Category Archives: Taxes

The Felon-In-Chief?

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For some time, I have referred to Mitt Romney as the Panderer-In-Chief based on the corny speeches he has given on the campaign trail – “The trees just seem the right height here.”  Now I realize that his tendency to lie and pander to any audience is the least of his obvious faults.

Recent investigations into his 2010 tax return and Bain Capital have yielded an array of offshore accounts and questionable investments, such as an I.R.A. account of $102 million, even though Romney could only legally put $2,000 a year into the account for 15 years and, depending on the type of plan he used, another $30,000 per year.

That’s some rate of return!

There’s also the matter of his accounts in tax havens such as Bermuda, the Cayman Islands, Luxembourg and Switzerland. In talking with bankers and economists, I’ve confirmed that there are only two reasons to open accounts in those places: Secrecy and Tax Evasion.

It’s clear that Romney is one of many who are responsible for an estimated $100 billion in lost annual tax revenue by sending their money offshore, costing ordinary taxpayers an average of $484 a year.  In other words, you have to pay more taxes to make up for tax deadbeats like Romney.

Of course, as CEO and sole owner of Bain Capital, Romney practiced what his Republican rivals termed “Vulture Capitalism.”  He bought up cash rich companies, took the cash, and charged the companies large sums for “management consulting.”  Then when the cash ran out, he either fired the staff and outsourced the jobs overseas or dismantled what was left at salvage rates.

But that’s not the worst of it – at least for Romney.

The Boston Globe found that contrary to Romney’s statements, he was still involved in his company several years after he said he had resigned.  That doesn’t sound like a big deal, except that it means Romney likely committed one or more felonies.  You see, he filed a federal disclosure stating that he left Bain in 1999.  Yet the company’s SEC filing in 2002 listed Romney as “sole stockholder, chairman of the board, chief executive officer and president.”  This would make Mitt guilty of a federal felony for certifying on federal disclosure forms that he left active management of Bain Capital in February of 1999.

Oops!

If elected, Mitt could be our nation’s first presidential felon.  Moreover, if he lied on disclosure forms, he may have lied on his federal tax returns.  There are many other questions about Romney.  But his business dealings and finances are shrouded in secrecy.  Indeed, The Washington Post summarized the opinions of experts across the political spectrum by saying Romney’s disclosures were “the most opaque they have encountered.”

Now imagine the uproar if Teapublicans found that President Obama had offshore tax havens and shipped American jobs overseas.  The torch and pitchfork crowd would’ve already surrounded the White House.

The Truth About The Great “Job Creator.”

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Former Governor and current Panderer-In-Chief, Mitt Romney, claims that he has the experience to put our economy on the fast track.  The question is, the fast track to where?

In his 15 years at Bain Capital, Romney made tens of millions by buying companies and dismantling them, or firing employees and outsourcing jobs to China.  Indeed, according to a story published in Vanity Fair, Bain itself found that during the period of 2002 to 2007, there is “little evidence that private equity owners, overall, added value” to the companies they took over.  Instead, the company found that most of its profits were the result of overall economic growth, rising stock markets and leverage.

More disturbing, the Vanity Fair article found that Romney used every conceivable trick to avoid paying federal income taxes.  Not only did he stash money in a secret Swiss bank account.  He stashed an estimated $30 million in Bain Capital Funds in the Cayman Islands.  In another questionable transaction, he shifted funds to his wife’s name in order to avoid taxes.  There’s even the mystery of how Romney’s IRA, with contribution ceilings of $2,000 per year for 15 years, now contains up to $102 million!

So, while most Americans play by the rules and pay up to 35 percent of their income in taxes, the great “Job Creator” deposited millions off-shore in order to avoid paying taxes to the country he wants to run?  And in the process, he destroyed American companies and jobs?

If this man collects a single vote from an ordinary working American, that’s one more than he deserves.

How Performance-Based Compensation Is Killing America.

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Sometime in the late 70s, I met with a client to discuss his marketing plans for the year.  When I asked about the company’s long-term plans, the client said that his Fortune 500 Company no longer does long-term planning.  When the client noticed my obvious surprise, he told me that things were changing too quickly.  He went on to explain that the company’s CEO is now compensated with a base salary and performance-based stock options.  The higher the stock price, the more the CEO would be paid.

Now more than 30 years later, the effects of performance-based compensation are obvious.

CEOs now base their companies’ success on the share price of securities.  Not on brand value, number of offices and employees, company holdings and investments, or sales.  As a result, many CEOs are now willing to mortgage the future of their companies in order to maximize share price.  Of course, one way to accomplish their short-sighted goal is to increase productivity, aka employee layoffs.  Another popular method is to cut or eliminate employee benefits.  Yet another method is to export jobs to countries that have a plentiful supply of low-cost workers, no labor unions and few regulations.

There is no loyalty to long-time employees, vendors, communities, the nation or the environment.  The only thing that matters is the stock value and how that translates into executive compensation.  The average tenure of a CEO with any one company is slightly more than 8 years.  As a result, they often don’t care about what happens to that company 10, 20 or 30 years from now as long as they have time to cash in their stock.  If the company is aquired or merged, that only means the stock price is likely to go up.

If we want to take back our country from these greedy few, we have to change the way performance is measured.  The price of a share of stock is not enough.  We must also measure the value of corporations to our nation – the number of jobs provided, impact on our environment, contributions to communities, value of natural resources consumed, and taxes paid.

Until that happens, you will continue to see CEOs lead our nation in a race to the bottom.

The Teapublican Book of Lies.

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You know those things Teapublicans present as facts that just never quite make sense?  The ones that are repeated day after day on Fox News Channel and right wing radio?  The conservative ideas that have been tried and failed, but keep coming back?

I’ve taken 50 of those so-called “facts,” researched them, and presented my findings in a new book:  The Teapublican Book of Lies.  It’s a sort of handbook for debates with your conservative friends and family members.

Pardon the shameless self-promotion, but you can buy the book from Amazon.

The Real Freeloaders.

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For the past year Teapublicans, cheered on by Fox News Channel, have complained that the poor pay no federal income taxes.  They have insulted those who are down on their luck by calling them the “Freeloader Class.”  Yet, at the same time, they decry tax increases for the wealthy as “Class Warfare.”

Well, Teapublicans, you now have another group of freeloaders worthy of your disdain and venomous attacks:  According to a report by the Internal Revenue Service, more than 35,000 people with incomes of $200,000 or more paid no federal income taxes in 2009.

These are people who, by any standard, must be considered wealthy, but through a variety of tax credits and deductions were able to zero out their federal income tax bill.

Tell me, Teapublicans, which is worse?  The working poor and the elderly who make so little they are not required to pay federal income taxes?  Or those fortunate enough to earn substantial incomes and use a combination of write-offs and accounting tricks to avoid their responsibilities?

The answer is clear, even if you are unlikely to admit it.

How Teapublicans Win.

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What happens when you combine the least educated and least curious portion of our electorate with the most selfish and greedy?  What happens when those people are guided by the religious certainty that the Earth is 6,000 years old and that the destruction of our planet will only hasten their opportunity to ride in the golden chariot to heaven?  What happens when they’re led by people who are willing to tell any lie and embrace any falsehood to be elected?

The result is today’s Republican Party.

Of course, they’ll never admit it.  According to Teapublicans, they’re simply trying to rescue America from socialists, communists, fascists and other undesireables such as Democrats, women, school teachers, government workers, labor unions, immigrants, gays, lesbians, transgenders, people of color, and the poor.  I’m sure there are many other “enemies,” but I don’t know what’s inside the minds of Teapublicans.  And, given the ugliness of their rhetoric, I certainly don’t want to peek inside!

The reality is that Teapublican leaders want their followers to fear their neighbors, so they won’t notice the big money interests pulling the strings behind the curtain.  They’re quite literally rigging the system and walking off with the money.  They’ve pushed their tax burden onto the already overburdened middle class.  They collect billions in government contracts and subsidies. And by gaining control of the Supreme Court, they’ve usurped even more control of our political system.

Now they’re out to undermine Social Security and Medicare.  The end result will be to give large financial institutions and insurance companies (both controlled by Wall Street) access to still more of our money.

If more people recognized what’s going on, Teapublicans would never again win an election.  They can’t win based on an open discussion of ideas and truth.  They can only win through a combination of lies, intimidation, dirty tricks and fear.

This year, they are led by a candidate who quite blythely says today what is in direct contradiction with what he said yesterday.  And his followers eat it up.  They’ve manufactured the usual number of straw dogs to excite their base and intimidate opponents, such as ballot measures designed to appeal to their religious base in order to incite more campaigning from the pulpit.  They’ve created PACs and Super PACs with tens of millions in anonymous money to buy votes.  And they are well on their way to repressing minority votes through new voter ID laws.

We’ve seen it all before…in 2000, 2004 and 2010.  And with each passing election cycle, the conversation leans further to the right and ordinary citizens lose a little more control of our country.

Requiem For The American Dream.

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This isn’t so much a blog post as an obituary.  The American Dream was defined as the ability for Americans to rise above their parents’ experience.  The ability to, as the result of education and hard work, become a success.  It is measured by the distribution of wealth and upward mobility.

In both of those measurements, the US now trails most of the world’s advanced nations.  A report by the Organization for Economic Co-Operation and Development (OECD) found that social mobility between generations is dramatically lower in the US than Denmark, Australia, Norway, Finland, Canada, Sweden, Germany and Spain.

The American Dream didn’t pass into history as the result of natural causes.  It was starved to death by Teapublicans who signed Grover Norquist’s “no new taxes” pledge.  It was bludgeoned by the likes of George W. Bush, Richard “The Dick” Cheney and their cartel of oil companies and military defense contractors.  It was driven off a cliff by greedy Wall Street bankers and their enablers such as former Senator Phil Gramm.

Republicans may have led the attack on the Dream. But many Democrats participated. President Clinton signed the Republican bill that revoked the Glass-Steagall Act allowing Wall Street bankers to gamble with your money and our futures.  He also signed a Republican bill opening commodity markets to gambling.

Many Congressional Democrats cast their votes alongside Republicans to starve government through the Bush tax cuts.  And they added their names to legislation approving the invasion of Iraq.

As the result of these actions, corporations were allowed to rake in large profits while sending our jobs offshore.  They were allowed to stash profits in offshore accounts to avoid paying taxes.  Banks were allowed to privatize their profits and socialize their failures.  The wealthy got even wealthier while paying lower taxes.  Banks got homeowners to sign mortgages at inflated interest rates, then took their homes to support the banks’ gambling habit.

The only question left is what now?  Will we allow economic disparity to grow dividing our nation into the haves and have nots?  Or will we resurrect the Dream?  The coming elections will provide the answers.

What Politicians Aren’t Telling You About The Economy.

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As a result of the 2008 economic crash created by the lack of regulation of Wall Street gamblers, new home construction has slowed to a relative trickle.  According to the National Associaton of Home Buildiers (NAHB), the number of housing units started in the U.S. totaled only 609,000 in 2011.  That compares to 1,131,000 in 2006 as measured by the US Census Bureau and Department of Housing and Urban Development.

Using NAHB estimates that for each new home built three jobs are created, these numbers represent a loss of more than 1.5 million jobs.  They also represent a loss of $67,000 in federal taxes and $23,000 in state and local taxes for each home not built!

And that’s just part of the problem.  In addition to the jobs lost that are directly related to home construction, there are job losses for landscapers, pool builders, movers, the makers and sellers of furniture, window treatments, appliances and more.  Indeed, a writer for The Outer Banks Voice tracked the number of people involved in building his new home in 2010.  He counted a total of 219!

Now multiply that number of 219 times the 522,000 fewer homes built in 2011 than before the Great Recession and you see the scope of the problem.

But there is some good news.  NAHB estimates 1.7 to 1.8 million new homes are needed each year to accommodate population growth and replacement of older housing stock.  So we are creating tremendous pent-up demand.  Sooner or later, the housing market is going to explode.  But it’s going to take time.  Those who bought homes between 2005 and 2008 were burned by home ownership.  They were taken advantage of by unethical mortgage lenders.  They were foreclosed by uncaring banks.  And even if they didn’t lose their homes, they have found that their homes are worth far less than before.

How do you get these people to forget the recent past and jump into the market again?  Given the low prices of homes and low interest rates, there are plenty of incentives.  But, unfortunately, it’s going to take years.

Americans tend to have short memories, but not when it comes to their money.

How “Starve The Beast” Became “Starve The Poor.”

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For years, Teapublicans have marched to a tune called “Starve The Beast.”  The premise is that government has gotten too big and expensive so, in order to bring it under control, they must deprive it of the revenue needed to fund it.  As band-leader-in-chief, President George W. Bush cut taxes, primarily for the wealthy.

As a result of those tax cuts, two unfunded wars and a bill designed to buy the votes of seniors in time for the 2004 election, the Bush administration squandered the Clinton-era budget surpluses and led us into massive deficits and an ever-growing national debt.

Rather than being alarmed by these Bush decisions, Teapublicans reveled in them.  And, when the economy collapsed in 2008, Teapublicans recognized two opportunities:  One, by blocking every attempt to speed up the recovery, they hope to make President Obama a one-term president.  Two, by howling about the enormous deficit and debt they created, they hope to make it easier to cut government and the things Teapublicans seem to hate most: Medicare, Medicaid and Social Security.

They say Americans can no longer afford such programs.  They point to the long-term “instability” of Medicaid and Medicare while failing to admit that much of that instability is caused by the skyrocketing medical and pharmaceutical costs they refuse to address.  I believe their hatred for “Obamacare” is driven by the fact that it will help mitigate costs, thereby saving Medicaid and Medicare.

Likewise, Teapublicans seem to relish every new report on Social Security that shows the program running out of funds in the not-too-distant future.  They point to the large group of retiring Baby Boomers as the reason the program needs to be privatized (gotta get it out of the clutches of big government, you know).

What they fail to mention is how easily Social Security could be permanently fixed.  Either increasing individual contributions to the plan by little more than 1 percent or removing the cap on incomes above $106,000 would protect Social Security for future generations.  But that wouldn’t allow Teapublicans to meet their long-term goals of privatizing Medicaid, Medicare and Social Security.

As for the people whose health care would be left at the mercy of large, greedy insurance companies and the retirees who might be relegated to dumpster-diving the next time the stock markets crash, no worries.

Teapublicans are more than willing to starve the poor in order to Starve The Beast.

The Politicization Of Everything.

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The publicity for the Trayvon Martin killing served to emphasize the depths of our culture.  When the Samford, Florida Police Department announced that the killer, George Zimmerman, would not be charged, Martin’s family was understandably outraged.  They asked MSNBC’s Rev. Al Sharpton to pick up the case and publicize it nationally.  Of course, that meant that Fox News Channel and right-wing radio had to take the side of George Zimmerman.

If a travesty such as the Martin case can be politicized, I guess we shouldn’t be surprised that every other part of our culture is viewed through the same divisive lenses.  We have politicized science, education, health care, contraception, religion, race, women’s rights, the environment, the military, our judiciary, veteran’s affairs, Social Security, Medicare, guns, energy, agriculture, sports and, of course, journalism.

That hasn’t always been the case.  Prior to the early 80s, evolution was considered settled science.  Few questioned our education system.  Religion did not intrude in the classroom, except in parochial schools.  Outside of our military, no one carried guns except police and criminals.  And the media were bound by high standards of objectivity.

What changed?

Following the debacle of Watergate, the moribund Republican Party made an unholy alliance with evangelical leaders. Later, the Fairness Doctrine was repealed unleashing conspiracy talk radio.  Evangelists flooded radio and cable television with conservative politics and the message that Christianity was under attack.  Greedy right-wing mouthpieces like Rush Limbaugh, Sean Hannity and Glenn Beck filled the airwaves with their theories of a New World Order.  Rupert Murdoch built a media empire on hate and Teapublican talking points.  And worst of all, the National Rifle Association and American Legislative Exchange Council began writing legislation and recruiting state legislators to serve their ideological agendas.

And our conservative-leaning populace sucked it all in.

So here we are…arguing about racism, judicial “activism,” contraception, the origin of “personhood,” immigration, Bible studies and prayer in the classroom, religious messages in government buildings, cutting taxes for the rich, guns on campus, etc., etc., etc.

And all the while we’re arguing, the real problems such as a crumbling infrastructure, economic inequality, the exodus of high-paying jobs, too-big-to-fail corporations, climate change, the extinction of wildlife, an increasingly inaccessible and unaffordable health care system, and massive national debt are only getting worse.