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July 17th, 2014

7/17/2014

THESE ARE SOME OF THE THINGS TO WATCH FOR AND THINK ABOUT THESE NEXT MONTHS AS THE BOND MARKET PREPARES TO COLLAPSE. I WANT PEOPLE TO KNOW THAT AS WITH THE SUBPRIME MORTGAGE LOAN COLLAPSE YOUR POLS NOT ONLY KNOW IT IS GOING TO HAPPEN----THEY ARE CREATING THE CONDITIONS FOR THE CRASH. THAT IS BECAUSE THEY WORK FOR GLOBAL CORPORATIONS AND PROFIT. GET RID OF THEM!

Keep in mind the entire financial system of frauds is based on tricking people, or allowing others to trick people into taking on more debt than they can handle knowing the end result will be a collapse in market that leaves people/government unable to pay the debt. With the subprime mortgage fraud the banks targeted low-income homeowners not only to gain control of real estate in urban areas but to target the Federal Housing Authority and its taxpayer payments of fees and loans. This coming municipal/sovereign debt fraud collapse targets again government coffers and taxpayers as corrupt neo-liberal politicians load the states and cities with debt knowing this crash in 2015 is a sure thing. Public officials take an oath to serve and protect the Constitution and citizens and none of this meets this oath. They are aiding and abetting a crime by knowingly placing the public in harms way. Remember, we can build Baltimore schools by simply ending the billion in fraud and corruption each year so there is plenty of taxpayer money for these infrastructure projects. It is the leverage needed to implode the state and city economy.

AGAIN, WE CAN REVERSE THIS----WE SIMPLY NEED TO ELECT POLS THAT REBUILD RULE OF LAW AND OVERSIGHT AND ACCOUNTABILITY. EASY PEASY.

I want to make sure people understand that all of this was known years ago---below you see in 2011 financial analysts were advising to prepare for the collapse. During that time think how many credit bond and leveraging deals have been made in Maryland and Baltimore---including the big $1 billion deal to rebuild public schools. I was shouting and writing to show the public knew this was malfeasance so we are under no obligation when the crash comes to hand everything to investment firms as they plan. We must have Rule of Law to provide that protection. This is why these elections are critical these next few election cycles and it is why Maryland was willing to allow systemic election violations for Governor to make sure the right person was in place to protect the fraud when this collapse comes.

Keep in mind the FED controls when this crash occurs to the extend of ending QE and allowing the manufactured inflation be replaced by real inflation numbers . This will create the environment for mass exodus from the bond market and she has no way to stop this as it has maxed and is now unable to be contained. She may delay it, but it will come and it appears likely 2015 will be the longest she can delay. Inflation which is now thought to be 5% or so will jump to some of the highest levels in US history and it is all because of FED policy and Congress and Obama passing laws that made municipal bond markets artificially attractive. They sold our bond market to the world just as they sold toxic subprime mortgage loans to the world. They earned trillions and the American people lost everything as will happen this time around.

This article refers to the last time the FED considered ending QE in 2011.... as we know Bernanke decided to extend the death sentence and allow Yellen to handle the collapsing economy.

SHE WILL HAVE NO CHOICE AS THE FED IS MAXED IN DEBT AND INFLATION IS NOT CONTAINABLE. IT'S ONE BIG PONZI SCHEME.

O'Malley and the Maryland Assembly sold citizens out statewide and Rawlings-Blake and Baltimore City Hall sold citizens out locally as they did during the subprime mortgage loan fraud.

The Coming Bond Market Crash: The Three Moves Every Investor Must Make

By Martin Hutchinson, Global Investing Specialist, Money Morning · July 1, 2011

Since last November, the U.S. Federal Reserve has been buying U.S. Treasury bonds at a rate of about $75 billion a month. That's part of Fed Chairman Ben S. Bernanke's "QE2" program, under which the central bank was to buy $600 billion of the government bonds.

But QE2 ended yesterday (Thursday), meaning the Fed will no longer be a big buyer of Treasury bonds.

So starting today (Friday), the U.S. Treasury needs to sell twice as many Treasury bonds to end investors as it had been.

But the problem is, who's going to buy them?

Not China, which is diversifying its trillions in assets to get as far away from the U.S. dollar as fast as it can.

Not Japan, which is trying to rebound from its March 11 earthquake, tsunami and nuclear disaster - and is focusing all its spending on reconstruction.

And - as we've seen -neither is the Bernanke-led Fed.

I'm telling you right now: We are headed for an epic bond market crash. If you don't know about it, or don't care, you could get clobbered.

But if you do know, and are willing to take steps now, you can easily protect yourself - and even turn a nice profit in the process.

Let me explain ...

A Timetable for the Coming Crash I'm an old bond-market hand myself - my experience dates back to my days at the British merchant bank Hill Samuel in the 1970s - so I see all the signs of what's to come.

Having the two biggest external customers of U.S. debt largely out of the market is a huge problem. Unfortunately, those aren't the only challenges the market faces. The challenges just get bigger from there - which is why I'm predicting a bond market crash.

Latest Comment^ It is 2013, QE3 is out so maybe his timing is off but with all the printed mon…

Steadily rising inflation is one of the challenges. Inflation is a huge threat to the bond markets, and is almost certain to create a whipping turbulence that will ultimately infect the stocks markets, too.

Many pundits will tell you that if investor demand for bonds declines, and investor fear of inflation increases, bond-market yields could increase in an orderly fashion.

But I can tell you that the bond markets don't work like that. Price declines affect existing bonds as well as new ones, so the value of every investor's bond holdings declines. And with many of those investors heavily leveraged - especially at the major international banks - the sight of year-end bonuses disappearing down the Swanee River as bonds are "marked to market" will cause a panic. That's especially true when end-of-quarter or end-of-year reporting periods loom.

That's why we can expect a bond market crash at some point. If you ask me to make a prediction, I'd say that September or December were the most likely months for such a crash.

A Boxed-In Bernanke One sad - even scary - fact about what I'm predicting is that Fed Chairman Bernanke won't be able to do much about it ... though he'll certain try.

Consumer price inflation is now running at 3.6% year-on-year while producer price inflation is running at 7.2%. In that kind of environment, a 10-year Treasury bond yielding 3% is no longer economically attractive. Since monetary conditions worldwide remain very loose, inflation in the U.S. and worldwide will trend up, not down.

The bottom line: At some point, the "value proposition" offered to Treasury bond investors will become impossibly unattractive. When that happens, expect a rush to the exits.

If Bernanke attempts "QE3" - a third round of "quantitative easing" - he will have a problem. If other investors head for the exits, Bernanke may find that the U.S. central bank is as jammed up as the European Central Bank (ECB) currently is with Greek debt: Both will end up as the suckers that are taking all the rubbish off of everyone else's books.

There's a limit to how much Treasury paper even Bernanke thinks he can buy. And if everyone else is selling, that "limit" won't be high enough to save the bond market.

With Bernanke buying at a rapid rate, the inflationary forces will be even stronger, so every Bureau of Labor Statistics report on monthly price indices will be marked by a massive swoon in the Treasury bond market.

Eventually, there has to be a new head of the Fed - a Paul A. Volcker 2.0 who is truly committed to conquering inflation. Alas, it won't be Volcker himself since, at 84, he is probably too old.

But it might be John B. Taylor, who invented the "Taylor Rule" for Fed policy. The Taylor Rule is actually a pretty soggy guide on running a monetary system. But it has been flashing bright red signals about the current Fed's monetary policy since 2008.

However, since a Fed chairman who is actually serious about fighting inflation would be a huge burden for current U.S. President Barack Obama to bear - and could badly hamper his chances for re-election, any such appointment is unlikely before November 2012.

How to Profit From the Bond Market Crash

Given that reality, it's likely that Bernanke will attack any bond market crash that occurs ahead of the presidential election just by printing more money; there won't be any serious attempt to rectify the fundamental problem, meaning inflation will continue to accelerate.

For you as an investor, this insight leads to two conclusions that you can put to work to your advantage. The scenario I've outlined for you will be:

Very good for gold and other hard assets. Challenging for Treasury bonds; prices will remain weak no matter how vigorously Bernanke attempts to support them.

So what should you do with this knowledge? I have three recommendations.

First and foremost, if Bernanke were not around, I would expect gold prices to fall following a bond market crash. But since he's still at the helm at the Fed, I expect him to do "QE3" in the event of a crash. And that means gold - not Treasury bonds - would become an investor "safe haven."

You can expect gold prices to zoom up, peaking at a much higher level around the time Bernanke is finally replaced. Silver will also follow this trend. So make sure you have substantial holdings of either physical gold and silver or the exchange-traded funds (ETFs) SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV).

Second, if you want to profit more directly from the collapse in Treasury bond prices, you could buy a "put" option on Treasury bond futures (TLT) on the Chicago Board Options Exchange (CBOE). The futures were recently trading around 94, and the January 2013 80 put (CBOE: TLT1319M80-E) was priced around $4.50, which seems an attractive combination of low price and high leverage.

Finally, if you don't already own a house, you should buy one - and do so with a fixed-rate mortgage. A U.S. Treasury bond market crash will send mortgage rates through the roof, so today's rates of about 4.8% will represent very cheap money, indeed. Even if house prices decline by 10%, a 2% rise in mortgage rates would increase the monthly payment (even accounting for a 10% smaller mortgage), by a net 11.8% (the payment on a $100,000 mortgage at 4.8% is $524.67; that on a $90,000 mortgage at 6.8% is $586.73).

Needless to say, the same benefits apply to rental properties financed by fixed-rate mortgages: With lower home ownership and rising inflation, rents are tending to rise significantly.

There's a storm coming in the Treasury bond market. But by recognizing its approach, we can turn the bond market crash to our advantage.

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HMMMMMM.....reduce reserve funds and raise public debt.....all to augment the billions of dollars lost to the Maryland economy to fraud each year.

The debt takes the form of state leverage for projects and services----they have even leveraged the public pension funds all with no indication that 2015 will bring a major recession/depression. DIDN'T SEE THAT COMING YOUR NEO-LIBERALS AND NEO-CONS WILL SAY!

All that leverage supposedly balanced the state budget and O'Malley pretended to be saving public sector jobs and pensions all while knowing this economic crash will lead to huge layoffs and end public sector pensions. Labor union leaders know this dynamic and still go with the neo-liberals doing it! As we all know each year since this 2010 article the public debt and leverage has increased. Again, Republicans in other states are doing the same thing so do not listen to Maryland Republicans playing this card---they would do the same.

Maryland Governor’s Budget Cuts Reserve Payments, Boosts Debt

by Patrick Temple-West JAN 20, 2010 8:44pm ET Bond Buyer

WASHINGTON — Maryland Gov. Martin O’Malley yesterday released a proposal for the state’s fiscal 2011 budget that would reduce reserve fund contributions and increase public debt by 7.1% over fiscal 2010.

Below you see what is only the tip of the iceberg with tax credits that commit a level of tax forgiveness for decades that starves our government coffers. O'Malley cut higher education aid and public transportation funding to pay for just a few of these corporate subsidies all in the name of jobs. Well, when the bond market crash comes and the jobs are gone because of the recession global corporations will still be receiving tax breaks as they do business/make profits overseas.

WHO CARES ABOUT LEVERAGE AND STATE DEBT WHEN THE IDEA IS TO MAXIMIZE PROFITS FOR GLOBAL CORPORATIONS.

We'll just cut more services, programs, sell public assets, and let global corporations handle the business of government that now has no revenue.
I'm not going to format since one can just look down very quickly to see all of the development is done with tax credits. They all are supposed to create jobs and help low-income people all of which will be killed by the coming economic crash from the credit leverage in these very policies. Attracting global corporations to Maryland is the answer to jobs and a strong economy say neo-liberals-----only it does the opposite. Most of these tax breaks will go to large corporations.

$2 million in tax credits for creating 10 poverty jobs......hmmmmmm.

Maryland Department of Business & Economic Development

economic development and the creation of jobs. MVF targets emerging technology-based businesses including biotechnology, information technology, telecommunications, software development and advanced materials.• Challenge Investment Program – $650,000 to ten start-up firms.• Enterprise Investment Fund – $2.2 million – three new firms and follow-on funding to five companies.Federal IncentivesCommunity Development Block Grant Program – Economic DevelopmentThis program assists local governments in implementing commercial and industrial economic development projects. Approved program funds are disbursed to eligible local jurisdictions as conditional grants and used for public improvements for business start-up or expansion or business loans. Projects must create jobs with the majority targeted to individuals from low to moderate income or eliminate blight conditions that impede commercial and industrial development. Fund uses include acquiring fixed assets, infrastructure and feasibility studies. • CDBG-ED funds of $2.2 million supported seven closed projects to create or retain 185 full-time jobs. Three projects worth $1.3 million were approved, representing 129 new or retained jobs.Maryland Economic Adjustment FundMEAF assists small businesses with upgrading manufacturing operations, developing commercial applications for technology, or entering new economic markets. Eligible businesses include manufacturers, wholesalers, service companies and skilled trades. Funds can be used for working capital, machinery and equipment, building renovations, real estate acquisition and site improvements. •Four Maryland Economic Adjustment Fund projects totaling $703,000 were approved and five transactions totaling $726,500 were closed.Tax Credit ProgramsOne Maryland Tax Credit Program Businesses can qualify for up to $5.5 million in income tax credits under the program when they invest in an economic development project in a “qualified distressed county.” Qualified Distressed Counties currently include: Baltimore City, Allegany, Dorchester, Garrett, Caroline, Somerset and Worcester. The business must create at least 25 new full-time positions at the project within 24 months of the date the project is placed in service. The business must be engaged in an eligible activity and incur eligible project or start-up costs. • FY2009 – 3 final certificates of eligibility issued for businesses that created 219 new jobs.Job Creation Tax CreditEncourages businesses to relocate to or expand in a Maryland Priority Funding Area by providing income tax credits based on new jobs created. Subject to various restrictions and conditions including location, wage levels and number of jobs created the credit may be for 2.5% up to $1,000 per job or 5% of annual wage up to $1,500 per job. • FY2009 – 7 final certificates of eligibility issued for businesses that created 307 new jobs.Enterprise Zone ProgramBusinesses located in a maryland enterprise Zone may receive income and real property tax credits in return for creating jobs. Local governments apply to the Department to designate Enterprise Zones. The ten-year real property tax credit reduces taxes on property improvements for ten years. The income tax credit for creating new jobs is$1,000 per new worker; for hiring economically disadvantage employees, up to $6,000 per new employee (over three years).• As of June 2009, there were 29 Enterprise Zones and two focus areas. • FY2010– 753 businesses will receive property tax credits totaling $26.3 million.– State share to reimburse localities will be $13.1 million, assuming the State’s full obligation is met.– Credits are based on real property investments totaling $1.945 billion.AGENCY MISSION & ACTIVITIES (contintued)
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Here you see for whom neo-liberals and neo-cons in Maryland work---as they say we do not need to bring money home to pay taxes and build infrastructure---we have plenty of business overseas thanks to O'Malley's 8 years of sending all of Maryland's revenue to building global structures for development. We are exporting education and health care businesses none of which grows jobs in Maryland.

This is why neo-liberals are not concerned about the coming economic crash----it will not hurt these global corporations and it will provide excuses to hand more public operations/assets to these global corporations. Dulaney and neo-liberals are trying as hard as they can to repatriate global tax requirements in schemes to build infrastructure. Remember, if they paid taxes we would have the money for infrastructure. Domestic businesses pay taxes so the answer is GET RID OF GLOBAL CORPORATE CONTROL OF YOUR ECONOMY! Dulaney is a Clinton investment banker who knows banks owe tens of trillions of dollars in fraud but does not seem to want to offer that solution. Buying Treasury bonds when the bond market is preparing to collapse? REALLY MR DULANEY?

Raise your hand if you know the answer is to get rid of global corporations from the Maryland economy rather than pretending to need to beg them for their taxes!!!!! EVERYONE. Raise your hand if you understand that tax breaks in exchange for bond purchases just when the bond market is ready to collapse will simply allow corporations to enter a bond market at the bottom for tremendous profits just as happened in 2008 with the stock market crash. THAT'S WHAT THESE POLICIES ARE ALL ABOUT!

Everyone knows as well that the main avenue for recovering those tens of trillions of dollars in corporate fraud is HIGHER CORPORATE TAXES but as this article shows neo-liberals and neo-cons only intend to lower corporate taxes....you know, its all about job creation.

Md. Companies Have Billions in Assets Overseas Business Top News — 28 March 2014 By Fola Akinnibi
Capital News Service

6 WASHINGTON – The president’s budget, released in early March, called for the creation of a national fund to finance repair of the nation’s crumbling roads, bridges and other infrastructure — an idea also proposed by a freshman Maryland congressman.

Rep. John Delaney, D-Potomac, wants to fund infrastructure repair by bringing home billions of dollars in foreign earnings from U.S.-based corporations. The congressman said he has been long concerned about decaying infrastructure.

Delaney’s Partnership to Build America Act would create a new way to pay for these repairs. Corporations would provide the money by buying bonds in The American Infrastructure Fund.

In exchange, they would be allowed to bring back money locked up overseas without paying the full 35 percent corporate tax rate.

Delaney’s bill could come as a relief to corporations with large foreign operations that have deferred paying U.S. corporate taxes on their overseas earnings indefinitely. For example, 10 Maryland-based multinational corporations, including Columbia-based MICROS Systems Inc. and Baltimore-based Under Armour Inc., are holding a combined $3.5 billion overseas, according to filings with the Securities and Exchange Commission.

While it would mean a major tax savings, none of the 10 publicly held Maryland companies contacted would comment on the proposed legislation.

One expert said there’s little incentive to bring the funds back with so much business opportunity overseas. Instead, it makes sense for U.S. companies to let the overseas funds stay put and postpone a U.S. tax bill.

“It’s better to defer,” said Michael Faulkender, a finance professor at the University of Maryland’s Smith School of Business.

Further, the Delaney proposal is out of sync with many plans to overhaul the U.S. tax code, he said. “Every proposal on the table is for the corporate tax rate to go down, not up.”

Rich Badmington, W.R. Grace & Co.’s vice president of global communications, said most of the Columbia chemical company’s revenue comes from international operations. The company plans to continue investing in those operations.

“We are able to do that without bringing cash back to the U.S. because we are continuing to invest,” Badmington said. “(Research and development) is a function that requires continuing investment and we have quite a lot of that outside the U.S.”

President Barack Obama’s latest budget plan called for the creation of a government-owned entity to finance infrastructure projects. Delaney said the president’s support for something similar to his bill was “great,” and said it shows how much momentum the bill has.

“We’re very optimistic about it, we have strong bipartisan support,” Delaney said.

The bill has 57 co-sponsors in the House and 12 in the Senate, including Sens. Lindsey Graham, R-S.C., and Michael Bennet, D-Colo., head of the Senate Finance Committee’s Taxation and IRS Oversight subcommittee. Hearings have not been scheduled for the bill.

Under the tax code, corporations can avoid paying taxes on foreign earnings as long as the money is being permanently reinvested overseas. When the corporations decide to bring these funds back home, a process called “repatriation,” the money then is subject to U.S. taxes.

Originally, the tax exemption was meant to help U.S. corporations compete overseas, said Mitchell Kane, a tax professor at New York University’s School of Law. Companies claimed paying taxes in two countries would put them at a disadvantage and the government responded with the exemption, he said.

The plan was to have the companies pay foreign taxes, which in many cases are lower than the U.S. tax rate, and then pay U.S. taxes when the money was repatriated. After this process, the company would receive a credit for any foreign taxes paid, Kane said.

Allowing such an exemption has created an incentive for companies to keep their money overseas and defer the U.S. corporate tax, said Jane Gravelle, an economist with the Congressional Research Service. But parking money offshore isn’t a long-term solution for companies, she added.

“They may think they can hold their breath forever and borrow money,” Gravelle said. “How long are they going to be able to do that? Shareholders eventually want dividends.”

This exemption could result in $265.7 billion in lost revenue for the federal government through 2017, according to a 2013 report by Congress’ Joint Committee on Taxation.

For now, however, companies aren’t likely to repatriate without a major tax discount.

W.R. Grace has more than $1.1 billion held overseas and would have to pay $149.7 million in taxes if it was repatriated, according to SEC filings. That money will remain overseas, except in instances where repatriation would result in minimal or no U.S. taxes, the company said in its most recent SEC filing.

MICROS Systems, a Maryland-based computer hardware and software producer, has about 61 percent of its cash and cash equivalents, $385.8 million, held internationally with no plans to repatriate, according to the company’s most recent filings with the SEC.

Maryland-based apparel company Under Armour has $95.2 million, or 27 percent, of its cash and cash equivalents held overseas with no plans to bring it back.

Spokespersons from MICROS and Under Armour could not be reached for comment.

Other companies have begun to repatriate their foreign funds, which Kane said could help cover corporate expenses. McCormick & Company, a spice, herbs and flavoring manufacturer, repatriated $70 million in 2012, according to the company’s most recent SEC filings. Even still, most of the company’s cash is held in foreign subsidiaries, the filings said.

A spokesperson for McCormick and Co. could not be reached for comment.

Some of the largest U.S. corporations make about half of their money internationally, Delaney said. The bill is just a way to get some of it back.

“It creates a way for some of that money to come back, which is good for our economy,” Delaney said. “And it creates this large-scale infrastructure fund, which is good for our country.”

Instead of government funding, the American Infrastructure Fund would raise cash through a $50 billion bond offering. Companies would buy the bonds at a 1 percent fixed interest rate and a 50-year term, in exchange for a chance to repatriate a certain portion of overseas earnings tax-free for every dollar spent on bonds.

A bond to repatriation ratio would be determined by an auction and could result in companies paying an effective 12 percent tax rate, Delaney said. Money raised in the bond sale could then be leveraged and loaned to state and local governments for projects.

The auction process will benefit both the infrastructure fund and the corporations, which will be able to find a price that is right for them, Delaney said.

“We’ve talked to them and they’re very supportive of it,” he said.

The American Business Conference, Associated Equipment Distributors and Terex Corporation are among those supporting the bill.

Tech giants and pharmaceutical corporations have lobbied for a repatriation holiday since the 2004 American Jobs Creation Act allowed them to repatriate at a discounted rate. Because of the intellectually-based capital that these companies thrive on, it is sometimes easier for them to keep assets overseas.

For example, Apple has $124.4 billion held overseas, according to the company’s most recent SEC filing.

The 2004 bill reduced repatriation taxes to 5.25 percent if corporations promised to invest the money at home. The one-year holiday is widely regarded as a failure because it spurred an increase in repatriation, but not an increase in jobs or investments, according to a report by the Congressional Research Service.

“The argument was that it would be a stimulus” to the U.S. economy, Gravelle said. “Most people who studied this found out it was being used to repurchase shares.”

Share repurchases are a common way to boost stock prices.

Corporations used the money to pay stockholders dividends and pay off debts, which doesn’t make for a good stimulus, she continued. Instead, the holiday created a “moral hazard” and companies have parked money overseas, waiting for the next holiday, Gravelle said.

Delaney’s bill has short-term benefits but doesn’t address the larger problems with the tax code, Faulkender said. Corporations will want to move more and more operations overseas if they can find discounts on U.S. taxes, he added.

“If you signal that firms are going to realize a lower tax rate, even after repatriation, on their foreign operations than on their domestic operations, you’re going to incentivize even more offshoring,” he said.

“I don’t think that’s good for the U.S. economy.”

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May 15th, 2014

5/15/2014

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CORPORATE POLITICIANS ARE NOW MOVING ALL PUBLIC REVENUE TO MAXIMIZING CORPORATE PROFITS. LET'S LOOK AT THE TAX CODE TO SEE WORKING AND MIDDLE-CLASS MADE TO PAY MORE BECAUSE CORPORATIONS ARE PAYING NOTHING AND IN FACT USING TAXES IN PROFIT-MAKING.

WHILE DISMANTLING PUBLIC SERVICES AND HANDING PUBLIC ASSETS TO CORPORATIONS ------THE PUBLIC IS INCREASINGLY BECOMING THE DEEPLY POOR RELIANT ON GOVERNMENT HANDOUTS FOR BASIC NEEDS.

AS WALL STREET COLLECTION AGENCIES ARE INFUSED THROUGH ALL PUBLIC AGENCIES TAPPING MORE PUBLIC WEALTH IN FEES, FINES, AND OUTRIGHT FRAUD -------THE PUBLIC JUSTICE SYSTEM THAT HOLDS WHITE COLLAR CRIME AND CORPORATE TAX EVASION ACCOUNTABLE IS BEING COMPLETELY DISMANTLED.

The Trans Pacific Trade Pact will have all US government reporting to global corporate tribunals which will write all public policy, decide how law is enforced, will extract ever higher taxes, fees, and rates from people living in a corporate state. The building of this structure starts by centralizing all power of public policy and justice to the executive offices-----mayor, county executive, governor, and President and away from legislative bodies and the courts. This is why you see so many 'commissions' that make vital decisions all appointed by these executives. When you have corporate public executives you have corporate appointments to commissions and hence no public policy in the public interest. THIS IS A DELIBERATE BUILDING OF GOVERNMENT STRUCTURE AWAY FROM OUR NORMAL DEMOCRATIC PROCESS. When a governor and state assembly simply tell a court that awards damages to citizens that the state will not pay those damages.....you see the court system undermined.

That mayor, county executive, governor, and President is reporting and taking action from this global corporate tribunal and not you and I.

Let's look how the rich and corporations are now not only paying no taxes but the taxes you and I pay go right to the pockets of corporations. I have talked at length about corporate subsidy at all levels of government. Maryland raised taxes across the board through the Erhlich/O'Malley terms to augment this corporate subsidy. Now, they are passing the estate tax break which allows the same people enriched from the massive corporate frauds to keep their loot.

REPATRIATION OF GLOBAL CORPORATION TAX REQUIREMENTS.

Obama made a mantra of holding corporations accountable and reversing wealth inequity and we see has done the complete opposite. Below we see the most important corporate tax issue------how to extract tax revenue from US global corporations working in the US and controlling all of our public policy yet not paying a cent in corporate tax. Why is it important for corporations to pay taxes? THEY USE LARGE SECTORS OF THE PUBLIC INFRASTRUCTURE.....OF ENERGY AND PUBLIC SERVICES.....THEY BENEFIT FROM OUR PUBLICLY EDUCATED CITIZENS......AND ARE PROTECTED IN COURT BY OUR PUBLIC JUSTICE SYSTEM. Corporations use all of these public benefits 1000% more than a single individual. THAT IS WHY CORPORATIONS PAY TAXES. It is not a double-tax burden as opponents to corporate tax say. Keep in mind corporate tax designations like s-corporation status move much tax burden off to shareholders who now rarely pay taxes at all----because there is no accountability.

ALONG WITH SYSTEMIC CORPORATE FRAUD, IT IS THIS CORPORATE TAX EVASION MAKING OUR GOVERNMENT COFFERS EMPTY.

The big corporate tax issues of 2008 election were how the US would make US global corporations pay their fair share as most business moved to expanded global markets. US global corporations have spent these last years since the crash consolidating overseas and building overseas headquarters from which they operate yet they lord over all of us here in the US. IF THEY DO BUSINESS AND HAVE OFFICES IN THE US-----THEY MUST PAY TAXES. Since these corporations have left the US economy stagnant as they expand overseas the money earned and taxed has fallen dramatically, starving our government coffers. The effects of global markets and corporations on our domestic economy is STARK. We cannot maintain a democratic society with global markets.

The REPATRIATION TAX was meant to address these global market gains back when NAFTA passed with Reagan/Clinton. Don't worry they said----we will make sure all that money gained overseas brings revenue to our government coffers. Then, they wrote the law with so many loopholes that no money from overseas profits has come to the US-----US corporations have simply left those profits sit off-shore. So, the US loses billions of corporate tax revenue each year because neo-liberals with a super-majority in Congress ignored all policy issues that would have held corporations accountable. Just think, this expansion since 2008 has almost all business executed by US corporations now overseas. This was the issue all democratic candidates for office ran with in 2008-----and then ignored. This is how you know your candidate is a neo-liberal.

THE US IS NOW LIKE A THIRD WORLD NATION THAT SIMPLY EXPORTS ALL MONEY RESOURCES AND KEEPS ITS OWN COUNTRY IMPOVERISHED.

Obama just offered up an override of the corporate repatriation tax of trillions of dollars in tax avoidance as a way to pay for infrastructure work. Obama cannot see the corporate fraud but he is an expert on giving trillions of dollars in corporate tax cuts. THAT'S A NEO-LIBERAL FOR YOU----WORKING FOR WEALTH AND PROFIT. Keep in mind this repatriation issue has existed since Clinton and NAFTA. When your pols allow a corporation to become too large to oversee-----they have failed the American people. The 2008 election was about reversing these policies and it was instead met with trillions of dollars in corporate tax breaks and FED policy that expanded these corporations ten fold.

REMEMBER, SIMPLY REINSTATING RULE OF LAW WOULD IMMEDIATELY DOWNSIZE ALL OF THESE GLOBAL CORPORATIONS. THIS IS WHY ELECTIONS HAVE BEEN CAPTURED TO MAKE SURE ANY CANDIDATE SEEKING TO DO THIS IS CENSURED.

Global corporations are now telling us they will repatriate these tax evasive profits at a 3.5% tax and Obama suggests this tax revenue will go right into infrastructure. Remember what infrastructure means----corporate infrastructure------gas pipelines and export terminals, high-speed rail and CSX cargo rails and bridges for example. Remember, the American people are paying huge amounts of money in taxes for the roads and high utility rates for water and sewage infrastructure. SO, neo-liberals are saying OK......let's bring in just enough to allow US global corporations to pay for their infrastructure development. See the parallel with Enterprise Zone corporate tax breaks-----any corporate taxes paid stays right in that Enterprise Zone maintaining corporate infrastructure.

Caterpillar dodged $2.4 billion in US taxes by booking 85% of its profits in Switzerland, where the company employs a mere .5% of its workforce and has zero factories or warehouses.

Dodging Repatriation Tax Lets U.S. Companies Bring Home Cash
By Jesse Drucker Dec 29, 2010 12:01 AM ET Forbes

At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.

The money -- including hundreds of billions in profits that U.S. companies attribute to overseas subsidiaries to avoid taxes -- is supposed to be taxed at up to 35 percent when it’s brought home, or “repatriated.” Executives including John T. Chambers of Cisco Systems Inc. say a tax break would return a flood of cash and boost the economy.

What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.”

Merck & Co Inc., the second-largest drugmaker in the U.S., last year brought more than $9 billion from abroad without paying any U.S. tax to help finance its acquisition of Schering-Plough Corp., securities filings show. Merck is also appealing a federal judge’s 2009 finding that Schering-Plough owed taxes on $690 million it had earlier brought home from overseas tax-free.

Photographer: Joshua Roberts/Bloomberg John Chambers, chief executive officer of Cisco Systems Inc.

The largest drugmaker, Pfizer Inc., imported more than $30 billion from offshore in connection with its acquisition of Wyeth last year, while taking steps to minimize the tax hit on its publicly reported profit.

Disclosures in Switzerland and Delaware by Eli Lilly & Co. show the Indianapolis-based pharmaceutical company carried out many of the steps for a tax-free importation of foreign cash after its roughly $6 billion purchase of ImClone Systems Inc. in 2008.

‘Trivially Small Taxes’

“Sophisticated U.S. companies are routinely repatriating hundreds of billions of dollars in foreign earnings and paying trivially small U.S. taxes on those repatriations,” said Edward D. Kleinbard, a law professor at the University of Southern California in Los Angeles. “They devote enormous resources first to moving income to tax havens, and then to bringing those profits back to the U.S. at the lowest possible tax cost.”

With the exception of the Schering-Plough case, no authority has accused Merck or Pfizer or Lilly of paying less tax than they should have. While corporations have no obligation to pay any more than the legal minimum, “the question is what should that minimum be?” said Kleinbard, a former corporate tax attorney at Cleary Gottlieb Steen & Hamilton LLP and former chief of staff at the congressional Joint Committee on Taxation.

U.S. companies overall use various repatriation strategies to avoid about $25 billion a year in federal income taxes, he said.

‘Best of Worlds’

“The current U.S. international tax system is the best of all worlds for U.S. multinationals,” said David S. Miller, a partner at Cadwalader, Wickersham & Taft LLP in New York. That’s because the companies can defer federal income taxes by shifting profits into low-tax jurisdictions abroad, and then use foreign tax credits to shelter those earnings from U.S. tax when they repatriate them, he said.

They’re aided by a cadre of attorneys, accountants and investment bankers in the tax-planning industry -- such as a panel of KPMG LLP tax advisers who held forth in a chilly hotel ballroom at a Philadelphia conference last month. There, they discussed a series of techniques for multinationals to return cash from overseas while avoiding or deferring the taxes.

KPMG tax advisers Kevin Glenn and Tom Zollo used slides to describe several methods. One diagram resembled a schematic from the Manhattan Project. Another strategy would require certain “bells and whistles” to convince regulators of an actual non-tax business purpose, Glenn explained.

Cat and Mouse

Such maneuvers reflect a decades-long cat-and-mouse game. As regulators and lawmakers tighten the rules, companies seek new, legal methods for getting around them. One of the techniques the KPMG advisers discussed was in response to loophole-closers Congress passed in August to address a projected $1.4 trillion federal budget deficit. The changes will make it harder for companies to manipulate the credits they get for taxes paid overseas.

“Some of the best minds in the country are spent all day, every day, wheedling nickels and dimes out of the tax system,” said H. David Rosenbloom, an attorney at Caplin & Drysdale in Washington, D.C., and director of the international tax program at New York University’s school of law.

Chambers, Cisco’s chief executive officer, brought up a repatriation break during the White House meeting, according to a person familiar with the discussion. It could reprise a 2004 tax holiday that allowed multinationals to return profits to the U.S. at a tax rate of 5.25 percent. U.S. corporations brought home $362 billion, with $312 billion qualifying for the relief, according to the Internal Revenue Service.

Short-Term Fix

Such a move “is a short-term fix to a long-term problem, which is the uncompetitive U.S. tax structure,” said Cisco spokeswoman Jennifer Greeson Dunn. The San Jose, California-based company reported $31.6 billion of undistributed foreign earnings, on which it had paid no U.S. taxes, as of July 31.

President Obama, who campaigned in part against companies’ use of offshore havens to avoid U.S. taxes, asked Treasury Secretary Timothy F. Geithner to follow up on the issue with business leaders, according to a White House official who asked not to be identified because the discussions were private.

The argument that a new tax break for offshore earnings would generate a domestic stimulus “holds no water at all,” said Joel B. Slemrod, an economics professor at the University of Michigan’s school of business and former senior tax economist for President Reagan’s Council of Economic Advisers. U.S. companies are already sitting on a record pile of cash -- $1.9 trillion in liquid assets, according to Federal Reserve data.

‘Cash Hoards’

“The fact that they have these cash hoards suggests that investment is not being constrained by lack of cash,” Slemrod said.

U.S. multinationals boost earnings by shifting income out of the country via transfer pricing, a system that allows them to allocate costs to subsidiaries in high-tax countries and profits to tax havens. Google Inc., for example, cut its taxes by $3.1 billion in the last three years by moving most of the income it attributed overseas ultimately to Bermuda, Bloomberg News reported in October.

The tax benefits from such profit shifting can have a greater impact on share price than boosting sales or cutting other expenses, since the reduced rate goes straight to the bottom line, said John P. Kennedy, a partner at Deloitte Tax LLP, speaking at the conference in Philadelphia Nov. 3.

Boosting Share Prices

For a hypothetical company that has 1,000 shares outstanding, has pretax income of $5,000 and trades at 20 times earnings, cutting just 2 percentage points off the rate could drive the share price up $2, Kennedy said.

“You may think two bucks isn’t much, but when you’re the CFO and she has 100,000 options, that’s pretty interesting,” he said. He cited large pharmaceutical and biotech companies, including Merck, Amgen Inc. and Eli Lilly, which have reported effective income tax rates at least 10 percentage points below the statutory 35 percent rate.

The bottom line: The effective tax rate “is, and will continue to be, the metric that is used to judge your performance,” he told the audience of corporate tax accountants and attorneys.

U.S. drugmakers shift profits overseas far in excess of actual sales there. In 2008, large U.S. pharmaceutical companies reported about four-fifths of their pre-tax income abroad, up from about a third in 1997, according to a March article in the journal Tax Notes by Martin A. Sullivan, a contributing editor and former U.S. Treasury Department tax economist. Their actual foreign sales grew more slowly, to 52 percent from 38 percent.

Stranded Cash

Deloitte’s Kennedy warned that booking large portions of income overseas can mean “you are going to strand so much cash offshore that your business chokes.” That’s because the foreign profits cannot be used for such purposes as building domestic factories without triggering federal tax. Overall, U.S. companies reported more than $1 trillion in such “indefinitely reinvested earnings” offshore at the end of 2009, according to data compiled by Bloomberg.

Last year, Merck, based in Whitehouse Station, New Jersey, tapped its offshore cash, tax-free, to pay for just over half the cash portion of its $51 billion merger with Schering-Plough, according to company filings.

At the deal’s closing, Merck’s foreign subsidiaries lent $9.4 billion to a pair of Schering-Plough Dutch units. Then the Dutch companies used those funds to repay a pre-existing loan from their U.S. parent, securities filings show. The $9.4 billion ended up with Schering-Plough shareholders as part of the cash owed under the merger, according to the company’s disclosure.

No Tax Hit

Bottom line: Merck used its overseas cash to pay the former Schering-Plough shareholders -- with no U.S. tax hit. In considering whether companies owe taxes in such cases, the IRS often asks whether payments from an offshore unit constitute a dividend, which would be taxable.

In Merck’s case, it arguably could be, said Robert Willens, who runs an independent firm that advises investors on tax issues.

“Merck was obligated to pay Schering-Plough shareholders and they tapped into the funds of their overseas subsidiaries to do it,” he said. “You’d have to be concerned about a constructive dividend there.”

Merck objected to any characterization of the payment as a dividend. “We don’t think the characterization is accurate and we remain confident with our tax position,” said Steven Campanini, a company spokesman.

On Appeal

In the Schering-Plough case decided last year, the drugmaker brought home $690 million tax-free as a result of assigning its rights to income from a complex interest-rate swap to a foreign subsidiary in the 1990s. A judge found the company “failed to establish a genuine purpose for the transactions other than tax avoidance” and said Schering-Plough was not entitled to $473 million in back taxes in dispute. Merck is appealing the judgment.

Even when companies pay large tax bills to import their foreign profits, they find ways to minimize the impact on the earnings they show investors. Last year, New York-based Pfizer repatriated more than $30 billion from offshore to help pay for its $64 billion purchase of Wyeth, according to company disclosures and a person familiar with the transaction.

The acquisition created a so-called deferred tax liability on Pfizer’s balance sheet of about $25 billion, according to securities filings, in part to allow for an anticipated tax hit on the earnings that would be repatriated.

Impact Wiped Out

While bringing home more than $30 billion helped generate a $10 billion tax obligation, Pfizer was able to draw down $10 billion of its new deferred liability through its income statement. Doing so wiped out the tax impact of the repatriation on its earnings reported to shareholders.

So while the company paid a real tax bill to the U.S. government stemming from the repatriation, that tax payment had limited impact on its publicly reported profits.

Pfizer made use of a legal accounting quirk that allowed it to set up the deferred liability on its balance sheet, but reverse part of that liability through its income statement, said Edmund Outslay, a professor of tax accounting at Michigan State University.

“Had Pfizer repatriated these earnings independently of the purchase of Wyeth, it would have incurred a huge tax charge” on its income statement, Outslay said. “So through the magic of purchase accounting, you create an opportunity to bring this money home while mitigating its impact on your effective tax rate.”

Effective Tax Rate

Pfizer spokeswoman Joan Campion said the $10 billion tax hit was indeed erased on the income statement because of the accounting treatment, but noted that the company’s effective tax rate rose in 2009 in part because Wyeth’s overseas profits were repatriated to help finance the deal.

Other strategies based on acquisitions have achieved nickname status among corporate tax advisers.

The “Killer B” maneuver is named for section 368(a)(1)(B) of the Internal Revenue Code, which deals with tax-free reorganizations. A U.S. company using the technique would sell its shares to an offshore subsidiary, bringing cash back to the U.S. tax-free. The offshore unit could then use the stock to make an acquisition. In 2006, the IRS issued a notice aimed at shutting down the maneuver.

Using a Variation

International Business Machines Corp. used a variation on the technique in May 2007, with an offshore unit purchasing the shares from a trio of banks, according to a company securities filing. That permutation wasn’t covered by the IRS in 2006. Two days after IBM’s disclosure, the agency announced plans for additional rule changes addressing stock sales to subsidiaries from shareholders as well as directly from parent companies.

The “Deadly D,” also named for a section of tax law, allows a U.S. company to attach the high tax basis in a newly acquired company to one of its existing foreign units. In some cases, doing so enables the U.S. parent to pull cash from the subsidiary up to the amount of the recent purchase price tax-free. The Obama administration has proposed changing the provision that enables the maneuver.

Lilly closed on its purchase of ImClone in November 2008. The next month, the newly acquired company converted to an LLC and Lilly transferred the investment to its main Swiss subsidiary, Eli Lilly SA, according to disclosures in Switzerland and Delaware. The transfer was in exchange for a $5.8 billion note payable to the U.S. parent company due at the end of 2011.

Extracting Earnings

Willens, the independent tax adviser, said the steps indicated a likely D reorganization, or another method “to extract earnings from overseas without tax consequences -- of course.” Lilly had no comment beyond its filings, said David P. Lewis, the company’s vice president for global taxes.

The KPMG panel discussion in Philadelphia, called “Global Cash Tax Management Plans and Repatriation Planning,” dissected other techniques, including one that took six slides to explain. It works like this:

Soon after a U.S. multinational has purchased another U.S. company, the new unit promises to pay the parent a large amount of cash pursuant to a note agreement. Since both parties are U.S. companies, there is no tax bill for the parent under current U.S. law.

Then the new acquisition converts to a foreign company. So when the payment pursuant to the note is made, it comes from overseas. That means the foreign cash is treated as a nontaxable payment under the note, instead of a taxable dividend.

Going Offshore

The newly converted foreign subsidiary could access the multinational’s existing offshore cash by borrowing from a foreign sister unit, said Glenn, the KPMG tax partner. He and Zollo were joined by colleague Frank Mattei, as well as Don Whitt, a Pfizer tax official.

“This basic transaction is something that at least a couple of taxpayers have done, and I know a number of others have evaluated,” Glenn said. The strategy’s name follows the alphabetic tradition of Bs and Ds. It’s called “the Outbound F.”

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Remember, the biggest way of recovering massive corporate fraud is through direct taxation. This is what the Robin Hood----financial tax on banks was to do. Neo-liberals intend to cut all corporate taxes just as republicans they simply have to pretend they hate doing it. So, you hear all kinds of data pushed in the media that US corporations are uncompetitive because of high tax rates-----only, they do not pay those tax rates.

The media never points out as well that other nations have tax systems that capture corporate tax in other ways then income tax so actually other nations do tax their corporations as much and more that US corporations.

IT IS A LIE TO MAKE US CORPORATIONS SEEM AT A DISADVANTAGE FROM HIGH TAX RATES.
When your neo-liberal paints corporate tax reform as holding corporations accountable----they are lying to you. Any changes to corporate tax code will be loosely written for plenty of loophole avoidance.

STOP ELECTING NEO-LIBERALS WHO ONLY WANT TO BOOST CORPORATE PROFIT.

The Tax Repatriation Issue

By Matthew Yglesias Slate

The idea of a corporate income tax repatriation holiday seems to have fallen off Washington's political agenda for now, but since a lot of very rich well-known companies would benefit from it I imagine the idea will come back and in light of Apple CEO Tim Cook's remarks today I thought I should try to explain it.

The way the American corporate income tax works is that the actual location of the corporate income in question matters. So if Apple runs a subsidiary in Japan that earns huge profits selling iPhones to Japanese people, the federal government deems this none of the IRS' business. The tax is paid only on American income based on US-based operations. And obviously US-based multinationals are happy to not pay those taxes. The problem arises, however, because in order to use those profits to pay a dividend or acquire a US-based company you would need to bring those foreign profits home and pay taxes on them. This becomes a scenario where the high statutory rate of the corporate income tax makes a big difference. As we've seen before, thanks to extensive availability of loopholes and deductions the overall corporate income tax burden isn't very high. But the headline rate is 35 percent. That's kind of a big deal. If it was somehow possible for Congress to commit itself to never altering the corporate income tax, at some point the stockpiles of foreign cash would just get too ridiculous and firms would suck it up and pay the bill. But because everyone knows there's a chance that congress will either cut the corporate income tax rate or declare a temporary "repatriation tax holiday" the rational shareholder prefers to not get paid a dividend out of foreign earnings. Better to sequester the funds abroad and wait for President Romney to create a more favorable tax environment. So in a funny way, the fact that a tax holiday might happen ends up strengthening the case for doing a tax holiday.

More fundamentally it strengthens the case for corporate income tax reform and over the long term for finding a different, less distortionary form of revenue.

_________________________________________

Corporate politicians always use the idea of simplifying the tax code as a way to increase tax revenue paid by the rich and corporations. They always tie this sacrifice by corporations to ending a social program for example. Clinton famously did this when he ended Welfare and started to privatize public agencies. You see where this repatriation law went in exchange for huge losses to the public sector services and programs. This is what you are now hearing in Congress, the Maryland Assembly, and even locally in Baltimore. WE CANNOT AFFORD PUBLIC SECTOR WORKERS AND THEIR BENEFITS BECAUSE NO CORPORATE AND WEALTH TAXES ARE BEING COLLECTED. So, Doug Gansler and Heather Mizeur----running for Governor of Maryland use a Combined Reporting scheme for making corporations pay while privatizing all that is public and bashing public sector pensions and wages. Combined Reporting has been shown to be too expensive to implement and indeed states having these laws do not enforce them.

IT IS JUST A SCHEME USED TO MAKE IT APPEAR CORPORATIONS ARE PAYING THEIR FAIR SHARE.

Keep in mind that Maryland has absolutely no oversight and accountability in corporate and tax responsibilities as it is-----can you imagine the state actually building a structure that would hold corporations accountable in this complex fashion?

OF COURSE NOT----IT IS A PLOY FOR ENACTING EVER LOWER TAXES ON CORPORATIONS. THIS IS NOT PROGRESSIVE FOLKS!

'The definition of a "unitary business," which determines the entities that are part of the combined report, is notoriously imprecise and subject to controversy, resulting in the under-inclusion of entities; prolonged administrative and court disputes; and arbitrariness by the revenue department in seeking to include profitable entities but excluding loss entities'.

Combine reporting of corporate income taxes isn't a panacea for Maryland

May 31, 2013

Regarding your recent editorial on combined reporting for corporate income tax in Maryland, you argue that a switch to combined reporting in favor of a 0.65 percent decrease in the corporate rate would represent only a temporary "inconvenience" (How to make Md.'s taxes more competitive," May 9).

The Council On State Taxation, a trade association representing almost 600 corporations engaged in interstate commerce, including significant operations in Maryland, has found that combined reporting neither provides the panacea for perceived "hiding" of profits nor provides the "permanent" revenue benefit asserted in the editorial.

The editorial notes that combined reporting is "a decades-old idea that is the law in a majority of states." While it is true that combined reporting has spread from its mainly western confines to some eastern states, with the exception of West Virginia and Washington, D.C., the mid-Atlantic and South are otherwise devoid of this mandatory filing method.

Had the editorial page ever canvassed corporate tax departments, it would have found that combined reporting is not a short-term inconvenience. The definition of a "unitary business," which determines the entities that are part of the combined report, is notoriously imprecise and subject to controversy, resulting in the under-inclusion of entities; prolonged administrative and court disputes; and arbitrariness by the revenue department in seeking to include profitable entities but excluding loss entities.

The editorial cites the current anti-abuse provisions in the Maryland corporate tax law as an example of complexity. Rather, these provisions underscore that every reporting regime will be subject to scrutiny as to whether it creates opportunities for abuse; it is hardly an argument for why including every related entity under the uncertain unitary business standard, and determining taxable income for the "multi-state conglomerate," to use the words of the editorial, is no more difficult than determining the income of a single entity doing business in Maryland.

One need only look to California and Illinois to see prime examples of states with hopelessly complex combined reporting regimes that are constantly seeking revisions in response to other perceived "loopholes" in the law.

The editorial also asserts that combined reporting "seeks to more accurately calculate a corporation's economic activity in a state." This statement may well reflect the intent, but not the reality.

In practice, combined reporting may actually reduce the link between income tax liabilities and where income is earned. Combined reporting regimes vary across the states; it is fair to say that each state's system is unique. Combined reporting variables include what entities are included or excluded from the combined report; how inter-company transactions are handled; treatment of net operating losses and credits among group members; treatment of foreign income and expenses; and many more complex and arcane tax rules.

Perhaps the greatest variable is apportionment. This imprecise gauge of income attributable to the taxing state becomes even more inaccurate in combined reporting states, as states and taxpayers struggle with the proper inclusion of factors of numerous corporate and pass-through entities. Add on the tendency of taxpayers to exclude profitable entities and revenue departments to exclude loss entities and you get a pretty clear picture of how combined reporting works in the real world.

This leads to the main point of the editorial: revenue. The editorial makes the simplistic "trade-off" argument for a modestly lower corporate rate, saying that there would be some immediate and permanent revenue benefit from a combined reporting move.

In bad times, the Maryland Business Tax Reform Commission found, combined reporting would be a revenue loser. As profits continue to grow (hopefully), the Department of Legislative Services projects revenue gains. Ignore the uncertainties mentioned above that make this revenue spike anything but a certainty, especially in the early years after adoption, when compliance and enforcement will be in their fledgling stages.

Do Marylanders really think a demonstrably fluctuating revenue source will fund long-term tax relief for business? Or, more likely, would Maryland be saddled with a complex, anti-competitive, under-performing corporate tax regime the next time trouble approaches and the state looks to raise revenue?

Independent studies have shown that combined reporting at best is an uncertain proposition for raising revenue – it could just as well be a revenue loser (see, for example, the recent University of Tennessee study on the topic, cited in our opposition testimony to SB 469).

Further, the editorialists should remember that any tax increases will ultimately be borne by labor in the state, through fewer jobs (or lower wages over time), or by in-state consumers (through higher prices for goods and services).

The editorial also seems to embrace the idea that Maryland shouldn't try to compete for investment by larger businesses, instead looking to "start-up" companies for its future. Don't throw in the towel, Maryland! Go for both. Improve your business climate, including your tax regime. Demand performance for business tax breaks by all means. But don't embrace combined reporting as the panacea it isn't.

Douglas L. Lindholm, Washington, D.C.

The writer is president and executive director of the Council on State Taxation.

____________________________________

New Report: Fortune 100 Companies Have Received a Whopping $1.2 Trillion in Corporate Welfare Recently Military contractors, oil companies and banks are the biggest 'welfare queens' around.

March 19, 2014 | Alternet

Most of us are aware that the government gives mountains of cash to powerful corporations in the form of tax breaks, grants, loans and subsidies--what some have called "corporate welfare." However, little has been revealed about exactly how much money Washington is forking over to mega businesses.

Until now.

A new venture called Open the Books, based in Illinois, was founded with a mission to bring transparency to how the federal budget is spent. And what they found is shocking: between 2000 and 2012, the top Fortune 100 companies received $1.2 trillion from the government. That doesn't include all the billions of dollars doled out to housing, auto and banking enterprises in 2008-2009, nor does it include ethanol subsidies to agribusiness or tax breaks for wind turbine makers.

What Open the Book's forthcoming report does reveal is that the most valuable contracts between the government and private firms were for military procurement deals, including Lockheed Martin ($392 billion), General Dynamics ($170 billion), and United Technologies ($73 billion).

After military contractors, $21.8 billion was granted out to corporate recipients in the form of direct subsidies; literally transfers of cash from the pockets of Americans to major corporations. The biggest winners were General Electric (GE) ($380 million), followed by General Motors (GM) ($370 million), Boeing (BA) ($264 million), ADM ($174 million) and United Technologies ($160 million).

$8.5 billion in federally subsidized loans were also doled out to giant oil companies Chevron and Exxon Mobile, and $1 billion went directly to massive agri-business Archer Daniels Midland. Of course, the banks also got their piece of the pie: $10 billion in federal insurance went to Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, not including any of the 2008 bailout money. Walmart enjoyed its share of federal insurance backing as well. Thanks to Open the Books, the curtain has been lifted and the whole country can now witness the great suckling of corporate America. As Open the Books founder Adam Andrzejewski put it: "Mitt Romney had it wrong: When it comes to the Fortune 100, it's 99%, not 47%, on some form of the government's gravy train."

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Republicans try their best to make it sound that most money in the Farm Bill goes to Food Stamps----but it is not true. What should disturb more people is that Americans are now overwhelmingly so poor as to be dependent on Food Stamps and this is what a third world society does----makes its people desperate for government food sources.

So, progressives would not be shouting as loudly for more Food Stamps then they would that too many Americans now depend on Food subsidies....ALL WHILE EACH CITIZEN IN AMERICA IS OWED A FEW HUNDREDS OF THOUSANDS OF DOLLARS IN CORPORATE FRAUD.

IF YOUR POL IS NOT DEMANDING JUSTICE FOR THE AMERICAN PEOPLE FROM MASSIVE CORPORATE FRAUD OF PUBLIC WEALTH-----THEY WORK FOR CORPORATIONS----GET RID OF THEM!!!!

Who Are the Real Welfare Queens?

55 Billion Goes to:

School lunch & breakfast programs
WIC (Women, Infants, & Children)
Food subsidies
Food stamps
Nutrition education
Other food and health programs

127 Billion Goes to:

Corporate funding (direct & indirect)
Grants to Fortune 500 companies
Big Agra subsidies (including sugar)
*****************************************************

Let's look beyond the direct corporate subsidy in the Farm bill to how Food Stamp revenue is spent. As health care reform pushes the poor out of health care access because -----'those people who are obese and/or have diabetes and heart disease brought it on themselves'-----we see the entire SNAP program has been driven by forcing people to buy the cheapest food sources that happen to be bad health choices but make corporations fabulously rich.

There is a movement to make SNAP more nutritious by promoting SNAP debit cards at farmers markets----this is good yet the 7-11 stores have SNAP signs that say they sell healthy food. We want people to have choice in what foods to buy----but if you have food deserts where the most people are on food stamps-----you are not really addressing the issue.

WHY DOES THE PUBLIC SECTOR NOT MAKE SURE THESE COMMUNITIES HAVE ACCESS TO GOOD FOOD WITH PUBLIC MARKETS? OH, THAT'S RIGHT-----WE ARE ELIMINATING THE PUBLIC SECTOR!

Also note that as shown above-----a super-sized majority of farm bill spending goes to US global agriculture and its infrastructure and profit-subsidy.....not small farmers.

Washington

7 Farm Bill 2013: Corporate Welfare on Steroids

By David Zeiler, Associate Editor, Money Morning · June 17, 2013 ·

If you're like most Americans, you probably think the primary purpose of the Farm Bill up for congressional authorization this year is to help farmers.

Of course, when it comes to the ways of Washington, nothing is ever that simple.

The 2013 edition of the Farm Bill, which is the main federal legislation for setting U.S. food policy, passed the Senate last week and now moves on to the House.

First crafted during the Great Depression to help struggling farmers, the Farm Bill is renewed and modified every five years. Congress was supposed to renew it last year, but instead merely extended it in deference to the 2012 election.

This year's Farm Bill calls for spending of $955 billion over 10 years and is 1,150 pages long.

And yes, some of that nearly $1 trillion does go to programs that help farmers. But not much of it.

Nearly 80% goes to fund the food stamp program, otherwise known by the more politically correct name of "Supplemental Nutrition Assistance Program" (SNAP) it was given in 2008.

Yet what's most appalling about Farm Bill 2013 is how much it benefits dozens of large U.S. corporations, such as Wal-Mart Stores, Inc. (NYSE: WMT), Monsanto Co. (NYSE: MON), Kraft Foods Group Inc. (Nasdaq: KRFT) and Tyson Foods Inc. (NYSE: TSN).

Back in 2008, $173.5 million was spent on lobbying that year's farm bill, most of it by corporations eager to ensure that their subsidy gravy train wouldn't get derailed.

It was the second-most lobbying money ever spent on any U.S. legislation, falling short only of the $250 million spent on Dodd-Frank.

That kind of money buys top-of-the-line lobbying power.

"On the [2008] Farm Bill, special interests hired an army of well-connected lobbyists to press their case with Congress, including 45 former members of Congress, [and] at least 461 former congressional and executive branch staffers (including 86 that worked for former agriculture committee members or the U.S. Department of Agriculture)," noted a report on Farm Bill lobbying by Food & Water Watch.

It's little wonder that Farm Bills are chock full of corporate welfare.

Digging into Farm Bill 2013 -- Where the SNAP Money Ends Up While most Americans who receive SNAP benefits need them to get by, most of that money ends up in the hands of big, profitable corporations.

The Farm Bill 2013 allocates $760.5 billion to the food stamp program, and many corporations have gone to great lengths over the years to ensure their share of that pie is as large as possible.

One of the best examples is the soda industry. The Center for Science in the Public Interest estimated that $4 billion in SNAP money was spent on soda purchases in 2010 (this despite that the primary purpose of SNAP is to make sure low-income people can purchase nutritious food).

That's a significant incentive. And sure enough, two All-American companies - Coca Cola Co. (NYSE: KO) and Pepsi Co, Inc. (NYSE: PEP) -- helped get soda eligible for food stamps back in 1964, and continue to spend large sums on making sure it stays that way.

Back in 2008, Coca-Cola spent $513,000 lobbying the Farm Bill; Pepsi spent $437,000.

The fight to keep snacks and sodas on the list of SNAP eligibility is a running battle, and big corporations are definitely winning.

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March 27th, 2014

3/27/2014

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REMEMBER, THE GOAL OF NEO-LIBERALISM IS TAKING THE US FROM A FIRST WORLD SOCIAL DEMOCRACY TO A THIRD WORLD AUTOCRATIC PLUTOCRACY. THAT MEANS INSTEAD OF MODERN DAY AMERICA THEY LOOK TO MEDIEVAL EUROPE----THE DARK AGES ----FOR THEIR SOCIAL MODEL. THE MASSES IMPOVERISHED, HEAVILY TAXED WAITING FOR THE GENTRY TO SPONSOR PUBLIC PROJECTS WHILE THE CHURCH HANDLES THE POOR---AND NOT SO WELL!

Today's blog looks at billionaires as benevolent philanthropist.

This is indeed where neo-liberals are going. The next phase after -'we have all the money and will do as we please' - is building the image of billionaire as benevolent philanthropist----you know----THE MEDICIs. You could feel sorry for the delusions of grandeur from a moneyed-class equal to mafia-cartels, but this is life and death and fighting for democracy in America. We are seeing in US media a build-up of image of billionaires for social good. As they starve public coffers by fraud and tax evasion they are being allowed to 'donate' for the common good and corporate tax deductions.

Meanwhile, you and I have moved back to the vision of the US as first world social democracy. HMMMMM...did I see 900,000 registered democrats in Maryland? Do you really think they want to go with neo-liberalism and Medicis?

I DON'T THINK SO!!! SEE WHY IT IS SO IMPORTANT TO KEEP CINDY WALSH FOR GOVERNOR OF MARYLAND OUT OF ELECTION COVERAGE AND OFF THE CAMPAIGN TRAIL!

What I am seeing and hoping to build with my candidacy is a structure around crony democratic politics in Maryland and the US. We do not need party machines and media money for campaigns. We need labor unions and justice organizations, churches and university political groups to network for the candidate working for labor and justice. Simple community networking and education about the need to ignore the onslaught of media campaign advertising by neo-liberal candidates with corporate war chests.

ALL OF MARYLAND CANDIDATES FOR GOVERNOR ARE NEO-LIBERALS EXCEPT CINDY WALSH. SHAKE THE BUGS FROM THE RUG------GET RID OF CORPORATE CONTROL OF THE DEMOCRATIC PARTY.

Regarding Basu's singing of praises for US billionaires and funding of basic research:

NEO-LIBERALS MAKING BILLIONAIRES LOOK WARM AND FUZZY AS THEY PUSH AMERICAN CITIZENS TO CHARITY!

Who doesn't like a billionaire made rich from the massive corporate frauds of last decade exploding shareholder wealth from looting the US Treasury and American people. A billionaire that parks hundreds of billions of dollars in revenue off-shore to avoid paying taxes and who is guilty of more hundreds of billions of dollars in tax fraud and tax evasion. A billionaire that backs basic research that will earn his corporation trillions of dollars in profit at the expense of public health and interest. God bless those billionaires say Basu and corporate public media. Who needs those trillions of dollars stolen from the public that funded basic research in public universities and gave the development benefits to the public rather than private patenting to soak the public as consumer. WHAT AMERICAN PATRIOTS THESE BILLIONAIRES ARE! Sound like the North Korean Great Leader propaganda? YOU BETCHA!

Let's look at the tax policies at the Federal, state, and local level that that allow this fleecing of the US Treasury beyond an IRS that has been gutted of employees to keep from doing investigations of hundreds of billions of dollars in corporate tax fraud that when recovered will make state and local universities flush with cash in education Trusts and grants and public research funding.

YOU SEE, IT IS THE MONEY THAT MADE THESE BILLIONAIRES RICH THAT IS NOW MISSING FROM THE ECONOMY BRINGING DEBT AND DISMANTLING OF PUBLIC SECTOR SERVICES AND PROGRAMS. UNIVERSITY TUITION TOO HIGH----BLAME THAT BILLIONAIRE.

Do you get a sick feeling in the pit of your stomach when a corporate CEO from the likes Starbucks receives all kinds of media coverage for 'donating' to veterans charities because he is upset with the conditions for veterans at VA hospitals around the country? Let's see how Starbucks evades paying corporate taxes and bring that back to fund all the public VA hospitals.

Starbucks wakes up and smells the stench of tax avoidance controversy

Cafe chain executive to face questions from MPs, while protesters plan to turn branches into creches and refuges

    Simon Neville and Shiv Malik
    The Guardian, Sunday 11 November 2012

Starbucks
Police protect a Starbucks branch during an anti-cuts march last month after the company's low tax bill was revealed. Photograph: Suzanne Plunkett/Reuters

On an average day its outlets are a hive of social activity, hosting everything from business meetings to reading groups looking for that all-important appointment with a morning caffeine rush, approvingly overlooked by a branded community bulletin board. But Starbucks should be careful what it wishes for.

The direct action group UK Uncut plans to turn dozens of the coffee empire's UK branches into creches, refuges and homeless shelters to highlight the chain's tax avoidance tactics.

The announcement of the action comes on the day a Starbucks executive faces questions from the House of Commons public accounts committee over why the company paid no corporation tax in the UK during the past three years, despite senior US management trumpeting the company's profitable operations in Britain.

MPs will also question management representatives from Google and Amazon, both of which have faced criticism for basing their European operations in countries that have lower tax rates such as Ireland and Luxembourg.

In his appearance before the committee, Starbucks' chief financial officer, Troy Alstead, will attempt to repair the company's reputation, which, according to research by YouGov, continues to suffer because of the controversy.

In a similar session last week, MPs accused HM Revenue & Customs (HMRC) officials of having cosy relationships with big businesses. Speaking about the arrangements with Starbucks, the Conservative MP Richard Bacon said: "It smells – and it doesn't smell of coffee. It smells bad."

UK Uncut has said it will start targeting Starbucks on the Saturday following the autumn statement by the chancellor, George Osborne, on 8 December. The campaign group is attempting to draw a link between government cuts, in particular those that affect women, and tax avoidance by multinational businesses.

Sarah Greene, a UK Uncut activist, said funding for refuges and rape crisis centres faced cuts unless companies paid their fair share of tax. HMRC estimates around £32bn was lost to tax avoidance last year.

Greene said the government could easily bring in billions that could fund vital services by clamping down on tax avoidance, but was instead "making cuts that are forcing women to choose between motherhood and work, and trapping them in abusive relationships".

The group, which rose to prominence after staging a sit-in at Vodafone stores, Sir Philip Green's Topshop and Fortnum & Mason, turned its attentions to Starbucks last month after an investigation by Reuters discovered the company had paid only £8.6m in corporation tax since launching in the UK 14 years ago, despite cumulative sales of £3bn.

Longstanding Uncut campaigner Anna Walker said the group wanted to "galvanise the anger" that women were feeling: "We've chosen to really highlight the impact of the cuts on women this time. So there is going to be a real focus on transforming Starbucks into those services that are being cut by the government … [such as] refuges and creches," she said.

Walker said the campaign group had been in touch with women's groups across the country in the lead-up to the direct action event and believed that, along with a pre-established network of activists, dozens of the company's coffee shops were likely to be targeted.

"Starbucks is a really great target because it is on every high street across the country and that's what UK Uncut finds really important: people can take action in their local areas," she said. "We're really hoping that women who are impacted by the cuts, who are seeing their Sure Start centres where their kids go being reduced in services, and people who use refuges, [will] be involved."

Several international organisations have faced criticism over their UK accounts, with Amazon, eBay, Facebook, Google and Ikea all paying little or no corporation tax despite large British operations.

However, according to pollsters at YouGov's BrandIndex, Starbucks has suffered the deepest damage to its image.

The organisation, which records the strength of companies' brand identities, revealed Starbucks' cachet plummeted following the tax revelations and continues to languish at near-record lows.

Its "buzz" score, which measures the number of negative and positive comments customers have heard, hit -16.7. That is only slightly higher than the lowest levels it hit during the most heated point of the controversy last month, at -28.6. A year ago its rating was at +3.1.

By comparison, Google and Amazon – both due at the select committee – have seen their ratings seemingly unaffected.

UK BrandIndex director Sarah Murphy said: "A brand's buzz score typically recovers quite quickly following a spate of bad press, but we aren't seeing that with Starbucks, which is quite unusual. Its scores started to level out around the end of last month, but whatever modest recovery Starbucks has made could well be in jeopardy if this story flares up again in the media."

The coffee store chain insists it pays the correct level of taxes. The group chief executive, Howard Schultz, has said in a statement: "Starbucks has always paid taxes in the UK despite recent suggestions to the contrary.

"Over the last three years alone, our company has paid more than £160m in various taxes, including national insurance contributions, VAT and business rates."

However, MPs will no doubt point out that VAT is paid by the customers at point of sale and collected by Starbucks.

Margaret Hodge, who chairs the public accounts committee, told parliament last month that Apple, eBay, Facebook, Google and Starbucks had avoided nearly £900m of tax. The prime minister, David Cameron responded to the claim by saying: "I'm not happy with the current situation. I think [HMRC] needs to look at it very carefully. We do need to make sure we are encouraging these businesses to invest in our country as they are but they should be paying fair taxes as well."

A spokeswoman for Starbucks said on Sunday: "While the subject of tax law can be extremely complex, Starbucks respects and complies with tax laws and accounting rules" in each of the 61 countries where we do business, including the UK – a market that we remain committed to for the long term. We've posted the facts about our tax practices in the UK on our website .

"Starbucks' economic impact in the UK spans far beyond our stores and partners (employees). We spend hundreds of millions of pounds with local suppliers on milk, cakes and sandwiches, and on store design and renovations. When you take into account the indirect employment created by Starbucks' investments in the UK, the company's extended economic impact to the UK economy exceeds £80m annually.

"We hope that UK Uncut will respect the wellbeing of our partners and customers, and recognise the value that we add to the economy, creating jobs and apprenticeships, as well as paying our fair share of taxes in the UK."
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How does a US global corporation go from being called a tax cheat and immoral in overseas press.....which is far more free and fair than a US state-run corporate media......to being the good guys in America donating all that money for tax write-offs instead of paying US taxes that would flood government coffers with revenue?

NEO-LIBERALS AND NEO-CONS CONTROL US MEDIA AND HAVE MADE IT US CHAMBER OF COMMERCE ALL THE TIME. THE US MEDIA IS NOW EQUAL TO ROMANIA AS FREE PRESS. ERGO, BASU'S LOVEFEST.

We all know that as all US commerce becomes consolidated and owned by the same few people at the top we will not be able to police US global corporations overseas and while they stagnate our US economy for growing profits overseas, all that wealth generated overseas does nothing for US yet we have the global headquarters ruling over all government and public policies and taxpayers subsidizing corporate wealth. The article above on the state of US corporations doing business in the UK paying no taxes is mirrored in America. The difference, the American people are electing the very neo-liberals turning their heads to this massive fraud and allowing media to ignore all of this.

EUROPE IS SEEING MORE ACCOUNTABILITY BECAUSE ITS CITIZENS HIT THE STREETS AND VOTE BAD POLS OUT OF OFFICE.

Starbucks, Google, Amazon accused of 'immoral' tax avoidance ...

www.csmonitor.com/.../1203/Starbucks...immoral-tax-avoidance

Starbucks, Google, and Amazon were among the major multinational corporations accused by lawyers of exploiting British tax laws to move UK-made profits ...
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Sending money stolen through tax fraud and shareholder wealth created by massive corporate fraud of US Treasury to charity just to write the donation off future taxes-----WHAT A GUY-----HOWARD SCHULTZ! Mind you, I have a history of Starbucks and its beginning in Seattle even having a Starbuck's green Jeep in my enthusiasm for fair trade coffee. THOSE DAYS ARE LONG GONE.

Do you know the entire GI Bill would be flush with money if Starbucks paid its corporate taxes and shouted to end massive corporate fraud?

THE LEVEL OF DISGRACE IN PUSHING AMERICAN VETERANS TO HAWKING FOR CHARITY IS UNMEASURABLE.

Starbucks CEO To Donate $30 Million To Support PTSD Research For Veterans

The Huffington Post | by Melissa McGlensey

Posted: 03/21/2014 6:18 pm EDT Updated: 03/21/2014 6:59 pm EDT

Starbucks Starbucks Coffee Howard Schultz Charity Military Veterans Veterans Video Impact News

Starbucks CEO Howard Schultz is making a large donation to help U.S. veterans.

Schultz spoke to CBS Evening News on Wednesday and announced his plan to allocate most of the $30 million donation toward researching solutions to brain trauma and post-traumatic stress disorder.

PTSD affects between 11 and 20 percent of military members who served in the Iraq and Afghanistan wars, according to the Department of Veterans Affairs.

Schultz told CBS that veterans often don't get the treatment or understanding they need and deserve.

"The truth of the matter is, and I say this with respect, more often than not, the government does a very -- a much better job of sending people to war than they do bringing them home, " he stated. "They're coming home to an American public that really doesn't understand and never embraced, what these people have done."

Schultz has shown support for troops in the past. Last year, Starbucks announced its initiative to hire 10,000 veterans and spouses of active military in five years.

The unemployment rate among post-9/11 veterans dropped to 9.0 percent last year, down from 9.9 percent the year before, according to the Bureau of Labor Statistics. This number is about 1.6 percentage points above the civilian population.
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Bill Gates was given the 'good billionaire' logo by neo-liberals trying to push the Buffett 'billionaires need to pay what their secretary pays in taxes' at a time when the US needs billionaires to pay what they paid before the Reagan/Clinton era-----60-70% tax rate -----to bring back the massive frauds and swing the pendulum back to flush government coffers and a first world society. This is not targeted tax policy-----

IT IS SIMPLY RULE OF LAW AND JUSTICE BRINGING TENS OF TRILLIONS OF DOLLARS IN CORPORATE FRAUD BACK TO US TREASURY AND PUBLIC TRUSTS.

As Basu pretends that Bill Gates created the Gates Global Health Initiative for the good of mankind the first thing that comes to mind is that African and Asian PHARMA developed and patented by the Gates foundation has Bill Gates, Obama, and Clinton lobbying hardest this past decade to dismantle all of public health and protections of generic manufacturing and subsidy of PHARMA around the world with the Trans Pacific Trade Pact. It is Bill Gates building a PHARMA corporation that seeks to maximize profits by gutting all public health protections for medicine around the world. WHAT A GUY-----BILL GATES THAT GOOD BILLIONAIRE!

While in Washington State I attended Microsoft shareholder meetings that had stockholders angry that Bill was moving all Microsoft money to a trust that was then spending billions of dollars in Pharma and health care products in Africa and Asia. Warren Buffett moved his billions to this new economy as well. WHILE BEING TOUTED AS PHILANTHROPISTS THEY WERE SIMPLY GUARDING MONEY FROM TAXATION UNDER THE GUISE OF PRIVATE NON-PROFITS WHILE THEY BUILT WHAT THEY KNEW WAS THE NEXT ECONOMIC ENGINE-----HEALTH AND EDUCATION. This was at the end of Reagan and the beginning of Clinton when the transition to privatization of public health and education to create the next Wall Street markets were made.

RAISE YOUR HAND IF YOU THINK A BILLIONAIRE USING PRIVATE NON-PROFITS AND THE GUISE OF PUBLIC HEALTH TO SHIELD MONEY FROM TAXATION ALL TO CREATE AND PATENT PHARMA TARGETING A DEVELOPING WORLD THEY WANT TO MAKE A MARKET IS A GOOD GUY------NO ONE!!!!

Bill Gates is the face of Race to the Top and education privatization for the same reason-----creating private education businesses centered online and developed by Microsoft and other tech institutions. The Industrial Philanthropists built the public structures of public universities, libraries, and K-12 and Bill Gates Foundation seeks to tear them down for profit. WHAT A GUY-----BILL GATES!

Keep in mind that all these excuses of republicans defunding the IRS or Wall Street regulatory agencies made by neo-liberals are a farce. Look to neo-liberal Maryland where fraud and corruption is king to see a dismantled and unfunded oversight.

RECOVERING CORPORATE FRAUD PAYS FOR ITSELF, NO REPUBLICANS OR TAXPAYER MONEY NEEDED. THAT FIRST BILLION IN RECOVERY PAYS FOR THE NEXT TRILLION DOLLARS IN RECOVERY!

Microsoft, HP skirted taxes via offshore units: U.S. Senate panel

By Kim Dixon

WASHINGTON Thu Sep 20, 2012 7:12pm EDT

A variety of logos hover above the Microsoft booth on the opening day of the International Consumer Electronics Show (CES) in Las Vegas January 10, 2012. REUTERS/Rick Wilking

A variety of logos hover above the Microsoft booth on the opening day of the International Consumer Electronics Show (CES) in Las Vegas January 10, 2012.

(Reuters) - Microsoft Corp and Hewlett-Packard Co pushed back against claims by a U.S. Senate panel on Thursday that they used offshore units and loopholes to shield billions of dollars in profits from U.S. taxes.

Calling tax avoidance rampant in the technology sector, the Senate's Permanent Subcommittee on Investigations said tech companies used intellectual property, royalties and license fees in overseas tax havens to skirt taxes.

The panel subpoenaed internal documents from the companies and interviewed Microsoft and HP officials to compile its report, which uses the companies as case studies.

"The tax practices and gimmicks range from egregious to dubious validity," Democratic Senator Carl Levin, chairman of the panel, said at a news conference.

Officials at HP and Microsoft strongly denied any wrongdoing, noted tax officials had not objected to the structures and said there were valid reasons for tax planning.

Senator Tom Coburn, the top Republican on the panel, signed onto the new report but blamed Congress.

"Tax avoidance is not illegal. Congress has created this situation," Coburn said, criticizing the complex tax code and the 35 percent corporate tax rate, among of the world's highest, though few companies pay that statutory rate.

The subcommittee said that from 2009 to 2011, Microsoft shifted $21 billion offshore, almost half its U.S. retail sales revenue, saving up to $4.5 billion in taxes on goods sold in the United States.

This was accomplished, the report said, by aggressive transfer pricing, where companies value intra-company movement of assets. Corporate units must use a fair market price to value transfers, but critics say they are manipulated to minimize tax.

The report also said the software giant shifts royalty revenue to units in low-tax nations, such as Singapore and Ireland, avoiding billions of dollars of U.S. tax.

Levin said one Microsoft Singapore unit was legally headquartered in Bermuda and had no employees. Levin asked Microsoft's tax vice president, William Sample, if the reason was to cut its tax bill. "Yes, that is correct," Sample said.

Sample also said several offshore units employ hundreds of workers, which Levin noted was a tiny fraction of its workforce.

IRS CITES CHALLENGE

Internal Revenue Service officials are not allowed to comment on specific taxpayers, but Chief Counsel William Wilkins said enforcing transfer pricing law "has been the IRS's most significant international enforcement challenge."

U.S. companies have at least $1.5 trillion in profits sitting offshore. Most say they are keeping them there to avoid U.S. tax. Of the top 10 companies with the biggest offshore cash balances, five are in the technology sector.

"The high-tech industry is probably the No. 1 user of these offshore entities to transfer intellectual property," Levin said.

The panel said Hewlett-Packard funded U.S. operations with a stream of intra-company loans, using an exception in the law for short-term loans, to avoid billions of dollars in taxes.

Levin said more than 90 percent of HP's cash was sitting offshore, as opposed to about 65 percent of revenue coming from countries outside the United States.

An HP spokesman said in a statement that the hearing was a politically motivated attack.

"We are disappointed to see what appears to be a politically motivated attack on one of America's largest employers," HP spokesman Michael Thacker said before the hearing.

Lester Ezrati, an HP tax vice president, said HP used cash faster in the United States for valid reasons including that certain payments like pensions must be made with U.S. cash.

"HP has an overall strategy to minimize expenses and that is what generates where the cash is located," and "one of those expenses is taxes," Ezrati said.

REPATRIATED PROFITS TAXABLE

Under tax law, foreign profits are subject to U.S. tax when they are "repatriated," or brought into the United States, usually in the form of a dividend.

One internal document released by the panel suggested that HP routinely brought money into the U.S. without paying U.S. tax. An HP presentation noted that "without planning, repatriation of foreign earnings could lead to tax payments."

Loans by the foreign units to a related U.S. entity are considered a dividend for tax purposes but there is an exception for loans that are repaid within 30 days, according to the committee's tax experts.

HP set up a complicated series of short-term loans starting in 2008 to these businesses that were continuous without gaps, to get around that provision, the panel found.

Big companies have lobbied for a tax holiday to let them bring offshore profits into the United States at a reduced tax rate, arguing that the profits are trapped offshore. That effort has fallen flat amid reports suggesting such a program would cost the government significant revenue and not produce U.S. jobs.

The report on transfer pricing "mocks the notion that profits of U.S. multinationals are 'locked-up' or 'trapped' offshore," Levin said.

The subcommittee also criticized accounting giant Ernst & Young for blessing HP's practices.

Ernst & Young partner Beth Carr said that the firm stands firmly behind its auditing for HP.
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Below you see from 2002-2005 Bill Gates was positioning himself for the coming Affordable Care Act health legislation and privatization and making of global health corporations. Keep in mind that mental health pharma was just given a boost in rewriting the Psychiatric definition of what constitutes depression. increasing government subsidy of more depression PHARMA as Gates moves to Prozac. Medicare and Medicaid will now pay for depression medicine for what we all know is common sadness.

Bill Gates was simply moving his wealth to what he knew would be the new markets created by privatization of public health and education-----AFFORDABLE CARE ACT AND RACE TO THE TOP.

ALWAYS WORKING FOR THE PUBLIC'S INTERESTS THOSE GOOD BILLIONAIRES! NEO-LIBERALS----WORKING FOR WEALTH AND PROFIT AND THIRD WORLD QUALITY OF LIFE. HOW DO THEY RUN AS DEMOCRATS?

Below you see a blogger that obviously attended the same Microsoft shareholder meetings I did.

created 04/07/2005 - 07:35, updated 31/08/2006 - 14:01 by cybe

Bill Gates is [alledgedly] giving 95% of his wealth for africa ......

I wonder if he is diversifying his investments and has bought shares in the pharmaceutical industry so he is just transferring his money into a new business venture whilst "looking" as though he is giving it away.

The Real Way to Health is a completely different one:- "Healing in His Wings"

Three articles below:

Bill Gates sells MSFT, takes Prozac
Bill Gates and Big Pharma
Bush's bogus AIDS offer, and why Bill Gates is making it worse.
The Gates And Buffet Foundation Shell Game

Bill Gates sells MSFT, takes Prozac

By Andrew Orlowski in San Francisco
http://forms.theregister.co.uk/mail_author/?story_url=/2002/09/09/bill_gates_sells_msft_takes/

Published Monday 9th September 2002 19:48 GMT

Bill Gates has sold almost half a billion dollar's worth of Microsoft stock this year, and begun to invest heavily in big pharma. In the second half of this year he bought 2.5 million shares in Eli Lilly, manufacturer of Prozac, and also made major investments in Merck and Pfizer, notes /Information Week/.

The 9 million shares Gates relinquished represent only a tiny proportion of Chairman Bill's MSFT holdings, or about 1.36 per cent.

Eli Lily's patent on Prozac expired a year ago, but the company has sought to widen its appeal, combining its with other drugs and marketing it as a kind of MSG of anti-depressants.

"Companies are getting a lot more creative in ways to sustain the product lifespan of drugs," a J.P. Morgan told The Street.

In sickness and in wealth, big pharma remains the most profitable industry in America. No doubt Gates took comfort in the Bush administration's indulgent attitude towards the inflated prices charged by the pharmaceutical industry. Although nine out of ten drugs fail clinical tests, the industry - which argues that high prices are needed to justify R&D - spends two and half times as much on marketing than on research, according to Families USA .

(I'll defer to our very own Thomas C Greene, who covered the industry in detail).

A crack about anxiety-inducing computer software would simply be too cheap, so we won't dream of making it here.

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We must be very careful to follow where these last few years of US global corporation has led under Obama and neo-liberals in Congress. Remember, between the FED policy and trillions in fake job stimulus money that was just used to expand US global corporations overseas, the US has allowed global corporations to create a global network of empire that looks just like this one below. IT IS HORRENDOUS.

So, as Basu tells us on corporate 'public' media WYPR that billionaires are doing good in their bequests to basic research, the entire world knows what kind of empire Bill Gates is building!

'Blackwater, Monsanto and Gates are three sides of the same figure: the war machine on the planet and most people who inhabit it, are peasants, indigenous communities, people who want to share information and knowledge or any other who does not want to be in the aegis of profit and the destructiveness of capitalism'.

A Link Between Monsanto, Blackwater & Bill Gates?

By majestic on January 3, 2011 in News

There’s an unlikely story circulating on various underground news sites claiming that the controversial biotech company Monsanto has acquired infamous mercenary outfit Blackwater (now trading as Xe Services). The report apparently first appeared in La Jornada, one of Mexico City’s leading daily newspapers, described by Noam Chomsky as “the one independent newspaper in the whole hemisphere.” Pravda has translated the original Spanish text written by Silvia Ribeiro into English. From my reading of the Jeremy Scahill article that seems to form the basis of the report, the most you can deduce is that Monsanto hired the creeps at Blackwater to do dirty work for them, but the rumor keeps circulating, so could there be a grain of truth somewhere in this story?:

A report by Jeremy Scahill in The Nation (Blackwater’s Black Ops, 9/15/2010) revealed that the largest mercenary army in the world, Blackwater (now called Xe Services) clandestine intelligence services was sold to the multinational Monsanto. Blackwater was renamed in 2009 after becoming famous in the world with numerous reports of abuses in Iraq, including massacres of civilians. It remains the largest private contractor of the U.S. Department of State “security services,” that practices state terrorism by giving the government the opportunity to deny it.

Many military and former CIA officers work for Blackwater or related companies created to divert attention from their bad reputation and make more profit selling their nefarious services-ranging from information and intelligence to infiltration, political lobbying and paramilitary training – for other governments, banks and multinational corporations. According to Scahill, business with multinationals, like Monsanto, Chevron, and financial giants such as Barclays and Deutsche Bank, are channeled through two companies owned by Erik Prince, owner of Blackwater: Total Intelligence Solutions and Terrorism Research Center. These officers and directors share Blackwater.

One of them, Cofer Black, known for his brutality as one of the directors of the CIA, was the one who made contact with Monsanto in 2008 as director of Total Intelligence, entering into the contract with the company to spy on and infiltrate organizations of animal rights activists, anti-GM and other dirty activities of the biotech giant.

Contacted by Scahill, the Monsanto executive Kevin Wilson declined to comment, but later confirmed to The Nation that they had hired Total Intelligence in 2008 and 2009, according to Monsanto only to keep track of “public disclosure” of its opponents. He also said that Total Intelligence was a “totally separate entity from Blackwater.”

However, Scahill has copies of emails from Cofer Black after the meeting with Wilson for Monsanto, where he explains to other former CIA agents, using their Blackwater e-mails, that the discussion with Wilson was that Total Intelligence had become “Monsanto’s intelligence arm,” spying on activists and other actions, including “our people to legally integrate these groups.” Total Intelligence Monsanto paid $ 127,000 in 2008 and $ 105,000 in 2009.

No wonder that a company engaged in the “science of death” as Monsanto, which has been dedicated from the outset to produce toxic poisons spilling from Agent Orange to PCBs (polychlorinated biphenyls), pesticides, hormones and genetically modified seeds, is associated with another company of thugs.

Almost simultaneously with the publication of this article in The Nation, the Via Campesina reported the purchase of 500,000 shares of Monsanto, for more than $23 million by the Bill and Melinda Gates Foundation, which with this action completed the outing of the mask of “philanthropy.” Another association that is not surprising.

It is a marriage between the two most brutal monopolies in the history of industrialism: Bill Gates controls more than 90 percent of the market share of proprietary computing and Monsanto about 90 percent of the global transgenic seed market and most global commercial seed. There does not exist in any other industrial sector monopolies so vast, whose very existence is a negation of the vaunted principle of “market competition” of capitalism. Both Gates and Monsanto are very aggressive in defending their ill-gotten monopolies.

Although Bill Gates might try to say that the Foundation is not linked to his business, all it proves is the opposite: most of their donations end up favoring the commercial investments of the tycoon, not really “donating” anything, but instead of paying taxes to the state coffers, he invests his profits in where it is favorable to him economically, including propaganda from their supposed good intentions. On the contrary, their “donations” finance projects as destructive as geoengineering or replacement of natural community medicines for high-tech patented medicines in the poorest areas of the world. What a coincidence, former Secretary of Health Julio Frenk and Ernesto Zedillo are advisers of the Foundation.

Like Monsanto, Gates is also engaged in trying to destroy rural farming worldwide, mainly through the “Alliance for a Green Revolution in Africa” (AGRA). It works as a Trojan horse to deprive poor African farmers of their traditional seeds, replacing them with the seeds of their companies first, finally by genetically modified (GM). To this end, the Foundation hired Robert Horsch in 2006, the director of Monsanto. Now Gates, airing major profits, went straight to the source.

Blackwater, Monsanto and Gates are three sides of the same figure: the war machine on the planet and most people who inhabit it, are peasants, indigenous communities, people who want to share information and knowledge or any other who does not want to be in the aegis of profit and the destructiveness of capitalism.

* The author is a researcher at ETC Group

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I watched a TV commercial that had UnderArmour CEO standing on an African mountaintop stating that he wants to use his billions to help the poor worldwide. This is the same CEO who demands his UnderArmour headquarters in Baltimore be given tax-free status starving Baltimore City government coffers of money that would go to underserved communities and public schools.

IF THAT ISN'T OBSCENE ENOUGH-----UNDERARMOUR USES THE FACT THAT THE VETERANS ADMINISTRATION HAS BEEN DISMANTLED AND NEO-LIBERALS ARE PUSHING VET CHARITY TO SUPPORT VETS.

So, rather than paying taxes that would support a strong, public supported VA, he is making profits off of his athletic brand and 'donating' money to vet charities for corporate tax write-offs. WHAT A GUY-------BILLIONAIRE PROFITS OFF OF VETS FORCED TO SEEK CHARITY IN LIEU OF VETERAN'S BENEFITS!

Below you see yet another corporation that is ground zero for making the American people impoverished and yet finding time to 'donate' to help the poor.

THIS IS NEO-LIBERALISM WHERE WEALTH AND PROFIT CREATE AN AUTOCRATIC SYSTEM MODELED ON MEDIEVAL EUROPE-----THEY CALLED IT THE DARK AGES.

UNDERARMOUR---GlassDoor

“Employee survey results were poor”
Director (Former Employee)
Baltimore, MD

I worked at Under Armour full-time for more than 3 years

Pros – Successful brand w/ currently valuable stock

Cons – Don't just go by these anonymous reviews. In a recent survey of all employees, findings were that an overwhelming majority feel "disengaged", "overworked" , "underpaid", and "under appreciated". What was the founder's response when he pulled Directors into a room? Instead of saying "here's what we're going to do", he said "it's your problem. You fix it." Needless to say there's extremely high turnover. Those that do stay wish they were somewhere else.

Advice to Senior Management – Listen to employee issues and do something about. Currently you're doing neither.

No, I would not recommend this company to a friend – I'm not optimistic about the outlook for this company

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TAX CREDITS FOR HIRING VETS IS LIKE ENTERPRISE ZONE TAX CREDITS FOR HIRING THE UNDERSERVED ------AS IN BALTIMORE'S INNER HARBOR THESE CONTRACTS ARE ALL IGNORED AND THE JOBS ARE FILLED WITH FRAUD AND WORKPLACE ABUSE.

All across the country veterans are being hired into the worst of jobs and working conditions as corporations get tax credits for simply hiring. Those fighting to keep public military positions are being harassed and denied civil liberties and workplace safety. Remember, the Bush Administration made military service contracts NULL and VOID requiring national guard and military to serve extended service tours knowing these troops would be battle weary and did while dismantling Va facilities. AS Obama does the same, O'Malley travels overseas to recruit Veterans to substandard online degrees and career colleges.

UNDERARMOUR
Shop the Wounded Warrior project

Between August 2012 and December 2014, Under Armour® will make a donation of over $1 Million to Wounded Warrior Project™ benefitting injured service members and their families.
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The neo-liberals spent all last decade shouting against the abuses of the US troops by neo-conservatives and now neo-conservatives are blaming neo-liberals for the outrageous move to dismantle all that is public veterans administration.

TAG TEAM OF GLOBAL CORPORATE POLS----STOP ALLOWING A NEO-LIBERAL DEMOCRATIC LEADERSHIP CHOOSE YOUR CANDIDATES---RUN LABOR AND JUSTICE IN ALL PRIMARIES!

Below you see the same labor and justice conditions that existed under Bush are now super-sized under Obama and neo-liberals in Congress. Do you hear your incumbent shouting out against the deliberate attack of public sector workers in order to get them to quit and be replaced by private contractors and to protect yet more people breaking the US laws from prosecution?

General News 3/1/2014 at 17:57:53

Veterans Speak Out Against a Debilitating Federal Workplace Harming the Health of America's Returning Military

By Ward Jordan

opednews.com

(WASHINGTON, DC)   -- In a recently released statement veterans, members of The Coalition For Change, Inc. (C4C), called for the U.S. Congress and the Obama administration to stop the political power play and to mandate that federal supervisory and management officials face discipline for willfully breaking civil rights and whistleblower-protection laws.

"The unrestrained retaliatory actions the VA supervisors take against subordinate employees cripples the agency's healthcare system and stifles many employees from exposing unfair customs, unsafe conditions and unlawful practices," said Oliver Mitchell, a U.S. Marine Corps veteran and a former employee with the Veterans Affairs' Greater West Los Angeles Medical Center Imaging Service, Radiology Section. While serving as a Patient Services Assistant, Mitchell received "excellent" performance ratings.   "Things changed rapidly after I refused an order to purge patient documents," Mitchell explained.   "The harassment started and VA officials detailed me repeatedly after I filed a whistleblower complaint with the Office of Special Counsel (OSC)."

According to Mitchell, both the VA's Office of Inspector General and the OSC failed to properly pursue the matter even after hearing Mitchell's submitted audio tape of employees discussing how to destroy veteran patients' records.   "Although I declined to purge patient records, VA officials hired another employee to delete valid MRI requests from the system as a means of reducing the backlog," said Mitchell, now homeless after being constructively removed from the U.S. Veterans Affairs pursuant to terms put in a settlement agreement.

"The constructive discharge is a popular tactic used in discharging complaining parties," said Janel Smith, a disabled Air Force veteran and the Vice President of the Coalition For Change, Inc. (C4C).

Ralph Saunders, a U.S. Marine Corps veteran and a former employee with the VA's New Orleans Medical Center, agreed that reprisal against employees who file complaints is a daunting problem.   According to Saunders, VA personnel once destroyed his medical documents and subjected him to endless reprisal after he filed an Equal Employment Opportunity (EEO) complaint against a manager who had denied him requested time off from work to accommodate his wife's heart-surgery operation. Saunders prevailed in his discrimination complaint (Saunders v Shinseki, Case Number 200L-0629-2004-100828).

Unequivocally, the Equal Employment Opportunity Commission (EEOC) found managers (Cassandra Holiday, Jeanette Butler, and Linda Cosey) guilty of "abusing the rules" and "retaliating against Saunders for his protected EEO activity."   The EEOC also found "evidence that officials retaliated against other employees who filed EEO complaints."   Saunders, who had worked sixteen years with the VA before officials targeted him for removal from federal service, is presently challenging the VA on a settlement-breach issue.

"Retaliation by rogue VA managers is destroying the lives of men and women who served honorably on active duty in the U.S. Armed Forces," said Isaac Decatur, a U.S. Navy veteran, who after eighteen years with the department was fired from Veterans Affairs' Durham, North Carolina, office after filing an EEO complaint (Decatur v Shinseki, 0120073404).

"I wrote to President Obama about the VA's failure to take discipline against the supervisors who engaged in the blacklisting of employees and who the EEOC found guilty of discrimination," said Decatur. "My letter to the President spurred a reply letter from the EEOC in which the federal agency, charged with enforcing federal laws prohibiting employment discrimination, openly asserted: While EEOC orders agencies to consider; we have no authority to issue discipline."

"Some of these VA managers need to face conspiracy criminal charges for destroying veterans' records and engaging in various illegal activities," said Chauncey L. Robinson, who served in the Persian Gulf War. Robinson reported that he has been waiting twenty-one years for the VA to process his claim for Post-Traumatic Stress Disorder (PTSD) and a heart condition. "VA officials destroyed my records," said Robinson, who joined other veterans in a class-action lawsuit that asserts the VA has been systematically violating veterans' due process for decades (Gary Kendall v Eric A. Shinseki, Secretary of Veterans Affairs Case No. CV07-103-S-EJL).

"The ill-treatment of VA's workforce harms the well-being of VA's employees as well as the veterans deserving of timely health care and benefits," said Al Hunt, III, a Gulf War veteran and a former VA supervisor with the New Orleans Medical Center. Hunt explained that he was forced to resign from the VA due to discriminatory practices and harassment. "I refused to be complicit in a managerial scheme to write-up and fire black veterans who bravely served our country solely because they had exposed civil rights abuses in the VA workplace," Hunt said.

"Internal federal workplace dysfunction will continue to adversely impact public programs and services until supervisors and managers are held accountable for violating civil rights and whistleblower-protection laws." said Tanya Ward Jordan, the President and Founder of the volunteer support and advocacy group, C4C.

-------------------------------------------------------
About The Coalition For Change, Inc. (C4C)
The Coalition For Change, Inc. (C4C) is a Washington, DC-based volunteer organization comprised of present and former federal employees who have been injured or ill-treated due to workplace race discrimination and /or reprisal. C4C recently produced a YouTube video to expose how an internal broken workplace system harms the public. The video is entitled -- Veterans Affairs Dishonoring America's Veterans and Civil Servants.

__________________________________________________

Below is possibly more than you want to know about Bill Gates as US corporate lobby to end public health and capture health patents and curb generics but it is one of the best overviews. Keep in mind this was written in 2011 and we now know TPP is worse than this article shows.

Bill Gates and Warren Buffett placed hundreds of billions of dollars into trusts under the guise of private non-profits and health care that are now these very patents and intellectual rights protections sought for the PHARMA and health industry. So, rather than paying taxes and allowing the public do the research to produce these PHARMA results as it always has, these billionaires privatized the research and seeks patents and protections on what would be a trillion-dollar PHARMA industry in developing worlds.

AS BILL GATES SAID AT THE 1990s SHAREHOLDER MEETING QUESTIONING HIS MOVING OF ALL THAT MONEY INTO TRUSTS RATHER THAN REINVESTING IT IN TECH INNOVATION-----'WE ARE MOVING TO AFRICA AS THE NEXT MARKET AND WE HAVE TO MAKE IT LIVABLE FOR US EMPLOYEES BEING SENT THERE TO WORK. Meanwhile, all of the African citizens that were helped by these research and development activities are now seeing funding disappear and are not feeling to advantages of all that patented research.

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

How the Trans-Pacific Partnership Agreement Threatens Access to Medicines

The eighth round of closed-door negotiations for the Trans-Pacific Partnership (TPP) agreement will be held in
Chicago from September 6-15, 2011. Negotiations during this round are expected to be substantial, as the
current nine negotiating countries, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United
States and Vietnam, plan to present the outlines of an agreement at the Asia Pacific Economic Cooperation
(APEC) Leaders’ meeting in Honolulu, November 8-13 2011.1
According to the United States Trade Representative (USTR), “U.S. involvement in the TPP is predicated on the
expansion of the agreement to include more economies across the Asia-Pacific region,”2 and should “set the
standard for 21st-century trade agreements going forward.”3 It is therefore expected that the norms that emerge
from these negotiations will serve as a baseline for future trade agreements, potentially impacting a much wider
group of countries, including developing countries where MSF has medical operations and beyond. For
example, Japan and South Korea are reportedly currently considering joining the TPP.
TPP negotiating parties are under no obligation to subject their negotiating positions to public scrutiny; only the
final agreed-upon text will be made publicly available. However, a leaked draft of the U.S. position, now
available to the public,4 indicates that the U.S. is demanding aggressive intellectual property provisions that go
beyond what international trade law requires. Furthermore, the U.S. position represents a major retreat from
previous U.S. commitments to global health, including the 2007 bipartisan New Trade Policy, in which
Congress and the Bush administration agreed to abide by important public health safeguards in future trade
agreements.

1. INTELLECTUAL PROPERTY AND ACCESS TO MEDICINES
Vital Importance of Affordable Medicines
Affordable, quality generic medicines are a critical component of treatment programs. About 80% of the HIV
medicines that MSF uses are generics, and MSF routinely relies on generic drugs to treat TB, malaria, and a
wide range of infectious diseases. In fact, all the major donors and leading international treatment providers,
including the Global Fund to Fight AIDS, Tuberculosis and Malaria, The U.S. President's Emergency Plan for
AIDS Relief (PEPFAR), UNITAID and UNICEF, rely on quality affordable generic drugs for the programs they
support. PEPFAR, which purchases 80-90 percent of its ARVs drugs from generic suppliers, has reported
significant savings through the purchase of generic medicines.5
The first generation of HIV drugs have come down in price by 99 percent over the last decade, from
U.S.$10,000 per person per year in 2000 to roughly $60 today, thanks to generic production in India, Brazil and
Thailand, where these drugs were not patented. This dramatic price drop has been instrumental in helping scale
up HIV/AIDS treatment for more than six million people in developing countries. About 80 percent of donorfunded
anti-AIDS drugs and 92 percent of drugs to treat children with AIDS across the developing world comes
from generic manufacturers.

1 http://www.ustr.gov/tpp
2 http://www.ustr.gov/about-us/press-office/press-releases/2010/june/ustr-ron-kirk-comments-trans-pacific-partnership-talk
3 http://www.ustr.gov/about-us/press-office/press-releases/2009/november/ustr-news-kirk-comments-trans-pacific-partnership
4 Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
5 http://jama.ama-assn.org/content/304/3/313.short

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

Public Health Safeguards Threatened
Since the creation of the World Trade Organization (WTO) and the conclusion of the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS) in 1995, the most comprehensive multilateral
agreement on intellectual property to date, developing countries have struggled to strike a balance between
protecting public health and making their patent laws TRIPS compliant. Patents and other intellectual property
(IP) regulations pose significant barriers to access to life-saving medicines, and flexibilities in patent systems are
recognized as important public policy tools in the fight to protect public health interests. Even developed
countries like the U.S. have utilized TRIPS-compliant legal flexibilities to protect public health and other
national interests.
The WTO 2001 Doha Declaration on TRIPS and Public Health was signed to reaffirm that the TRIPS
Agreement does not and should not prevent members from taking measures to protect public health, and that it
can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public
health and, in particular, to promote access to medicines for all.

These commitments were reaffirmed and
strengthened in the 2008 World Health Organization (WHO) Global Strategy and Plan of Action on Public
Health, Innovation and Intellectual Property.
However, over the last decade, many developing countries have come under pressure in trade negotiations not to
use TRIPS flexibilities and to implement even tougher rules than those set out in TRIPS – these are known as
“TRIPS plus.” The U.S. and the European Union routinely use bilateral and regional trade agreements to limit
or circumvent developing countries’ abilities to implement the Doha Declaration and safeguard public health.
The U.S. and the E.U. both have large pharmaceutical industries lobbying for stricter patent regulations, and
these interests not only tip the balance away from public health protections and threaten access to medicines, but
also work to counter the efforts of global health programs.

In fact, studies have shown that U.S. bilateral and regional free trade agreements (FTAs) have already
undermined access to medicines in developing countries. For example, Oxfam found in a 2007 study6 that
during the five-year period since Jordan implemented TRIPS plus measures included in the U.S.-Jordan FTA,
medicines prices rose 20 percent, without any corresponding benefit in terms of domestic innovation or access
to new products. In addition, the Center for Policy Analysis on Trade and Health (CPATH) found in a 2009
study7 that once Guatemala enacted data exclusivity, on the basis of the Dominican Republic-Central America-
United States (CAFTA-DR) FTA, prices for some medicines rose significantly – even though just a handful of
medicines were under patent protection.
Recognizing the damaging effects that trade agreements have had on public health, the Bush administration and
the U.S. Congress signed a bipartisan agreement on May 10th, 2007, known as the 2007 New Trade Policy to
scale-back the harshest IP protections in order to strike a better balance between protection of IP and public
health needs. The agreement specifies that the USTR should modify its intellectual property demands in trade
agreement negotiations so that important public health safeguards are included. Yet in several meetings with
U.S. civil society, the USTR has stated on the record that they are considering options in the TPP that would
shift U.S. policy away from the 2007 New Trade Policy.
MSF is concerned that the U.S. demands for the TPP negotiations threaten to roll back vitally important public
health safeguards in developing countries, creating a fundamental contradiction between U.S. trade policy and
U.S. commitments and priorities on global health.
Medical Innovation Threatened
MSF is also concerned about the effects that intellectual property norms have on innovation for essential
medical technologies. The USTR presents its efforts to demand stronger regimes for intellectual property
protection in developing countries as a tool to protect innovation. MSF recognizes the importance of innovation

6 http://www.oxfam.org/en/policy/bp102_jordan_us_fta
7 http://www.cpath.org/sitebuildercontent/sitebuilderfiles/cpathhaonline8-25-09.pdf
8 http://waysandmeans.house.gov/media/enewsletter/5-11-07/07%2005%2010%20New%20Trade%20Policy%20Outline.pdf

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

and the need to finance research and development. We are a humanitarian medical organization that needs and
welcomes biomedical innovation to better treat our patients. However, the reality is that intellectual property
protection in the medical field keeps prices high and limits access to treatment, and furthermore does not
stimulate innovation for many of the diseases affecting people in developing countries, where patients have
limited purchasing power. By seeking greater and higher intellectual property norms in developing countries,
the U.S. government is perpetuating a failed business model that links innovation costs to high prices, and does
not address the innovation needs of developing countries.

2. THE TRANS-PACIFIC PARTNERSHIP AND ACCESS TO MEDICINES

The TPP negotiations are being conducted in secret, so MSF other interested stakeholders don’t have access to
the U.S. or other countries’ demands. However, according to a leaked draft of the U.S. position, now available
to the public at http://keionline.org/node/1091, as well as correspondence and discussions between Congress and
the USTR, the U.S. is expected to demand the following TRIPS plus measures to be included in the

Intellectual Property Chapter of the TPP:

a) Broadening the scope of patentability: the U.S. wants to make it easier to patent new forms of old
medicines that offer no added therapeutic efficacy for patients
The TRIPS agreement includes important flexibilities for governments to decide what type of “innovation”
deserves to be protected by patents in a given country. Essential terms such as ‘novelty,’ ‘inventive step,’ and
‘industrial applicability’ are left undefined as standards to be best determined by individual governments within
the context of existing national legislation and circumstances.
However, the U.S. is seeking to erode this flexibility by requesting that TPP partners introduce new rules that
would severely limit the ability of each country to define what is ‘patentable.’

For example, the U.S. proposal for the TPP requests the patenting of a “new form, use, or method of using” an
existing product - even if there is no increase in efficacy. This technique, known as “evergreening,” allows
pharmaceutical companies to obtain or extend monopoly protection for old drugs simply by making minor
modifications to existing formulas. Evergreening significantly delays the arrival of more affordable generic
medicines onto the market.
Novartis has been battling the Indian government on its implementation of this flexibility since 2006, when its
patent for the cancer drug imatinib mesylate (Gleevec) was rejected on the grounds it was based on a drug
compound that already existed. Having lost its case in 2007 and the patent appeal in 2009, Novartis is now
attempting to ensure the words ‘therapeutic efficacy’ are interpreted in a way that allows even small changes to
an old medicine – such as imatinib mesylate – to be patentable10.
Additionally, the US seeks to require that parties make patents available on plants and animals, as well as
diagnostic, therapeutic and surgical methods for the treatment of humans or animals despite the fact that Article
27 of the TRIPS Agreement explicitly allows for the exclusion of these inventions from patent protection11.
Aside from the serious ethical concerns for surgeons performing procedures on patients, this text is not even
compatible with the U.S. policy not to enforce patents against medical professionals.

b) Restrictions on pre-grant patent oppositions: the U.S. wants to make it harder to challenge unjustified
patents
The TRIPS agreement allows countries and third parties (including generic companies and civil society organizations such as patient groups) to file an opposition to the granting of a patent - either before it has been

Article 8.1, Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
http://www.msfaccess.org/about-us/media-room/press-releases/drug-company-novartis-tries-weaken-indian-patent-law-protects
Article 8.2, Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
http://keionline.org/node/1216

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

granted (pre-grant opposition) or after (post-grant opposition). Patent opposition procedures have been
successfully used in several countries to prevent patents being granted undeservedly.
For example, in June 2008 the Indian patent office rejected a patent for the hemihydrate (syrup) form of
Nevirapine (NVP), a widely-used antiretroviral (ARV) treatment, based on pre-grant oppositions by civil society
groups. The price of NVP has decreased dramatically over the past years as a result of generic competition.
Similarly, the Indian patent office rejected the patent application for Tenofovir Disoproxil Fumarate (TDF), an
important HIV drug highly recommended by the World Health Organization (WHO), and Darunavir (DRV), a
third-line ARV, based on pre-grant oppositions.
Patent oppositions are an essential public health safeguard that can accelerate the entry of generic competition,
improve the patent system through public participation, and help reduce over-patenting.
However, the U.S. government is now seeking to clamp down on this flexibility and prevent pre-grant oppositions in TPP partner countries,13 making it more costly and cumbersome to oppose a patent. In addition, patent offices will not have the benefit of the expertise of opponents/competitors to the applicant who may be
able to identify inaccuracies in the application before a patent is approved.

c) Imposing new forms of IP enforcement: the U.S. wants to allow customs officials to seize shipments of drugs on mere suspicion of IP infringement and to increase damages for IP infringement
The TRIPS agreement allows for governments to have a great amount of flexibility when designing the mechanisms that the country will allow for the enforcement of IP rights. However, the U.S., through the TPP and other tools (e.g. ACTA14), is demanding that countries enforce IP rights with new forms of enforcement beyond what TRIPS requires.
For example, the U.S. is requesting that TPP countries grant customs officials the ex officio right to detain
shipments of medicines at the border, even in transit, if the goods are suspected of being counterfeits or if they
are considered “confusingly similar” to trademarked goods.
Under TRIPS, “counterfeit” products are defined as those resulting from criminal – and not civil – trademark
infringement, which occurs knowingly and on a commercial scale. The U.S.’s proposed TPP IP chapter allows border officials to rely on a different, more lenient standard - “confusingly similar” – in order to seize consignments. This standard conflates pure commercial trademark disputes, which do not represent a threat to
public health or patent rights, with criminal offenses, such as production of counterfeit, falsified or substandard
medicines.

In fact, customs and border officials are often not fully trained or equipped to make accurate assessments with
regard to intellectual property infringement and may be overzealous in the protection of brand name companies.
For example, during 2008 and 2009, at least 19 shipments of generic medicines from India to other countries
were impounded while in transit in Europe on grounds that the shipments were suspected of infringing patent
rights. In one instance, German customs authorities wrongfully seized a drug shipment of “Amoxicillin” on the
suspicion that it infringed the brand name “Amoxil” – the cargo was detained for four weeks while further
investigation took place, eventually revealing that there was no trademark infringement. In another instance,
the Dutch customs authorities seized a shipment of the AIDS drug abacavir sulfate while it was en route (via
Europe) from India to a Clinton Foundation project in Nigeria.

Article 8.7, Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
The Anti-Counterfeiting Trade Agreement (ACTA) would impose limits on price-reducing generic competition and jeopardize the free flow of legitimate medicines across borders.

Article 14.4, Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
16 http://www.doctorswithoutborders.org/publications/reports/2011/2011Special301MSF_Final.pdf
17 http://www.doctorswithoutborders.org/publications/reports/2011/2011Special301MSF_Final.pdf
18 http://www.bmj.com/content/340/bmj.c2672.extract
19 http://www.twnside.org.sg/title2/IPR/pdf/ipr13.pdf
20 http://www.safemedicines.org/nigeriabound-hivaids-drugs-seized-in-netherlands.html

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

In addition, under the U.S.’s proposed TPP regulations, shipments that are legitimate in the country of origin
and the country of ultimate destination would still be subject to detention in the transit country. Unwarranted
interception of legitimate in-transit pharmaceutical supplies can undermine legitimate trade in generic
medicines.

Furthermore, the U.S. is requesting TPP countries to mandate that judicial authorities consider valuing damages
based on “the suggested retail price or other legitimate measure of value submitted by the right holder” in cases
of infringement of intellectual property rights,” a mechanism that strongly favors the rights holder and
increases damage amounts. Each country should have the flexibility to individually determine the appropriate
measure for damages for IP infringement.

d) Expanding data exclusivity: the U.S. is seeking to expand a backdoor way to grant monopoly status
Data exclusivity is a TRIPS plus provision that restricts access to essential clinical trial data pertaining to the
safety and efficacy of drugs. Data exclusivity measures prevent generic manufacturers from using existing
clinical research to gain regulatory approval of their medicines, forcing them to perform duplicate clinical trials
or wait for the “data monopoly” period to end.
In the absence of data exclusivity measures, when a generic manufacturer applies to register and sell a version of
a previously-registered medicine, they only have to provide data showing that their product is equivalent to the
original. The drug regulatory authority relies on the clinical trial data provided by the original manufacturer to
evaluate the safety and efficacy of the generic drug.
The introduction of data exclusivity provisions essentially creates a new system for granting monopolies by
blocking registration of generic medicines until the data exclusivity period ends, even if the patent monopoly
has already ended or been overcome, for example with the use of a compulsory license. Under these terms,
generic competition is stifled not only for old medicines no longer under patent protection, but also for new
medicines that don’t warrant patent protection.
Data exclusivity prevents the registration of generic versions of a medicine for many years (the U.S. is asking
for up to 12 years of data exclusivity for some classes of drugs), unless the generic manufacturer repeats the
necessary clinical trials. This is not only extremely costly, but also arguably unethical, as it forces duplication
of clinical trials for patients and animals in order to prove something that is already known.
In addition, while there are clear methods and procedures by which patents can be challenged and overcome –
such as patent oppositions and compulsory licenses – rules governing data exclusivity for pharmaceutical test
data do not always provide the same public health safeguards.
Although it is not yet clear what the U.S. demands for data exclusivity will be for the TPP, the U.S. has
traditionally pressed for a minimum term of five years, similar to U.S. law for certain products. However,
Pharmaceutical Research and Manufacturers of America (PhRMA) has been aggressively lobbying for the TPP
to require 12 years of data exclusivity for a subset of pharmaceutical drugs, called biologic (also called
biosimilar or biopharmaceutical) drugs.

In August 2011, several members of the House of Representatives,
led by Rep. Henry Waxman, urged president Obama to refrain from negotiating any provisions on exclusivity
for biologics in the TPP, noting that a 12-year exclusivity period would impede the ability of Congress to
achieve the administration's proposal that the exclusivity period for biologics be reduced to seven years, as
reflected in the FY2012 budget proposal, without running afoul of U.S. trade obligations. It is also unclear if
the U.S will allow the public health safeguards for data exclusivity specified in the 2007 New Trade Policy.

Article 12.3 (b), Leaked TPP IPR chapter (http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf)
http://www.who.int/medicines/services/expertcommittees/pharmprep/QAS04_093Rev4_final.pdf
http://www.pharmalot.com/2011/05/phrma-wants-12-years-data-protection-in-tpp-talks
http://www.waxman.house.gov/UploadedFiles/TPP_Biologics_Letter_08-04-11.pdf
Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

e) Requesting patent term extensions: the U.S. is seeking to keep generic competitors out of the market,
for longer
The TRIPS Agreement requires patents to last 20 years. Although it is not yet clear what the U.S. demands for
patent term extensions in the TPP will be, the U.S. is expected to seek to extend the monopoly patent period in
order to compensate for administrative delays in the regulatory process, even though the 2007 New Trade Policy
made patent extensions optional for countries negotiating trade agreements with the U.S. Such extensions delay
the entry of generic medicines, punishing patients for bureaucratic delays.

f) Requesting patent linkage: the U.S. is seeking to turn drug regulatory authorities into ‘patent police’
Patent linkage provisions prevent drug regulatory authorities from approving new drugs if they could potentially
infringe existing patents. Such provisions effectively require drug regulatory authorities, which are responsible
for evaluating the safety, quality, and efficacy of medicines, to take on the responsibility of policing patents, an
area normally under the purview of separate patent authorities. Linking drug registration and patent status can
delay generic entry into the market and is an aggressive TRIPS plus measure.
The 2007 New Trade Policy made patent linkage optional for countries negotiating trade agreements with the
U.S. Most countries in Europe do not impose linkage between patent status and drug registration. If a linkage
obligation is included in the TPP, it will impose on developing countries more restrictive conditions for the
registration of generic medicines than are found in Europe3. OBAMA ADMINISTRATION BACKTRACKING ON U.S. COMMITMENTS TO ACCESS TO
MEDICINES

The TPP is the first trade agreement negotiated under the Obama administration. Leaked U.S. positions and
correspondence and discussions between Congress and the USTR indicate that the U.S. is prepared to walk
away from its previous public health commitments, including the 2007 New Trade Policy.

The bipartisan May 10th, 2007 New Trade Policy,25 signed by the Bush administration and U.S. Congress,
specified that the USTR should modify its intellectual property demands in trade agreement negotiations so that
important public health safeguards are included. The 2007 New Trade Policy aims to scale-back the harshest IP
protections for developing countries in order to strike a better balance between protection of IP and public health
needs. Although it did not go far enough, it was a step in the right direction. In particular:26
 Patent linkage provisions were made voluntary (whereas they had been mandatory in previous US trade
agreements).
 Patent term extension provisions were made voluntary (whereas they had been mandatory in previous
US trade agreements).
 Data exclusivity was limited to five years for new chemical entities; concurrent periods of exclusivity
were mandated, and public health exceptions were allowed to ensure governments could still implement
public health safeguards such as compulsory licenses.
When the 2007 New Trade Policy was announced, the House Ways and Means Committee called it “a
fundamental shift in U.S. trade policy.”27 However, the U.S. pharmaceutical industry has been aggressively
lobbying against the 2007 New Trade Policy being applied to the TPP negotiation countries.

USTR has stated
that they are considering options in the TPP that would shift U.S. policy away from the 2007 New Trade Policy
and toward greater protection of intellectual property rights for brand-name pharmaceutical companies in the
25 http://waysandmeans.house.gov/media/enewsletter/5-11-07/07%2005%2010%20New%20Trade%20Policy%20Outline.pdf
26

For an analysis of the May 10 agreement, see: Fabiana Jorge. New U.S. trade policy: A turning point?. Journal of Generic Medicines
(2007) 5, 5–8. doi:10.1057/palgrave.jgm.4950093. Available at: http://www.palgrave-journals.com/jgm/journal/v5/n1/abs/4950093a.html
27 http://waysandmeans.house.gov/media/enewsletter/5-11-07/07%2005%2010%20New%20Trade%20Policy%20Outline.pdf

Doctors Without Borders/Médecins Sans Frontières (MSF) Campaign for Access to Essential Medicines
TPP Issue Brief - September 2011

Several Members of US Congress have also warned against this possibility and written to the
Obama administration to demand that it uphold the 2007 New Trade Policy28.

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October 01st, 2013

10/1/2013

0 Comments

PLEASE STOP ALLOWING THESE CORPORATE POLS AND MEDIA HIDE THE FACT THAT TENS OF TRILLIONS OF DOLLARS IN CORPORATE FRAUD AND TAX EVASION NEED TO COME BACK AND OUR GOVERNMENT COFFERS WILL BE FLUSH WITH MONEY.

Wonder why Congress would allow the US to be taken from first world to third world on about $150,000 salary plus health benefits? Below you see why. These pols are getting super-sized pay-to-play in a system that allows anyone to pay someone else through these offshore accounts. DOES THAT SOUND LIKE GOOD PUBLIC INTEREST, DEMOCRATIC LAW? Yet, your neo-liberal here in Maryland is all for this banking system. We are fortunate to have International Journalists working with Wikileaks-like sites to locate lots of this money and to whom it is attached and we will pull together cases to claw this back. We need to have a candidate that will connect the US to the International Criminal Courts so this massive fraud can be handled like the Holocaust looting. These journalists are using the same structures to hunt and identify wealth according to country carted to these offshore accounts.

"According to the CBC, there was a massive leak of 'files containing information on over 120,000 offshore entities — including shell corporations and legal structures known as trusts — involving people in over 170 countries. The leak amounts to 260 gigabytes of data, or 162 times larger than the U.S. State Department cables published by WikiLeaks in 2010...In many cases, the leaked documents expose insider details of how agents would incorporate companies in Caribbean and South Pacific micro-states on behalf of wealthy clients, then assign front people called "nominees" to serve, on paper, as directors and shareholders for the corporations — disguising the companies' true owners.' Makes a good read and there are some good interactive components. Perhaps Slashdot readers can figure out how the source of the leak, the D.C.-based International Consortium of Investigative Journalists got their hands on this data."

The good news is that the American people can and will get this money back as we organize and reverse this corporate hold on government by getting rid of neo-liberals and rebuild the democratic party. Just think how much money Obama and neo-liberals could have brought back to government coffers and now, they are play-acting that there is a crisis around every corner to hide why they are dismantling the US public sector!

The first thing a neo-liberal supermajority in 2008 did was to protect the wealth inequity by massive corporate fraud. The next thing....make it easier to hide and/or keep the massive wealth the few now have. The estate tax and other legislation from the Depression era designed to keep a few from amassing this huge wealth we have today are being dismantled by neo-liberals. ALL OF MARYLAND DEMOCRATS ARE NEO-LIBERALS.

You see that the top states working hard to hide wealth are democratic leaders-----HARRY REID OF NEVADA AND JOE BIDEN OF DELAWARE. You know, those blue-collar kind of guys! WAKE UP AND RUN AND VOTE FOR LABOR AND JUSTICE!

America’s Most Wealth Friendly States Continue to Bid for Your Clients’ Trust Business

Posted by Jerry Cooper, Contributor - on January 15th, 2010

State legislatures are still enacting trust law enhancements to provide greater protection for your client’s wealth.

As more wealthy families cross borders to protect assets, they choose to set up personal trusts in states other than their own to take advantage of favorable trust laws.

According to recent data, 72 percent of U.S. households with more than $1 million in investment assets use trusts as a key component to their estate planning.

The main reasons to cross borders are:

• Some states don’t tax assets held in a trust, while distributions might be taxable in your home state.

• Trust codes in some states seek to protect assets from lawsuits and creditors.

• Some states allow “dynasty trusts” which permit future generations to avoid estate taxes.

Over the last few years a growing number of states have revised their trust codes to add features that provide for creditor protection, low or no state income tax and ability to establish a dynasty trust which allows for assets to pass to heirs for generations to come.

Nevada recently revised its trust code to provide for directed trusts. Directed trust statutes provide for an ability for the trustee to appoint an investment advisor to manage assets within the trust.  This provides for low trustee fees and minimal trustee liability and provides flexibility to the investment manager ultimately benefiting the client.

Steven J. Oshins, an estate planning attorney and author of several trust laws in Nevada says, “Nevada’s new directed trust statute is critical to high net worth investors.” He adds, “Nevada now offers everything Delaware offers and more because of the combination of its 365-year dynasty trust law, two-year statute of limitations on self settled asset protection trusts and no taxation.”

Alaska revised its trust code to make it more difficult for divorcing spouses to grab trust assets.   State trust laws vary widely and clients should compare jurisdictions for features that best fits their needs. Some of the most important trust features include whether or not a state has income tax.

When setting up a trust arrangement having a trust in a state that has no income tax has a definite economic financial impact on your client’s family. Therefore, no state income tax is amongst the most important.

Dynasty trusts are important beginning next year when estate taxes resume at a 55 percent tax rate. The general rule is the longer the period of time that the trust can exist the better it is.

Other factors include the number of trust providers or independent trust companies in the state which is an indication of whether a trust center is beneficial to a client and the time zone from New York.

But going out of state for a trust may not always make financial sense, especially for smaller trust accounts. Since the most favorable jurisdictions might be in states where you don’t know an individual trustee, you might need to hire a corporate trustee, which can cost about between ½ of 1 % to 1% or less of trust assets per year, depending on the size of the trust.

Moving an existing trust may also involve additional fees and may require court approval, depending on how the trust was originally drafted and state law.

With great states spread around the country, one important factor to consider when seeking a home for a trust is the avoidance of state income taxes. Trust experts say one of the first factors to look for when examining where to set up a trust is whether the assets are subject to state taxes.

The idea is to let trust investments grow for as long as possible free of state taxes, which can save significant sums of money, especially in high-tax states such as New York and California. (Beneficiaries, however, may be taxed on distributions, depending on whether their home state has an income tax.) Alaska, Delaware, Florida, Nevada, South Dakota, and Wyoming are attractive because they don’t impose any taxes on trust assets.

The following chart, the Best States for Trusts gives you a thumbnail view of which states are best. It is divided into three tiers Tier 1 being the best, Tier 2 being good and Tier 3 being marginal. Given that Alaska, Delaware, Nevada, South Dakota are in Tier 1 they are probably your best choices for trust business.

States bidding for trust business often will not tax those assets they are betting on increased economic activity which will bring other prosperity to the state such as job creation, corporate tax revenue collected from trust companies, corporate tax assessments from the trust companies.

It is for this reason that state legislatures continue to sharpen their pencils and enact new laws designed to attract wealthy baby boomers and their parents’ estates for future generations. Trust accounts have been an important port of the investment landscape.

For wealth management organizations advisors can gain additional income and provide more value to their service by bundling trust services within investment management. Last year several advisory firms launched their own trust companies in order to be better positioned to provide these services.

This includes Wealth Advisors Trust Company and Dominion Trust Company in South Dakota, both new launches targeting wealthy clients from a wealth-friendly trust state. This trend was featured in an Investment News Article last summer, More Advisory Firms Expected to Start Trust Companies.

Trusts can be created for a variety of other purposes including avoiding probate, passing on a family home to heirs, protecting money from creditors, caring for disabled child or even providing for a pet after one dies. Trusts continue to grow in popularity thanks to the aging population and more aggressive trust marketing by financial firms and the concerns about maximizing trusts’ growth performance.

Asset protection trusts have gained in popularity as marketing vehicles for advisors over the last several years with Alaska, Delaware, Nevada and South Dakota being the most popular jurisdictions. Doctors, business executives and other professionals have become increasingly interested in these trusts, advisors say. With these you transfer assets into a trust run by an independent trustee who can give your client distributions from time to time. These trusts if set up properly are in most cases able to keep the assets of the trust out of reach of creditors.

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If you notice, the three banks handling the most offshore accounts and wealth are the same 3 most guilty of the massive financial frauds of last decade with almost no penalty and lots of flooding of Fed money at the time of the crash.

We know much of the money is-----we only need Rule of Law reinstated to get it. As the US Congress fights over the IRS tax scandal regarding political non-profits rage, the IRS is being defunded more and more so tax recovery does not happen.

THIS IS A NEO-LIBERAL ADMINISTRATION AND NOT ONE WORD FROM CONGRESS AS TO THESE TRILLIONS OF DOLLARS OF TAX EVASION.

'The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs'

22 July 2012 Last updated at 12:20 ET

Tax havens: Super-rich 'hiding' at least $21tn

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined.

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for the Tax Justice Network.

Tax expert and UK government adviser John Whiting said he was sceptical that the amount hidden was so large.

Mr Whiting, tax policy director at the Chartered Institute of Taxation, said: "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?"

Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

Mr Henry used data from the Bank of International Settlements, International Monetary Fund, World Bank, and national governments.

His study deals only with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

The report comes amid growing public and political concern about tax avoidance and evasion. Some authorities, including in Germany, have even paid for information on alleged tax evaders stolen from banks.

The group that commissioned the report, Tax Justice Network, campaigns against tax havens.

Mr Henry said that the super-rich move money around the globe through an "industrious bevy of professional enablers in private banking, legal, accounting and investment industries.

"The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries.

"From another angle, this study is really good news. The world has just located a huge pile of financial wealth that might be called upon to contribute to the solution of our most pressing global problems," he said.

'Huge black hole' James Henry says his $21tn figure is a conservative estimate

The report highlights the impact on the balance sheets of 139 developing countries of money held in tax havens that is put beyond the reach of local tax authorities.

Mr Henry estimates that since the 1970s, the richest citizens of these 139 countries had amassed $7.3tn to $9.3tn of "unrecorded offshore wealth" by 2010.

Private wealth held offshore represents "a huge black hole in the world economy," Mr Henry said.

Mr Whiting, though, urged caution. "I cannot disprove the figures at all, but they do seem staggering. If the suggestion is that such amounts are actively hidden and never accessed, that seems odd - not least in terms of what the tax authorities are doing. In fact, the US, UK and German authorities are doing a lot."

He also pointed out that if tax havens were stuffed with such sizeable amounts, "you would expect the havens to be more conspicuously wealthy than they are".

Other findings in Mr Henry's report include:

At the end of 2010, the 50 leading private banks alone collectively managed more than $12.1tn in cross-border invested assets for private clients
The three private banks handling the most assets offshore are UBS, Credit Suisse and Goldman Sachs
Less than 100,000 people worldwide own about $9.8tn of the wealth held offshore.

Mr Henry told the BBC that it was difficult to detail hidden assets in some individual countries, including the UK, because of restrictions on getting access to data.

A spokesman for the Treasury said great strides were being made in cracking down on people hiding assets.

He said that in 2011-12 HM Revenue & Customs' High Net Worth Unit secured £200m in additional tax through its compliance work with the very wealthy.

He said that agreements reached with Liechtenstein and Switzerland will bring in £3bn and between £4bn and £7bn respectively.

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Top Offshore Banking Locations for Enhanced Privacy and Protection

Emma Mackenzie | 7 Nov 2012 |

Offshore bank accounts are commonly misrepresented as a financial tool for the ultra wealthy. In reality, most individuals can establish offshore bank accounts that benefit from low minimum deposits, tax-free savings, increased privacy, and asset protection. Depending on your citizenship, your financial objectives, and your banking needs, the most appropriate jurisdiction in which you should select to set up an offshore account will vary.

Besides being an effective investment and tax friendly vehicle, an offshore bank account offers numerous advantages to account holders. Not only can individuals make use of offshore accounts to diversify their investment portfolios, but also they can benefit from tax savings, high interest rates, legal protection, and financial stability. However, knowing which jurisdiction to establish your account in is key to achieving your financial goals. Many countries require personal presence for the opening of an account, while other locations may require substantial deposits. Upon deciding on your primary banking goals, you can then ascertain the most suitable jurisdiction to bank with.

Here we provide the top five locations that offer unparalleled banking privacy to account holders.

#1 Seychelles The Seychelles is a renowned jurisdiction for the opening of offshore bank accounts; individuals can achieve asset protection in a financially stable and secure climate whilst enjoying 100% anonymity and heightened account privacy. One of the most favored aspects of the Seychelles as an offshore banking destination is that the jurisdiction’s governmental authorities have no direct access to bank information without a court order. In addition, there is no personal presence required to open a Seychelles offshore account.

Seychelles is favored not only for its high levels of privacy and banking protection, but also for its tax friendly climate; the country has 13 double tax treaties including Cyprus, Barbados, UAE and China. Further to this, the Tax Information Exchange Agreement (TIEA) is signed only with the Netherlands, making the Seychelles an excellent choice for individuals seeking tax and privacy benefits.

Additional features:

Online banking access
International wire transfer payments
1-2 days to open account
Available banking currencies include but are not limited to USD, EUR, GBP and CAD

Individuals should note that the initial minimum deposit required is US $100,000.

#2 Cyprus Although Cyprus is an EU member state and thus operates in accordance with the EU Savings Tax Directive 2005, information regarding interest paid to legal entities including trusts and foundations are not subject to the directive and as such, cannot be passed over to tax authorities. In addition, Cyprus authorities cannot obtain any financial or banking information regarding an account holder without a court order.

Cyprus bank accounts boast 100% anonymity and no personal presence is required to open an account.

Additional features:

No initial minimum deposit is required
No minimum balance is required
Tax friendly jurisdiction with double tax treaties with 45 countries
Access to online banking
International wire transfer payments
Banking currencies include USD, EUR, GBP and CAD

#3 Belize For individuals whose primary concern is banking privacy, Belize reigns as one of the best bank account choices. Not only is banking secrecy ‘strictly enforced by law’, but personal presence is not a requirement for opening an account. Authorities cannot access any bank information about an account holder without a court order, which can only bse obtained with good reason i.e. evidence that funds are a result of a crime.

Belize offshore bank accounts have a credible reputation as a safe financial vehicle for asset protection and wealth management purposes. Banking institutions, which provide offshore accounts, are regulated by the Belize Central Bank in accordance with:

The Banks and Financial Institutions Act 1995
The Introduction of the Offshore Banking Act 1996
The Money Laundering (prevention) Act 1996

Additional features:

International bank cards
Savings and time deposit accounts
Exempt from local taxes or exchange control restrictions
Accounts can be in any major currency including USD, EUR, CAD
Account can be opened in 1-2 working days
Access to online banking and bank cards

Account holders should note that a minimum initial deposit of US $1,000 is required, and a minimum balance of US $1,000 must be maintained at all times.

#4 Singapore Singapore’s domestic tax law favors offshore bank account holders in that the government of Singapore cannot access banking information on the account holders, information on investment gains, and bank-deposit interest activity under domestic tax law. Account holders therefore enjoy advanced levels of privacy and banking secrecy, as the government cannot pass over any financial information to the tax authorities of the account holder’s country of domicile.

As one of the world’s largest offshore financial centers, Singapore is widely regarded for its continued commitment to asset protection and banking privacy through the enforcement of strict secrecy regimes. One way of furthering your banking privacy is to open an offshore Singapore account under the name of a foreign entity such as a trust, foundation, or corporation. In doing this, certain situations may allow account holders to be exempt from reporting requirements on their personal assets.

Additional features:

Accounts can be opened in any major currencies including SGD, USD, EUR and AUD
Singapore remains a top financial center for stability and secure monetary controls
Lowest tax rates in Asia
Accounts can be held in gold
Access to online banking
International wire transfer payments
ATM bank card with worldwide acceptance
Quick set up (usually 1-2 business days)

Personal presence may be required in Singapore in order to open an offshore bank account (effective September 1st 2011).

#5 Dubai Dubai offers exceptional levels of anonymity and privacy for bank account holders. With banking secrecy at the forefront of Dubai’s banking institutions’ priorities, account holders can rest assured that their assets will be protected to the highest of levels. Dubai’s privacy policy regarding offshore bank account activity is highly regarded by investors on a global scale.

Additional features:

Online banking is available to all account holders, enabling transactions to be performed internationally
Choice of either corporate or private bank account to suit your needs
No fund transfer restrictions
No tax on interest, investment income, inheritance, exchange controls and capital gains
Dubai is a reliable and stable financial center with no tax exchange agreements with any countries
Flexible banking system
Dubai’s legislation favors the confidentiality and privacy of investors and account holders

Preservation of banking privacy Banking privacy cannot be taken for granted, and with ongoing agreements for banking and tax transparency in place, countries across the globe are facing difficulties in maintaining their reputation as a financial center for banking secrecy, stability and financial security.

Due to the European Union Tax Savings Directive 2005 – known informally as the automatic exchange of information – all EU countries are now restricted in the level of financial privacy they can guarantee to offshore investors. This has subsequently catapulted the popularity of banking in offshore locations, particularly in the Caribbean and Asia. Other agreements such as the Tax Information Exchange Agreement (TIEA) also adversely affect the financial privacy of individuals banking in countries member to the TIEA.

The future of offshore banking confidentiality Nevertheless, maximum banking privacy can still be achieved, legally, professionally and quickly by opening an account in one of the abovementioned locations. Not only will account holders enjoy anonymity, banking privacy and financial confidentiality with respect to their banking activities, but in many cases, they have the opportunity to open an account under the name of a corporation to achieve 100% anonymity and confidentiality.

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July 08th, 2013

7/8/2013

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WHEN IT COMES TO BEING RANKED AT THE BOTTOM NATIONALLY IN FRAUD, CORRUPTION, AND TRANSPARENCY.....STATE ASSEMBLYMEN JON CARDIN AND PETER FROSH WORK TO PROTECT THE FRAUDSTERS AS DOES ATTORNEY GENERAL DOUG GANSLER WHO IS RUNNING FOR GOVERNOR

WRITE TO MICHAEL GREENBERGER AT U OF M LAW SCHOOL AND TELL HIM MARYLAND WANTS A RULE OF LAW ATTORNEY GENERAL!!!

I want to move away from the attack on health care in America to reminding people that all of the austerity cuts, rise in local and state taxes, cutting and privatization of public programs and assets are all caused by revenue lost to corporate fraud with no attempt by Justice to recover. When they give a press release saying they are fighting fraud and give an amount of a few billion.....largest ever.....we know there are tens of trillions of dollars owed the American people. WE CANNOT LET STAND THE THEFT OF WHAT IS OUR AND OUR CHILDREN'S FUTURE.

Do not believe the corporate media favorite for health fraud numbers.....80 billion dollars,......we all know that number is more like $600 billion each year for these few decades. So it is clear, if anything is done with health care costs....they need to use universal care to bring back all that stolen taxpayer and individual health care money!

In Maryland, our State Attorney General Doug Gansler who has the distinction of being the deputy dog for a state ranked at the bottom for fraud and corruption and has suspended Rule of Law in Maryland has a campaign sign with his picture saying he is fighting for health insurance coverage for the little guys. This is such garbage as to make the strongest stomach weak. He single-handedly ignores all health fraud that has billions of dollars lost in Maryland alone to fraud and he is silent as Maryland Assembly makes sure the laws protect the health industry from public ability to recover fraud. GANSLER IS AIDING AND ABETTING CORPORATE FRAUD AND RUNNING FOR HIGHER OFFICE!

We are going to see over this next year a release of millions of bank and government documents from Wikileak and from NSA Snowden that give the public ever more of a view as to the extent of criminal fraud whether corporate tax evasion or other fraud. I am sure we will see as well that NSA was not only surveilling for terrorist activity....they were data mining to give US corporations advantage in markets.....all of which is illegal. You are not seeing any attempts at stopping the economic chaos and it is because we have neo-liberals who 'WIN AT ALL COSTS' when it comes to corporate profits!

VOTE YOUR INCUMBENT OUT OF OFFICE AT ALL LEVELS....DO YOU HEAR YOUR DEMOCRATIC POL SHOUTING LOUDLY AND STRONGLY TO PAY ALL GOVERNMENT DEBT WITH RECOVERY OF CORPORATE FRAUD? THEN THEY ARE NOT A DEMOCRAT WORKING FOR LABOR AND JUSTICE!!!

Medical Fraud’s Staggering Price Tag

August 18, 2009

As the nation engages in a contentious debate over health care, one thing that almost everyone agrees on is the need to fight rampant fraud. Rip-offs add billions of dollars a year to the tab for health care in America. How much money could be saved by eliminating fraud? "It's just an extraordinary sum," Malcolm Sparrow of Harvard University told National Public Radio. Unsure if fraud costs $100 billion or $600 billion, Sparrow told NPR he is sure that whatever the first digit is, it has 11 zeroes after it. To address the problem, the Senate health committee on July 23 voted 23 to 0 for an amendment by Senator Bernie Sanders that would double penalties for health care fraud. “What we have seen for many years is the systemic fraud perpetrated by private insurance companies, private drug companies, and private for-profit hospitals ripping off the American people and the taxpayers of this country to the tune of many billions of dollars,” Sanders said.

Sanders’ amendment would authorize double the current penalties under the False Claims Act for fraudulently billing new health exchanges created by the reform bill. Convicted companies would face fines of up to six times the amount of the fraud. “I worry very much that for many international corporations getting hit with treble damages may well be worth it and passed along as a cost of doing business,” Sanders said. “What we have to tell these big multi-national corporations is that if they are going to engage in fraud they’re going to pay for it dearly.”

Virtually all of the major hospital chains, private insurance companies, and pharmaceutical companies have been involved in massive health care fraud over the past decade, the senator added. He also pointed to a string of criminal and civil cases against many of the leading corporate health care providers in the country, including:

Earlier this year, a jury found Pfizer owed Wisconsin $9 million for violating the state Medicaid fraud law more than 1.4 million times by purposely overcharging the state for prescription drugs. The company faces potential fines from $140 million to $21 billion. (Now, how does the public have any faith in these figures up to $21 billion, as we are never allowed to see these settlement details....the answer is we should have no faith)!
Also in 2009, UnitedHealth, a leading insurance company, paid $350 million to settle lawsuits brought by the American Medical Association and other physician groups for shortchanging consumers and physicians for medical services outside its preferred network.
In 2003, GlaxoSmithKline paid $88 million in civil fines for overcharging Medicaid for its anti-depressant Paxil.
Also in 2000, Humana paid $14.5 million to settle federal charges of overcharging government health programs.
In 2000, the Hospital Corporation of America agreed to pay $745 million to settle civil charges that it systematically defrauded Medicare, Medicaid and other federally-funded health programs.
(The head of HCA when this fraud happened is now Governor of Florida having a field day with health care reform....HCA has the most profit of all health care companies)

In addition to the Sanders Amendment, other initiatives to fight fraud include a new Obama administration task force made up of officials from the Department of Justice and the Department of Health and Human Services. A House version of the health care overhaul bill also includes anti-fraud provisions, such as $100 million a year to fight fraud and increased penalties for perpetrators, according to NPR.

To give an idea of what $100 million to fight fraud would do....we have one business in Baltimore getting $100 million in tax breaks. It is nothing. But all of fraud recovery would pay for itself, no republicans or taxpayer money needed.
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We must not let this stand as we allowed ourselves to lose political representation by not paying attention to whom we elected......from Clinton on we simply sent neo-liberals back to work with republicans to hand the country over to corporate interests! These pols have watched as all fraud was left without justice, the financial oversight agencies worked double-time to protect Wall Street from loses and manipulated great gains while the rest of the country falls into poverty. NONE OF THE FINANCIAL REFORM HAS HAPPENED AND NO JUSTICE FOR TENS OF TRILLIONS IN BANK FRAUD HAS OCCURRED. THIS IS TREASONOUS AND YOUR POLITICIAN IS AIDING AND ABETTING CRIME!

Wall Street Dodges Financial Reform Again --

By Erika Eichelberger

| Fri Jul. 5, 2013 2:01 PM PDT Mother Jones

The Dodd-Frank financial reform act, the law designed to clean up the abuses that led to the financial crisis, celebrates its third birthday this month. But only about a third of the rules required by the legislation have been finalized so far, and even those are not going into effect as scheduled. This week provided a perfect example of why that is: The Federal Reserve granted Goldman Sachs a two-year extension to implement a key Dodd-Frank rule that would require banks to move risky trading into separate affiliates that are not backed by the Federal Deposit Insurance Corporation (FDIC). Several other of the nation's biggest banks won the same exemption last month.

Financial reformers are not shocked. "Quelle surprise!" quips Bart Naylor, a policy advocate at the consumer advocacy group Public Citizen. "The Federal Reserve decides to heed the crush of Wall Street lobbyists."

The Dodd-Frank rule, which Goldman Sachs was supposed to implement by July 16, requires FDIC-insured banks to move most of their derivatives trades into separate firms so that when a trade goes bad the bank will have to handle the fallout, not taxpayers. (Derivatives are financial products with values derived from underlying variables, like crop prices or interest rates; they were a major catalyst in the economic meltdown of 2008.) In its request for an extension, Goldman told the Federal Reserve—the main overseer of derivatives dealers—that complying with the deadline would mean the firm would need to either divest or stop a big portion of its swaps trading; a transition period, Goldman said, would be needed to ensure that the rest of the economy is not damaged by the shift. On Tuesday, the Fed agreed.

There is a provision in the Dodd-Frank law that allows banks to request a two-year transition period, if complying with the rule will damage the wider financial system. But banks were already given three years to phase in compliance with the rule. "If the regulators hadn't let them waste [that] three-year period…then they could have been prepared to execute [the rule] in a way that was less disruptive," says Marcus Stanley, policy director at the financial reform advocacy group Americans for Financial Reform. "It's like saying I need an extension on my homework because it would be disruptive for me to to have do it all the night before," he adds. "This is just a generalized excuse for postponing action."

In June, other major banks, including JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo, were granted two-year extensions on the same rule. Along with Goldman Sachs, those banks control more than 90 percent of the $700 trillion derivatives market.

"The procrastination of both regulators and the banks on this portion of Dodd-Frank has been pretty amazing," Stanley told Bloomberg Businessweek in January.

This particular Dodd-Frank rule is also under assault by Wall Street's allies in Congress. A bill that would exempt a large number of derivatives trades from the so-called pushout rule sailed through the House financial services committee in May. It could come to the House floor for a vote as soon as next week.

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Freddie Mac was the dumping ground for all of the millions of dollars of fraudulent subprime loans along with AIG Insurance insuring these same fraudulent loans against default. Both are taxpayer liabilities as AIG was nationalized and Freddie is a private company that partners with the government so the taxpayers can pay all costs.....just as with all public private partnerships!

The massive subprime loan fraud involved trillions of dollars in fraud and Freddie and Fannie had/have $600 billion in bad loans on their books. If we had a Rule of Law nation the banks would have been forced to write down/off those bad loans on Freddie's books as they were criminal and the taxpayer would have taken a far lesser hit for this Wall Street Freddie. Rather, Obama and Third Way corporate neo-liberals worked hard to see that banks and shareholders lost little or nothing....actually gaining from the massive fraud. We saw a nationalized AIG pay 100% on insurance claims which never happens to a bankrupt corporation. So while main street was losing big time in investments, lost homes, and jobs.....the neo-liberals turn the banks fraud into massive gains. The Federal Reverve's policy of QE was simply a way of removing all toxic loans from the banks balance sheet and all of those trillions in bad debt are going to the Treasury for the taxpayer to pay. Now, the taxpayer is going to lose on the fraudulent Freddie loans that were never written down/off because they are auctioning at a huge loss those loans and it will be the same banks and investment firms that will buy these discounted loans that they created through fraud. Remember as well, these few years have seen foreclosures bundled and sold in bulk to these same players at discount.

Sp these 5 years of Obama's term and a neo-liberal Senate has seen all the massive mortgage fraud stay with the criminal banks, watched as the Fed and Treasury turned those fraudulent gains into a watershed of profit through manipulated markets, and sold most of the millions of homes involved in fraud and foreclosed because of the economic crash back to the same people. The money made by all of this fraud and corruption is in the trillions and the cost to taxpayers stuck with the fraud debt and economic damage in the tens of trillions. THIS IS JUST FOR THE SUBPRIME MORTGAGE FRAUD. IT DOES NOT INCLUDE ALL OF THE TENS OF TRILLIONS IN CORPORATE FRAUD.

YOUR LONG-TERM THIRD WAY NEO-LIBERAL HAS WORKED ON THIS SCHEME SINCE THE CLINTON ADMINISTRATION ALONG WITH BUSH.....OBAMA AND THE SUPERMAJORITY OF NEO-LIBERALS COULD HAVE PROTECTED THE PEOPLE SIMPLY BY APPLYING RULE OF LAW.

RUN AND VOTE FOR LABOR AND JUSTICE NEXT ELECTIONS! IF YOUR LABOR LEADERS AND JUSTICE LEADERS ARE NOT RUNNING CANDIDATES IN PRIMARIES AGAINST NEO-LIBERALS.....THEY ARE NOT WORKING FOR YOU AND ME!

Freddie Mac to $3 billion bills July 8
(Reuters) - Freddie Mac, the No. 2 U.S. home funding company, said it will sell $3 billion of reference bills on Monday.

Freddie Mac said it plans to sell $1 billion of three-month bills due Oct. 7, 2013, $1.5 billion of six-month bills, due Jan. 6, 2014, and $500 million of 12-month bills due July 7, 2014.

The bills will be sold over the Internet in a Dutch auction. In such uniform price auctions, successful bidders pay only the price of the lowest accepted bid rather than the actual price as in a conventional multiple-price auction.

Bids will be accepted from authorized dealers until 9:45 a.m. EDT (1345 GMT).

Settlement is July 9.

XXXXXXXXXXXXXXXXXXXXXX

Reference Bills® securities are unsecured general corporate obligations. This program supplements our Discount Notes program.

Provide a predictable supply of short-term debt at popular maturities, from one-month through one-year
Are offered in sizeable volumes on a regular, standardized issuance cycle
One-month Reference Bills auctions will be optional each week, with a minimum of one auction per month. Three- and six-month Reference Bills will be auctioned every week. Auctions of 12-month Reference Bills securities will be optional each week
Are globally sponsored and distributed
Are intended to encourage active trading and market-making
Facilitate term repo market development
Are designed to offer predictable supply, pricing transparency and liquidity, thereby providing premium-quality alternatives to Treasury bills.

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We really need to know that what is happening with the TPP and with the recent Supreme Court rulings violates the US Constitution.....it is not another interpretation, it is rewriting. Corporations are not people, they cannot be allowed to circumvent Constitutional rights simply by including a clause in a business contract, and they cannot be given the rights of writing law that excludes the people's rights to legislate change. All of this is a COUP by the politicians you re-elect each year......THEY ARE NEO-LIBERALS WORKING FOR WEALTH AND PROFITS AND NOT FOR THE PEOPLE!!

In Maryland we are starting to hear lectures in the community that describes Maryland as a corporation and that as a colony in the times described below they were chartered by the Queen as a corporation.....and that is what they are trying to do right now with all these public private partnerships.....make the state into one big corporation with the 1% as shareholders and the citizens as peasants! THIS IS NOT HYPERBOLE....IT IS HAPPENING! WE NEED TO SEE PEOPLE FORMING DEMOCRACY NOW ORGANIZATIONS IN THEIR COMMUNITIES!

What We Can Learn From America's First Tea Party About Countering Corporate Power

Saturday, 06 July 2013 09:57 By Thom Hartmann, Yes! Magazine | News Analysis

(Image: Wikimedia)Before there was Citizens United, a modern Tea Party movement, or national momentum to ban corporate personhood, Thom Hartmann shows that resistance to corporate power is just as patriotic as Boston’s original Tea Party.

On a cold November day, activists gathered in a coastal town. The corporation had gone too far, and the two thousand people who'd jammed into the meeting hall were torn as to what to do about it. Unemployment was exploding and the economic crisis was deepening; corporate crime, governmental corruption spawned by corporate cash, and an ethos of greed were blamed. “Why do we wait?” demanded one at the meeting, a fisherman named George Hewes. “The more we delay, the more strength is acquired” by the company and its puppets in the government. “Now is the time to prove our courage,” he said. Soon, the moment came when the crowd decided for direct action and rushed into the streets.

That is how I tell the story of the Boston Tea Party, now that I have read a first-person account of it. While striving to understand my nation's struggles against corporations, I came upon a first edition of Retrospect of the Boston Tea Party with a Memoir of George R.T. Hewes, a Survivor of the Little Band of Patriots Who Drowned the Tea in Boston Harbor in 1773, and I jumped at the chance to buy it. Because the identities of the Boston Tea Party participants were hidden (other than Samuel Adams) and all were sworn to secrecy for the next 50 years, this account (published 61 years later) is the only first-person account of the event by a participant that exists, so far as I can find. As I read, I began to understand the true causes of the American Revolution.

I learned that the Boston Tea Party resembled in many ways the growing modern-day protests against transnational corporations and small-town efforts to protect themselves from chain-store retailers or factory farms. The Tea Party's participants thought of themselves as protesters against the actions of the multinational East India Company.

Although schoolchildren are usually taught that the American Revolution was a rebellion against “taxation without representation,” akin to modern day conservative taxpayer revolts, in fact what led to the revolution was rage against a transnational corporation that, by the 1760s, dominated trade from China to India to the Caribbean, and controlled nearly all commerce to and from North America, with subsidies and special dispensation from the British crown.

Hewes notes: “The [East India] Company received permission to transport tea, free of all duty, from Great Britain to America…” allowing it to wipe out New England–based tea wholesalers and mom-and-pop stores and take over the tea business in all of America. “Hence,” he told his biographer, “it was no longer the small vessels of private merchants, who went to vend tea for their own account in the ports of the colonies, but, on the contrary, ships of an enormous burthen, that transported immense quantities of this commodity ... The colonies were now arrived at the decisive moment when they must cast the dye, and determine their course ... ”

A pamphlet was circulated through the colonies called The Alarm and signed by an enigmatic “Rusticus.” One issue made clear the feelings of colonial Americans about England's largest transnational corporation and its behavior around the world:“Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. They have levied War, excited Rebellions, dethroned lawful Princes, and sacrificed Millions for the Sake of Gain. The Revenues of Mighty Kingdoms have entered their Coffers. And these not being sufficient to glut their Avarice, they have, by the most unparalleled Barbarities, Extortions, and Monopolies, stripped the miserable Inhabitants of their Property, and reduced whole Provinces to Indigence and Ruin. Fifteen hundred Thousands, it is said, perished by Famine in one Year, not because the Earth denied its Fruits; but [because] this Company and their Servants engulfed all the Necessaries of Life, and set them at so high a Rate that the poor could not purchase them.”

After protesters had turned back the Company's ships in Philadelphia and New York, Hewes writes, “In Boston the general voice declared the time was come to face the storm.”

The citizens of the colonies were preparing to throw off one of the corporations that for almost 200 years had determined nearly every aspect of their lives through its economic and political power. They were planning to destroy the goods of the world's largest multinational corporation, intimidate its employees, and face down the guns of the government that supported it.

The Queen's Corporation

The East India Company's influence had always been pervasive in the colonies. Indeed, it was not the Puritans but the East India Company that founded America. The Puritans traveled to America on ships owned by the East India Company, which had already established the first colony in North America, at Jamestown, in the Company-owned Commonwealth of Virginia, stretching from the Atlantic Ocean to the Mississippi. The commonwealth was named after the “Virgin Queen,” Elizabeth, who had chartered the corporation.

Elizabeth was trying to make England a player in the new global trade sparked by the European “discovery” of the Americas. The wealth Spain began extracting from the New World caught the attention of the European powers. In many European countries, particularly Holland and France, consortiums were put together to finance ships to sail the seas. In 1580, Queen Elizabeth became the largest shareholder in The Golden Hind, a ship owned by Sir Francis Drake.

The investment worked out well for Queen Elizabeth. There's no record of exactly how much she made when Drake paid her share of the Hind's dividends to her, but it was undoubtedly vast, since Drake himself and the other minor shareholders all received a 5000 percent return on their investment. Plus, because the queen placed a maximum loss to the initial investors of their investment amount only, it was a low-risk investment (for the investors at least—creditors, such as suppliers of provisions for the voyages or wood for the ships, or employees, for example, would be left unpaid if the venture failed, just as in a modern-day corporation). She was endorsing an investment model that led to the modern limited-liability corporation.

After making a fortune on Drake's expeditions, Elizabeth started looking for a more permanent arrangement. She authorized a group of 218 London merchants and noblemen to form a corporation. The East India Company was born on December 31, 1600.

By the 1760s, the East India Company's power had grown massive and worldwide. However, this rapid expansion, trying to keep ahead of the Dutch trading companies, was a mixed blessing, as the company went deep in debt to support its growth, and by 1770 found itself nearly bankrupt.

The company turned to a strategy that multinational corporations follow to this day: They lobbied for laws that would make it easy for them to put their small-business competitors out of business.

Most of the members of the British government and royalty (including the king) were stockholders in the East India Company, so it was easy to get laws passed in its interests. Among the Company's biggest and most vexing problems were American colonial entrepreneurs, who ran their own small ships to bring tea and other goods directly into America without routing them through Britain or through the Company. Between 1681 and 1773, a series of laws were passed granting the Company monopoly on tea sold in the American colonies and exempting it from tea taxes. Thus, the Company was able to lower its tea prices to undercut the prices of the local importers and the small tea houses in every town in America. But the colonists were unappreciative of their colonies being used as a profit center for the multinational corporation.

Boston's Million-Dollar Tea Party

And so, Hewes says, on a cold November evening of 1773, the first of the East India Company's ships of tax-free tea arrived. The next morning, a pamphlet was widely circulated calling on patriots to meet at Faneuil Hall to discuss resistance to the East India Company and its tea. “Things thus appeared to be hastening to a disastrous issue. The people of the country arrived in great numbers, the inhabitants of the town assembled. This assembly, on the 16th of December 1773, was the most numerous ever known, there being more than 2000 from the country present,” said Hewes.

The group called for a vote on whether to oppose the landing of the tea. The vote was unanimously affirmative, and it is related by one historian of that scene “that a person disguised after the manner of the Indians, who was in the gallery, shouted at this juncture, the cry of war; and that the meeting dissolved in the twinkling of an eye, and the multitude rushed in a mass to Griffin's wharf.”

That night, Hewes dressed as an Indian, blackening his face with coal dust, and joined crowds of other men in hacking apart the chests of tea and throwing them into the harbor. In all, the 342 chests of tea—over 90,000 pounds—thrown overboard that night were enough to make 24 million cups of tea and were valued by the East India Company at 9,659 Pounds Sterling or, in today's currency, just over $1 million.

In response, the British Parliament immediately passed the Boston Port Act stating that the port of Boston would be closed until the citizens of Boston reimbursed the East India Company for the tea they had destroyed. The colonists refused. A year and a half later, the colonists would again state their defiance of the East India Company and Great Britain by taking on British troops in an armed conflict at Lexington and Concord (the “shots heard 'round the world”) on April 19, 1775.

That war—finally triggered by a transnational corporation and its government patrons trying to deny American colonists a fair and competitive local marketplace—would end with independence for the colonies.

The revolutionaries had put the East India Company in its place with the Boston Tea Party, and that, they thought, was the end of that. Unfortunately, the Boston Tea Party was not the end of that. It was only the beginning of the power of corporations in America.

The Birth of the Corporate “Person”

Fast forward 225 years.

The American war over corporate power is heating up again. A current struggle centers on the question of whether corporations should be “people” in the eyes of the law.

In October 2002, Nike appealed a lawsuit against it to the Supreme Court, asking it to rule that Nike's letters to newspapers about treatment of workers in Indonesia and Vietnam are protected by the First Amendment.

In Pennsylvania, several townships recently passed laws forbidding corporate-owned farms. In response, agribusiness corporations threatened to sue the townships for violation of their civil rights—just as if these corporations were persons.

Imagine. In today's America, when a new human is born, she is instantly protected by the full weight and power of the US Constitution and the Bill of Rights. Similarly, when papers called articles of incorporation are submitted to governments in America (and most other nations of the world), another type of new “person” is brought forth into the nation.

The new corporate person is instantly endowed with many of the rights and protections of personhood. It doesn't breathe or eat, can't be enslaved, can live forever, doesn't fear prison, and can't be executed if found guilty of misdoings. It is not a human but a creation of humans. Nonetheless, the new corporation gets many of the Constitutional protections America's founders gave humans to protect them against governments or other potential oppressors. How did corporations become persons?

After the Revolutionary War, Thomas Jefferson proposed a Bill of Rights with 12 amendments, one of which would “ban commercial monopolies,” forever making it illegal for corporations to own other corporations, to do business in more than one specific product or market, and thus forever preventing another oppressive commercial juggernaut like the East India Company from arising again in North America to threaten democracy and oppress the people.

But Jefferson's amendment failed and the corporations fought back. Now those corporations use the club of the amendments that did pass to influence elections and legislation favoring them—in the name of their rights as persons.

An Historic Goof?

What most people don't realize is that this is a recent agreement—and it is based on an historic error. Only since 1886 have the Bill of Rights and the 14th Amendment been applied explicitly to corporations. For 100 years people have believed that the 1886 case Santa Clara County v. Southern Pacific Railroad included the statement “Corporations are persons.” But looking at the actual case documents, I found that this was never stated by the court, and indeed the chief justice explicitly ruled that matter out of consideration in the case.

The claim that corporations are persons was added by the court reporter who wrote the introduction to the decision, called “headnotes.” Headnotes have no legal standing.

It appears that corporations acquired personhood by persuading a court reporter and a Supreme Court judge to make a notation in the headnotes of an unrelated law case. In Everyman's Constitution, legal historian Howard Jay Graham documents scores of previous attempts by Supreme Court Justice Stephen J. Field to influence the legal process to the benefit of his open patrons, the railroad corporations. Field, as judge on the Ninth Circuit in California, had repeatedly ruled that corporations were persons under the 14th Amendment, so it doesn't take much imagination to guess what Field might have suggested Court Recorder J.C. Bancroft Davis include in the transcript, perhaps even offering the language, which happened to match his own language in previous lower court cases.

Alternatively, Davis may have acted on his own initiative. This was no ordinary court reporter. He was well-connected to the levers of power in his world, which in 1880s America were principally the railroads, and had, himself, served as president of the board of a railroad company.

Regardless of how it happened, an amendment to the Constitution, designed to protect the rights of African Americans after the Civil War, passed by Congress, voted on and ratified by the states, and signed into law by the president, was re-interpreted in 1886 for the benefit of corporations. The notion that corporations are persons has never been voted into law by the people or by Congress, and all the court decisions endorsing it derive from the precedent of the 1886 case—from Davis' error.

Other legal errors have been corrected with time. The notions that women aren't persons under the law, (affirmed, for example, in the 1873 Bradwell v. State case) and that blacks aren't entitled to equal protection (decided in the Dred Scott and Plessy cases) were superseded by court cases affirming the full rights of African Americans and women under the law. The establishment of corporate personhood, on the flimsy foundation of a court reporter's insertion of a phrase into a legal summary, may be the next mistake to be corrected, particularly if grassroots efforts continue to challenge the legitimacy of corporate personhood.

(Adapted from Thom Hartmann's book Unequal Protection: The Rise of Corporate Dominance and The Theft of Human Rights)

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THIS IS FROM A WIKLEAKS RELEASE....THERE ARE MILLIONS OF PAGES FROM HACKED BANK DATA THAT IS TRICKLING OUT.....REMEMBER, MUCH OF THESE TRILLIONS STASHED IN OFFSHORE ACCOUNTS ARE FRAUD.

Below you see just the tip of the iceberg with corporate tax evasion......the wealthy have all their wealth in corporations and these corporations are avoiding all taxes. As is said below....there are lots of ways to get that money back other than hunting and taking these corporations to court!

DO NOT STOP SHOUTING FOR JUSTICE IN GETTING THIS MONEY BACK INTO GOVERNMENT COFFERS....IT IS WHY THEY ARE CUTTING ALL PROGRAMS AND SERVICES FOR PUBLIC INTEREST AND LOCALLY RAISING TAXES ON THE MIDDLE/LOWER CLASS TO MAKE UP FOR LOST CORPORATE REVENUE!

You will be taxed to death and get nothing for it if we do not reverse this!

Commenter on the article below:

Sigh, what a racket Submitted by beowulf on Tue, 01/18/2011 - 1:00am If this were something the government was serious about stopping, they'd treat these accounts like they do any cash held by suspected drug mules. They take the money (even if they let the suspect go) and tell them, if you want the money back, you can sue us and explain to the judge where the money came from.

One of my pet peeves about the tax system is that the capital gains tax, which is already taxed at a lower rate than earned income, does not apply to unrealized (or "accrued") capital gains. And since capital gains tax liability dies with the capital holder, their heirs inherit the property with all prior capital gains wiped clear. That's kind of a big tax loophole. For liquid property like stocks and bonds, cap gains could easily be taxed annually (so-called "accrual taxation"). For illiquid property like real estate or closely held company stock, cap gains could still be taxed at realization but with an interest penalty for every year their accrued cap gains were not taxed ( "retrospective taxation"). And if you don't sell it, death should be a realization event (last year when there was no estate tax, for once, heirs WERE required to pay capital gains taxes on the accrued gains).

For anyone who thinks its unconstitutional or impracticable to write accrual or retrospective taxation into the tax code, they're both already in the tax code. Futures contracts are taxed on an accrual basis and retrospective taxation already applies to passive foreign investment company stock.

What I'm driving out is, if the government traced the money from offshore bank accounts to offshore stock holdings, there would be a LOT of unpaid taxes owed simply from the interest penalty. Since they won't do that, if Congress simply applied accrual taxation to all securities and retrospective taxation to all other property. It would at least triple (key words being "at least") the $100 billion in capital gains taxes collected now without raising tax rates. I expect Lambert to get a tax credit for his compost pile before we see that happen.

Accrual taxation, 26 USC 1256 "contracts marked to market"
http://www.law.cornell.edu/uscode/html/u...
Retrospective taxation, 26 USC 1291 "interest on tax deferral"
http://www.law.cornell.edu/uscode/26/usc...

Check Out Who's Hiding $32 Trillion in Offshore Accounts

Greg Madison, Associate Editor - May 1, 2013

More than two million emails that shed light on the biggest tax dodge in history - trillions of dollars hidden in offshore accounts - have been uncovered by the British newspaper The Guardian and the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ).

Some $32 trillion has been hidden in small island banking hubs which host a bevy of trust funds, shell corporations and other tax havens, the Tax Justice Network estimates.

This money is to the financial world what the Higgs boson and dark matter are to particle physics: It's tough to prove it's there, but the universe doesn't make much sense without it. It's just a matter of connecting the money to the people hiding it.

That's been a tall order... until now.

An Unprecedented Tax Dodge Next to this bombshell, Wikileaks looks like a first-grader's game of Telephone.

In fact, the leak contains more than 200 gigabytes of data, compared with Wikileaks' two gigabytes.

The information is still being sifted through, even as it's being released to the public, but here's some of what's been found so far:

American Denise Rich, ex-wife of pardoned tax cheat Marc Rich, has been uncovered as the settlor and beneficiary of two large trusts based in the tiny Cook Islands. The ICIJ found that Denise Rich gave up her American citizenship in 2012. Her citizenship was convenient enough when President Clinton had the authority to pardon her ex-husband.

French President Francois Hollande, ardent socialist and tireless champion of the 75% marginal tax rate, appears in these documents, mostly by association. His campaign co-treasurer, Jean-Jacques Augier, has been forced to reveal the name of his Chinese business partner in a Caymans-based distribution company. Augier says he used his offshore company to make a large investment in China.

Australian actor Paul Hogan, of "Crocodile Dundee" fame, has lost about $35.3 million from an account that he used to offshore his "bonza" film royalties. His once-trusted tax adviser Philip Egglishaw ran off with Hogan's sizeable hidden offshore stash.

French banking scion Elie de Rothschild, of the famous banking family, has been named in the leaks. He was instrumental in setting up some 20 trusts and 10 holding companies in the Cook Islands, all extremely opaque in nature. His heirs have, not surprisingly, refused comment.

Brigitte Bardot's third ex-husband, Gunter Sachs, a millionaire industrialist, has been revealed as the owner of a huge, obscure wealth-masking machine: trust upon shell company upon holding company, almost ad infinitum, mostly based in the Cook Islands. The ICIJ has constructed an interactive map of Sachs' extensive offshore holdings and business networks. The network is fairly representative of the steps that many on this list have taken to hide their wealth away. You can marvel at its imponderable complexity here.

And these names are barely the tip of the iceberg. The shockwaves have already begun to spread through the corridors of wealth and power all over the world.

How Much is $32 Trillion? It bears repeating: $32 trillion has been stashed away, off the books, by corporations and wealthy individuals.

Let that sink in for a moment. The implications are stupefying. The real effects of this are far more subtle, and pernicious, but this makes for a fun thought exercise - even setting aside the fact that only some percentage of this huge sum would be fair game for the tax man.

In the extremely unlikely event that all $32 trillion was added to government coffers, that would be enough to give every man, woman and child alive on Earth today a roughly $4,600 "stimulus" check.

Maybe we could all enjoy a two-week vacation in the British Virgin Islands. After all, it seems to be the destination of choice for monied types...

A Bright, Sunny Hub for Dark Business The British Virgin Islands appear to be at the epicenter of this huge offshore stash.

The small Caribbean islands specialize in tourism and financial services. Along with far-flung places like Liechtenstein, Sark in the English Channel, the Cook Islands in the South Pacific, the Caymans and others, the British Virgin Islands are home to thousands of shadowy front companies, trusts and funds that host the bulk of this $32 trillion stash.

As of 2000, the last year verifiable data was available, roughly 400,000 companies were listed in the BVI offshore registry. The number certainly has increased. Some of these countries remain underdeveloped, their citizens impoverished, even though they have high per-capita GDPs, and trillions flow to and from their shores.

Tax havens like these tend to have in common secretive banking laws and loose residency requirements, which make them appealing to those with money to hide. In once extreme case, The Guardianlocated an erstwhile British subject, Sarah Petre-Mears, who was the "nominal director" of nearly 1,200 companies across the world.

Less a captain of industry and more a shill for dodgy investors, Petre-Mears ran companies fronting everything from porn sites to time-share vacation properties. She used dozens of different addresses across the globe, with most turning out to be post office boxes and mail drops.

The consequences of this enormous tax dodge are hard to calculate. How does one reckon who's entitled to what? Which country's tax rate do you use - Canada? Azerbaijan? Slovenia?

There's almost certainly an impact to national budgets, from highway construction to military spending to social programs.

It's safe to say that whenever anyone anywhere feels the sting of budget cutbacks, whether a brigadier-general in South Africa or a primary school teacher in England, they'll have a world-class selection of tax cheats in part to blame.

Journalists are still sifting through the data contained in this massive leak, but as they go along, there're no telling who will appear in the data - and those people are running out of time and places to hide.
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Neo-liberals will be working with republicans and Obama to lower the corporate tax rate and gave $4 trillion in corporate tax breaks in the past 4 years! They are moving to end all corporate taxes and have

Despite National Crackdown On Whistleblowers, IRS Relying On Informers To Report Tax Fraud
By Martin Michaels | September 13, 2012

In this Jan. 8, 2010 file photo, Bradley Birkenfeld, a whistleblower in the tax evasion case against Swiss bank UBS AG, pauses during a press conference outside the Schuylkill County Federal Correctional Institution in Minersville Pa, before reporting to the federal prison. (AP Photo/Carolyn Kaster, File )

(MintPress) — The Internal Revenue Service (IRS) is increasingly relying upon the whistleblower program to investigate cases of tax evasion and fraud. While estimates vary, wealthy U.S. citizens could be hiding up to $5 trillion in offshore accounts, according to a Senate report published in 2008. By providing rewards for successful indictments, the government could significantly reduce the multi trillion dollar deficit by recovering lost tax revenue.

While the program has netted more than $5 billion, critics believe the U.S. government is promoting an unfair double standard. Despite being financially compensated, those who expose tax fraud are still subject to prosecution despite bringing valuable information to the attention of authorities. This has occurred at a time when the Obama administration has cracked down on a record number of whistleblowers.

Bradley C. Birkenfeld, a former employee at UBS AG bank was awarded a $104 million “whistleblower award” earlier this week for reporting widespread tax fraud committed by his former employer. During his career at the financial services firm, Birkenfeld helped thousands of wealthy Americans move their money to Swiss banks in order to avoid taxation by the U.S. government.

UBS tax evasion The UBS case is one of the biggest cases of tax fraud in U.S. history. In 2009, UBS was found to have helped 19,000 clients move more than $20 billion to Swiss bank accounts, tax shelters outside the purview of U.S. financial regulation and taxation. Birkenfeld an employee of UBS at the time, played an integral role in helping UBS clients move their money to these tax shelters.

Birkenfeld would later divulge the details of widespread UBS fraud. After his testimony, the bank was forced to pay more than $780 million in fines. UBS closed the division responsible for the tax evasion and also agreed to hand over account information for more than 4,500 clients. An additional 33,000 tax evaders chose to report offshore accounts on their own accord, generating an additional $5 billion.

Birkenfeld, who himself was complicit in the tax fraud as a UBS employee was tried and sentenced to 40 months in prison for his role. Earlier this week the IRS rewarded the 47-year-old for his efforts in the UBS case, a case that many tax experts believe could lead to investigations in other financial institutions.

Stephen Kohn, Birkenfeld’s co-counsel in the case commented on his client’s actions in a recent interview, saying:

“It’s the largest whistleblower award in history. But Birkenfeld turned in the largest financial fraud. He turned in 19,000 felons, and $20 billion in one unit. We also know that 33,000 people are turning themselves in. The total amount of U.S. dollars in illegal offshore accounts is over $5 trillion. That is the estimation by a Senate report.”

Although Birkenfeld was rewarded generously for his cooperation, Kohn believes that it was wrong of the Justice Department to prosecute his client, adding, “When the Justice Department prosecuted Bradley Birkenfeld in one of the most absurd and misguided efforts, they took an asset, a person who turned in the keys to the kingdom, the first whistleblower to expose exactly how illegal Swiss banking worked, and instead of using him, they persecuted him.”

However, Swiss authorities believe that the U.S. government has displayed “hypocrisy” for prosecuting Birkenfeld, then later rewarding him. Pirmin Bischof a member of the upper house in the Swiss Parliament commented, saying, “It’s the height of hypocrisy if the U.S. is one day sentencing the guy to 40 months in prison and the next give him the highest reward.”

Regardless of the duplicitous actions by the U.S. government, Kohn’s client is by no means the the only whistleblower to be prosecuted for exposing crimes, fraud and misdeeds.

Crackdown on whistleblowers Other whistleblowers reporting crimes have similarly been prosecuted for their actions. Bradley Manning, a member of the U.S. army has been held in solitary confinement since 2010 on 22 charges, including conspiracy and “aiding the enemy.” Manning allegedly released a cache of documents exposing U.S. military corruption and the murder of innocent civilians in Iraq and Afghanistan.

A video titled, “Collateral Murder,” was released in the vast cache, implicating the U.S. military in the murder of innocent Iraqi civilians and members of the international press. Filmed in 2007, the video has gone viral, viewed more than 12 million times on YouTube. While the video has stirred controversy, there have been no arrests or prosecutions since the video’s release.

Similarly, WikiLeaks founder Julian Assange is currently involved in a diplomatic standoff, unable to leave the Ecuadorian Embassy in London. Assange’s WikiLeaks project has brought to light hundreds of thousands of diplomatic cables exposing corruption and war crimes committed by the U.S. armed forces and the U.S. government. U.S. authorities have sought his extradition for releasing classified information despite his being granted asylum in Ecuador last month.

The cases of Assange and Manning are, of course, different than that of Birkenfeld. However, all three are subject to a crackdown that occurs when the U.S. government has been found guilty of committing crimes, or has proven unwilling to prosecute crimes committed by its own citizens.

Unlike other whistleblowers, Birkenfeld received relative leniency for his crimes and was later compensated generously for his cooperation. While the case could lead to more investigations into offshore banking fraud, the unwillingness to properly tax major corporations remains a much larger, unaddressed issue.

Closing corporate tax loopholes Major U.S. corporations are able to move their corporate headquarters outside the U.S. while maintaining production and sales inside U.S. borders. When headquarters are moved offshore, corporations can avoid taxation despite being subject to other government regulations.

Consumer advocacy groups believe that this major loophole has cost the U.S. government more than $100 billion in annual tax revenue. U.S. PIRG, a consumer advocacy group, has advocated for closing corporate tax loopholes, a necessary component of tax reform, saying on its website:

“No company should be able to game the tax system to avoid paying what it legitimately owes. And, yet, establishing shell companies in offshore havens for the purpose of tax avoidance is becoming more the rule than the exception for at least 83 of the nation’s top 100 publicly traded companies. GE, Google, Goldman Sachs and dozens of others have created hundreds of phantom entities with nothing more than a clever tax attorney and P.O. box.”

According to its website, U.S. PIRG is “a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.”

General Electric, a company that boasted $14.2 billion profit in 2010 adeptly avoided taxation altogether despite earning over $5 billion from U.S. sales. The company moved its address outside the U.S. and continues to avoid the 35 percent corporate tax rate.

Instead of prosecuting GE, Goldman Sachs and others for tax evasion, the U.S. government has consistently raised taxes on the middle class in order to close budget deficits and fund social programs.

This issue has become a cause celebre of Occupy Wall Street and sympathetic tax reform advocates in Washington. However, few voices have emerged calling for comprehensive corporate tax reform. The main issue is because Washington policies are largely dominated by corporations and wealthy donors able to shape policy by financing costly elections.

Sen. Bernie Sanders (I-Va.), one of the few advocates for corporate tax reform, commented on the issue in a statement last year saying, “We have a deficit problem. It has to be addressed, but it cannot be addressed on the backs of the sick, the elderly, the poor, young people, the most vulnerable in this country. The wealthiest people and the largest corporations in this country have got to contribute. We’ve got to talk about shared sacrifice.”

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January 03rd, 2013

1/3/2013

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This fiscal cliff deal saw Third Way corporate democrats institutionalize wealth inequity, allowing the one stick in raising revenue from the rich pass. The $14 trillion debt will now be paid by public spending cuts and cuts to social programs like entitlements/SS/ poverty programs. Those who follow politics knew that Maryland's Third Way democrats were in line to do this, but corporate media fights hard to make sure the electorate does not know what these corporate pols are up to.

The next big loss for 95% of the American people will take the form of corporate tax cuts as dems pretend there is yet another 'crisis' that makes them do it. The 14th amendment makes the debt ceiling unconstitutional so it is not a crisis. They will tell you and me they must lower corporate taxes but cut loopholes and tax breaks making this corporate tax reform revenue neutral. They do not tell you is that all of these loopholes and tax breaks come right back every time! Our public services and social programs never do.

Watch as Maryland's pols including that ex-pat Nancy Pelosi tell us that these cuts are necessary to save the programs. What they are really saying is that with ever falling revenue from the rich and corporations, with workers falling into poverty, and with trillions of dollars in corporate fraud yet to be recovered..there is no money for social programs and public services!

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!

THIS IS WHAT THE CORPORATIONS RECEIVED IN THE FISCAL CLIFF DEBT REDUCTION.....MORE CORPORATE TAX BREAKS!!

Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR Wednesday, 02 January 2013 08:57 By Matt Stoller, Naked Capitalism | News Analysis

President Barack Obama is flanked by Vice President Joe Biden as he speaks at a news conference following the House vote, at the White House, in Washington, January 1, 2013. (Photo: Luke Sharrett / The New York Times) Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on.

The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well. One of the core shifts in the Reagan era was the convergence of wealthy individuals who wanted to pay less in taxes – many from the growing South – with corporations that wanted tax breaks. Previously, these groups fought over the pie, because the idea of endless deficits did not make sense. Once Reagan figured out how to finance yawning deficits, the GOP was able to wield the corporate sector and the new sun state wealthy into one force, epitomized today by Grover Norquist. What Obama is (sort of) trying to do is split this coalition, and the extenders are the carrot he’s dangling in front of the corporate sector to do it.

Most tax credits drop straight to the bottom line – it’s why companies like Enron considered its tax compliance section a “profit center”. A few hundred billion dollars of tax expenditures is a major carrot to offer. Surely, a modest hike in income taxes for people who make more than $400k in income and stupid enough not to take that money in capital gain would be worth trading off for the few hundred billion dollars in corporate pork. This is what the fiscal cliff is about – who gets the money. And by leaving out the corporate sector, nearly anyone who talks about this debate is leaving out a key negotiating partner.

So without further ado, here are eight corporate subsidies in the fiscal cliff bill that you haven’t heard of.

1) Help out NASCAR - Sec 312 extends the “seven year recovery period for motorsports entertainment complex property”, which is to say it allows anyone who builds a racetrack and associated facilities to get tax breaks on it. This one was projected to cost $43 million over two years.

2) A hundred million or so for Railroads - Sec. 306 provides tax credits to certain railroads for maintaining their tracks. It’s unclear why private businesses should be compensated for their costs of doing business. This is worth roughly $165 million a year.

3) Disney’s Gotta Eat - Sec. 317 is “Extension of special expensing rules for certain film and television productions”. It’s a relatively straightforward subsidy to Hollywood studios, and according to the Joint Tax Committee, was projected to cost $150m for 2010 and 2011.

4) Help a brother mining company out – Sec. 307 and Sec. 316 offer tax incentives for miners to buy safety equipment and train their employees on mine safety. Taxpayers shouldn’t have to bribe mining companies to not kill their workers.

5) Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.

6) $9B Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.”

7) Tax credits for foreign subsidiaries – Sec. 323 is an extension of the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This gibberish sounding provision cost $1.5 billion from 2010 and 2011, and the US Chamber loves it. It’s a provision that allows US multinationals to not pay taxes on income earned by companies they own abroad.

8) Bonus Depreciation, R&D Tax Credit – These are well-known corporate boondoggles. The tax credit was projected to cost $8B for 2010 and 2011, and the depreciation provisions were projected to cost about $110B for those two years, with some of that made up in later years.

Conveniently, the Joint Committee on Taxation in 2010 did an analysis of what many of these extenders cost. You can find that report here.

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One of the issues that will come with the corporate tax reform in a few months will be the repatriation tax. This law placing taxes on overseas profits was meant to discourage taking jobs overseas and so far has been forgiven, letting corporate profits from overseas come in to US as low as 5.25%. This is for what these global corporations are waiting for now as trillions of dollars are sitting in overseas shelters.

Obama has said he favors strengthening laws like this repatriation tax again he says to deter taking jobs overseas. He does not have a good record in these promises! GIVEN THAT MOST OF US CORPORATE PROFIT WILL COME FROM OVERSEAS GROWTH FOR DECADES TO COME....IF THEY ALLOW THIS 5.25% TO TAKE HOLD......THEY ALWAYS SAY THIS LOW RATE IS A JOB CREATOR......IT WILL DRAIN OUR JOBS GROWTH AND GOVERNMENT COFFERS. Please shout loudly to stop the push towards the 5.25% repatriation!!!!
September 29 2006 | Filed Under » What is the purpose of a "repatriated tax break", and why is it so controversial? In 2004, Congress passed the American Jobs Creation Act to create new jobs in an effort to boost the economy. One of the results of the act was the implementation of a repatriated tax break, which gave U.S. multinational corporations a one-time tax break on money earned in foreign countries.

The tax break allows foreign earnings to be taxed at a rate of 5.25%, which is significantly lower than the usual corporate tax rate of 35%. Previously, much of the earnings derived from foreign countries were not transferred back to the U.S. because multinationals can defer paying taxes on foreign earnings until they decided to send the earnings back in the form of a dividend.

Ultimately, the government's rationale is that the tax break would act as a good incentive for American multinationals to send their foreign earnings back to the U.S., and then use the earnings to create more American jobs and/or expand operations in the U.S.

Critics of the idea believe that because the companies aren't required to use the repatriated earnings for the sole purpose of American job creation (but the bill does prevent companies from using the money for executive compensation, dividends and stock investments)

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OVER DECADES THESE POLS ALWAYS PRETEND TO DO A REVENUE NEUTRAL REFORM OF CORPORATE TAXES. EACH TIME WHAT THEY DO IS LOWER THE CORPORATE RATES WITH CUTTING LOOPHOLES AND TAX BREAKS AND CALL IT REVENUE NEUTRAL. WHAT THEY ALWAYS DO AS WELL IS SIMPLY BRING ALL OF THE LOOPHOLES AND TAX BREAKS BACK AGAIN-----IT IS NOT REVENUE NEUTRAL.....IT IS NOT A JOB CREATOR.....THEY ARE MISLEADING YOU!

VOTE YOUR INCUMBENT OUT OF OFFICE!!!

The myth of corporate tax reform

By Robert Pozen,September 28, 2011

House Speaker John Boehner recently joined the chorus of notables calling for corporate tax reform in any deficit-reduction package. Both Democrats and Republicans want to reduce the corporate tax rate from 35 percent to 25 percent, in return for eliminating the tax credits and deductions available primarily to U.S. corporations.

The rationale behind the proposal is sound in theory — a lower tax rate would help all profitable corporations. By contrast, Congress often bestows tax benefits on industries that are perceived as potential winners or those wielding political clout.

In theory, this proposal would also be revenue-neutral. The rate reduction would decrease U.S. tax revenue by approximately $600 billion during the next five years, but this would be offset by the additional tax revenue gained with the elimination of corporate tax “loopholes.”

But the chances of this proposal passing Congress on a revenue-neutral basis are slim. Most of the corporate tax benefits that would need to be repealed have both a significant positive effect on economic growth and deep political support among powerful constituencies. Moreover, repeal would hurt many non-corporate entities, such as local governments and partnerships running operating businesses, that would gain nothing from a lower corporate tax rate.

The biggest portion of tax benefits to be eliminated, more than $200 billion over five years, encourages U.S. companies to expand their activities in the United States — just what we need in these slow economic times. Examples include:

●$109 billion for accelerated depreciation that encourages U.S. corporations to buy machinery or equipment.

●$62.4 billion for U.S. corporations that locate their manufacturing facilities here, rather than abroad.

●$43.4 billion for U.S. corporations that increase their research activities and expense their experiments.

A second large chunk of corporate tax benefits, almost $100 billion over five years, supports the issuance of state and local bonds. Of this total, $73 billion is for the interest exemption on bonds for “public purposes” — which reduces the borrowing costs of cash-strapped states and cities. The rest is for the interest exemption on “special purpose” bonds — used to construct airports, docks and hospitals as well as water and sewage facilities. Such construction generates jobs and lays the foundation for future economic growth.

A third category, worth $54 billion over five years, provides tax benefits to specific industries. Some of these might seem vulnerable because they support industries under political attack, such as oil and gas, coal and other minerals. However, the total value of tax benefits to these industries that focus on extraction is less than $12 billion over five years — a minute portion of the $600 billion needed to finance the proposed reduction in corporate tax rates. Most industry-specific benefits go to less controversial businesses, such as $18 billion for non-taxed earnings by credit unions, mutual savings banks, nonprofit health insurers and other types of cooperatives.

A fourth category of tax benefits, worth about $50 billion over five years, promotes various social causes. The two largest in this category are tax credits for low-income housing ($34 billion) and tax deductions for corporate charitable contributions ($13.4 billion). Both of these tax benefits have a well-developed rationale and a well-organized group of political supporters.

The final category is the most complex — $213 billion for taxes deferred over the next five years on foreign profits of U.S. corporations. Although such corporate profits are officially subject to a 35 percent U.S. tax rate, this tax can be avoided as long as those profits are held by U.S. corporations in foreign bank accounts.

In other words, corporate tax reform can be achieved on a revenue-neutral basis only if Congress decides to raise $213 billion by repealing the current ability of U.S. corporations to defer indefinitely the 35 percent U.S. tax on their foreign profits. Instead, Congress is considering a proposal that would temporarily allow U.S. corporations to repatriate their foreign profits at a tax rate below 6 percent.

Of course, a compromise could be reached by lowering the corporate tax rate to 30 percent and retaining half of the current tax benefits for U.S. corporations. In a recent Grant Thornton survey, however, most corporate executives said that they would be unwilling to give up their tax credits and deductions unless Congress reduced the corporate tax rate to 25 percent or lower.

In short, corporate tax reform on a revenue-neutral basis would be politically unrealistic. Quick action to achieve this end is also likely, without careful management, to have an adverse impact on our fragile economy. Congress should focus its tax reform efforts on other dysfunctional aspects of the U.S. tax system.

Robert Pozen is a senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution. His latest book is “The Fund Industry: How Your Money Is Managed.” He can be followed on Twitter: @pozen.

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HAVING GOTTEN ABSOLUTELY THE LEAST HE COULD IN REVENUE FROM THE RICH IN THIS FISCAL CLIFF DEAL AND KNOWING HE WILL BACK A PLAN TO LOWER CORPORATE RATES, WE KNOW THAT THESE THIRD WAY CORPORATE DEMOCRATS WILL CUT ENTITLEMENTS AND SOCIAL PROGRAMS TO PAY FOR IT AND HAVE THE PUBLIC PAYING THE ENTIRE $14 TRILLION IN NATIONAL DEBT!!

THERE WILL BE NO REVENUE GENERATED FROM THIS CORPORATE TAX REFORM!

Obama's Tax Threshold Concession Bodes Ill for Debt Ceiling Talks
Wednesday, 02 January 2013 11:40 By Dean Baker, The Guardian | Op-Ed

President Barack Obama speaks about the fiscal cliff during a news conference at the Eisenhower Executive Office Building in Washington, December 31, 2012. (Photo: Luke Sharrett / The New York Times)The president won re-election promising to raise taxes on those earning more than $250,000. Now he's already capitulating.

There are three points that people should recognize about the fiscal cliff deal that appears to have been agreed by President Obama and the Republicans in Congress. The first is the simple and obvious point that we have gone over the cliff. There was no deal approved by Congress and signed by President Obama before the 1 January deadline.

This is important because the budget reporting on the "fiscal cliff" repeatedly asserted that the country and the economy faced dire consequences from not having a deal reached by this deadline. They repeatedly asserted that we risked a recession, grossly misrepresenting forecasts from the Congressional Budget Office, and others predicted the consequences of leaving higher tax rates and large spending cuts in place for the whole year.

There was also the prediction that the financial markets would melt down if there was no deal approved by the deadline. While the markets are not yet open, they actually rallied on the last day of 2012 on the news that the outlines of a deal had been agreed, even though the deadline would almost surely be missed.

In other words, the financial markets responded as many of us non-insiders predicted. As long as it was clear that a deal would be forthcoming, they didn't give a damn about the fiscal "cliff" deadline. Chalk this one up as yet another example of the experts – the people who report on the budget and the economy for the Washington Post and other major news outlets – not having a clue.

The second point has to do with the substance of the deal. For those who wanted to see key programs like social security and Medicare protected, this deal is pretty good news. The hare-brained idea of raising the age of Medicare eligibility to 67 seems to be off the table.

The plan to cut social security benefits by an average of 3% by changing the indexation formula for the cost of living adjustment is also, at least temporarily, off the table. The deal also continues the period of extended unemployment benefits, ensuring that 2 million unemployed workers will continue to receive checks.

On the revenue side, President Obama gave in to some extent, raising the threshold for applying the Clinton era tax rates to $450,000, compared to the $250,000 level he had touted during his campaign. This is a gift of roughly $6,000 to very rich households, since it means even the wealthiest people will have the lower tax rate applied to $200,000 of their income. Perhaps more importantly, it continues the special low tax rate for dividend income, with the richest of the rich paying a tax rate of just 20% on their dividend income.

The resulting loss of revenue from these concessions is roughly $200bn over ten years, or about 0.5% of projected spending during this period. By itself, this revenue loss would not be of much consequence; what matters much more is the dynamics that this deal sets in place.

This is the third point. President Obama insisted that he was going to stick to the $250,000 cut-off requiring that the top 2% of households, the big winners in the economy, go back to paying the Clinton era tax rates. He backed away from this commitment even in a context where he held most of the cards. We are now entering a new round of negotiations over extending the debt ceiling where the Republicans would appear to hold many of the cards.

While the consequences may not be as dire as the pundits claim, no one could think it would be a good idea to allow the debt ceiling to be reached and force the government into default. The Republicans intend to use this threat, however, to coerce further concessions from President Obama. The president insists that there will be no negotiations over the debt ceiling: no further concessions to protect the country's financial standing.

At this point, though, is there any reason for people to believe him?

This is a president who encouraged members of Congress to vote for the Troubled Asset Relief Program (Tarp) in 2008 with a promise that he would put bankruptcy cramdown for mortgage debt (allowing restructuring of housing loans for people with distressed mortgages) at the top of his agenda once he took office. This is a president whose top aids boasted about "hippie punching" when they ditched the public option in the Affordable Care Act. This is a president who has explicitly put cuts to social security on the agenda, while keeping taxes on Wall Street speculation off the agenda.

And this is a president who decided to put deficit reduction, rather than job creation, at the center of the national agenda – even though he knows the large deficits are entirely the result of the collapse of the economy. And, of course, he is the president who appointed former Senator Alan Simpson and Morgan Stanley director Erskine Bowles to head his deficit commission, enormously elevating the stature of these two foes of social security and Medicare.

Given his track record, there is little doubt that President Obama can be trusted to make further concessions, possibly involving social security and Medicare, in negotiations on the debt ceiling. Oh well, at least we can laugh at the experts being wrong about the fiscal cliff "Mayan apocalypse".

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