BS: Tax avioder in chief?

Subject: BS: Tax avioder in chief?
From: Jack the Sailor
Date: 10 Jul 12 - 08:20 PM

Tax avoider in chief?

Subject: RE: BS: Tax avioder in chief?
From: GUEST,999
Date: 11 Jul 12 - 11:46 AM

It's a long article but it should be read by anyone who needs to understand what y'all have in Romney as a presidential candidate.

Subject: RE: BS: Tax avioder in chief?
From: Greg F.
Date: 11 Jul 12 - 12:21 PM

The Boobocracy don't CARE what they got, Bruce- as long as it ain't Obama.

Subject: RE: BS: Tax avioder in chief?
From: Bat Goddess
Date: 11 Jul 12 - 12:35 PM

Excellent reportage and analysis from Vanity Fair throughout its history and this article is up to their usual standard of excellence. (Despite the beefcake or cheesecake on the cover and the articles about society or rich people behaving badly.)

Linn

Subject: RE: BS: Tax avioder in chief?
From: Don(Wyziwyg)T
Date: 11 Jul 12 - 07:27 PM

I reckon that's right Greg, and I also think that it isn't what Obama does, but what he is that colours the opinions of the rednecks.

Don T.

Subject: RE: BS: Tax avioder in chief?
From: Sawzaw
Date: 11 Jul 12 - 09:38 PM

Ahhhhhh

Obama's net worth has increased to an estimated $7.3 million while being president.

He is part of the 1% so it must be true that the rich get richer and the poor get poorer.

Subject: RE: BS: Tax avioder in chief?
From: GUEST,999
Date: 12 Jul 12 - 12:21 AM

Senators and Wealth.

Subject: RE: BS: Tax avioder in chief?
From: Jack the Sailor
Date: 12 Jul 12 - 09:21 AM

Romney Outsourced Jobs to China then outsourced the outsourcing to Bermuda!

He KNOWS how jobs are created!

Subject: RE: BS: Tax avioder in chief?
From: Don(Wyziwyg)T
Date: 12 Jul 12 - 09:24 AM

It would seem, Sorearse, that with $7.3 mill, against Romney's $250 mill, Obama barely scrapes into the bottom of that 1%, while old Mitt has his greedy mitts on the top end.

Obama needs to get a move on, because when it comes to dollars he's playing catchup with only 2.92% of his opponent's fortune.

From the same page the following:

~~~~Seven of the ten richest members of Congress are Republican.- According to "Business Insider".

Don T.

Subject: RE: BS: Tax avioder in chief?
From: pdq
Date: 12 Jul 12 - 09:52 AM

~~~~Seven of the ten richest members of Congress are Republican.- According to "Business Insider". ~ Don T.

Some people couldn't get a fact right if it bit them in on the d**k.



Here are the top 10 richest members of Congress according to Business Insider:

1) Rep. Michael McCaul (R-TX) Estimated Net Worth $294M
2) Rep. Darrell Issa (R-Ca) ENW $$220M
3) Sen. John Kerry (D-Ma) ENW $193M
4) Sen. Jay Rockefeller (D-WV) ENW $81M
5) Sen. Mark Warner (D-Va) ENW $76M
6) Rep. Jared Polis (D-Co) ENW $65M
7) Sen. Frank Lautenburg D-NJ) ENW $55M
8) Sen. Richard Blumenthal (D-CT) ENW $52M
9) Sen. Dianne Feinstein (D-Ca) ENW $45M
10) Rep. Vern Buchanan (R-FL) ENW $44M

7 Democrats, 3 Republicans

Subject: RE: BS: Tax avioder in chief?
From: GUEST,999
Date: 12 Jul 12 - 10:12 AM

Don't seem to be neither Democrats nor Republicans hurting in the bucks departmant. Y'all might want to read this article.

Subject: RE: BS: Tax avioder in chief?
From: Jack the Sailor
Date: 19 Jul 12 - 06:52 AM

Subject: RE: BS: Tax avioder in chief?
From: Jack the Sailor
Date: 19 Jul 12 - 06:55 AM

SUPER Tax avoider

Kleinbard means that Romney might have loaded up his retirement account with assets from his private equity firm, Bain Capital, and assigned artificially low values to those assets in order to get around the federal contribution limits.

Subject: RE: BS: Tax avioder in chief?
From: YorkshireYankee
Date: 19 Jul 12 - 09:56 PM

Oops... two problems with the post above:
One: didn't realise I'd lost my cookie.
Two: thought I'd ticked "Preview" before hitting "Submit", so the post above is mostly in italics but shouldn't be. I'm re-posting it: perhaps some kind Mudelf will delete my previous post? Thanks!

Interesting that the total of the seven Dems is $567 million, while the total of three Repubs is $558 million. Don't know what it goes to show, but I do find it interesting.

Jack, that link at the top is brilliant (I just adore the subhead "The Caped Avoider!") -- extremely detailed and informative. Thanks for posting it.

I think there are a few key sections particularly worth posting here; they sum things up so very well...

I:
A person who worked for Mitt Romney at the consulting firm Bain and Co. in 1977 remembers him with mixed feelings. "Mitt was … a really wonderful boss," the former employee says. "He was nice, he was fair, he was logical, he said what he wanted … he was really encouraging." But Bain and Co., the person recalls, pushed employees to find out secret revenue and sales data on its clients' competitors. Romney, the person says, suggested "falsifying" who they were to get such information, by pretending to be a graduate student working on a proj­ect at Harvard. (The person, in fact, was a Harvard student, at Bain for the summer, but not working on any such proj­ects.) "Mitt said to me something like 'We won't ask you to lie. I am not going to tell you to do this, but [it is] a really good way to get the information.' … I would not have had anything in my analysis if I had not pretended.

This seems to have been the attitude at the top of SO many places: banks, newspapers, businesses, governments. Wondering about the banking crisis? Phone hacking? Libor fraud? The bosses say "We didn't order them to do these things, honest!" Of course they didn't; they just made it clear that ends were FAR more important than the means...

II:
A Deutsche Bank analysis of 68 Bain deals Romney was involved in calculated an internal rate of return—a standard private-equity benchmark—at a staggering 88 percent annually (though after fees and inflation, investor performance may have been little more than half that). It is substantially on this stellar rec­ord that Romney is now running for president. His work at Bain was unquestionably good for himself and for Bain, but was it also good for the businesses he acquired, for their workers, and for the economy, as he claims?

A report by Bain and Co. itself, looking at the period from 2002 to 2007, concluded that there is "little evidence that private equity owners, overall, added value" to the companies they took over: nearly all their returns are explained by broad economic growth, rising stock markets, and leverage. Josh Kosman, who researched the subject of private equity for his book The Buyout of America, singles out Bain Capital in particular. "They take pride in pushing the leverage envelope [i.e., use of borrowed money, which magnifies returns, while off-loading the risks onto others] more than their peers," he says. "I have heard that from limited partners in Bain's funds. I have heard that from bankers who lend money to finance their leveraged buyouts. Bain always prided itself on 'We'll push leverage more than the others.' They brag about that, behind closed doors."

Dade Behring is a cause célèbre for Romney's and Bain's critics, and it illustrates the leverage problem clearly. In 1994, Bain bought Dade International, a medical-diagnostics company, then added the medical-diagnostics division of DuPont in 1996 and a German medical-testing company called Behring in 1997. Former Dade president Bob Brightfelt says the operation started well: the Bain managers were "pretty smart guys," he recalls, and they did well cutting out overlap, and exploiting synergies.

Then brutal cost cutting began. Bain cut R&D spending to an average of 8 percent of sales, a little more than half what its competitors were doing. Cindy Hewitt, Dade's human-resources manager, remembers how the firm closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation, and relocated some staff to Miami, then the company's most profitable plant. Based on re­a­ssur­ances she had received from her superiors, she told those uprooting themselves from Puerto Rico that their jobs in Miami were safe for now—but then Bain closed the Miami plant. "Whether you want to call it misled, or lied, or manipulated, I do not believe they provided full information about what discussions were under way," she says. "I would never want to be part of even unintentionally treating people so poorly."

Bain engaged in startling penny-pinching with the laid-off employees. Their contracts stipulated that if they left early they would have to pay back the costs of relocating to Miami—but in spite of all that Dade had done to them, it refused to release the employees from this clause. "They said they would go after them for that money if they left before Bain was finished with them," Hewitt recalls. Not only that, but the company declined to give workers their severance pay in lump sums to help them fund their return home.

In 1999, generous pensions were converted into less generous benefits, wages were cut, and more staff members were laid off. Some employees contacted Norman Stein, then the director of the pension-counseling clinic at the University of Alabama law school, with a view to challenging the conversions. Stein says the employees were "extraordinarily nervous," so fearful, in fact, that they refused to let lawyers even make copies of pension documents. "I have been dealing with pensions issues for over 25 years and I never saw anything like this," recalls Stein. The spooked employees did not go to court. Stein says that, while breaking pension contracts like this was not unheard of, the practice at that time was "questionable," adding that Dade may have saved $10 to $40 million from converting its pensions.

The beauty—or savagery—of leverage is that it can magnify any and all cash-flow boosts, such as this one. Take $10 to $40 million squeezed from a pension pot, then use that to create new, rosier financial projections to borrow several times that amount, and then pay yourself a big special dividend from the borrowed funds, many times the size of the pension savings. That is just what Bain Capital did: the same month it converted the pensions, it created new financial projections as a basis to borrow an extra $421 million—from which Bain, its co-investor Goldman Sachs, and top Dade management extracted $365 million in dividends. According to Kosman, "Bain and Goldman—after putting down only $85 million … made out like bandits—a $280 million profit." Dade's debt rose to more than $870 million. Romney had left operational management of Bain that year, though his disclosures show that he owned 16.5 percent of the Bain partnership responsible for the Dade investment until at least 2001.

Quite soon, however, a fragile Dade faced adverse conditions in the currency markets, and it had to start in effect cannibalizing itself, cutting into the core of its business. It filed for bankruptcy in August 2002 and Bain Capital departed. When Dade emerged from bankruptcy, its new owners invested in long-term R&D, and it flourished again.

Nor was this an isolated incident: Kosman lists five other "formerly healthy" companies—Stage Stores, Ampad, GS Technologies, Details, and KB Toys—Bain helped drive into bankruptcy, while making big profits. (Despite numerous entreaties from Vanity Fair to Bain Capital to address on the record points in this article with which it might disagree, the firm refused to do so and instead provided this statement: "When politics overwhelm fact, some will distort or cherry-pick our record and launch unfounded allegations and insinuations. The truth and the full record show that Bain Capital operates with high standards of integrity and excellence in compliance with all laws. Any suggestion to the contrary is baseless.")

Again, doesn't this really tell us all we need to know about the banking crisis?

And finally, III:
The term "financialization" describes two interlocking processes: a disproportionate growth in a country's deregulated financial sector, relative to the rest of the economy, and the rising importance of financial activities with a focus on financial returns among industrial and other non-financial corporations, often at the expense of real innovation and productivity.

Some see the rising influence of finance and financial models in epochal terms. Author of Financialization and the U.S. Economy Özgür Orhangazi summarizes academic literature that sees financialization "as one of the indicators of the decline of the heg­e­mon­ic power": imperial Venice, Genoa, Holland, and Britain all saw their power rise on the back of productive industrial capitalism, followed by domination by the financial sector, which eventually began to cannibalize the productive sector in pursuit of financial returns—a process that ended in weakness and collapse.

Little noticed in the academic discussions of financialization is the role of offshore tax havens, one of the big reasons the financial sector has become so powerful. In 1966, Michael Hudson, a young Chase Manhattan balance-of-payments economist, was in a company elevator when he was handed a memo by a former State Department operative. The memo came from the U.S. government, and Hudson was tasked with figuring out how much foreign money the U.S. might attract. "They were saying, 'We want to replace Switzerland,' " Hudson explains. "All this money will come here if we make this the criminal center of the world. We wanted foreign criminal money, which was patriotic, but not American criminal money."

In the years since then, almost unknown to most Americans, the United States has turned itself into a giant tax haven for foreigners, just as the memo suggested. Federal and state tax laws have been deliberately shaped to give foreigners special tax exemptions unavailable to Americans, plus financial secrecy and exemptions from regulatory restraints. "We have criticized offshore tax havens for their secrecy and lack of transparency," said Senator Carl Levin. "But look what is going on in our own backyard."

In this grand scenario, tax havens such as the Caymans serve as feeders of foreign savings into Tax Haven U.S.A. from abroad, providing foreign investors with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly.

The money sucked into Tax Haven U.S.A., often via the "feeder" tax havens, is frequently tax-evading and other criminal foreign money, in the spirit of Hudson's 1966 memo, and it is predominantly channeled not into productive investment but into real estate and financial business.

Nothing to add...

Subject: RE: BS: Tax avioder in chief?
From: Jack the Sailor
Date: 20 Jul 12 - 01:04 AM

""Mitt said to me something like 'We won't ask you to lie. I am not going to tell you to do this, but [it is] a really good way to get the information.' � I would not have had anything in my analysis if I had not pretended."

Wasn't there a scene just like that in "Wall Street?"