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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.”

______________________________________________
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-----T
HEY 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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November 29th, 2013

11/29/2013

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THE MOVEMENT OF REAL ESTATE TO THE FEW AT THE TOP IS IN FULL SWING AND MARYLAND IS FRONT AND CENTER IN THIS MASSIVE FRAUD.  IT IS WHY THERE IS NO TALK IN MARYLAND JUSTICE CIRCLES ABOUT THIS MASSIVE FRAUD THAT TARGETED THE WORKING CLASS AND POOR.  MARYLAND IS STILL THE HIGHEST IN FORECLOSURES AS THE MIDDLE-CLASS ARE NEXT IN LOSING THEIR HOMES FROM THE DAMAGES OF THIS FRAUD!

THE SUBPRIME LOAN FRAUD CONTINUES!!!!!!

We are seeing every level of government working to protect corporate profits and shield corporate fraud and tax evasion as laws are passed making civil rights and liberties threatened.  This is happening in Baltimore City Hall, the Maryland Assembly, and US Congress.  I saw an article that stated democrats in Congress were behind this massive WalMart protest and yet------a supermajority of democrats could not find it in them to raise the minimum wage to $15 an hour or protect worker and retirement benefits.  So, as civil liberties and public justice are suspended.......corporate fraud is in full swing! 

THIS IS O'MALLEY'S MARYLAND---- 

I keep stating the obvious, but we must make it a mantra coming from all sectors of US society-----WE SIMPLY NEED TO RECOVER MASSIVE CORPORATE FRAUD IN THE TENS OF TRILLIONS TO REVERSE WEALTH INEQUITY!  SIMPLY REINSTATING RULE OF LAW WILL DO IT!

This is why I highlight all the avenues of corporate fraud that exist in Maryland and Baltimore.  Below you see that while Maryland passes laws against protesting......the corporations being protested are wanted for all kinds of fraud.  WalMart represents wage theft, tax evasion, and the social costs of poverty wages is huge. 

As you see REIT is a property tax law that adds to the 'you can bet on anything on Wall Street' casino atmosphere.  With all things Wall Street fraud is infused so, as cities and states lose property tax revenue by handing yet another corporate cost over to shareholders......we know that the major shareholders are not paying the taxes required from REIT.  Then you have the bizarre renting your business to yourself scheme showing there is no oversight for open infringement.

We simply need to enforce law..... and all that requires is a Rule of Law GOVERNOR AND MAYOR.  Fraud recovery pays for itself so if an attorneys office is captured.....an executive can do the deed!

With REIT fraud you not only have shareholders failing to pay for profits from this policy, you have corporations like WalMart getting tax breaks on taxes they don't pay......selling themselves as 'renters'.  Or the ultimate fraud in using REIT on subprime mortgage loan fraud recycled en masse from the FED as bundled mortgage buy-backs.



VISIGOTH ALERT!!!!!!!

Did you know that Maryland is tops with the REIT law that allows corporations like WalMart to 'rent to themselves'? WalMart not only steals from its employees but your Maryland neo-liberals allow them to steal from public coffers. So, while the Maryland Assembly claims poverty and cuts education and public services, it hands out so much in corporate subsidy as to make taxes profits!

WE ARE GOING TO HAVE TO MAKE SURE WALMART PAYS ITS RAIN TAX!!!!


Please look at the last article to see how Maryland is tied in to this FED mortgage bond buy-back scheme that simply takes these subprime loans off of banks' accounts and moves them to a newly created business that markets them as REIT investments!  

Remember, the FED is spending trillions of dollars on this buy-back and this Maryland corporation is loading itself with this discounted real estate. It was the Washington suburbs that was home of MERS-----the mortgage title laundering machine for the massive mortgage fraud.

Wal-Mart’s State Tax Evasion Ploy: Paying Rent to Itself

By Jesse Drucker
First published by The Wall St. Journal, February 1, 2007

As the world’s biggest retailer, Wal-Mart Stores Inc. pays billions of dollars a year in rent for its stores. Luckily for Wal-Mart, in about 25 states it has been paying most of that rent to itself — and then deducting that amount from its state taxes.

The strategy is complex, but the bottom line is simple: It has saved Wal-Mart from paying several hundred million dollars in taxes, according to court records and a person familiar with the matter. And Wal-Mart is far from alone.

IT’S A DEAL
The arrangement takes advantage of a tax loophole that the federal government plugged decades ago, but which many states have been slower to catch. Here’s how it works: One Wal-Mart subsidiary pays the rent to a real-estate investment trust, or REIT, which is entitled to a tax break if it pays its profits out in dividends. The REIT is 99%-owned by another Wal-Mart subsidiary, which receives the REIT’s dividends tax-free. And Wal-Mart gets to deduct the rent from state taxes as a business expense, even though the money has stayed within the company.

Partly thanks to sophisticated financial strategies like these, states’ tax collections from companies have been plummeting. On average, Wal-Mart has paid only about half of the statutory state tax rates for the past decade, according to Standard & Poor’s Compustat, which collects data from SEC filings. The so-called “captive REIT” strategy alone cut Wal-Mart’s state taxes by about 20% over one four-year period. Now several state regulators are trying to crack down on the strategy, used largely by retailers and banks, and some other states have changed their laws to try to end the practice. Yesterday, New York Gov. Eliot Spitzer included elimination of the loophole as part of his proposed budget, a fix he said would bring the state $83 million a year.

North Carolina tax authorities are challenging Wal-Mart, saying its REIT strategy was intended to “distort [the company's] true net income,” according to its filings in the case in Superior Court in Raleigh, N.C. The state calls captive REITs a “high priority corporate tax sheltering issue” and in 2005 ordered Wal-Mart to pay $33 million for back taxes, interest and penalties stemming from the REIT. The company paid it and last year sued the state for a refund.

The structure Wal-Mart is using features some unusual elements. Because REITs must have at least 100 shareholders to gain tax benefits, roughly 100 Wal-Mart executives were enlisted to own a combined total of around 1% of the REIT’s shares, without any voting rights. H. Lee Scott Jr., now Wal-Mart’s CEO, was listed as the REIT’s “managing trustee” from 1996 to 2004.

A single Wal-Mart real-estate official, Tony Fuller, represented the company both as tenant and landlord in its lease with itself. Ernst & Young LLP, the accounting firm that sold the strategy to Wal-Mart, also is the company’s outside auditor. In its internal sales training materials, the accounting firm explicitly labeled the strategy as a method to reduce taxes — a red flag to tax authorities, who often demand that tax shelters have other business purposes.

Wal-Mart attorneys say in court filings that the strategy is perfectly legal and that North Carolina is exceeding its authority. A spokesman for the Bentonville, Ark., company, John Simley, said Wal-Mart “is comfortable with its current structure and is in compliance with federal and state tax laws.” He added that the REIT structure was adopted to “more effectively and efficiently manage the company’s real-estate portfolio, including the impact on the company’s overall state tax planning.”

Regulators in at least a half-dozen states are going after companies that have trimmed their taxes through similar arrangements, including Regions Financial Corp.’s AmSouth Bancorp. unit; AutoZone Inc. of Memphis, Tenn.; and two units of Bank of America Corp. In a Massachusetts case against Bank of America unit Fleet Funding Inc., authorities call Fleet’s REIT arrangement a “sham” in court filings. They note that Fleet increased the salaries of the roughly 100 employees whom it made REIT shareholders to compensate them for personal income taxes stemming from ownership. The Multistate Tax Commission, an association of state revenue authorities, says it has started examining the use of captive REITs to avoid taxes, alerting states to the issue and proposing legislative fixes to close the loophole.

States collected more than $44 billion last year in corporate income taxes, out of $607 billion in total state tax receipts, according to the Nelson A. Rockefeller Institute of Government, a nonpartisan think tank associated with the State University of New York. But the average effective corporate state and local tax rate has dropped from 6.7% during the 1980s to about 5% during the first half of this decade, according to a recent report by the Congressional Research Service. This is in part because of the proliferation of state and local tax breaks, as well as tax shelters, according to several academic and government studies.

Some corporate state tax planners say arrangements like these are merely smart business, and that the loopholes exploited by companies should be fixed by state legislatures rather than litigated by state lawyers. Critics of the shelters complain they let companies use public services provided by local governments — such as police and fire protection or new highways — without having to shoulder their fair share of the costs. Meanwhile, the portion of state taxes borne by individuals is steadily rising.

Congress created REITs in 1960 as a way to allow smaller investors to put money in a wide portfolio of commercial real estate, spreading their risk. Congress also gave them a tax benefit: REITs aren’t subject to corporate income tax on the profits they pay to shareholders as long as they pay out at least 90% of the profits. The shareholders still usually get federally taxed on the dividends, which still count as income for them.

After a boom in REITs in the early 1990s, big accounting firms including Ernst & Young and KPMG LLP figured out that on the state level, they could pair the tax break on REIT dividends with a separate tax rule that allows companies to receive dividends tax-free from their subsidiaries. With the REIT as a subsidiary itself, two rules aimed at avoiding double taxation could be combined to effectively avoid any taxation at all.

The strategy worked especially well if the REIT was owned by a company incorporated, and claiming to do all its business, in a state such as Delaware or Nevada that often wouldn’t tax the corporate income anyway. That created an extra hurdle for other states to challenge the practice if they caught onto it.

Ernst & Young early on targeted the banking industry as a possible beneficiary of the captive REIT strategy. Like retailers, banks have branches in many states and often are liable for lots of state-level corporate tax. Ernst & Young targeted at least 30 banks, some of them its audit clients. The SEC generally permits that dual role as long as the firm’s fee isn’t contingent on the tax savings.

According to documents from a 1995 internal Ernst & Young sales training meeting reviewed by The Wall Street Journal, the accounting firm suggested banks put some of their income-producing assets, such as a portfolio of mortgages, into a REIT subsidiary, then use the double-tax break to “shelter” the income from state taxes. The REIT would issue a tiny number of non-voting shares to bank “officers and directors” to meet the 100-shareholder rule that REIT law requires.

U.S. banks “pay millions of dollars each year in state and local taxes,” read the Ernst & Young presentation to its sales force. “The FSI State Tax Financial Product we have developed can significantly reduce or eliminate this heavy tax obligation…” One section of the Ernst & Young sales package featured hypothetical questions from clients about the REIT shelter, and the proposed answers. To pass legal muster, many corporate tax shelters purport to have additional business purposes behind merely saving taxes. Ernst & Young, however, was blunt about the reason for its proposed strategy:

“Q: What’s the business purpose?
“A: Reduction in state and local taxes.

“Q: What if the press gets wind of this and portrays us as a ‘tax cheat’?
“A: That’s a possibility….If you are concerned about possible negative publicity, you can counter it by reinvesting the savings in the community.”

An Ernst & Young spokesman declined to comment on its REIT work, saying the firm was “prohibited from commenting on client matters.” The spokesman said he could not verify the authenticity of the internal sales training documents based on quotes provided by the Journal. However, he said the “limited language communicated in the internal memo does not reflect the quality and nature of the advice we provide to our clients.”

State authorities have had mixed records so far in pursuing back taxes and penalties in captive-REIT cases. AutoZone, the big auto-parts chain, won the right to deduct the dividends from its taxes in Kentucky but lost a preliminary round in Louisiana . The Hawaii Department of Taxation won a case involving a REIT used by Central Pacific Financial Corp., a bank holding company. AmSouth is in litigation with Alabama over tax benefits from its REIT.

Fleet Funding’s REIT, on which the company was advised by KPMG, has led Massachusetts to seek more than $42 million in back taxes, interest and penalties. BankBoston Corp. is in similar litigation with Massachusetts . Both banks have been acquired by Bank of America, which declined to comment on the litigation.

Fleet’s attorneys have said in court papers that its REITs were legitimate, and the fact that they were partly motivated by tax considerations does not legally undermine their valid business purpose — to raise capital, they say. A KPMG spokeswoman declined to comment on the Fleet case, but said it had stopped any involvement with “prepackaged tax products” before a 2005 agreement it made with the U.S. Justice Department over improper tax strategies that also led to the indictment of 17 former KPMG officials.

It’s unknown how many disputes have been raised over the strategy used by Wal-Mart and others, because such tax disputes are generally not disclosed unless lawsuits are publicly filed or the company reveals them in SEC filings.

Wal-Mart adopted its captive-REIT structure just as it was unwinding a previous strategy to reduce taxes that states had begun to challenge. For the first half of the 1990s, the retailer used a so-called intangible holdings company structure also used by many other corporations. Wal-Mart transferred its trademarks to a subsidiary called WMR Inc. in Delaware, which does not tax many forms of corporate income. Then it paid the subsidiary for the use of the brands. That allowed Wal-Mart to deduct those payments from its local income taxes in some states, while WMR’s income wasn’t taxed by Delaware.

Several states won challenges to the strategy, used by various retailers. Wal-Mart settled a dispute over its use of WMR in Louisiana — the details of the settlement are sealed — and lost on the main points of a case in New Mexico. Wal-Mart merged with WMR in February of 1997 and its use as a state tax avoidance vehicle was apparently discontinued, according to New Mexico court records.

In the meantime, Wal-Mart set up a new vehicle to control its state tax bill: captive REITs. In the summer and fall of 1996, Delaware corporate records show, Wal-Mart created a new hierarchy of subsidiaries: a REIT called the Wal-Mart Real Estate Business Trust; a Delaware-based parent company for the REIT, called the Wal-Mart Property Co.; and Wal-Mart Stores East Inc., parent of the Delaware firm. Wal-Mart Property owned 99% of the REIT’s shares, and 100% of the voting shares, according to Wal-Mart court filings in North Carolina and West Virginia. The company also set up a similar arrangement for its Sam’s Club stores.

To meet the 100-shareholder threshold required for REITs, Wal-Mart distributed a minimal amount of nonvoting stock, to approximately 114 Wal-Mart employees, according to a person familiar with the arrangement. The dividend payouts were nominal. The structure involved Wal-Mart’s top executive tier. The shareholders were generally executive vice presidents and above. David Glass, then Wal-Mart’s president and CEO, was listed as president of Wal-Mart Stores East on the lease agreement, and Paul Carter, then a Wal-Mart executive vice president, was listed as the president of the REIT.

Wal-Mart began transferring to the REIT ownership of the properties — the land and buildings — for hundreds of its stores in 27 states, real-estate records show. Then Wal-Mart Stores East signed a 10-year lease agreement with its REIT that took effect on Jan. 31, 1997, agreeing to pay a fixed percentage of the stores’”gross sales” as rent, according to a copy of the arrangement filed in the North Carolina case. Mr. Fuller, the Wal-Mart real-estate official, is listed as the contact for both the tenant and the landlord. The original lease was due to be renewed this week.

Wal-Mart could deduct from its state-taxable income the rent paid by Wal-Mart Stores East to the REIT. The REIT paid the majority of its rental earnings to its 99% owner, Wal-Mart Property Co., in the form of dividends. That company’s base in Delaware gave it another way to avoid liability for state taxes, since some states do require that dividends a REIT pays to its corporate owner be taxed, as the federal government does.

The Delaware subsidiary then paid the money back to Wal-Mart Stores East, the same subsidiary that made the payments to the REIT to begin with. Those payments to Wal-Mart Stores East weren’t taxed either, because dividends paid to a corporation by a subsidiary normally aren’t counted as taxable income for the parent company.

The result of the circuitous transaction: Wal-Mart could effectively turn rental payments to itself into state level tax-deductions in most of the states where the payments have been made. Under typical circumstances, rent paid to a third-party landlord also would reduce taxable income. But that would ordinarily be cash out the door, like most other tax-deductible expenses. Here, the majority of the tax-deductible rental payments came straight back to Wal-Mart.

The national tax savings have been significant. Over a four-year period, from 1998 to 2001, Wal-Mart and Sam’s Club paid company-controlled REITs a total of $7.27 billion that eventually came back to Wal-Mart in states across the country, according to a North Carolina Department of Revenue auditor’s report filed in court by Wal-Mart. Based on an average state corporate income tax rate of 6.5%, three accounting experts consulted by The Wall Street Journal estimated the REIT payments led to a state tax savings for Wal-Mart of roughly $350 million over just those four years. SEC filings show the company paid $1.18 billion in state taxes during that period. The loss of federal deductions that bigger state tax payments would have triggered brought the company’s effective tax savings overall down to about $230 million. Wal-Mart declined to comment on the figures.

It is not clear how much Wal-Mart has paid to its own REITs in the most recent five years. The yearly rental payments — on which the tax savings are based — are pegged to the “gross sales” of the stores, according to the lease agreement.

Underscoring that the rental payments were cashless Wal-Mart accounting moves, an affidavit filed in North Carolina by the company’s former controller, James A. Walker Jr., states that the payments were made by simply debiting the account of one subsidiary and then crediting the account of the other. “Wal-Mart Stores, Inc. served, in effect, as a bank for” both sides, the affidavit stated.

In 2005, after an audit, the North Carolina Department of Revenue issued a notice to Wal-Mart challenging the REIT structure. The state is site of about 140 of the company’s roughly 3,900 U.S. stores, including Sam’s Clubs. Wal-Mart paid the $33 million the state sought, and in March 2006 sued for a refund.

The company argues that the state does not have the authority to essentially combine the results of the subsidiary that did business in North Carolina with those of the Delaware-based unit and the REIT. The Delaware-based subsidiary, the company says, did no business in North Carolina and therefore was not taxable there. The company says in court filings that the REIT was qualified under federal law, that all the deductions were properly taken and that its North Carolina tax returns reflect its “true income.”


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REITs: Real estate investment scams may involve new development projects or buying, or beleaguered properties. Non-traded real estate investment trusts that are owned by banks or waiting for foreclosure or short-sale can be problematic for customers, as can investment funds purportedly tied to interest in real property that has no equity and is very leveraged.
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As you see here,  the Gary Kain was manager for Freddie and Fannie during the time of the movement of subprime loans into the hands of government insured agencies....$.800 billion in subprime loans were dumped on these government/taxpayer agencies during this man's term  as Obama has refused to protect taxpayers from this massive fraudulent dump by demanding these loans just be written off.  So, the man who knowingly  imploded Freddie and Fannie now works with a corporation getting the bulk of mortgage buy-backs from the FED at discounted prices and 0% mortgage interest rates and using REIT to make record profits.  These are foreclosed homes landing with an investment firm in bulk numbers and they are avoiding paying property taxes with REIT.  The same person creating the fraud is now heading a second round of profit-making from the fraud and it is based in Maryland.

MERS WAS MARYLAND BASED AND NOW THIS AMERICAN CAPITAL IS THE FRONT FOR MOVING MILLIONS OF HOMES OFF THE BANKS' BOOKS BY THE FED AND INTO THE HANDS OF CONNECTED INVESTORS.

SEE WHY OBAMA WENT TO MARYLAND POLS IN FILLING FEDERAL POSTS?  WE ARE FRAUD UNLIMITED!!!


We simply need to reinstate Rule of Law and we can reverse all this fraud and return wealth to the people!
Maryland and New York are key to this fraud because both states are the locations of the bulk of the fraud.


Bloomberg News MAR 28, 2013 10:18am ET

REITs Trigger Fed Warning as Gary Kain Tops $100 Billion

Gary Kain spent 20 years at Freddie Mac managing as much as $800 billion of bonds before the U.S. took over the company. Since 2009, he’s used his knowledge of the home-loan market to help turn American Capital Agency Corp. into the fastest growing mortgage debt investor.


American Capital’s assets grew to $100.5 billion at the end of last year from less than $5 billion three years earlier, making the Bethesda, Md.-based real estate investment trust the largest after Annaly Capital Management Inc., in an industry that’s drawing attention from investors and the Federal Reserve for its double-digit yields and rapid expansion.


REITs bought more than $100 billion of government-backed mortgage securities in 2012, the most since at least the credit crisis, and will purchase another $60 billion in 2013, JPMorgan Chase & Co. estimated this month. Fed Gov. Jeremy Stein pointed to the expansion of mortgage REITs, which have amassed almost $400 billion of the debt, during a speech last month on risky behavior in credit markets influenced by the central bank holding borrowing costs near zero for a fifth year and investors searching for high-yielding assets.

“Agency mortgage REITs deserve attention in particular because they have exploded in size,” said John Gilbert, chief investment officer at General Re-New England Asset Management, a unit of Warren Buffett’s Berkshire Hathaway Inc. that oversees $64 billion. “We’ve been dealing with the unintended consequences of monetary policy for a long time. We have to be on the lookout for the downside.”

American Capital, along with growing the fastest, has also been one of the most successful of the mortgage REITs. Since Kain, 48, was named chief investment officer, it’s returned 258%, including reinvested dividends, almost double the returns of a 34-company index.

The firm was started by private-equity financier Malon Wilkus and went public in February 2008, just as the Fed was responding to the biggest financial crisis since the 1930s.

Wilkus, chief executive officer of investment firm American Capital Ltd., hired Kain to help “navigate the evolving mortgage landscape,” he said in a statement at the time. The original management team had left in January 2009, about four months after the government seized Fannie Mae and Freddie Mac, when loan losses pushed the two firms to the brink of bankruptcy.

Kain, now president of the REIT, joined the firm when it held a little more than $2 billion and the Fed was preparing to start buying government bonds to resuscitate the housing market.

He took advantage of the central bank’s buying and used cheap borrowing costs to increase leverage for the REIT’s purchases of government-backed mortgage securities. The bets paid off, with the company returning 53 percent in 2009 including reinvested dividends.

Kain oversaw an average of about $700 billion during his last few years with the company, primarily government-backed mortgages. Since these bonds don’t take credit risks, his main responsibility was hedging for changes in interest rates. The portfolio also included non-agency mortgage-backed securities, including the subprime debt that helped fuel the housing boom and contributed to the company’s losses that led to the government rescue.

“A major emphasis of the subprime AAA portfolio was around hitting affordable housing goals so it was not as pure of an investment mindset,” Kain said.

When the government seized the company and sought to shrink the portfolio and the company’s imprint on housing finance, Kain said he “knew life at Freddie Mac was going to be very different” and started considering other options.

“His background was a perfect fit for American Capital,” said Jason Arnold, an analyst at RBC Capital Markets in San Francisco. “There’s been a lot of problems at Fannie and Freddie so it’s not surprising that someone would want to go out and do something else rather than be under the umbrella of the U.S. government.”

REITs have been among the biggest winners from government policies to resuscitate housing and stimulate the economy. The Fed has made it easier and cheaper for the companies to borrow through the so-called repo market. The central bank’s buying has also pushed up the value of mortgage bonds that REITs invest in.

Dividend yields that average about 12% have also lured investors seeking alternatives to corporate and government debt paying shrinking coupons. American Capital is yielding more than 15%.

Kain has applied knowledge from his experience at Freddie Mac to buy mortgage bonds that have a lower risk of refinancing, helping the firm return 17% this year. Since the debt typically trades above 100 cents on the dollar, homeowners taking out new loans when interest rates fall can erase the value of the securities.

The resurgence of REITs has attracted the attention of Fed officials and regulators, including the Securities and Exchange Commission, which has said it’s examining whether the companies should be allowed to continue borrowing without restrictions.

The concerns are overstated as REITs are limited by the quality of assets or lender confidence in how they manage their businesses, according to Kain.

“Fannie Mae and Freddie Mac were not regulated by the markets,” Kain said. “That was a key complaint which turned out to be very fair. There weren’t any market forces that were controlling the government sponsored enterprises. They could borrow money irrespective of their risk posture because of the implied guarantee” of the government, he said.

Kain’s team at American Capital, which includes longtime Freddie Mac colleagues Peter Federico and Christopher Kuehl, managed more in assets as of Dec. 31 than regional banks such as Keycorp and M&T Bank Corp. Kain is also chief investment officer of American Capital Mortgage Investment Corp., a separate REIT with $7.7 billion in assets that buys securities not backed by the government. The two companies have a staff of about 50 people, according to Wilkus.


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As with the s corporation, REIT is designed to allow corporations to shed tax responsibility ------
s corporations shed tax responsibility on profits and REIT sheds tax responsibility on property taxes.  REIT not only is used to avoid tax payment, it is used to get tax breaks under the guise of rental property.  In Baltimore/Maryland, billions of dollars have been lost to REIT in a few decades.

What can we do if there is a law allowing this you say????!!!!

What happens with REIT just as with s corporations is that the shareholders get the money saved from these laws and


THEY ARE REQUIRED TO PAY THE TAXES.  WELL, AS WITH ALL THAT IS FRAUD AND CORRUPTION----MOST SHAREHOLDERS DO NOT.  ALSO, AS THE ARTICLE ABOVE SHOWS ABUSES OF THIS REIT LAW ARE SO PERVASIVE THAT BRINGING BACK THE REVENUE LOST JUST FROM REIT WOULD BE IN THE BILLIONS OF DOLLARS FOR MARYLAND!



United States History From 2008 to 2011, REITs faced challenges from both a slowing United States economy and the late-2000s financial crisis, which depressed share values by 40 to 70 percent in some cases.[3]

Legislation Under U.S. Federal income tax law, a REIT /ˈriːt/ is "any corporation, trust or association that acts as an investment agent specializing in real estate and real estate mortgages" under Internal Revenue Code section 856.[1] The rules for federal income taxation of REITs are found primarily in Part II (sections 856 through 859) of Subchapter M of Chapter 1 of the Internal Revenue Code. Because a REIT is entitled to deduct dividends paid to its owners (commonly referred to as shareholders), a REIT may avoid incurring all or part of its liabilities for U.S. federal income tax. To qualify as a REIT, an organization makes an "election" to do so by filing a Form 1120-REIT with the Internal Revenue Service, and by meeting certain other requirements. The purpose of this designation is to reduce or eliminate corporate tax, thus avoiding double taxation of owner income. In return, REITs are required to distribute at least 90% of their taxable income into the hands of investors. A REIT is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. Some REITs also engage in financing real estate. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.[2]

Structure See also: List of public REITs in the United States In the United States, a REIT is a company that owns, and in most cases operates, income-producing real estate. Some REITs finance real estate. To be a REIT, a company must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.[44]

To qualify as a REIT under U.S. tax rules, a company must:

  • Be structured as a corporation, trust, or association[45]
  • Be managed by a board of directors or trustees[46]
  • Have transferable shares or transferable certificates of interest[47]
  • Otherwise be taxable as a domestic corporation[48]
  • Not be a financial institution or an insurance company[49]
  • Be jointly owned by 100 persons or more[50]
  • Have 95 percent of its income derived from dividends, interest, and property income[51]
  • Pay dividends of at least 90% of the REIT's taxable income
  • Have no more than 50% of the shares held by five or fewer individuals during the last half of each taxable year (5/50 rule)
  • Have at least 75% of its total assets invested in real estate
  • Derive at least 75% of its gross income from rents or mortgage interest
  • Have no more than 25% of its assets invested in taxable REIT subsidiaries.
Because of their access to corporate-level debt and equity that typical real estate owners cannot access, REITs have a favorable capital structure. They are able to use this capital to finance tenant improvement costs and leasing commissions that less capitalized owners cannot afford.
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In Maryland and Baltimore our pols love making government offices rented from private owners.  That is yet another way to send public money to private hands that no one would think to be in the public interest.

  LOOK!!!!!!!  THERE'S A REIT FOR THAT!!!


CWH also owns 21.1% of the common shares of Government Properties Income Trust (GOV), a former subsidiary which owns properties that are majority leased to government tenants.

O'Malley and Rawlings-Blake has tied Maryland citizens to so many government office rentals that our public sector is just as much the renter society as the rest of us.  Make no mistake, these 1% do not want the public owning any real estate!
Think how much tax revenue is lost from this private building with the government as tenant and REIT!



Government Properties REIT: Do You Want To Be The U.S.'s Landlord?

Oct 13 2012, 07:22  |  about: GOV, includes: CWH

Combing through REITWatch 08-2012, my eye was caught by Government Properties Income Trust (GOV), a fairly recent property REIT with seemingly interesting financials, as shown in the table below:

(click to enlarge)

A property REIT's Price to FFO (funds from operations) ratio is the proper equivalent of P/E for this type of company.

The usual Price to Earnings ratio is not really applicable to REITs because:

  1. Net earnings are "artificially" lowered by significant depreciation and amortization linked to the sizable real estate assets owned by the REIT.
  2. Net earnings are increased by nonrecurring gains on sales from properties. In the case of an actively managed REIT (frequently buying and selling real estate), net earnings will be considerably affected.
By removing depreciation and gain on sales on properties from earnings, FFO (a non-GAAP measure) facilitates comparisons between REITs.

An intuitive way to look at it is to consider that FFOs are the collected rents, net of all charges whether from operations or financing. Basically, it's what is left in your pocket as a landlord/shareholder.

When a REIT shows a low Price to FFO, one would expect that to be a good sign (like a low P/E), but could also potentially indicate some difficulties in running operations, or too much debt, or some other significant negative. Looking at what seems like a no-brainer, our job as rational investors is to check that there are no red flags hidden somewhere.


The Obama REIT: A Secure 7% Yield

Jan 14 2013, 15:24  |  about: GOV   Seeking Alpha

Once again I'll come back to a high yield security for income seekers. Of course one of the risks in buying yield these days is related to the threat of higher bond yields that could negatively affect income stocks. What if there were a security that paid relatively secure dividends and benefited from all of the federal government expenditures that are expected to come with another four years of an Obama administration? Clearly I wouldn't be writing this article unless such a security did exist.

Government Properties Income Trust (GOV) is a REIT that owns $1.7 billion of office properties in 31 states (and DC) with 10 million square feet of rentable space. The majority of its space is rented to various governmental entities. Of its 82 properties, 60 are primarily leased to the federal government, 18 are primarily leased to state governments and one is leased to the United Nations. Whatever you may believe about our government finances, it is incomprehensible that governmental entities will simply go out of business (as could happen with a private enterprise), making these leases of a much higher quality. In fact, only about 7% of total revenue comes from private firms. GOV is well diversified geographically and despite receiving so much of its revenue from the federal government, just 10% of revenue comes from DC.



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Below you see the next phase of the massive mortgage fraud.  Remember, we have yet to have justice from the massive subprime mortgage fraud and the damages it did to the economy with the collapse of 2008.  Trillions of dollars lost from the fraud and tens of trillions of dollars in damages to individuals and government coffers yet to come back!  People who lost their homes in the actual fraud and those families losing their homes from the unemployment caused by the fraud all will be getting homes back as soon as Rule of Law is reinstated.

Neo-liberals had planned the movement of real estate ownership from the middle/lower class to a few at the top with this massive fraud.  Remember, this subprime mortgage scam started in the Clinton Administration as Robert Rubin and CitiBank started this financial scheme.  So, targeted fraud on the lower-class and the long economic downturn from the tens of trillions of dollars sucked from the US economy from fraud are the culprits of lost home ownership.  Now the Obama Administration has suspended Rule of Law and refuses to reverse the fraud and loss of homes.

In cities like Baltimore the movement of real estate is so crony and corrupt that you feel as though you were in Kabal, Afghanistan watching Visigoths looting the landscape.  City real estate agents have been sidelined as the city buys property and hands it to developers of choice.  Subprime mortgage fraud settlements so far simply help make people renters and fail to return those defrauded to home ownership. As this article shows the intent is to make most US citizens prey for these investment firms that created the fraud and now have been handed all the foreclosed homes.


SIMPLE REINSTATEMENT OF RULE OF LAW WILL BRING THESE HOMES BACK TO THOSE DEFRAUDED.  THE WEALTH PEOPLE LOST AS THE RESULT OF THE FRAUD WILL COME BACK AND PEOPLE CAN RETURN TO OWNING HOMES!


Skeptics Criticize Single-Family REITs


Published on: Tuesday, August 28, 2012 Written by: Rosa Eckstein Schechter inShare      

Single-family real estate investment trusts (REITs) are springing up in response to the rise in availability of distressed properties. The new funds focus on buying up blocks of foreclosed single-family homes to rehab and then use for rentals and sales are increasing. Critics argue it will reshape society by turning the majority of Americans into tenants and that there will be no regulations preventing abuse of the new system, which may include passing off maintenance and other responsibilities to the new tenants. It’s further believed that many purchasers have no rental management experience and are not concerned with getting any before they start renting. For more on this continue reading the following article from JDSupra.

As more and more investment chatter centers around the possibility of investing in the huge volume of single family homes that have, or will be, foreclosed upon in the United States, many are seeing an opportunity in Single Family REITs.  (Read our earlier posts about this blossoming investment vehicle here.)

However, there are those that are very concerned about what Rental REITs (both apartments and SFDs) will mean in the long run to the American economy - and the U.S. Citizen.  Here are some of their concerns and criticisms (with a hat tip to Yves Smith at Naked Capitalism for collecting most of these in his column and its commentary):

1.  The expected popularity of this investment vehicle, together with the decline in homeownership in this country, may mean that many Americans will be tenants to private equity landlords: it will change the very essence of our society.  These private equity landlords won't be like beloved Stanley Roper in the old Three's Company TV Series - nearby, quick to respond to complaints, always involved in maintainance.  Nope.  The worry is that Private Equity Landlords will be anonymous, unapproachable and possibly mysterious owners of properties without any regard for their tenants' concerns or the property's needs.

2.  This is a new concept, and even if Rental REITs have some interest in being good landlords, they've got no pattern to follow, no example in the past to use in figuring out how to be the Corporate Stanley Roper.  

3.  Gretchen Morgenson of the New York Times points to skullduggery happening in New York City with apartment REITs:  including suspicions of sending fake notices and fraudulent notices of non-payment (when payments have been made) to replace low paying tenants.

4.  Some are predicting that these new Private Equity Landlords are going to transfer the responsibility of maintaining the property to the tenant as part of the lease terms.  

5.  If the Rental REITs fails to meet its own obligations, like Tishman Speyer did a couple of years ago on a NY apartment REIT, a large number of tenants are suddenly in limbo - and may not even be aware that their Private Equity Landlord has defaulted on its own agreements.  

As more discussion occurs on this new investment vehicle, especially its latest version - the Single Family REIT, these and other worries will be a part of the conversation.  And they should be.  However, here's the big elephant in the room: there are unprecedented numbers of homes sitting on bank balance sheets right now because of all the foreclosures that have happened in this country.  We know the impact of this very well here in Florida.

Something needs to be done to move forward, and we have no pattern here for how to fix this mess.  It's something new.  

So, new answers are being developed like Single Family REITs, not in a sinister way to thwart the American Dream, but in an optimistic way to get the economy moving again.  Those homes have to get off the bank's shoulders so banks can get back to the industry of finance and not housing.


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Keep in mind that while Federal coffers are going dry from lack of revenue coming from corporations and massive corporate fraud.....and public services and assets are being used to pay for it......the stock market is making huge money from the ability of corporations not to pay property taxes!

Can you imagine how many people would invest in these stocks if shareholders actually paid the taxes required?

SIMPLY AUDITING SHAREHOLDER TAX PAYMENTS WILL BRING TRILLIONS OF DOLLARS BACK TO GOVERNMENT COFFERS AND END THIS RALLY AT THE EXPENSE OF THE PUBLIC!



REITs Set Record, Raise $51.3 Billion in 2011 January 20, 2012

The total returns of listed U.S. equity real estate investment trusts were approximately four times those of the broader stock market in 2011, according to the National Association of Real Estate Investment Trusts. REITs are securities that sell like stocks and invest in real estate directly through properties or mortgages.

NAREIT said the total return of the FTSE (Financial Times Stock Exchange) NAREIT All Equity REITs Index was up 8.28 percent for the year, and the FTSE NAREIT All REITs Index, which includes both equity and mortgage REITs, was up 7.28 percent, compared with a 2.11 percent gain for the S&P 500.

The more than 8 percent gain for equity REITs in 2011 came on top of a 27.95 percent gain in 2010 and a 27.99 percent increase in 2009—years in which the S&P 500 gained 15.06 percent and 26.46 percent, respectively. Equity REITs outperformed the S&P 500 for the past 1-, 3-, 10-, 15-, 20-, 25-, 30-, and 35-year periods, according to NAREIT.

Dividends Boost Performance

Much of REITs’ performance advantage has come from the stocks’ dividend payouts, since almost all of a REIT’s taxable income is paid to shareholders as dividends. The FTSE NAREIT All Equity REITs Index’s 8.28 percent total return in 2011 included a share price return of 4.32 percent, and the FTSE NAREIT All REITs Index’s 7.28 percent total return included a share-price return of 2.37 percent.

The dividend yield of the FTSE NAREIT All Equity REITs Index at December 30, 2011, was 3.82 percent, and the dividend yield of the FTSE NAREIT All REITs Index was 4.83 percent, compared to 2.22 percent for the S&P 500.

“The strong, continuing income stream from REITs is an important component of the appeal of REIT shares for investors,” said NAREIT President and CEO Steven A. Wechsler. “REIT dividends boost an investment portfolio’s performance in good times and help insulate it from downside shocks in turbulent market conditions,” he said.

REITs Set Capital Record

REITs raised a record amount of capital in the public markets in 2011, including a record amount of equity.

REITs raised $51.3 billion in public equity and debt in 2011, more than the $49 billion raised in the previous record year of 2006. Additionally, in spite of 2011’s volatile stock market, $37.5 billion of the capital raised in the year was in public equity, compared with $22 billion in 2006 and $32.7 billion in 1997, the prior record year for REIT equity offerings.






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October 01st, 2013

10/1/2013

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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.


0 Comments

June 07th, 2013

6/7/2013

0 Comments

 
Baltimore has a public media outlet in WYPR that is simply corporate run commercial media and they get taxpayer money to support this as public media.  We need to shout out against the capture of media that we need to speak in the public interest and not give us disinformation by Wall Street.

Last time I wanted to show how Third Way are giving all public assets to corporate profit and I wanted to do that a little today.  Looking at local to national policy the public is under siege by corporate powers.  A headline on MSNBC .....a neo-liberal political station....said that having big banks isn't a bad thing and that financial reform is going just fine.  REALLY???? 



Regarding Basu's airline ticket fee -palooza:

Do you know why corporations shifted to the fee for service that is modeled on doctor's services a few decades ago? So banks, airlines, car rentals, etc have a basic price plan and then all of the fees for additional services that drive consumers crazy used to add billions in profit and a maximized market value. It all has to do we the corporate tax loophole. Here is a clip out of Connecticut's tax law that gives a good view of the benefit of 'unbundled services':


Connecticut Sales and Use Taxes on Services, Taxable Services

Douglas A. Joseph, CPA
Partner

Tony J. Switajewski, CPA
Partner


..............

With all of the exclusions under business management services, there is a wealth of planning opportunities available. A general principle of Connecticut sales and use taxation is that if a combination of taxable and nontaxable property and/or services are bundled together into one service, the taxable component will cause the entire service to be taxable. To avoid this costly and unfair result, the strategy is to unbundle the taxable and nontaxable service components. Ideally, there would be separate service contracts and separate invoices produced. Secondarily, one contract and one invoice which clearly identify taxable and nontaxable services and associated fees, may be utilized. In either instance, the service provider will need to keep detailed time records or other means of valuing the relative components so as to stand up to DRS audit scrutiny.

So, you see that it is tax law written deliberately to allow for zero taxes on unbundled services which spurs all of these copious and hidden fees. An airline is almost doubling its gains when it charges individual fees but is only paying taxes on the base ticket charge. The same deal exists for banks. States have differing standards for fees, but you see the value. A democratic supermajority would have ended this madness of fees on consumers when they controlled government in 2009, but Third Way corporate democrats have control of the democratic party and they work for wealth and profit so THEY LIKE LAWS THAT GIVE BUSINESSES AN OUT ON TAXES. Think about how much of our economy is service based and how much business is written off because of this law!

Whether S corporation, B corporation, or this service fee scheme every avenue of corporate tax is being written off. When businesses with property were left with property tax bills corporate pols invented these business tax credits and government owed partnerships that eliminate even that tax. THESE TAX LOOPHOLES ARE HAPPENING ONLY IN THOSE GOVERNMENT HATING RED STATES....THEY ARE HAPPENING IN THIRD WAY CORPORATE DEMOCRATIC STATES LIKE MARYLAND AND THIS IS WHY THE TAXES ON THE MIDLE/LOWER CLASS ARE GROWING TO UNREASONABLE LEVELS. It is not because the state is protecting and serving its citizens!



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 This is classic Baltimore for you....Carl Stokes created an uproar when he sought to reverse a court order that held Ticketmaster fees as too large. Stokes wanted to pass a law protecting those large fees. The outrage was so loud that he is now being cast as wanting to hold Ticketmaster accountable....but look at his cap positions....he is going to allow low cost events by charged 15% while high cost events will only see 5%. Now, who attends events over $150? That's right....yet again the middle/lower class is the money-maker. GET RID OF THIRD WAY CORPORATE AND WEALTH DEMOCRATS....




Ticketmaster Service Charges to Face Regulation in Baltimore

Updated: Thursday, June 6 2013, 10:35 PM EDT

Huge service fees that Ticketmaster and other ticket sellers add could soon be reduced for Baltimore events. A Maryland bill has been introduced to stop companies from charging what one council member calls outrageous fees. Currently, Ticketmaster can charge users an extra 25 to 80 percent extra in service fees. Currently, there is not much users can do to avoid the fee, unless they are willing to go to court but that could be changing. On Thursday night at the 8x10 in Federal Hill, people are getting ready for the soulful sounds of The Cris Jacobs Band. But concert-goers were not ready for the $7.90 service fee that Ticketmaster charged on a $12.00 ticket. Councilman Carl Stokes agrees with Ticketmaster customers who feel that the service charges are outrageous. As a result, he has recently introduced the Consumer Protection Bill. The bill would cap surcharges: tickets $50.00 or less could only face an extra charge of 15%, and ticket $150.00 or more t would face a charger no greater than 5%. The bill would also update a law from 1948, which recently helped a Baltimore man win a lawsuit against Ticketmaster. He claimed he was being ripped off by the company’s excessive fees. If the bill passes, the law would force ticketing agencies to clearly show the full price of the ticket upfront.


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Montgomery County is one of the wealthiest in the country and has plenty of money to support all social programs.....this is why we know that this sequestration is Third Way corporate democrats along with republicans....CAN YOU IMAGE THE KINDS OF PEOPLE THAT WOULD ALLOW SOCIAL SAFETY NETS BE DISMANTLED IN ORDER TO PROTECT MASSIVE WEALTH?

Remember, these people in power got super-rich by lying, cheating, and stealing.....THEY ARE SOCIOPATHS who intend to squeeze all of us dry!!

Sequester stalls Meals on Wheels programs

By Robert Samuels, Published: May 31

For almost 30 years, First United Methodist Church of Hyattsville has delivered 10 meals a week to homebound seniors who live nearby. But with the sequester leading to a reduction of federal funds next month, the church’s skeletal staff has come to a sad conclusion.

“We’re just going to have to close,’’ said Deanna Lesche, the treasurer for the church’s Meals on Wheels program. Its program used to receive $1,200 each quarter; it will now receive only $1,100 all year. That’s not even enough to pay the cook.

About 37 percent of Americans now say they've felt the sequester's impact. We took a look at who's actually being affected so far.

The sequester will cut 33,000 work-study jobs for college students this fall, and my daughter's among those affected.

Across the country, Meals on Wheels programs are slashing staff, reducing the number of meals delivered or shutting down. The programs receive money through the Older Americans Act, which is filtered through state governments, which divvy up the funds to local agencies based on factors such as size and levels of poverty.

Programs typically provide two hand-delivered meals a day; some make lunches for senior and community centers.

“These meals save me from doing so much work,” said Bruce Campbell, 81, a retired food-service manager and Hyattsville Meals on Wheels client who walks on a prosthetic leg. “Without it, I don’t know. I guess I’d cook for myself.”

Hyattsville’s service isn’t one of the multimillion dollar senior nutrition programs that put on lavish fundraisers. It is run by a 63-year-old church secretary and serves about a dozen clients, some of whom struggle to pay the $2.50 charge per meal. It illustrates the far-reaching consequences of the government impasse on Capitol Hill.

According to March 1 estimates, the sequester will result in a 5 percent decrease in Meals on Wheels programs in Maryland, Virginia and the District. Those cuts are slightly below the national average of 5.6 percent. Wealthier, urban areas fare better.

The cuts in the three jurisdictions threaten nearly 75,000 seniors, according to the Meals on Wheels Association of America. Officials in Montgomery County eliminated an empty position to fund programs until November, while officials in Fairfax County and the District have committed to use their coffers to make up for the loss.

“If this wasn’t happening, we could have used that money for more services,” said Sally White, executive director of Iona Senior Services, which delivers meals to seniors in Northwest Washington. “But you have to make do with what you have.”

Programs that feed seniors were suffering even before the sequester. Federal funding has flat-lined for years, while costs for food and gas have increased, said Jill Feasley, who directs the Meals on Wheels program in Takoma Park. It’s not unusual for programs to have waiting lists.

The organizations have found themselves trying to reimagine how they fund themselves. Meals on Wheels of Central Maryland, which serves 1,300 clients in Baltimore, Howard, Anne Arundel and Montgomery counties and Baltimore city, has reduced its staff by 5 percent and will deliver food one day less a week.

Other programs have considered serving only frozen meals, Feasley said. Some might hold fundraisers.



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Maryland should note that its two Third Way corporate democrats Cardin and Mikulski voted for the cuts....and the voted for all the $3 trillion in corporate tax breaks and these huge farm subsidies.....'WE HAD TO DO IT TO SAVE THE SNAP PROGRAM'!  they say. 

NO, YOU HAD A SUPERMAJORITY IN 2009 THAT ALLOWED YOU TO FULLY FUND FOOD STAMPS FOR 10 YEARS

THIRD WAY CORPORATE DEMOCRATS ARE WORKING AS HARD AS REPUBLICANS TO END ALL WAR ON POVERTY AND NEW DEAL PROGRAMS

Shame on the 28 Democratic senators who voted to cut food stamps!

The Senate voted down an amendment restore $4.1 billion in food stamp cuts.  Only 26 senators voted “yes.”

But we can’t blame obstructionist Republicans. Twenty-eight Democrats joined with Republicans to defeat this amendment. If this stands, 500,000 low-income households will lose benefits.

Food Stamps are already being cut as the federal stimulus dries up, and these proposed new cuts—from both parties—will only make it worse.  

Please join Social Security Works and Campaign for America's Future by signing our petition to these 28 Senate Democrats, demanding they put low-income families ahead of corporate welfare—and to oppose draconian cuts to food stamps.

Dear Sens. Baucus, Bennet, Cardin, Carper, Coons, Donnelly, Durbin, Feinstein, Franken, Hagan, Harkin, Heinrich, Heitkamp, Johnson, Kaine, Klobuchar, Landrieu, Manchin, McCaskill, Mikulski, Nelson, Pryor, Rockefeller, Shaheen, Stabenow, Tester, Mark Udall and Warner:

Please put low-income families who rely on food stamps ahead of corporate welfare, and vote against draconian cuts to such needed benefits!



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I thank Michael Greenberger for presenting this loss of privacy in a balanced way.....making it clear that while these actions may be legal with these new set of Patriot Act laws....it is policy that has yet to have open national discussion and that has broad and for many deep negative connotation. Do we really believe that a government that no one trusts is just looking at numbers and will come back for a warrant when more information is wanted? Of course not. I like that Congress is more worried about whether their personal information is being mined as well!

WHAT WE ARE NOT HEARING IS WHO THE US GOVERNMENT SEES AS TERRORISTS THESE DAYS.  President Obama actually said that America has some pretty crazy characters these days.  What we have are large sectors of America hating having a government that is criminal, corrupt, and corporate.  Whether it is right wing militia groups or left wing anti-war and oppression groups with their civil disobedience....these anti-government sentiments are Obama's fault and they are legitimate concerns from citizens used to living in a first world, democratic society.  So, we are watching a nun who breaks into a drone facility and spray paints anti-war graffiti is now a terrorist.  It may be illegal, but these things were always considered civil disobedience.  It includes Occupy as the FBI has been recording their member's every move.  It includes Code Pink who were crazy enough to use a national media event to shout out in protest.  It includes bloggers like me who use the words Wall Street and criminal....Eric Holder and treason in the same sentence!

Sure, there are sleeper cells of jihadists....white separatists who are getting violent....black groups forming to fight extreme oppression.  THESE ARE SYMPTOMS OF A FAILED AND CAPTURED GOVERNMENT SYSTEM.  THE ANSWER LIES IN CORRECTING THE GOVERNMENT, NOT MAKING CITIZENS THE CRIMINALS!!


Report: Government getting phone records Counterterrorism expert: Verizon not only company exposed

UPDATED 6:53 AM EDT Jun 07, 2013  Baltimore Sun

  • Phone record collection stirs fervent debate Frightening government overreach or valuable law enforcement tool?

    That's the question politicians in Washington, and millions of citizens around the United States, asked Thursday thanks to a jolting report suggesting the government has been collectin...

    More
News that the government is secretly collecting phone records of Verizon customers has people asking many questions, and it raises the debate on which is more important, personal privacy or public safety?

Maryland counterterrorism expert Michael Greenberger said Verizon is the only company exposed, but he suspects all the major phone carriers are giving this kind of information to the government. But the reason behind it might make it OK in the eyes of some Americans.

"Now that it's public, this is a shock to the system," Greenberger said.

Greenberger said the government is not collecting information on the substance of the call, but looking at the actual numbers and the duration of the calls.

"What you can reason from that is there are numbers they have that they associate with terrorists and they want to see who is talking to whom. For example, I am calling a terrorist organization and speaking on the phone for a long period of time -- that would give them cause to look more carefully at my activities," Greenberger said.

He said the Obama administration followed the proper legal channels by getting approval from a judge in the secret foreign intelligence surveillance court set up by Congress. But the news is tough for many Americans to take, even if they have nothing to hide.

"This sort of undercuts the thesis of living in a free society that you don't have people looking over who you're calling -- even if they're not listening to what you're saying. There'll be a lot of discussion about this; it will have to be digested," Greenberger said.

He said now that the secret operation is public, it may become ineffective. 

"Now that it's public, a lot of terrorist organizations may say to themselves, "We have to stop talking on the phone,'" Greenberger said.


Friday, 07 June 2013 14:35

As the New York Times (NYT) Blasts Obama/Bush Surveillance State Tactics, Maybe Elites Will Become Concerned

MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

The Natonal Security Agency (NSA) in Maryland.In a withering June 6 editorial entitled "President Obama’s Dragnet," the New York Times editorial board lacerated the White House for its intrusive surveillance state tactics:

The administration has now lost all credibility on this issue. Mr. Obama is proving the truism that the executive branch will use any power it is given and very likely abuse it. That is one reason we have long argued that the Patriot Act, enacted in the heat of fear after the Sept. 11, 2001, attacks by members of Congress who mostly had not even read it, was reckless in its assignment of unnecessary and overbroad surveillance powers.

Based on an article in The Guardian published Wednesday night, we now know that the Federal Bureau of Investigation and the National Security Agency used the Patriot Act to obtain a secret warrant to compel Verizon’s business services division to turn over data on every single call that went through its system. We know that this particular order was a routine extension of surveillance that has been going on for years, and it seems very likely that it extends beyond Verizon’s business division. There is every reason to believe the federal government has been collecting every bit of information about every American’s phone calls except the words actually exchanged in those calls.

Articles in The Washington Post and The Guardian described a process by which the N.S.A. is also able to capture Internet communications directly from the servers of nine leading American companies. The articles raised questions about whether the N.S.A. separated foreign communications from domestic ones.

Despite insulting platitudes (as the NYT calls them) from the Obama administration defending the massive invasion of privacy ("Intelligence Chief Says Massive Data Collection Is No Big Deal, But Reporting It Is" -- Forbes), the NYT's fierce condemnation of, in essence, sweeping data collection may finally wake some elites in the US up to the dangers of the enabling -- euphemistically named -- "Patriot Act."

Indeed, the NYT concludes its damning editorial with a shot at the "Patriot Act" itself: "Stunning use of the act shows, once again, why it needs to be sharply curtailed if not repealed."

Glenn Greenwald, who has been focused like a laser for years on constitutional abuses by the Bush and Obama administrations, wrote a column in The Guardian on May 4 that details wider government collection of private data than the public is even aware of. This, according to one former counter-terrorism expert who appeared on CNN, may include the large-scale recording of telephone conversations by the National Secuity Agency (NSA). This is technologically possible through advancement in broad information gathering capabilities within the NSA and other agencies.

There is even a government agency, the National Reconnaissance Office (NRO), that most Americans have never heard of whose sole purpose is satellite surveillance and intelligence data gathering.  According to the NRO website,

The NRO has been intertwined with innovation since its inception. Formed in response to the Soviet launch of Sputnik, the NRO was secretly created on September 6, 1961 with the purpose of overseeing “all satellite and overflight reconnaissance projects whether overt or covert.” The existence of the organization is no longer classified today, but we’re still pressing to perform the functions necessary to keep American citizens safe. As the NRO mission states, we are relentlessly working to foster “Innovative Overhead Intelligence Systems for National Security.”

The slogan of the NRO is "Supra et Ultra" – above and beyond – which also can be translated to "out of reach," which is just what has become of those in the government through four administrations who have expanded domestic spying far, far beyond its constitutionally permitted limits.








0 Comments

March 19th, 2013

3/19/2013

0 Comments

 
THANKS FOR YOUR PATIENCE WHEN A WEEK DAY KEEPS ME FROM MY COMPUTER!!!

SIMPLY RUN AND VOTE FOR LABOR AND JUSTICE AND WE CAN AND WILL TURN THIS AROUND.  IF YOUR ORGANIZATION IS NOT DOING THIS.......THAT LEADERSHIP IS NOT WORKING FOR YOU AND ME!!!!!

I want to end for now my discussion of Zeitgeist and Sustainability as building new social order that seeks to keep most people in poverty and living with no social safety nets.  Your Third Way corporate democrat intends to make all that is public private and maximize wealth at the top.....THAT IS THEIR CAUCUS PRINCIPLE.


Below you see how energy and greening tax credits have filled corporate balance sheets and they all show as profits not cost in development.  Remember, the public universities are now where all research and development is done for corporations and they are all supported by the taxpayer and students. These tax breaks are pure profit!!  Add to that the level of fraud and you see why corporations are richer than any time in human history.  Clinton and Obama are the ones to thank because they ran and took the democratic party away from the people and worked for these corporate profits!!!

We know that s-corporations are set up to allow the shareholders to bear the burden of business taxation and that these shareholders are not paying a cent in taxation for the most part.  The b- corporation is geared to do the same thing only with a claim to be environmental/justice oriented while doing it.  That is not happening as well.  I received a message from National Insurance Company that they were now a corporate sponsor of Human Rights Watch.  In Baltimore, land of human rights violations, not one word is said of police brutality, incarceration, and wage poverty.  It fights only for gay rights and environment......THE O'MALLEY/OBAMA.....THIRD WAY AGENDA.  These are great justice issues only neither have anything to do with real human suffering. 

WE ARE WATCHING DEATH AND SUFFERING IGNORED FOR LESS PRESSING ISSUES.  DO YOU HEAR OF AMNESTY INTERNATIONAL?  THEY HAVE BEEN BANISHED FROM AMERICAN PRESS BECAUSE THEY RANK THE US AS TOPS IN HUMAN RIGHTS VIOLATORS.  THEY ARE A REAL HUMAN RIGHTS ORGANIZATION!!!

The point is this:  Human Rights Watch is a DAVOS 1% Organization that simply ignores most human rights issues created by the 1% and captures this policy.  It doesn't really work for historical and deadly justice issues.  So, you have an insurance agency like National Insurance partnering with this 'human rights' organization and immediately it is a b-corporation getting tax write-offs for its charitable work.  THESE B-CORPORATIONS ARE SIMPLY FUNNELING MONEY AS DONATIONS TO ORGANIZATIONS THAT CAPTURE THE POLICY ISSUE THAT PROTECTS PEOPLE FROM THE ABUSES CREATED BY THE COUNTRIES SUPPORTED BY THE US.

It is not a good policy to allow b-corporations to write-off taxes when we know fraud and corruption is rife.  It will simply be abused.





Human Rights Watch

United States and the CIA

Strong criticism against Human Rights Watch was caused by the Organization's declarations in favour of CIA illegal actions of Extraordinary rendition towards suspected terrorists. CIA Secret Rendition Policy Backed by Human Rights Groups? “Human Rights Watch and, apparently, other human rights groups signed off on renditions in talks with the Obama administration, saying publicly that there is "a legitimate place" for the practice.


Selection bias

The Times accuses HRW of "imbalance" since it ignores many human rights abusing regimes while covering other zones of conflict "intensely", notably Israel. It issued 5 lengthy reports on Israel in one 14 month period, whereas in 20 years it has issued only 4 reports on the conflict in Kashmir, despite the fact that there have been 80,000 conflict-related deaths in Kashmir and the fact that "torture and extrajudicial murder have taken place on a vast scale."[31] It issued no report on post-election violence and repression in Iran. One source[who?] told The Times, "Iran is just not a bad guy that they are interested in highlighting. Their hearts are not in it. Let’s face it, the thing that really excites them is Israel.” [28] The Times also accuses HRW of failing to report on human rights abuses of Arabs when "perpetrators are fellow Arabs."[28]

Nick Cohen, writing in The Spectator in February 2013, says that both "Amnesty International and Human Rights Watch look with horror on those who speak out about murder, mutilation and oppression if the murderers, mutilators and oppressors do not fit into their script."[32]


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Imagine that a startup in greening has the designation of B corporation....it gets both the tax breaks in doing business and then it gets tax breaks for simply being.  One top of that most times the 'cause' for which it works is not really met.



B Corp and a Benefit Corporation are Not Created Equal


By Jonathan Mariano | September 8th, 2011


Corporation is a non-profit certification from B-Lab, a company that supports the legal structure Benefit Corporation

B Corp is just short hand for a Benefit Corporation, right? Not quite. Although there are similarities between the two in name, and in spirit, there is a crucial difference. B Corp is a certification and a Benefit Corp is a legal entity. Let me explain.

The Confusion Between B Corp and Benefit Corporations
First off, let’s talk about the confusion. If we look at the description of a B Corp and a Benefit Corporation, both are extremely similar.

“Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems.” – B Corp

“Benefit Corporations are a new class of corporation that are required to create a material positive impact on society and the environment and to meet higher standards of accountability and transparency.” – Benefit Corporation.

Confusing? Yes. Both seek to benefit society and the environment. So then what is the difference?

B Corp – The Certification
B Corp is a certification offered by a non-governmental organization named B Lab. (I know, alphabet soup confusion!) There is no state legislative mandate or structure, per se.

Rather, companies wishing to become a Certified B Corp fill out an Impact Assessment. A company not only has to meet certain social and environmental criteria, but provide support documents to become fully certified. Furthermore, company bylaws must eventually be amended to include stakeholder interests. The change in bylaws will make the company strikingly similar to a Benefit Corporation in corporate structure.

Benefit Corporation – A State Legal Entity
A Benefit Corp is a state government legal corporate structure. It is a way to legally structure a company like an LLC, S-Corp, or C-Corp. Benefit Corporation status will allow companies to embed their sustainable principals into their DNA. In some ways, this is just a more straighfortward version of what B Lab is trying to do with the B Corp certification.

The California Legislature recently passed legislation to allow companies incorporated in the state to be Benefit Corporations. The nuances of the bill may differ from state to state in order to accommodate each states unique legal structure.

Yet, the heart of the the Benefit Corporation is the same across the board. Rather than a corporation focusing on just profit for the shareholders, a Benefit Corporation is required to focus on the public benefit (hence the name Benefit Corporation.)

Only five states have the Benefit Corporation as an option when incorporation in that state: Hawaii, VIrginia, Maryland, Vermont, New Jersey. Six more states are in the process of making it part of their states corporate legal system: Colorado, New York, North Carolina, Pennsylvania, California, and Michigan.

On a side note, just to clear up even more confusion, B Lab, creator of the B Corp certification also advocates for such legislation.

B Corp or Benefit Corporation?
Now that we have cleared up the difference between B Corp and Benefit Corporations, can a company be both a B Corp and a Benefit Corp? The answer is yes, granted you meet the requirements of certification and incorporate in a state that has a Benefit Corp entity.

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New, for those who don't know Delaware's record for corporate protection, from 0% taxation to judicial courts that try national cases and always seem to fall in favor of that business.  There is the perk of Delaware being the national capital in dynasty accounts that create shell corporations and accounts to hide wealth.......WHAT CORPORATE STATE WOULDN'T WANT THAT DESIGNATION?

WAIT.......MARYLAND SAYS LET'S USE FAKE SOCIAL AGENDAS AS A SELLING POINT!!!!!

Almost all of what is happening is designated health, environment, and arts.


Maryland in line to become B corporations pioneer New type of company would be organized around social agenda

by Douglas Tallman | Staff Writer  

 ANNAPOLIS — Maryland is poised to become the first state in the nation to recognize a new classification of corporation that puts social welfare issues on the same footing as profits.

"For these companies, it makes sense and it's consistent with the brand we're trying to establish in Maryland," said Del. Brian J. Feldman (D-Dist. 15) of Potomac on Saturday.

Feldman sponsored House legislation that would have the state recognize so-called B corporations — "B" for benefit — in which for-profit companies have environmental, public health or arts objectives integrated into their charters.

"The B corporation legislation builds into the DNA of the company public purposes along with private purposes," said Sen. Jamie B. Raskin, the Senate sponsor of the legislation.

The bill passed the House, 135-5, on Monday. The Senate version passed, 44-0.

Del. H. Wayne Norman, a lawyer who has set up charitable entities, was one of five Republicans to vote against the legislation.

"I don't see any necessity for the B corporation. I'm happy with my no vote, my red vote," said Norman (R-Dist. 35A) of Bel Air. "I just didn't see the need to change a long-standing law."

Companies could become B corporations after a two-thirds vote of their shareholders. The companies would have to report to a third party its efforts to live up to its social agenda, similar to how companies report financial data to Moody's Investors Service.

The legislation also gives a B corporation's directors some protection if shareholders sue because the company's public-service goals conflict with the stockholders' fiduciary interest.

But Feldman and Raskin say that more than the legal protections, the legislation offers corporations a chance to brand themselves as community-minded businesses.

The B corporation benefits from being able to tell people they have organized not only to raise shareholder value but also to advance the environment and enhance a particular community, said Raskin (D-Dist. 20) of Takoma Park.

"I think that Maryland can become the Delaware of B corporations," he said. "We could be the magnet for companies that want to organize in this way."

A Web site set up for the issue says 285 companies have organized themselves as B corporations by altering their own charters or bylaws, but Raskin said they are B corporations in name only.

"None of them are recognized that way as a matter of state statute," he said.

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The amount of money corporations are making in tax fraud is enormous.......only outdone by the profits from outright business fraud and it could only happen with your Third Way corporate democrat at all levels of government.  Maryland is ground zero for these corporate pols running as democrats!!!!

RUN AND VOTE FOR LABOR AND JUSTICE!!!!!!!



Tax lobbyists help businesses reap windfalls While Congress fights over ways to cut spending and the deficit, generous breaks for corporations pass with little notice

By Christopher Rowland |  Globe Staff     March 17, 2013

Pete Marovich for The Boston Globe

Tax breaks won by the Washington lobbying industry, centered on the K Street corridor, show how cheap it is, relatively speaking, to buy political influence.



WASHINGTON — Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers.

By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years.

The return on that lobbying investment: about 6,700 percent.

These are the sort of returns that have attracted growing swarms of corporate tax lobbyists to the Capitol over the last decade — the sorts of payoffs typically reserved for gamblers and gold miners. Even as Congress says it is digging for every penny of savings, lobbyists are anything but sequestered; they are ratcheting up their efforts to protect and even increase their clients’ tax breaks.

‘It’s not about tax policy, it’s about benefiting the political class and the well-connected and the well-heeled in this country,’ Said Senator Tom Coburn of oklahoma.

The Senate approved tax benefits for Whirlpool and a host of other corporations early on New Year’s Day, a couple of hours after the ball dropped over Times Square and champagne corks began popping. A smorgasbord of 43 business and energy tax breaks, collectively worth $67 billion this year, was packed into the emergency tax legislation that avoided the so-called “fiscal cliff.’’



Whirlpool officials said the tax breaks help the company retain jobs, but in recent years, it has closed refrigerator manufacturing plants in Indiana (above) and Arkansas.

In the days that followed, the tax handouts for business were barely mentioned as President Obama and members of Congress hailed the broader effects of the dramatic legislation, which prevented income tax increases on the middle class and raised top marginal tax rates for the wealthy.

Yet the generous breaks awarded to narrow sectors of the American business community are just as symptomatic of Washington dysfunction as the serial budget crises that have gripped the capital since 2011. Leaders of both parties have repeatedly declared their intention to make the corporate income tax code fairer by lowering rates and ending special breaks, while intense lobbying, ideological divides, and unending political fights on Capitol Hill block most progress.

The result: sweeping bipartisan tax reform of the sort negotiated in 1986 by Republican President Ronald Reagan and Democratic House Speaker Thomas P. “Tip’’ O’Neill Jr. is rated a long shot once again this year. In fact, the most visible signs of cross-party cooperation on corporate taxes are among regional groups of lawmakers who team up, out of parochial interest, to maintain special treatment for businesses in their home states.

In the absence of meaningful change, corporations like Whirlpool continue to pursue the exponential returns available from tax lobbying. The number of companies disclosing lobbying activity on tax issues rose 56 percent to 1,868 in 2012, up from 1,200 in 1998, according to data collected by the nonpartisan Center for Responsive Politics.

Whirlpool had plenty of company on New Year’s, including multinational corporations with offshore investment earnings, Hollywood companies that shoot films in the United States, railroads that invest in track maintenance, sellers of energy produced by windmills and solar panels, and producers of electric motorcycles.

Their special treatment is a fraction of a broader constellation of what the federal Joint Committee on Taxation estimates will be $154 billion in special corporate tax breaks in 2013, contained in 135 individual provisions of the tax code.

Watchdogs and tax analysts denounce these favors as a hidden form of spending that amounts to corporate welfare. In essence, these “tax expenditures’’ are no different than mailing subsidy checks directly to companies to pad their bottom lines.

Congress reduced the number of tax breaks in 1986 as part of the broader reform package. The breaks steadily crept back, particularly in the last decade, as lawmakers heeded requests from advocacy groups and business lobbyists to lower taxes as a way of subsidizing particular industries.


Howard Carruth of Arkansas, a machine maintenance worker, lost his job with Whirlpool last year. He said Congress made a mistake giving tax breaks to the company.


“There’s a justification and rationale for virtually every one of these. They have their intellectual advocates, and they have their political advocates, and that’s how they get in the law,’’ said Lawrence F. O’Brien III, an influential lobbyist and a top campaign fund-raiser for Senate Democrats who represents financial industry clients and other interests.

Whirlpool has a powerful Michigan delegation behind it, including key committee chairmen of tax-writing and energy committees in the House. In response to questions from the Globe, the company said its special tax breaks led it to save “hundreds’’ of American jobs from the effects of the recession.

“Energy tax credits required that Whirlpool Corporation make significant investments in tooling and manufacturing to build highly energy-efficient products,’’ Jeff Noel, Whirlpool’s corporate vice president of communication, said in an e-mail. “If you look at our 101-year history, we have definitely paid our fair share of US federal income taxes.’’

But its federal income taxes have been minimal in recent years, thanks in large part to tax credits and deferrals, according to public filings. Its total income taxes — including foreign, federal, and state — were negative-$436 million in 2011, negative-$64 million in 2010, and negative-$61 million in 2009. It carries forward federal credits as “deferred tax assets’’ that it can use to lower future tax bills.

The renewed tax breaks granted by Congress in January, which were retroactive to the beginning of 2012, will not be recorded until Whirlpool pays its 2013 taxes. Because of the absence of that tax credit, and because of greater earnings and changes in foreign taxes, the company estimated its total 2012 tax expenses will be $133 million.

Whirlpool did not provide a specific number of jobs retained. The benefits were not sufficient to protect Whirlpool’s employees at a refrigerator manufacturing plant in Arkansas. Last summer, the company laid off more than 800 hourly workers, closed the factory, and moved manufacturing of those refrigerators to Mexico. It was part of an overall reduction of 5,000 in its workforce announced in 2011 in North America and Europe.

Congress “made a big mistake,’’ by authorizing hundreds of millions of dollars in tax credits for Whirlpool based on arguments that the company would retain domestic jobs, said Howard Carruth, a machine maintenance worker and union official who began work at the plant in 1969 and lost his job last year when the plant closed.

“They really hurt the economy around here,’’ he said. “I blame the corporate greed.’’  NOT THE POLITICIANS GIVING THEM ALL OF THESE BREAKS?

The closing also transformed Carruth from loyal to embittered customer: “We bought Whirlpool for our own house, for family and friends. If one of those goes out in my house right now, it will not be replaced by Whirlpool.’’

Many companies would probably pay much higher taxes — including Whirlpool — if Congress eliminated special breaks and lowered the income tax rate to 25 percent from the current 35 percent.  THIS IS NOT TRUE!!!!!  CAN YOU EVEN IMAGINE THAT LOWERING THE RATE WILL CAUSE THESE BUSINESSES TO PAY MORE?  IT IS RIDICULOUS!!!

An extra benefit of winning government subsidies through the tax code: Recipients remain immune from spending cuts like the automatic “sequester’’ imposed on March 1.

Called the “tax extenders,’’ 43 credits, deferrals, and exceptions for general business and energy firms were lumped into the fiscal cliff legislation. The returns on lobbying investments companies realized when the Senate passed its fiscal cliff bill helps explain why Washington tax lobbyists remain in demand:


■ Multinational companies and banks, including General Electric, Citigroup, and Ford Motor Co., with investment earnings from overseas accounts won tax breaks collectively worth $11 billion — a return on their two-year lobbying investment of at least 8,200 percent, according to a Globe analysis of lobbying reports.

■ Hollywood production companies received a $430 million tax benefit for filming within the United States. As a result, companies like Walt Disney Co., Viacom, Sony, and Time Warner — with the help of the Motion Picture Association of America, chaired by former Connecticut senator Christopher J. Dodd — realized a return on their lobbying investment of about 860 percent.

■ Railroads lobbied on a broad array of issues, a portion of which yielded $331 million for two years’ worth of track maintenance tax credits. Return on investment: at least 260 percent.

■ Even at the low end of the economic scale the returns can be large. Two West Coast companies that manufacture electric motorcycles — Brammo Inc. of Oregon, and Zero Motorcycle Inc. of California — reported combined lobbying expenditures of $200,000 in 2011 and 2012. They won tax subsidies payable to the consumers who buy their products worth an estimated $7 million. The electric motorcycle market stands to receive a return on that investment of up to 3,500 percent.

Like each of the industries that won special treatment in the Jan. 1 “extenders’’ corporate tax measure, the electric motorcycle lobby argued that tax breaks would protect or create jobs. Electric motorcycle manufacturers only employ hundreds of workers now, said Jay Friedland, Zero Motorcycles vice president, but could employ thousands in the future.

“There are definitely provisions in the extenders that people scratch their heads at, but if your goal is to build a replacement for the pure oil economy, this is the kind of industry you want to make an investment on,’’ he said.

Measuring the rewards for lobbying on individual tax provisions is by nature imprecise, especially for large corporations that weigh in on dozens of issues. Companies file blanket disclosure reports that do not break down their lobbying expenditures by individual issue.

Publicly traded companies like Whirlpool with narrower lobbying agendas, and who publish their annual tax credit benefits in shareholder disclosure reports, are easier to track.

In addition to seeking tax breaks, corporate lobbyists also seek to protect favorable elements that are already baked into US tax policy. Private equity firms, for instance, fight each year to defend the tax treatment of “carried interest’’ payments for investment managers. Those payments are treated as a capital gain by the Internal Revenue Service, and thus taxed at a much lower rate, 20 percent in 2013, than the top income-tax rate of 39.6 percent.

The best-known example of a millionaire benefiting from “carried interest’’ tax treatment was Mitt Romney, the 2012 Republican presidential nominee, who reduced his individual tax rate to below 15 percent by applying the provision to his extensive Bain Capital profits.

The publicity surrounding Romney’s tax returns fueled an onslaught by critics. The private equity industry’s trade group and the nation’s largest firms spent close to $28 million on lobbying in 2011 and 2012, according to public records. So far, they have won — a benefit that the Obama administration has estimated is worth at least $1 billion over two years. The return on investment for maintaining the status quo on the carried-interest tax rate over two years was at least 3,500 percent.

The returns show how cheap it is, relatively speaking, to buy political influence.

“It’s an end run around policy, and that makes it very efficient,’’ said Raquel Meyer Alexander, a professor at Washington and Lee University in Virginia who has examined the investment returns on lobbying. “Firms that sit on the sidelines are going to lose out. Everyone else has lawyered up, lobbied up.’’

Critics lament that fiscal combat between Republicans and Democrats is preventing serious reform of the business tax code.

“What we’re doing is running a Soviet-style, five-year industrial plan for those industries that are clever enough in their lobbying to ask all of us to subsidize their business profits,’
’ said Edward D. Kleinbard, a former chief of staff at the Joint Committee on Taxation and now a law professor at the University of Southern California.

“These are perfect examples of Congress putting its thumb on the scale of the free market,’’ he said. “I’ll be damned if I know why I should be subsidizing Whirlpool.’’

Congress has the opportunity every two years to stop doling out a good portion of these favors. A peculiarity of many special tax breaks is that Congress places “sunset’’ provisions on them.

Some observers say passing temporary tax breaks gives lawmakers an ongoing source of campaign funds — from companies that are constantly trying to curry favor to get their tax credits renewed. Others say it’s because making these tax rates permanent would require a 10-year accounting method — a step that would show how much each provision is truly costing taxpayers.

Whatever the reason, Congress has made many of them quasi-permanent, by simply extending them again and again.

“It’s the same cowardice that Congress has on everything. They don’t want to be truthful about what they are doing,’’ said Senator Tom Coburn, an Oklahoma Republican and persistent critic of government waste and special deals in the tax code.

Coburn voted against the raft of “extenders’’ when they were previewed and approved by the Senate Finance Committee at a hearing in August 2012. He offered amendments to strip individual tax breaks out of the package — including the high-efficiency appliance tax credit for Whirlpool and GE — but they were shot down by the majority Democrats on the committee, led by chairman Max Baucus, of Montana.

“It’s not about tax policy, it’s about benefiting the political class and the well-connected and the well-heeled in this country,’’ Coburn said in an interview. “We’re benefiting the politicians because they get credit for it. And we are benefiting those who can afford to have greater access than somebody else.’’

Whirlpool pursues its Capitol Hill agenda from an office suite it shares on the seventh floor of a building on Pennsylvania Avenue that is loaded with similar lobbying shops and sits just a few blocks from the Capitol. Across the street, lines of tourists wait to view the original Declaration of Independence and the Constitution at the National Archives.

Whirlpool and other appliance manufacturers won tax breaks for producing high-efficiency washing machines, dishwashers, and refrigerators in 2005, as part of a sweeping package of energy incentives approved by the Republican-controlled Congress.

But that victory was just the beginning of a prolonged effort. Whirlpool and other appliance manufacturers must perpetually work to win renewal of their credits every two years or so. In recent years, the company has spent around $1 million annually on lobbying, up from just $110,000 in 2005.

The fiscal cliff legislation represented the third time the appliance tax credits were included in a tax extenders bill.

Defending the credits has become easier, said a person who has participated in Whirlpool’s lobbying efforts. The extenders, this person explained, is an interlocking package of deals, each with a particular senator or representative demanding its inclusion.

“Some of it is the inherent stickiness of something that is already in the tax code,’’ said the person, who was not authorized to speak about Whirlpool’s efforts and requested anonymity. “If they open Pandora’s box and start taking things out, it’s politically very difficult.’’

The paradoxical posture of senators of both parties was on full display at the hearing last summer of the Senate Finance Committee to consider the most recent package of tax extenders. Some members lamented the system of doling out tax breaks, pledging to reform the corporate code, even as they defended individual items in the legislation and voted to approve it.

The senators said they wanted to provide stability and predictability for businesses that had come to rely on the temporary provisions to stay afloat and retain workers.

They did make an effort to trim the package: Some 20 provisions were left on the cutting room floor, according to data cited in committee. The panel ultimately approved the bill with a bipartisan, 19-to-5 majority.

Senator Debbie Stabenow, a Democrat from Michigan, went to bat for Whirlpool and other companies who she said are creating next-generation appliances that save water and electricity.

“We have one of those major world headquarters in Michigan — and it’s amazing what they are doing,’’ she said. “Right now, we are exporting product, not jobs,’’ she added, without mentioning Whirlpool’s Arkansas plant closure last year.

Former senator John F. Kerry, another member of the committee, said certain industry sectors need temporary tax subsidies. Oil and gas companies, Kerry explained, benefit from permanent tax breaks in the law, while the wind, solar, and other alternative energy interests are forced to come to Congress “hat in hand’’ every two years.

Coming “hat in hand’’ in this context means deploying teams of lobbyists, mostly former Capitol Hill aides. They left their government jobs with an understanding of the tax code and, working in the private sector, are able to leverage their political connections to gain access to congressional leaders and staff.

Among the busiest and most influential of these tax-lobbying teams is Capitol Tax Partners, a firm headed by Lindsay Hooper, and his partner, Jonathan Talisman. Hooper served as a tax counsel to a senior Republican on the Senate Finance Committee in the 1980s. Talisman held the post of assistant treasury secretary for tax policy during the Clinton administration. They did not respond to requests for comment.

Capitol Tax Partners lobbied on behalf of 48 companies in 2012, according to its mandatory disclosure reports. That client roster includes a bunch of companies that won tax breaks in the fiscal cliff bill: Whirlpool (energy-efficiency tax credits), State Street Bank (tax treatment of offshore investment income), and the Motion Picture Association of America (tax breaks for domestic film production), to name a few.

In Whirlpool’s case, Capitol Tax Partners and other boutique tax lobbyists helped the company win access to key lawmakers, said the person who has participated in the company’s lobbying efforts.

“There is a certain amount of door-opening and phone-call-answering quality of some of these firms that can be useful to make sure that you are getting your message to the right person at the right point in time,’’ the person said. “But on the substantive issues, these were done by the energy-efficiency advocacy groups and the companies themselves.’’

After the Senate Finance Committee approved the tax extenders package last summer, it remained uncertain when it would materialize on the Senate floor for a final vote. Insiders kept their eyes peeled as the rancorous debate over the fiscal cliff — whether taxes would rise on the middle class wealthy — drowned out any voices discussing corporate tax reform.

Nothing was certain, until majority Democrats rolled out their bill on New Year’s Eve. With tax increases for the rich included, it would raise $27 billion in new revenue in 2013. The Obama administration trumped that figure as helping to reduce the deficit
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December 07th, 2012

12/7/2012

0 Comments

 
I NEED TO CORRECT AN ENTRY FROM YESTERDAY.  I PRESENTED THE FBI REPORT ON HEALTH FRAUD THAT GAVE THE FIGURE OF 10% OF HEALTH SPENDING AND SAID THAT WAS 1/3......WHAT I MEANT IS THAT IN 2012 IT HAS BECOME 1/3 OF ENTITLEMENT SPENDING AS FRAUD IS NOW AT $300-400 BILLION.

MAKE NO MISTAKE, THE BIGGEST ISSUE IN THIS DEBT REDUCTION DEBATE IS CORPORATE TAX REFORM  MAKING CORPORATIONS PAY.  MOVING THE CAPITAL GAINS TAX FROM 15% TO 20% IS MINOR.  LOWERING THE CORPORATE TAX RATE IS UNACCEPTABLE.

THESE THIRD WAY CORPORATE DEMOCRATS ARE READY, WILLING, AND ABLE TO GIVE CORPORATIONS THE CUTS THEY NEED.  WE REELECTED INCUMBENTS SO WE DESERVE IT.  WE CAN REVERSE THIS.  THE SPENDING CUTS ARE BEING OFFERED SO AS  TO AFFORD THIS RACE TO THE BOTTOM IN CORPORATE TAXATION.  AMERICA IS THE ONLY NATION IN THE WORLD DOING THIS TO SUCH GREAT EXTENT,  BUT IT DOES SET PRECEDENT FOR OTHER COUNTRIES TO SAY THEY MUST.  WE CANNOT ALLOW AMERICAN POLICY TO HARM ALL OF DEVELOPED WORLD.  THE MANTRA OF MAKING BUSINESS COMPETITIVE IS A LIE.

IN MARYLAND WE DON'T JUST PLAY WITH TAX FRAUD, OUR POLITICIANS EMBRACE TAX FRAUD.  YOU CAN'T GET ENFORCEMENT WHEN THE PEOPLE CHARGED WITH THE DUTY ARE ACTIVELY COMMITTING THE CRIME.  TODAY I'D LIKE TO TALK ABOUT THE OTHER HUGE CORPORATE TAX PROBLEM THAT YOUR THIRD WAY CORPORATE DEMOCRAT IS REFUSING TO FIX.......THE 'S' CORPORATION.  I SPOKE EARLIER ABOUT THIS TAX SCHEME.  IT BASICALLY ALLOWS A COMPANY HAVING LESS THAN 100 SHAREHOLDERS....AND THAT IS HOW MOST CORPS ARE LISTING NOW....THE ABILITY TO PASS TAX REQUIREMENTS OFF TO SHAREHOLDERS SO THE CORP ITSELF PAYS NO TAX ON PROFITS.  THE BUSINESS OWNER SIMPLY PAYS TAX ON WHATEVER INCOME HE/SHE ASSIGNS AS SALARY.  I AM BEING VERY SIMPLISTIC SO PLEASE DON'T FIND EXCEPTIONS.  MY POINT IS THIS: NOT ONLY ARE THESE CORPORATIONS NOT PAYING TAXES, THESE SHAREHOLDERS OVERWHELMINGLY ARE NOT PAYING TAXES BECAUSE NO ONE IS AUDITING TO VERIFY.  WE ARE TALKING HUGE AMOUNTS OF MONEY LOST TO GOVERNMENT COFFERS AT ALL LEVELS.

THIS IS WHY WE HAVE THE GOVERNMENT SHORTFALLS IN REVENUE AND WE MUST DEMAND THAT CORPORATIONS PAY 39% WITH NO LOOPHOLES OR PROTECTIONS!!!!

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!


IT IS IMPORTANT TO UNDERSTAND HOW HARMFUL ALL OF THIS CORPORATE TAX POLICY IS TO ALL LEVELS OF GOVERNMENT.  I GO ON AND ON ABOUT HOW BALTIMORE AND MARYLAND USES DISTORTED TAX POLICY TO EXCESS.  THESE POLS ARE TRADING THE NATION'S FUTURE TO THESE CORPORATE VULTURES.

AS IMPORTANT, IT IS THE FAILURE OF POLS AT THE NATIONAL LEVEL TO ADDRESS THIS AS FEDERAL LEGISLATION.  THIS CORPORATE TAX POLICY HAS STATES PLAYING ONE OFF ANOTHER AND MUST BE ADDRESSED AT THE NATIONAL LEVEL.  THIRD WAY HAS CAPTURED THE SENATE LEADERSHIP, REPUBLICANS HAVE THE HOUSE SO THEY FEEL THEY CAN PROTECT CORPORATIONS REGARDLESS OF VOTER OUTRAGE.

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!

HERE IN MARYLAND THE CAPTURED POLITICAL SYSTEM KEPT ALL THE NATIONAL POLS IN OFFICE.  SARBANES, CARDIN, CUMMINGS,  MIKULSKI, RUPPERSBERGER, VAN HOLLEN, AND HOYER ALL STATED THEIR READINESS TO DO A SWEEPING CORPORATE TAX REFORM THAT LOWERED THE TAX RATE WHILE ENDING LOOPHOLES (LOOPHOLES COME BACK) PAYING FOR IT BY CUTTING ENTITLEMENTS.   ALL OF THE INCUMBENTS LINING UP FOR NEXT ELECTION ARE THE CORPORATE FARM TEAM.......THEY WILL DO THE SAME THING......ANTHONY BROWN, MAGGIE MCINTOSH, FRANCHOT, ULMAN, AND GANSLER.

MAKING CORPORATIONS PAY IS THE PRIMARY POLICY ISSUE ANY FISCAL PROGRESSIVE WILL HAVE THIS NEXT ELECTION!!!

CALL, WRITE, AND SHOUT AT YOUR INCUMBENT THAT WE KNOW WHAT IS RIGHT AND WE EXPECT THEM TO DO IT!!!


Editorial
Race to the Bottom
Published: December 5, 2012 New York Times

Competition among states and cities to lure businesses in hopes of creating jobs is not new, but it has become more fierce in recent years. An investigation by The Times found that state and local governments are giving out $80 billion a year in tax breaks and other subsidies in a foolhardy, shortsighted race to attract companies. That money could go a long way to improving education, transportation and other public services that would have a far better shot at promoting real economic growth.


Instead, with these giveaways, politicians and officials are trying to pick winners and losers, almost exclusively to the benefit of big corporations (aided by highly paid lobbyists) at the expense of small businesses. Though they promise that the subsidies are smart investments, far too often the jobs either don’t materialize or are short-lived, leaving the communities no better off.

The three-part series by Louise Story described how in places like Texas and Ohio, state and local governments have lavished millions of dollars in tax breaks on corporate giants like Samsung and the Big Three automakers — even as they faced budget deficits and were forced to cut spending on critical services. The tax revenues forgone in this giveaway frenzy should concern Congress deeply. After all, federal funds account for one-fifth of state and local budgets.

In one particularly egregious example in Pontiac, Mich., the State of Michigan gave $14 million in tax credits and a state pension fund guaranteed $18 million in bonds to a movie studio that created just 12 permanent jobs. In Texas, Amazon.com, the online retailer, received tax abatements, sales tax exemptions and other benefits totaling $277 million to open a warehouse that promises to employ 2,500 people. Those benefits were granted after the retailer closed another warehouse because of a dispute with the government involving sales taxes.

Many governments don’t know the full value of the subsidies they hand out in the form of tax refunds, rebates, loans, grants and more. And they don’t know if the jobs created would have been created anyway. The fact is, numerous studies show that such incentives result in only a small increase in jobs and that any gains usually come at the expense of other cities and states.

Local governments would be much better off investing tax dollars in education and public works that would deliver long-term benefits to both businesses and workers. California, for instance, is among the least generous of the larger states in doling out tax breaks. It gave out just $112 per capita compared with $759 in Texas, $672 in Michigan, and $210 in New York. Its experience leaves no doubt that investments made in public institutions like the University of California system can remain critically important to economic growth decades later.

The senseless race to give away billions in subsidies is, of course, hard to stop when elected leaders think a pledge of potential jobs might help in their next election. But even when attracting businesses is a legitimate goal, it has to be done in ways that are fair and transparent.

The trouble with targeted incentives is that they are little more than transfers of wealth to a handful of powerful corporations from all other taxpayers, including other businesses. If the problem is excessive tax burdens on businesses in general, then the solution is broad tax reform that also benefits small business owners, who are more likely to stick around if the regional economy weakens and who are unlikely to hopscotch around the country in search of a bigger tax break.


______________________________________________________

BELOW  IS THE RESPONSE FROM MARYLAND'S COMPTROLLER FRANCHOT ABOUT HOW MARYLAND HANDLES THE PRIMARY METHOD OF FILING CORPORATE TAXABLE INCOME.  THEIR ANSWER......WE DON'T HAVE ANY MECHANISM TO CHECK, WE JUST LET THE FEDERAL IRS TELL US IF THERE IS A PROBLEM.  IF YOU KNOW THAT 80% OF SHAREHOLDERS ARE SUSPECTED OF NOT FILING WOULD YOU MAKE THAT A PRIORITY IN REVENUE COLLECTION?

OF COURSE YOU WOULD IF YOU WERE HONEST!

One reason U.S. corporate tax collections are low is that many U.S. small business owners file personal income tax returns, said Eric Toder, co-director of the nonpartisan Tax Policy Center.

MY LETTER TO FRANCHOT:

I'm reading that the tax revenue that should be coming to federal and state governments from S Corps are largely unreported by shareholders.  A study showed as high as 80% of S corp taxes go unpaid.  There is also the matter of S corps paying employee taxes to shareholders that do work for these S corps.  The study showed that this tax is rarely paid.

Will you provide me with the data for Maryland regarding the revenue collection for S corps and point to me how your office addresses these concerns?



December 3, 2012

Re: Maryland Public Information Act Request
Dear Ms. Walsh:
This is in response to your electronic mail dated October 25, 2012, sent to the Custodian of Records, Maryland Comptroller’s Office.

Pursuant to the Maryland Public Information Act you have requested “data for Maryland regarding revenue collection from S corps and …how [the Comptroller’s Office] addresses [unpaid S corp taxes]”.


In accordance with the Maryland Public Information Act, Section 10-611 et seq. of the State Government Article (“SG”) of the Annotated Code of Maryland, a thorough review of the Comptroller’s Office’s records has been conducted and found no records responsive to your request.
Further answering your inquiry, you should be informed that S corporations receive special treatment under the provisions of the Internal Revenue Code. The name, “S corporation” or “Sub-S Corporation,” is derived from Subchapter S, 26 U.S.C. §1361, etc., of the Internal Revenue Code (“IRC”). That gist of that special treatment is that a corporation electing to be treated under Subchapter S of the IRC does not pay an income tax. Instead, it is treated as a pass-through entity (similar to partnerships, limited liability companies, etc.) in which the shareholders/members are required to report their pro-rata share of the corporation’s income, expenses and other required amounts, on their individual income tax returns. The entity issues to the shareholder/member an annual Schedule K-1 containing the information the required to be reported on the shareholder/member’s individual income tax return.
Maryland law requires that taxpayers who are domiciled in Maryland report all income from whatever source on their individual tax returns. For members/shareholders of a pass-through entity, this would include reporting the entity’s information as provided on the Schedule K-1. If pass-through entity income is omitted for federal and Maryland purposes, we rely on the Internal Revenue Service (“IRS”) to identify these taxpayers through a sharing program. We are notified by the IRS of their assessments and make similar assessments on the Maryland return for the corresponding year. This program is automated in the Maryland processing data base. If a Maryland taxpayer omits that information on their Maryland return but not on their federal return, a different Maryland audit program will identity those taxpayers and issue assessments. Both of these programs are administered by the Compliance Division of the Maryland Comptroller’s Office.
S Corporations and other pass-through business entities that have income from Maryland sources are required to file

HOW CAN YOU SAY THAT SOMEONE OR SOMETHING IS REQUIRED IF YOU DO NOT VERIFY??????
__________________________________________________
Why is it that all around the world governments and citizens are shouting down US corporate abuse and we in America don't?  Worldwide US corporations are now much maligned and spoken of in terms of dishonesty, inhumanity, and an entity to be curtailed.....just like a terrorist.  How did the US go from being a standard-bearer to predator?  Clinton's free-market globalization policy allowed corporations to much wealth and power and people with the worst traits rise to the top.

Please step up your activism through rallies and boycotts of these global/national corps and elect people who shout for downsizing these behemoths.  They keep saying they are doing what is prescribed by law.......that is where your incumbent comes in.  Watch what they do with corporate tax reform and:

VOTE YOUR INCUMBENT OUT OF OFFICE!!!!

Starbucks Tax Row: £10m Climbdown
By (c) Sky News 2012 | Sky News – 18 hours ago

Starbucks (NasdaqGS: SBUX - news) has vowed to pay more corporation tax than it is obliged to as the coffee chain denies hiding profits from the UK taxman.

The company's UK managing director Kris Engskov told Sky News that the decision to "take action" followed anger from its customers in recent weeks.

Starbucks will now pay around £20m in corporation tax over the next two years, after paying nothing last year.

The U-turn comes after the Government pledged to crack down on tax avoidance after public outrage over how little some multinational companies contribute to the UK Exchequer.

Mr Engskov told Sky's Jeff Randall: "We are paying corporate tax and we are going to do that beyond what is required by the law and whether we make a profit in the next two years and I think that is what we should do.

"We have reacted to our customers... We have seen that doing business responsibly is good for the bottom line and this is a good example of that."

In the same interview, he said the US coffee giant had not been profitable in the UK since it brought its brand to Britain 14 years ago.

And he admitted their 2011 report and accounts may be wrong when they referred to the fact that the UK was making a "significant portion of the net revenue and earnings of our international operations". 

This could mean major penalties for the company.

Since arriving in the UK, Starbucks has paid just £8.6m in corporation tax despite taking billions of pounds in revenue from its shops, which now number more than 750.

The low bill has been explained by the practice of transfer pricing, which involves charges being made by companies in the same group based in different jurisdictions, with the effect of depressing profits in the higher-tax jurisdiction.

In Starbucks' case, that relates to the royalty fee paid to a sister company in the Netherlands for the right to use its brand and coffee recipe.

While the previous tax arrangements were legal, its actions were called into question amid a wider debate about tax avoidance which has also engulfed the likes of Amazon and Google (NasdaqGS: GOOG - news) .

The companies were accused of "immorally" minimising UK tax bills in a damning report by the Public Accounts Committee of MPs (BSE: MPSLTD.BO - news) .  WOULD YOU HEAR THAT IN AMERICA????

Its (Euronext: ALITS.NX - news) chairman, Margaret Hodge MP told Sky News the development was a "step in the right direction" which had been brought about by "people power."

The firm has argued that its UK operations already inject £300m into the UK economy annually.

Mr Engskov, speaking earlier in a speech to business leaders, admitted that the "emotion" surrounding the tax payments had "taken us a bit by surprise".

"Since we started doing business here, we have always organised our tax affairs according to the letter of the law - always," he said.

"We have used existing and agreed-upon measures to pay what is expected of us, but not more - just as most companies do and I am sure many of the people here today run their businesses in similar ways."

But in his remarks to the London Chamber of Commerce he admitted: "With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more."

Mike Lewis, tax justice policy adviser for charity ActionAid UK,said: "Starbucks' tax back-down proves that companies do have a choice about where and how they pay taxes."

Other critics suggested the country should wait to see the colour of Starbucks' money.

Hannah Pearce, a UK Uncut spokesperson said: “Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger.

"Starbucks have been avoiding tax for over a decade and continue to deny that it paid too little tax in the past. Today’s announcement is just a desperate attempt to deflect public pressure.

"There’s no money yet, and hollow promises on press releases don’t fund women’s refuges or child benefits."

An HMRC spokesman said: "Corporation Tax is not a voluntary tax. The public expects businesses to pay their fair share and we will challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law."


0 Comments

October 25th, 2012

10/25/2012

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PLEASE PROTEST, RALLY, SHOUT TO YOUR POLS THAT WE WILL NOT LET CORPORATIONS PUSH ALL THEIR CORPORATE EXPENSE OFF ON THE PEOPLE!  WE WANT THEM PAYING 39% RATE WITH NO LOOPHOLES!


WE ARE GOING TO TALK TAXES/REVENUE FOR A FEW DAYS.  I MOSTLY FOCUS ON THE COPIOUS GIVE-A-WAY OF BUSINESS TAX CREDITS AND THE FACT THAT MUCH FRAUD IS HAPPENING.  AS WE KNOW, FRAUD AND CORRUPTION IS PERVASIVE IN MARYLAND AND AS SUCH WE DON'T HAVE TO LOOK FAR TO FIND MORE OPPORTUNITY FOR THE WEALTHY TO GET AWAY FROM PAYING TAXES. 

AS WE KNOW, MANY BUSINESSES DOING BUSINESS IN BALTIMORE COME FROM THE WASHINGTON SUBURBS (CAPITAL OF FRAUD) AND IF NOT THERE, THEN THE CORPORATIONS AND THEIR SUBCONTRACTORS ARE GENERALLY FROM OUT OF STATE.  IT IS THE RARE BIRD INDEED THAT GETS TO BE FROM THE BALTIMORE AREA AND BE ANYTHING OTHER THAN A SUBCONTRACTOR.  SO HOW DO ALL THESE BUSINESSES PAY TAXES?  FIRST, WE KNOW MARYLAND LOSES TAXES WHEN IT GOES WITH ALL THESE NATIONAL CORPORATIONS WHO SEND TAX MONEY BACK TO THEIR HOME STATES....CORPORATE AND EMPLOYEE.  THESE COMPANIES DO OWE SOME TAX FOR DOING BUSINESS IN MARYLAND.  LARGELY IT IS THE WASHINGTON SUBURB BUSINESSES THAT HAVE TAX RESPONSIBILITY FOR DOING BUSINESS.  THE TRICK IS THAT MOST OF THESE CORPORATIONS ARE DESIGNATED S CORPORATIONS AND AS SUCH, ALTHOUGH THEY DO OWE EMPLOYEE TAXES, THEY GET TO PUSH ALL TAXES ON PROFITS ON TO THEIR SHAREHOLDERS.  AS THE ARTICLES BELOW SHOW, IT IS HIGHLY LIKELY THAT NONE OF THESE ENTITIES ARE PAYING THOSE TAXES AT THE FEDERAL OR STATE LEVEL.

WE SEE THAT MARYLAND HAS A CORPORATE NET INCOME TAX RATE OF 8.25%.  I'M GOING TO ASK OUR STATE COMPTROLLER FRANCHOT HOW HE MAKES SURE THESE TAXES ARE PAID.  LOOK AS WELL AT THE PERSONAL NET INCOME TAX RATES TO SEE THAT A THIRD WAY DEMOCRATIC LEADERSHIP REFUSES TO TAX WEALTH AT A RATE WE NEED TO SEE TO REVERSE INCOME INEQUITY.  THE BRACKETS ADDED WERE UNDER A MILLION AND MARYLAND HAS LOTS OF WEALTHIER CITIZENS.

THE ARGUMENT IS THAT THESE CORPORATIONS OR WEALTHY PEOPLE WILL LEAVE THE STATE IF TAXES ARE HIGHER AND JOBS WILL BE LOST.  WE HAVE THOUSANDS OF PEOPLE WAITING TO OWN BUSINESSES THAT WILL GLADLY TAKE WHAT BUSINESS IS LEFT.  RIDDING OURSELVES OF THE STATE'S 1% WOULD BE CELEBRATED!

TAKE A LOOK AT THE END WHICH POLITICIANS IN ANNAPOLIS ALLOW THIS TAX SCAM TO HAPPEN AND WITH NO OVERSIGHT.  DEMAND THAT LAWS BE ENFORCED AND THAT EVERYONE PAY WHAT IS OWED FROM THE PAST, PRESENT, AND INTO THE FUTURE.  THIS HAS BECOME STATUS QUO BECAUSE THE SAME PEOPLE ARE SEND BACK YEAR AFTER YEAR!

VOTE YOUR INCUMBENT OUT OF OFFICE

FRANCHOT, MCFADDEN, BRANCH, JONES-RODWELL, AND JON CARDIN.......WHY ARE YOU NOT SHOUTING LOUDLY AND STRONGLY ABOUT ALL THE TAX REVENUE LOST ON S CORPORATION LAW AND LACK OF OVERSIGHT AT BOTH THE FEDERAL AND STATE LEVEL?

Maryland Business Corporate Tax, Maryland Personal Income Tax, Maryland Sales Tax Rates

What is the Maryland corporate net income tax rate(s)? 8.25%

What is the Maryland personal net income tax rate(s)?
0-1,000 2%
1,000-2,000 3%
2,000-3,000 4%
3,000-150,000 4.75%  MOST OF US FALL HERE
150,000-300,000 5%
300,000-500,000 5.25%
500,000-1 million 5.5%
1 million + 6.25% MOST OF MARYLAND'S WEALTH IS HERE...ONLY 1.5% HIGHER THAN US EVEN FOR BILLIONAIRES

There are also a lot of local income taxes with a average rate of 3%

What is the average Maryland sales tax rate(s)? 6%

______________________________________________________________________________

BELOW YOU SEE THE FEDERAL GOVERNMENT STATING THAT THERE IS CONCERN AS TO WHETHER CORPORATIONS AND SHAREHOLDERS ARE PAYING THEIR TAXES.  MOST CORPORATIONS THESE DAYS ARE S CORPORATIONS BECAUSE, AS YOU SEE BELOW, THEY CAN GET AWAY MORE EASILY FROM PAYING ANY TAXES.  NOW, WHILE S CORPORATIONS MOVE THE BURDEN OF TAX PAYING ONTO SHAREHOLDERS, THEY ARE STILL REQUIRED TO PAY TAXES FOR THE WORK THAT SHAREHOLDERS DO IN THIS PROCESS.  NOT ONLY ARE THE SHAREHOLDERS NOT REPORTING THESE GAINS, THEY ARE NOT REPORTING WORK DONE AND TAXES OWED BY CORPORATIONS.

SO, YOU LOOK AT MARYLAND WHO HAS AN 8.25% S CORPORATION TAX ON MARYLAND BUSINESSES AND BUSINESSES DOING BUSINESS IN MARYLAND.  WHAT ARE THE CHANCES THAT A STATE HAVING HARDLY ANY OVERSIGHT AND AUDITING HAS EVEN LOOKED INTO THIS?  THAT'S RIGHT......NIL.

LET'S ASK THE STATE COMPTROLLER THIS QUESTION......FRANCHOT.



IRS study of S corporation reporting compliance 

Wikipedia

In 2005, the IRS launched a study to assess the reporting compliance of S corporations[7] The study began in late 2005 and examined 5,000 randomly selected S corporation returns from tax years 2003 and 2004. The IRS intends to use the results to measure compliance in recording of income, deductions and credits from S corporations, and to formulate future audit criteria to better target likely non-compliant returns. This is part of a larger IRS effort to improve tax compliance and reduce the estimated $300 billion gap in gross reported figures each year. A large portion of that gap is thought to come from small businesses, and particularly S corporations, which are now the most common corporate entity, numbering over 3 million in 2002, up from about 750,000 in 1985.     _________________________________________________
NOW, WE ARE SEEING A GREAT DEAL OF MARYLAND'S AND BALTIMORE'S CONTRACT BIDDING GOING TO BUSINESSES OUT OF STATE.  IF THEY ARE IN STATE, THEY WILL BRING SUBCONTRACTORS IN FROM OUT OF STATE.  SO, WHO TRACKS TAX OBLIGATIONS IF SHAREHOLDERS ARE RESPONSIBLE FOR TAXES AND THESE COMPANIES ARE REGISTERED IN OTHER STATES?

YOU CAN SEE THIS IS A COMPLEX FINANCIAL INSTRUMENT AND THERE IS A 99.999% CHANCE THAT NO ONE IS PAYING TAXES THAT ARE OWED.  THIS IS WHY THEY DO IT.  MARYLAND COMPANIES WORK ELSEWHERE AND ESCAPE ALL SCRUTINY.  ADD TO THAT THE IDEA OF INDEPENDENT CONTRACTORS WHICH IS A GROWING JOB CLASSIFICATION AND YOU SEE WE ARE LOSING ALL CORPORATE TAX REVENUE.  THE BUSINESS TAX CREDITS SIMPLY EXTEND THAT TO PROPERTY TAXES AND LOCAL SERVICE TAXES.
                          

Maryland    

Tax Rate                   Brackets      
   8.25%                         $0 


Pass-Through Entities A pass-through entity is required to file Maryland Form 510, Pass-through Entity Income Tax Return, if the entity is formed or incorporated in Maryland, does business in Maryland, or has Maryland income (or losses). The following are pass-through entities:

  • Partnerships, as defined in § 761 of the Internal Revenue Code.
  • Limited liability companies (defined under Title 4A of the Corporations and Associations Article of the Maryland Code Annotated) classified as partnerships, as defined in § 761 of the Internal Revenue Code, and not taxed as a corporation or disregarded as an entity.
  • S corporations, as defined in § 1361 of the Internal Revenue Code.
  • Business trusts, treated as partnerships, as defined in § 761 of the Internal Revenue Code.


Nonresident members

If a pass-through entity has a nonresident member and any nonresident taxable income, then the pass-through entity is subject to the Maryland income tax. The pass-through entity is taxed on the nonresident taxable income, which is the sum of the nonresident members' distributive or pro-rata shares of the pass-through entity's income allocable to Maryland.

A "nonresident member" includes a nonresident individual member (defined as a person or fiduciary) and a nonresident entity member. A nonresident entity member is a corporation or pass-through entity that is not qualified or registered with the Maryland Department of Assessments and Taxation to do business in Maryland or not formed under Maryland law.

If you meet the federal tax law requirements to operate as an S corporation, the IRS allows your business to "pass through" its income to the shareholders. This means that your business will not pay any corporate level federal income tax. However, you'll have to claim your entire share of the business income on your personal federal income tax return even if you did not take any money out of the business.  DO YOU THINK THAT CHECK IS MADE? In Maryland, the law extends this favorable tax treatment to state corporate income tax liability for resident members and S corporations with only resident members will not be subject to the corporate income tax.



HERE ARE THE RESULTS OF THE STUDY FROM 2005.  WHAT WE SEE IS ACROSS THE BOARD DISREGARD TO THESE TAX LAWS AND HUNDREDS OF BILLIONS/TRILLIONS IN TAX REVENUE LOST AND THIS HAS BEEN THE STATUS QUO FOR DECADES.  SIMPLY AUDITING AND BRINGING THIS MONEY BACK TO GOVERNMENT COFFERS WOULD MAKE THE WEALTHY PAY THEIR FARE SHARE.

HAVE YOU HEARD YOUR INCUMBENT SHOUT LOUDLY ABOUT MASS DISREGARD OF TAX PAYMENTS BY CORPORATIONS/SHAREHOLDERS AS THEY TELL YOU THEY MUST CUT PUBLIC SPENDING TO PAY DOWN THE DEFICIT?


Tax Gap Actions Needed to Address Noncompliance with S Corporation Tax Rules GAO-10-195,
Dec 15, 2009
Contact: Michael Brostek
(202) 512-9039
contact@gao.gov
Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

S corporations are one of the fastest growing business types, accounting for nearly 4 million businesses in 2006. However, long-standing problems with S corporation compliance produce revenue losses in individual income taxes and employment taxes. GAO was asked to (1) describe the reasons businesses choose to become S corporations, (2) analyze types of S corporation noncompliance, what IRS has done to address noncompliance, and options to improve compliance, and (3) further analyze the extent of shareholder compensation noncompliance and identify options for improving compliance. GAO analyzed IRS research and examination data; interviewed IRS officials, examiners and other knowledgeable stakeholders; and reviewed relevant literature.

An S corporation is a federal business type that provides certain tax and other benefits, including a single level of taxation, limited employment taxes, and the ability to pass through business losses to shareholder returns. Single-level taxation can reduce overall taxes assessed based on business income, and applying business losses to individual returns can decrease shareholder tax obligations. S corporations also benefit from limited liability protection. According to IRS data, about 68 percent of S corporation returns filed for tax years 2003 and 2004 (the years data were available) misreported at least one item. About 80 percent of the time, misreporting provided a tax advantage to the corporation and/or shareholder. The most frequent errors involved deducting ineligible expenses, which could decrease S corporation shareholder tax liabilities. Even though a majority of S corporations used paid preparers, 71 percent of those that did were noncompliant. Stakeholder representatives said that preparer mistakes may be due to the lack of preparer standards as well as their misunderstanding of the tax rules. Shareholders of S corporations also made mistakes in calculating basis - their ownership share of the corporation - when taking losses passed to them from the corporation, potentially decreasing their total taxes. IRS officials as well as stakeholder representatives said that calculating and tracking basis was one of the biggest challenges for shareholders, and that S corporations themselves were in a better position in most cases to calculate basis for their shareholders. Some S corporations also failed to pay adequate wages to shareholders for their labor for the corporation, which led to underpaying employment taxes. Joint Committee on Taxation (JCT) and Treasury Inspector General for Tax Administration (TIGTA) reports show that inadequate shareholder wage compensation is a significant issue. Using IRS data, GAO calculated that in the 2003 and 2004 tax years, the net shareholder compensation underreporting equaled roughly $23.6 billion, which could result in billions in annual employment tax underpayments. Stakeholder representatives, IRS officials, and TIGTA have indicated that determining adequate shareholder compensation is highly subjective and hinders compliance and enforcement. IRS provides limited guidance on determining adequate compensation. Stakeholder representatives indicated that specific IRS guidance for both new and existing S corporations could help improve compliance. Additionally, IRS examiners often were not taking advantage of certain techniques in examining shareholder compensation. Analyzing a random sample of IRS examinations, GAO found that in cases where IRS examiners did document a form of analysis, they were more likely to make an adjustment than when no evidence of such analysis existed. Currently, IRS does not require specific documentation of their analysis for shareholder compensation by examiners. Legislative options exist to improve compliance with shareholder compensation rules; however, these options also raise notable trade-offs.


THESE POLITICIANS BELOW SHOULD BE SHOUTING LOUDLY AND STRONGLY THAT THESE S CORPORATIONS ARE NOT ONLY AVOIDING OVERSIGHT AT STATE AND NATIONAL LEVELS, THE SHAREHOLDERS RESPONSIBLE FOR ALL THE TAX ARE AS WELL.  WE WANT OUR MONEY FROM THESE PEOPLE/CORPORATIONS FROM THE PAST AND IN THE FUTURE!


Senate Budget and Taxation (B&T)


Chair: Edward J. Kasemeyer

Vice Chair: Nathaniel J. McFadden
                   David R. Brinkley Republican, District 4, Carroll & Frederick Counties  

Nancy J. King Democrat, District 39, Montgomery County

Richard F. Colburn

Richard S. Madaleno, Jr.Democrat, District 18, Montgomery County

Ulysses Currie Democrat, District 25, Prince George's County

Roger P. Manno

James E. DeGrange, Sr.

Douglas J. J. Peters

George C. Edwards

James N. Robey

Verna L. Jones-Rodwell

Delegate Ways and Means (W&M)

Chair: Sheila E. Hixson

Vice Chair: Samuel I. Rosenberg Kathryn L. Afzali

Anne R. Kaiser

Kumar P. Barve

Eric G. Luedtke

Joseph C. Boteler III

Aruna Miller

Talmadge Branch

LeRoy E. Myers, Jr.

Jon S. Cardin

Justin D. Ross

Mark N. Fisher

Andrew A. Serafini

C. William Frick

Melvin L. Stukes

Ron George

Michael Summers

Glen Glass

Frank S. Turner

Carolyn J. B. Howard

Jay Walker

Jolene Ivey
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    Author

    Cindy Walsh is a lifelong political activist and academic living in Baltimore, Maryland.

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