Rule of Law?

Out Of Touch White Privilege

I generally like Alec Baldwin in his dramatic and comedic acting roles.  Yet, with every passing year, as more of his actions and opinions come to light, he seems to represent the epitome of out of touch, wealthy, white privilege.

Alec Baldwin defends Felicity Huffman: 'The demonisation of wealth in this country is mind blowing'

As Baldwin put it, "I don’t think anyone involved in the college fraud cases should go to prison.  That includes past cases as well.  Community service, fines, yes.  But prison time, no."  

As someone on Twitter responded, "If they can afford hundreds of thousands of $$ to get their kids in [to college], how will a "fine" be a deterrent?"

Baldwin continued, "Community service is better.  The demonization of wealth in this country is mind blowing.  A country built on both freedoms and commerce.  Now, all success is scrutinized.  Merely to succeed, especially financially, invites scrutiny, judgment, abuse."

Wow.  Baldwin is so wrong and out-of-touch here.  There's a lot to unpack.

Yeah, if you can afford half a million dollars to bribe your kid into college, a fine isn't going to mean shit.  The same reason fining billion-dollar companies a few million for their wrongdoing doesn't stop them from continuing to do wrong.

"Demonization of wealth"?  WTF?

Not demonizing wealth at all.  It's just that people whom aren't "wealthy" (99% of the population) are sick of the wealthy cheating, lying, bribing and scamming their way into more privilege and ill-gotten gains.

The wealthy blather on and on about meritocracy - you get what you deserve based on talent, effort, and achievement.  With the wealthy always implying that this is how they made it.  But to believe this we would have to ignore nepotism, tax avoidance, bribery, inheritance and a litany of other schemes and scams the wealthy use to oppress the rest of us.

Baldwin also waxes nostalgic, "A country built on both freedoms and commerce."

Our history of slavery, racism and oppression seems to contradict Baldwin's rose-colored memory of how this country was built.   

Baldwin goes on complaining about success being scrutinized.  

Just the opposite.  This country drones on and on about every other fucking idiot who has made a buck or had an idea, and how great, fantastic and entrepreneurial they are.  Television is littered with wealthy know-nothings prattling on about anything and everything.  This country has a lot of self-loathing in that we keep eating up this shit, believing that these loudmouths have something to say and that they are actually better than anyone else.  Most believe they have some personal setback or inadequacy and that's why they aren't as good as some TV bozo like Donald Trump.  It's all bullshit.

Success being scrutinized?  Fuck that.  We mythologize and romanticize it into our own disadvantage.

In this country, we criticize the poor and the working class.  We're continually reducing wages and/or increasing costs for those whom can least afford it.  For the non-wealthy, retirement accounts are disappearing, benefits are shrinking, wages are stagnating, and health care is either too costly or nonexistent for many.

And, despite this, if anything, this country worships wealth.  It's why people keep voting against their own economic interest.  It's why Donald Trump is in office.  He's a big business man.  He has financially succeeded.  (At least this is what many of his supporters believe.)  And, because he did it, many believe they can too, and that's why they keep voting for cutting taxes on the rich and corporations - because someday they will be rich, too, and they don't want to pay those big taxes then either.

So fuck Alec Baldwin, Felicity Huffman, Lori Laughlin and all those assholes that think a slap on the wrist in fine for the wealthy that cheat the system.  Workers in the U.S. have been struggling for decades based on our worship the wealthy system of governance.  Economic inequality is at an all-time high.  It's well past the time where we should have already cleaned up this mess and punished these wealthy, spoiled perpetrators. 

We lock poor people up for decades of their life for much less than a $500,000 bribe.  It's time the wealthy started facing the same justice as the rest of us.  

Weekend Reading

Why And How Capitalism Needs To Be Reformed
The IRS Tried To Take On The Ultrawealthy. It Didn't Go Well.
The Tax Law's Big Winner Is The Millionaire CEO
Bernie Sanders's Fox News Town Hall Wasn't A Debate. Bernie Won Anyway.
Warren Has A Good Beginning For Ending Corporate Tax Avoidance
The Truth About U.S. Taxes Is That They Aren't High Enough
Yes, Graceland Actually Threatened To Move To Japan To Get $194 Million In Subsidies From Memphis
Ending The Economic War Among The States: A Strategic Proposal
Amazon's Next Frontier: Your City's Purchasing
The Undemocratic Making Of Indianapolis
The Future Of Unions Is White-Collar
Fun Fictions In Economics

Weekend Reading

For Democrats, Cleaning House Means Pelosi and Schumer Too
Surviving The Age of Trump
Did Trump Steal Wisconsin?
Why Oklahoma Can't Turn Off Its Earthquakes
Fracking Isn't Causing Oklahoma's Earthquakes - This Is
Do Markets Really Hate Uncertainty? Not At All
Why Are These Clowns Winning? Secrets of The Right-Wing Brain
Treat Start-Up Companies Like The Bucks
Walker's Lead Poisoned Politics
David Clarke The Demagogue
John Doe, Open Records Proves Harsdorf, Olsen Crooked, Unfit for Office
Wisconsin Corporations Won't Step Up To Improve State's Economy
Almost Two-Thirds of People In The Labor Force Do Not Have A College Degree
10 Facts About American Workers
How America Grew -- and Grew Unequal
Who Really Runs Your City?
Why I Left The Republican Party To Become A Democrat
Democratic Presidents are Better at Making Us Rich. Eight Reasons Why
Art of the Steal: This Is How Trump Lost $916M and Avoided Tax
Paying For Job Reductions: The Unreported Story of a Ballooning Tax Credit
The Deficit is Too Small, Not Too Big

Ron Johnson Invests In Irish Company That Resembles A Tax Shelter

GOP Senator Invests In Irish Company That Resembles A Tax Shelter

While it may be perfectly legal, Ron Johnson’s stake in the multimillion-dollar firm with one employee sure seems odd.

Sen. Ron Johnson (R-Wis.), who has defended corporate tax dodging throughout his Senate career, owns part of an Irish company that bears some of the hallmarks of a tax avoidance scheme. 

Johnson has a 9.9 percent stake in DP Lenticular, a Dublin-based company, according to his Senate financial disclosure for 2015. His investment is worth between $250,001 and $500,000 and he earned $5,001 to $15,000 in dividend income from the company that year, the disclosure indicates. 

The 9.9 percent stake is just below a cutoff that requires private citizens to disclose their ownership. Americans who own 10 percent or more of a foreign business must report it to the federal government. Now that Johnson is a member of Congress, he has to report all of his assets.

About Meijer Grocery Coming To Wisconsin...

Think you'll be saving money by shopping at Meijer? Think again.

Here we have yet another large corporation using their boardroom of lawyers to lower their property taxes...which means you'll be paying more.

In a long-building tax avoidance scheme, big businesses and their lawyers, with the help of malleable appraisers and tax representatives, are turning the appraisal profession on its head.

Some basic economic principles are imbued in property appraisal. Substitution is the idea that a comparable must not only be similar physically, but also economically (similar rents, expenses, etc.).

Typically the details and length of the lease are common factors a buyer would consider when contemplating the purchase of an income-producing property. The appraisal profession typically considers the rents a property can charge an outcome of the location - the land. Now, according to the lawyers, the value is due to goodwill and other intangibles...and, conveniently, most of these aren't taxable.

Take Walgreens, a court recently ruled that sales of Walgreens weren't good comparables or good indicators of value for ... Walgreens. Typical retail, a closed Blockbuster store, and mom-and-pop stores were deemed more comparable.

The City of Milwaukee recently settled a property tax dispute, dating back to 2010, with Walgreens, on 18 of their stores. The settlement was for $3.7 million dollars.

Opinions in the Milwaukee Journal Sentinel on the topic (incorrect grammar and all) were things like: "Is it any wonder why citizens and businesses want to get out of the City?" or "This should be good news for mayor Berrett now he has another excuse for not fixing the pot holes on almost every street in the city. Waite for him to try increasing the wheel tax again. Which reminds me is he spending any of the wheel tax money on streets."

So, giving a business a refund of $3.7 million is a reason for a business to go away? Not to mention, the $3.7 million Walgreens is not paying, now has to be paid by other citizens. When corporations avoid paying their fair share, everyone else has to pick up the slack.

Much of what this case hinges on is that fact that Walgreens claim the leases they have are not market rate and actual sales of other Walgreens are also not comparable market transactions.

On the transfer returns (which names the buyer and seller; and separates real estate, equipment and business value) for the Walgreens sales, the Property owners claimed the total sale prices were for the real estate. Plus, in their actual leases on these properties, they specifically state these are real leases and not financing instruments. [Transfer returns and court transcripts, which contain this, are public information.]

Yet, in court they have claimed just the opposite. And the judge agreed in a City of Madison v. Walgreens court case. Although, if we're going to accept these revelations as true, this means that Walgreens has submitted falsified transfer returns and entered into bogus contractual leases.

Much of how a property's value is declared is based on accounting - wherever they can shift the supposed value to lower their taxes the most (based on things like depreciation, etc.), that's where they'll enter it in the ledger. A Walgreens is built to be a Walgreens, nothing else. Just as other special purpose properties (like gas stations, car washes, etc.) are built for a specific use. The builder/owner does this because they expect a certain return on their investment at that specific site.

Walgreens feels more appropriate comparable properties, to establish the value of their properties, are vacant buildings and and other neighborhood establishments.

This is like saying to find out what my Chevy Camaro is worth I should look at what Ford Taurus' are selling for. They're both cars, right?

The court completely ignores the concept of substitution. A property is only comparable if a buyer would actually consider it as an alternative investment. A vacant store does not have the same marketability and value as a store with a 25-year lease.

If a current owner of a Walgreens store were to sell, he/she would base the sales price on what the income stream is worth - how much he/she gets from the leases. Which is why most Walgreens sell at twice what Walgreens are claiming they are worth in court.

This whole fiasco ignores the general market that is the triple-net lease, investment grade properties. These are properties under long-term leases (usually 25 years) where the tenants pay the expenses. Thus vacancy (a typical deduction from the cash flow) is non-existent for the property owner. And, expenses are minimal to non-existent since they are the responsibility of the tenant. For these reasons, the standard Walgreens drug store sells for $467 per square foot at a 5.6% capitalization rate. The minimum typical footprint of a Walgreens is 12,000 square feet; this equates to a $5,604,000 value (or a rental rate of roughly $26 per square foot).

Even though the market evidence indicates this is what typical investors buy and sell these properties for, Walgreens astonishingly claims the stores are only worth half that.

All of these factors corroborated the City's assessments on the Walgreens' properties. Yet, for some inexplicable reason, the judge bought Walgreens' self-interested and contradictory argument and decided rather than comparing apples to apples, one should compare apples and rotten apples. And, because of this, my fellow taxpayers, you will pay more since Walgreens is paying less.

And taxpayers should be upset over this (and start complaining to their city attorney office to fight back against this shakedown) because the ambulance-chasing lawyers tax representatives are trying to use these same arguments all over the country on restaurants, big box stores and a whole host of other properties. Which means, in the next few years, residential home owners will be paying a lot more, while commercial property owners will laughing all the way to the bank.

And, for big boxes (like Meijer, Target, Walmart, Lowes), some courts have decided the best comparable indicators of value are vacant, or "dark", stores. Somehow, a building that is closed and out of business is a viable alternative investment to an successfully operating one.

Olivia LaVecchia has more of the gruesome details:

Figuring out the value of a property can be a complicated business. In Michigan, town and county assessors typically use a property’s construction costs, minus depreciation, as a primary metric to determine its fair market value; taxable value is half that amount. Property owners sometimes prefer, instead, to use the sale prices of comparable properties. This was the approach that Lowe’s took—with a catch. Lowe’s looked at the definition of the word “comparable,” and decided to stretch it. It said that, because big-box stores are designed to be functionally obsolescent, comparable stores are those that have been closed and are sitting empty—the “dark stores” behind this method’s name... 

It’s an established part of the big-box retail model that the boxes themselves be custom-built, cheaply constructed, and disposable. If retailers decide that they need a bigger space, it’s cheaper for them to leave the old one behind and build a new one. When Walmart, for instance, opened its wave of new, twice-the-size Supercenters across the country in 2007, it left hundreds of vacant stores behind it. This means that new, successful stores like the Marquette Lowe’s are rarely the locations that are up for sale, and that when big-box stores do come on the market, it’s because they’ve already failed or been abandoned by the retailer that built them. In other words, Lowe’s was saying, it had built a property that, despite generating roughly $30 million in annual sales for the company, had very little value, and because of that, it should get a break in its property taxes... 

Despite all of this, cities and towns continue to buy into the myth, sold to them by the mega-retailers themselves, that big-box stores spark economic development. In service of this myth, local and state governments across the country have granted at least $2.6 billion in subsidies to just six large retailers, including $160 million to Walmart and $138 million to Lowe’s, according to another study from Good Jobs First.

When these businesses use their clout to avoid taxation, all other taxpayers pay more.

For Further Reading:
For Cities, Big Box Stores Are Becoming Even More Of A Terrible Deal
Multibillion dollar Meijer, Inc. finds another way to screw Michigan cities and kids

Meijer tax ruling may reverberate statewide

Unfair Comparisons? Meijer, other big-box retailers use ‘dark store’ loophole to cut their Michigan property tax bills

Meijer Stores LP v Marion County Assessor

Big box stores ringing up property tax discounts

For Cities, Big-Box Stores Are Becoming Even More of a Terrible Deal

Are big-box retailers getting a tax break at schools’ expense?

'Dark store' theory benefits Meijer, other big retailers

U.S. Corporate Tax Avoidance

From The Transcript:

Avoiding taxes has become a hallmark of America’s business icons; Apple, Google, GE, and many more of the Fortune 500. The nation’s largest corporations are sitting on more than $2 trillion in cash while revenue from corporate income taxes have plummeted from just below 40 percent in 1943 to just below 10 percent in 2012. Government and big business have colluded to create what’s tantamount to an “unlimited IRA” for corporations. 

That’s not my term, although I wish I had thought of it, because it explains so much about what’s gone wrong in a country where some 20 million workers who would like a full-time job still can’t get one. Yet the upper one percent of the population takes home a staggering 22.5 percent of America’s income while their effective federal income tax rate has dropped.

Weekend Reading

The Deficit Is Shrinking

Don't Blame Apple For Keeping Its Money
Austerity Does Not Help Unemployment, Stimulus Does
Subsidies - Good News And Not So Good
Wisconsin Lags Neighboring States In 12-Month Job Growth
Why We Need The Corporate Income Tax
Ben Bernanke, Force Of Nature
Hannity's Flip-Flopping On NSA Surveillance
Ron Johnson: 'Restoring Faith In Government' Is Wrong Solution
America's Worst Charities
College Costs Are Skyrocketing

U.S. Budget Cuts Too Fast, Slowing Recovery

Tax Men

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Indecision Political Humor,The Daily Show on Facebook

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Indecision Political Humor,The Daily Show on Facebook

The Odd Couple: Scott Walker & Public Policy

The playbook is still the same, Scott Walker's Budget To Lower Income Tax Rates, Freeze Local Aid.

As suspected, Much Of The Savings From Scott Walker's Proposed Cut Would Go To The Top 20%.

How does Scott Walker plan on paying for this? Walker's Massive Borrowing Scheme.

Large tax cuts for the wealthy don't improve economic growth nor do they cause these same rich people to move to avoid such taxation. The Myth Of The Rich Who Flee From Taxes.

In fact, austerity - cutting budgets and spending, especially during our present sluggish economy- tends to make matters worse. Budget Cuts Seen As Risk To Growth Of The U.S. Economy.

So, what do we get for all this austerity, cutting, slashing, and freezing. Average Income Tax Cut Under Governor Walker Budget: $83.

Are these measures, at least, creating jobs? States' Private Sector Job-Creation Slowed, Census Data Shows.

The Romney Files

The Federal Bailout That Saved Mitt Romney
The Hiring Of The President
History Shows Business Experience Doesn't Make A Good President
Impacts Of The Romney Budget Proposals
Inside Romney's Tax-Dodging Schemes
The Meaning Of Mitt
Mitt Romney
Mitt Romney & The Fantasy Budget
Romney's Budget Proposals Necessitate Large Cuts
The Romney Plan
Romney's Private Equity Magic Trick
Transaction Man
The True Story Of Mitt Romney & Bain Capital

Corporate Tax Dodgers

Citizen For Tax Justice has released an extensive report detailing corporate tax dodgers from 2008-2010.

Corporate Taxpayers & Corporate Tax Dodgers 2008-10

Press release with key findings:

A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author.  “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

The study examines 280 corporations, all from the Fortune 500 list.  All of the companies were  profitable in each of the last three years and provided sufficient and reliable information in their  financial reports about their pretax U.S. profits and their U.S. federal income taxes. Corporations are lobbying for lower corporate rates and an exemption for profits they shift  offshore. McIntyre, however, says “Our study provides proof that too many corporations are  already being coddled by our tax system.” Findings in the report include:

 The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.

 78 of the companies enjoyed at least one year in which their federal income tax was zero or less.

 30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.

 Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010.

 Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.

 Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period. Some companies within sectors fare worse than others. For example, the report finds that FedEx paid a 0.9 percent tax rate over the three year period while its competitor, UPS, paid a 24.1 percent rate.

 While retailers and wholesalers in the study generally pay average effective tax rates of about 30 percent, Amazon.com paid a rate of only 7.9 percent on its $1.8 billion in profits from 2008-2010.

 Financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years. More than half of federal corporate tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

 The top ten defense contractors saw their combined tax rate decline from 19.3 percent in 2008 to a mere 10.6 percent rate in 2010.

 U.S. corporations with significant (ten percent or more of their total worldwide profits) foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.

Weekend Reading

Death Of The Fringe Suburb
Double Taxation Of Corporate Profits & Other Fairy Tales
George Will Confused By Numbers At The Post Office
Mining Bill Rushed Before Governor's Office
Myth Of Profligate Euro Zone Countries
No New Drugs? Blame Wall Street
The Obama Spending Non-Surge
Skilled Jobs Go Begging? Not Quite
Small Business & The Millionaire Surcharge
The Squeeze On State Workers
Top 0.1% Of The Nation Earn half Of All Capital Gains
Walker's Union-Busting Bill Challenged In Court
Who Does Not Pay Taxes? Kimberly Clark, Brunswick, Rockwell, & Snap-On

Sunday Reading

Biggest public firms paid little U.S. tax
Has America become an oligarchy?
How corporate tax breaks could hurt small business
Income inequality is not a myth
Making globalisation work for workers
Soaring suburban poverty catches communities unprepared
Social Security and the federal deficit

Sunday Reading

Infrastructure Crumbles

Race To The Bottom

Wisconsin Tax Avoiders

Turning Tax Exemptions Into Revenue For Government

Unemployment Compensation in Wisconsin

Who Does Not Pay Taxes?

Wisconsin Values Budget

Can't Raise Taxes? Millionaires Will Move?

Do higher taxes cause millionaires to leave? Jon Shure and Ezra Klein say, "No."

Speaking of Tax Evasion

A truly horrible specimen of a person running for public office.

The 'lower taxes lead to job creation' claim is baloney.

And, don't forget it's the percentage of one's income paid in taxes (tax incidence) that matters (when trying to gauge the burden) not the total amount paid.

For Further Reading:
Corporate Scofflaws
Facts and Figures
Race To The Bottom
Tax Burden Illumination
Wisconsin Tax Truths

American Socialism

The incentives, giveaways, and hand-outs of taxpayer dollars to the wealthiest are plenty. That is, we have a system whereby those whom need the least assistance have the most potential to avoid taxation, yet, at the same time, are offered the most opportunities to reap benefits from the system. This has led to an overall regressive tax system.

The tools are:

Mortgage Interest Deduction

Externalities

Depreciation Schedules

TIFs

Capital Gains

Exemptions

Site Selection

Tax Credits

Property Tax Abatement

And these are only a few of the tools used to fleece unsuspecting taxpayers against their own best interests.

For Further Reading:

Carrying Burden For Super Rich

Closing The Other Tax Gap

Corporate Taxes Under Attack

No Tax on the $845 Million Sale of the Cubs

Researching Economic Development Subsidies

State Tax Issues: Wisconsin

Tax Evasion

Private Sector Shenanigans

Uncovering any type of fraud is a good thing, especially if it leads to a more efficient society using resources in a most optimum mannner. But why are there never any front page "breaking" news stories about the tax havens, exemptions, loopholes, fraud, and accounting gimmickry corporations use on a daily basis?

Obliged to Avoid Taxation

WOW! This is powerful stupid.

To correct Ms. Burnett, considering the tax burden rather than just the highest marginal rate, as a Center on Budget and Policy Priorities report found, "Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent."

For Further Reading:
Corporate Tax Avoidance in the States
Corporate Tax Decline & U.S. Inequality
Double Taxation Double-Speak
How Progessive is the U.S. Federal Tax System?
Most Firms Pay No Income Tax