who:

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Published: Wednesday 31 August 2011
“If he had his way taxpayers would pay states rather than the federal government for all the services and transfer payments they get.”

Of all the nonsense Texas Governor Rick Perry spews about states’ rights and the tenth amendment, his dumbest is the notion that states should go it alone. “We’ve got a great Union,” he said at a Tea Party rally in Austin in April 2009. “There’s absolutely no reason to dissolve it. But if Washington continues to thumb their nose at the American people, you know, who knows what might come out of that.”

The core of his message isn’t outright secession, though. It’s that the locus of governmental action ought to be at the state rather than the federal level. “It is essential to our liberty,” he writes in his book, Fed Up! Our Fight to Save America from Washington,“that we be allowed to live as we see fit through the democratic process at the ...

Published: Thursday 25 August 2011
“PolitiFact checked Pawlenty's attack and found it to be mostly true — Bachmann has never sponsored anything that became law.”

This is the latest installment in a series of reading guides on 2012 presidential candidates. We’ve also covered Texas Gov. Rick Perry and Congressman Ron Paul.

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Published: Sunday 7 August 2011
"People in the United States today don’t live anything close to similar sorts of lives. They live amid a level of inequality unseen since the early 1900s."

The American political system isn't working for average Americans anymore. Don't blame the Tea Party, new political science research suggests. Blame inequality.

In a sensible republic, democratically elected leaders come together in a respectful give-and-take to debate the problems that confront the people they represent. Eventually, these leaders, all debated out, come to agree on a set of solutions. They enact these solutions. The society progresses. End of story.

In real life, something approximating this political fairy tale can take place — but only in societies where most everybody first agrees on the problems that deserve debating. And that agreeing, in turn, usually only comes when the great majority of a society's people lead similar sorts of lives.

All this may explain, suggest some of America's top political scientists, why 21st century politics in the United States has polarized into hostage-taking gridlock.

People in the United States today don’t live anything close to similar sorts of lives. They live amid a level of inequality unseen since the early 1900s. And those early 1900s, note Princeton political analyst Howard ...

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