“THE PROBLEM IS NOT THAT PEOPLE LIKE WARREN BUFFETT PAY AT A 17 PERCENT RATE, IT’S THAT THEY CAN USE COMPLEX TRANSACTIONS NOT AVAILABLE TO MOST AMERICANS TO GET CASH FROM THEIR APPRECIATED STOCK WITHOUT PAYING ANY TAXES AT ALL.“
That America’s wealthiest taxpayers enjoy their lowest tax rates in decades is only a fraction of the benefits to being in America’s gilded “one percent.” The nation’s 400 wealthiest individuals have seen their effective tax rate cut in half over the last 20 years, gut experts say that dividend of wealth is just the “tip of the iceberg” in discovering how the rich avoid even more taxes and generate even greater financial largess. Already paying a low rate on declared earnings, most of America’s billionaires are able to pay no taxes at all on hundreds of millions of dollars in cash they receive through carefully managed stock deals. Tax experts say these “convoluted arrangements,” where billionaires basically loan out massive amounts of stock to brokers in exchange for the value of that sock in cash, have “no other reason” to be done but to allow them to dodge federal taxes and collect as much as $259 million in tax-free earnings.
NEW ALABAMA IMMIGRATION LAW LEADS TO ARREST OF MERCEDES BENZ EXECUTIVE, STIRRING NEW CONTROVERSY ABOUT THE LAW’S PURPOSE AND EFFECTIVENESS.
In what has quickly become the embarrassing hallmark moment in Alabama’s zealous enforcement of its new anti-immigration law, a Mercedes Benz executive visiting one of his corporation’s manufacturing plants in the state is pulled over and arrested for failing to have the proper identification mandated by the new law. The German citizen was eventually freed when a colleague provided ID, but incident has shaken the state and led to growing concerns over how the law is affecting Alabama’s economy and the international commerce that the state depends upon for tens of thousands of jobs. The Mercedes pant in Alabama is a major employer, and though the company has refused comment on the matter, many now worry if the immigration law will lead to Mercedes and other foreign manufacturers to abandon the state. Proponents of the toughest immigration law in the nation see the controversy differently, insisting that it’s proof that the law is unbiased because the officer that arrested the German executive “didn’t pull that guy over because he looked Hispanic.”
Three years into the Great Recession and fallout from the global financial crisis, and it may be surprising at which industry is “stronger” and more “profitable” than ever. A new government report shows that U.S. banks are posting their biggest profits in over four years, generating over $35 billion in 2011′s third quarter alone. This stands in marked contrast to other data like the 9 percent unemployment rate, stagnant wages, and no sign of a let-up in the great foreclosure crisis largely caused by these now-profitable financial institutions. Such profits also raise questions about the legitimacy of criticism from major banks about government regulation that, according to industry predictions, would cut back their profits to unsustainable levels, not allow them to reach four-year highs. That opposition led banks to reach for new fees, such as Bank of America’s derided and now-extinct debit card fee, as a means to offset the supposed crimp in their business plan, which all appears to be a flimsy pretext in the wake of Tuesday’s profit reports.
ARE YOU A MAJOR UTILITY COMPANY WITH A CRACKED NUCLEAR REACTOR? DON’T WORRY, SAYS THE FLORIDA PUBLIC SERVICE COMMISSION, YOU DON’T HAVE TO PAY FOR THAT! JUST SEND THE BILL TO FLORIDA’S “99 PERCENT.”
The state body charged with regulating the prices utility companies charge their customers, increasingly a toothless panel that approves whatever those companies demand, has green-lighted a request from Progress Energy to hike rates for its Florida customers in order to pay for most of the costs associated with extensive repairs on its “broken” Crystal River nuclear facility. Idle for two years, the plant was severely damaged when Progress “mishandled” what was supposed to be routine maintenance on generators at the site. Originally estimated to cost $230 million, repairs on the plant have gone off schedule and well over budget, spiraling up to $2.5 billion and not likely to be completed for at least another two years. Already charging customers extra on each bill for the costs of buying additional power with the Crystal River plan offline, Progress also wants Floridians to foot the costs of the repairs. They asked, and the Florida PSC delivered. Florida customers of Progress Energy will now be forced to pay $140 million in 2012 alone for repairs at the company’s “broken” nuclear plant.
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** UPDATE **
Principled Progressive is taking the Thanksgiving holiday off. We will return with headlines on Friday and Saturday. Thank you.