AI
Saturday, January 05, 2013 6:08:51 AM
Wegelin & Co. Admits It Helped U.S. Clients Hide $1.2 Billion From IRS
Posted: 01/03/2013 1:04 pm EST | Updated: 01/04/2013 3:32 am EST
NEW YORK (AP) — Switzerland's oldest bank became the first foreign bank to plead guilty in the United States to tax charges when it admitted Thursday that it helped American clients hide more than $1.2 billion from the Internal Revenue Service.
Wegelin & Co., founded in 1741, entered the plea in federal court in Manhattan, agreeing to pay $20 million in restitution to the IRS, a $22 million fine and an additional $15.8 million, representing the gross fees earned by the bank on the undeclared accounts of U.S. taxpayers between 2002 and 2011. U.S. authorities said the money, combined with an April forfeiture of more than $16.2 million by the bank, meant the U.S. had recovered about $74 million.
The bank had been accused of helping at least 100 U.S. clients conceal large sums of money from the federal tax collection agency in overseas accounts.
U.S. Attorney Preet Bharara said the bank became a haven for U.S. taxpayers looking to cheat on taxes through secret off-shore accounts.
"The bank willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from U.S. law enforcement," Bharara said.
He called it a "watershed moment in our efforts to hold to account both the individuals and the banks — wherever they may be in the world — who are engaging in unlawful conduct that deprives the U.S. Treasury of billions of dollars of tax revenue."
Wegelin, headquartered in St. Gallen, Switzerland, said in a statement that it had cooperated with the probe "within the bounds allowed for by Swiss law" since learning that it was under U.S. investigation.
U.S. authorities said Wegelin had no branches outside Switzerland but accessed the U.S. banking system through a correspondent bank account that it held at UBS AG in Stamford, Conn.
Prosecutors said Wegelin in 2008 and 2009 opened and serviced dozens of new accounts for U.S. taxpayers as it tried to capture clients lost by UBS after word surfaced that that UBS was being investigated for helping U.S. taxpayers evade taxes and hide assets in Swiss bank accounts.
Wegelin employees told U.S. taxpayer-clients that their undeclared accounts would not be disclosed to U.S. authorities because the bank had a long tradition of secrecy, prosecutors said. They added that the employees persuaded U.S. taxpayer-clients to move money from UBS to Wegelin by claiming that, unlike UBS, Wegelin did not have offices outside of Switzerland and would be less vulnerable to U.S. law enforcement.
Meanwhile, prosecutors said, Wegelin took additional steps to hide the accounts, including by putting them in the names of sham corporations and foundations formed under the laws of jurisdictions that included Hong Kong and Panama and by using code names and numbers to minimize references to the actual names of U.S. taxpayers on Swiss bank documents. They said the bank also was careful not to send account statements to U.S. clients in the United States and corresponded with clients through private email accounts.
In February 2009, UBS entered a deferred prosecution agreement with U.S. authorities and agreed to pay $780 million in fines, penalties, interest and restitution.
Copyright 2013 The Associated Press
http://www.huffingtonpost.com/2013/01/03/wegelin-co-pleads-guilty_n_2403572.html [with comments]
--
JPMorgan Faces Sanction for Withholding Madoff Documents
Eric Thorson, inspector general of the Department of the Treasury, is seen here at a hearing on Wall Street and the Financial Crisis in Washington, D.C. on April 16, 2010.
Andrew Harrer/Bloomberg
A man talks on his phone at JPMorgan & Chase Co. headquarters in New York.
Peter Foley/Bloomberg
By Robert Schmidt & Jesse Hamilton - Jan 4, 2013 11:28 AM CT
The U.S. Treasury Department’s inspector general has threatened to punish JPMorgan Chase & Co. (JPM) for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme.
Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege.
Thorson’s letter didn’t spell out what documents the OCC is seeking or the focus of its investigation. Madoff is serving a 150-year sentence after confessing to the fraud that once claimed to have $65 billion in customer assets.
The previously undisclosed OCC probe adds to the lender’s troubles in Washington, where several agencies and lawmakers are investigating the bank’s loss of at least $6.2 billion on botched derivatives trades. The losses have prompted regulators including the Federal Reserve to consider tightening proposed restrictions on proprietary trading.
Jennifer Zuccarelli, a JPMorgan spokeswoman, said the bank “will of course continue to work together with our regulators” on the investigation.
Confidential Guidance
“This dispute does not go to the merits of the matter but it does raise an important issue of principle: Whether we and other banks, large and small alike, have the fundamental right long recognized in this country to communicate freely with and seek confidential guidance from their lawyers,” Zuccarelli said in an interview.
Bryan Hubbard, an OCC spokesman, declined to comment on the agency’s inquiry.
In the letter sent to JPMorgan general counsel Stephen Cutler, the inspector general -- the Treasury’s internal watchdog -- dismissed JPMorgan’s arguments on attorney-client privilege, saying the OCC “could not do its work” if banks were allowed to withhold information on that basis. The OCC, an independent bureau of Treasury, asked the IG office to review the situation, Thorson said in the letter.
Failure to produce the records “will have to be seen as a continuing purposeful impediment to the authority of the OCC,” Thorson said in the letter, and would require “further action by our office.”
Trustee’s Claims
The trustee liquidating Madoff’s firm, Irving H. Picard, sued JPMorgan in December 2010, accusing the bank of aiding Madoff’s fraud. The lawsuit, eventually demanding $19 billion, the largest of Picard’s claims, has since been dismissed. Picard has appealed the ruling.
JPMorgan “had financial reports in its possession that clearly evidenced fraud,” David J. Sheehan, lead counsel for Picard and a partner at Baker & Hostetler LLP, said in a February 2011 statement. JPMorgan was the Madoff firm’s “primary banker for more than two decades,” Sheehan said.
JPMorgan benefited from Madoff accounts while it “helped perpetuate Madoff’s fraud by ignoring the red flags, and continuing to structure products and collect fees for their own enrichment,” according to the trustee’ lawsuit.
The bank would have made $398 million in pretax profit from Madoff deposits from 1986 to 2008, conservatively assuming no reinvestment gain, according to a 2011 study by Linus Wilson, an assistant finance professor at the University of Louisiana at Lafayette. The firm declined to comment on the study at the time.
Withdrawing Investments
The trustee’s claim also accused the bank of withdrawing $276 million in its own investments in Madoff-related feeder funds about three weeks before Madoff’s Dec. 11, 2008, arrest. JPMorgan described the withdrawals as part of “an across-the- board review of its exposure to hedge funds,” according to its court filings.
In responding to Picard’s suit, the bank issued a statement in 2011 saying it “did not know about or in any way become a party to the fraud” and called it an “unfounded claim” that JPMorgan earned substantial fees from Madoff’s account. JPMorgan also objected in court when the trustee sought more freedom to use confidential Madoff documents provided by the bank.
The OCC is also investigating the trading losses in the bank’s chief investment office and is preparing an enforcement action, according to a person briefed on the situation who asked not to be named because the matter isn’t public. The cease-and- desist order would require the bank to fix internal risk controls, the person said.
FERC Dispute
In a second dispute involving demands from federal regulators for documents, a federal magistrate judge in Washington ruled in November that JPMorgan could invoke attorney-client privilege to keep private e-mails requested by the Federal Energy Regulatory Commission.
The agency had accused a JPMorgan unit of making “factual misrepresentations” and omitting material information in communications with the California Independent System Operator, which operates the state’s power grid, and in filings to the commission. The FERC suspended the unit’s electricity-trading authority for six months starting April 1.
To contact the reporters on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net; Jesse Hamilton in Washington at jhamilton33@bloomberg.net
To contact the editors responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net; David Scheer at dscheer@bloomberg.net
©2013 BLOOMBERG L.P.
http://www.bloomberg.com/news/2013-01-04/jpmorgan-faces-sanction-for-refusing-to-provide-madoff-documents.html [with embedded video report, and comments]
--
What’s Inside America’s Banks?
Jamie Dimon, JPMorgan’s CEO, testifying last summer before the House Financial Services Committee about his bank’s sudden $6 billion loss.
Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.
January/February 2013 ATLANTIC MAGAZINE
http://www.theatlantic.com/magazine/archive/2013/01/whats-inside-americas-banks/309196/ [ http://www.theatlantic.com/magazine/archive/2013/01/whats-inside-americas-banks/309196/?single_page=true ] [with comments]
===
Powerful Tea Party Group's Internal Docs Leak—Read Them Here
FreedomWorks/Facebook [ http://www.facebook.com/FreedomWorks/photos_stream ]
FreedomWorks bills itself as a grassroots outfit, but it's bankrolled mostly by big-money donors.
By Andy Kroll
Fri Jan. 4, 2013 3:02 AM PST
FreedomWorks [ http://www.freedomworks.org/ ], the national conservative group that helped launch the tea party movement, sells itself as a genuine grassroots operation, and for years it has battled [ http://www.freedomworks.org/news/stages-of-denial ] accusations [ http://thinkprogress.org/politics/2009/04/14/37536/lobbying-clients-teaparties/ ] of "astroturfing [ http://www.youtube.com/watch?v=0W8BbJXjda8 (next below)]"
Last month, the Washington Post reported [ http://www.washingtonpost.com/politics/freedomworks-tea-party-group-nearly-falls-apart-in-fight-between-old-and-new-guard/2012/12/25/dd095b68-4545-11e2-8061-253bccfc7532_story.html ( http://www.washingtonpost.com/politics/freedomworks-tea-party-group-nearly-falls-apart-in-fight-between-old-and-new-guard/2012/12/25/dd095b68-4545-11e2-8061-253bccfc7532_print.html )] that Richard Stephenson, a reclusive millionaire banker [ http://www.cancercenter.com/press-center/leadership/richard-stephenson.cfm ] and FreedomWorks board member, and members of his family funneled $12 million [ http://www.opensecrets.org/outsidespending/contrib_all.php?cmte=C00499020&type=A&cycle=2012 ] in October through two newly created Tennessee corporations to FreedomWorks' super-PAC, which used these funds to support tea party candidates in November's elections. The revelation that a corporate bigwig like Stephenson, who founded [ http://www.cancercenter.com/press-center/leadership/richard-stephenson.cfm ] the Cancer Treatment Centers of America and chairs its board, was responsible for more than half of the FreedomWorks super-PAC's haul in 2012 undercuts the group's grassroots image and hands ammunition to critics [ http://thinkprogress.org/politics/2009/04/14/37536/lobbying-clients-teaparties/ ] who say [ http://www.youtube.com/watch?v=0W8BbJXjda8 (the same one just above)] FreedomWorks does the bidding of rich conservative donors.
Big donations like Stephenson's are business as usual for FreedomWorks. According to a 52-page report prepared by FreedomWorks' top brass for a board of directors meeting held in mid-December at the Virginia office of Sands Capital Management [ http://sandscapital.com/ ], an investment firm run by FreedomWorks board member Frank Sands [ http://www.freedomworks.org/about/board-of-directors ], the entire FreedomWorks organization—its 501(c)(3) and (c)(4) nonprofit arms and its super-PAC—raised nearly $41 million through mid-December. Of that total, $33 million—or 81 percent of its 2012 fundraising—came in the form of "major gifts," the type of big donations coveted by nonprofits and super-PACs. (FreedomWorks' nonprofit components do not have to disclose their funders.)
Well-heeled individual contributors ponied up $31 million—or 94 percent—of those major gifts, according to the FreedomWorks board book. Eight donors gave a half-million dollars or more; 22 donated between $100,000 and $499,999; 17 cut checks between $50,000 and $99,999; and 95 gave between $10,000 and $49,999. Foundations contributed $1.6 million in major gifts, and corporations donated $330,000. Corporations once accounted for more of FreedomWorks' hefty donations. In a memo included in the report, David Kirby, FreedomWork's vice president for development, and senior adviser Terry Kibbe wrote, "This year continued our trend of relying less and less on corporate support." At the same time FreedomWorks expanded its small donor ranks from 41,794 in 2011 to 81,081 in 2012. More than 30,000 of those small donors gave between a dollar and $99 this year.
According to ex-FreedomWorks chairman Dick Armey, when he joined the organization in 2003, FreedomWorks relied heavily on corporate donations. The group, he says, subsequently weaned itself off such underwriting and used direct-mail lists—some provided by Armey—to build up a base of small donors. But in the last year, there was a "big surge in private individual contributions," most of which Armey says he didn't know about. "The details were kept secret from me," he remarks.
FreedomWorks, flush with wealthy donors' money, took full advantage of the nation's lax campaign finance rules during the 2012 election cycle. The group's nonprofit side shifted millions [ https://www.opensecrets.org/pacs/pacgave2.php?sort=A&cmte=C00499020&cycle=2012&Page=1 ] of dollars [ https://www.opensecrets.org/pacs/pacgave2.php?sort=A&cmte=C00499020&cycle=2012&Page=2 ] in dark money to the FreedomWorks super-PAC, effectively hiding the true source of those funds. One campaign finance reform advocate blasted [ http://usatoday30.usatoday.com/news/politics/story/2012-02-05/undisclosed-pac-money/52978306/1 ] those internal money transfers as the "laundering of secret money." A FreedomWorks spokeswoman did not respond to requests for comment.
The December board report was prepared in the wake of a bitter internal battle between Armey and FreedomWorks president and CEO Matt Kibbe. As Mother Jones first reported [ http://www.motherjones.com/mojo/2012/12/dick-armey-resigns-freedomworks-tea-party ], Armey resigned in November after feuding with Kibbe over the direction of FreedomWorks. Armey accused [ http://www.motherjones.com/politics/2012/12/dick-armey-freedomworks-hostile-takeover-memo ] Kibbe of using FreedomWorks resources to write a book in a deal that awarded Kibbe the sales profits. Two board members allied with Armey in December launched a legal investigation [ http://www.motherjones.com/documents/549553-letter-from-c-boyden-gray-and-james-h-burnley ] into alleged wrongdoing at FreedomWorks. Kibbe, meanwhile, drafted a memo [ http://www.motherjones.com/politics/2012/12/dick-armey-freedomworks-hostile-takeover-memo ] charging that Armey tried to steer the group away from its tea party roots and toward a more mainstream GOP position. Four FreedomWorks staffers, including vice president for public policy and government affairs Max Pappas, resigned [ http://www.motherjones.com/mojo/2012/12/dick-armey-resigns-freedomworks-tea-party#update ] after news broke of Armey's resignation.
In 2012, according to the board book, FreedomWorks hosted 110 current and potential "investors" at a Jackson Hole, Wyoming, hotel for its second annual "Restore Liberty" donor retreat. The event resulted in a source pledging a $10 million matching grant; the board book does not name this source. In August 2013, FreedomWorks plans to fete donors at the four-star St. Regis resort [ https://plus.google.com/115474989738085320724/about?hl=en ] in Aspen, Colorado. (FreedomWorks also treats its board well, holding its August 2012 meeting at the Snake River Lodge and Spa in Teton Village, Wyoming, according to minutes taken at the meeting.)
In 2013, FreedomWorks plans to spend between $25 million and $30 million, according to the board book. Favored causes and projects include the annual Blog-Con convention, the right's answer to Netroots Nation; fly-ins for activists [ http://m.freedomworks.org/press-releases/freedomworks-grassroots-army-to-take-capitol-hill- ] to lobby members of Congress; briefings with lawmakers and their aides; and the recently launched FreedomWorks University [ http://www.freedomworksforamerica.org/posts/whats-next ]. FreedomWorks also plans to continue its financial support for Glenn Beck's media enterprise, including sharing a TV studio with and leasing office space to the Washington bureau of TheBlaze [ http://www.theblaze.com/ ], Beck's website and TV network.
The board book is chock full of strategy talk by the FreedomWorks' brass. In a memo to the board included in the report, CEO Kibbe panned GOP presidential nominee Mitt Romney as just another "old white guy." He acknowledged that his group's plan to help flip control of the US Senate to the GOP failed miserably ("We take our lumps with humility"), and he insisted that it's time to replace the aging image of the conservative movement with "younger, more diverse, more substantive voices for freedom in America." Kibbe asked: "Can liberty, personal responsibility, and doing things for yourself be the new 'cool'?"
Such a makeover, Kibbe wrote, can begin if FreedomWorks courts so-called "Ron Paul Millennials," the loud, loyal twentysomethings who in 2008 and 2012 followed the GOP libertarian presidential candidate from one stump speech to the next. Kibbe noted that FreedomWorks plans to reach out to blacks and Hispanics with a new "Black and Brown" tour, starring a Brazilian immigrant and tea party activist named Ana Puig. And he touted FreedomWorks' growing online presence, with 2.1 million members on its email list and 4 million Facebook fans.
Despite his organization's reliance on big-money donors, Kibbe stressed that the future of conservative politics is at the grassroots level. "Freedom is trending," he wrote to the board, "thanks to your willingness to keep up the fight."
Read FreedomWorks' Winter 2012 board book:
[complete 52-page document embedded, Scibd-style]
*
Support for Mother Jones' dark money reporting comes in part from the Puffin Foundation's First Amendment program.
Find all of our dark money reporting here:
http://www.motherjones.com/category/secondary-tags/dark-money
*
Copyright ©2013 Mother Jones and the Foundation for National Progress
http://www.motherjones.com/politics/2012/12/freedomworks-rich-donors-armey-kibbe-super-pac [with comments]
===
Electoral College Count Affirms Obama Win Over Mitt Romney
(Photo by Chip Somodevilla/Getty Images)
By DONNA CASSATA
01/04/13 08:00 PM ET EST
WASHINGTON — Congress made the obvious official on Friday. President Barack Obama has been re-elected.
In a joint session, Congress formally certified that Obama and Vice President Joe Biden were the winners in the November election with 332 electoral votes, well more than the 270 required. Republican Mitt Romney and his running mate, Rep. Paul Ryan of Wisconsin, won 206 votes.
It's a mostly ceremonial – yet constitutionally necessary – vote that's mostly intriguing to political junkies and policy wonks. The count Friday lacked the suspense of the drawn-out campaign and election but was steeped in tradition.
Biden and about a dozen senators trekked across the Capitol from the Senate to the House chamber, and the vice president joined House Speaker John Boehner, R-Ohio, on the rostrum. Senate pages carried two dark wooden boxes that contained the results of the electoral votes that had been counted in the state capitals last month. Clerks used silver letter openers to unseal the envelopes.
Taking turns, the leaders of the Senate Rules Committee – Chuck Schumer, D-N.Y., and Lamar Alexander, R-Tenn. – and the top members of the House Administration Committee – Reps. Candice Miller, R-Mich., and Robert Brady, D-Pa. – read the results from each state. Biden, who presided over the session, announced the final results to applause from the scattering of House and Senate members in the chamber.
The 12th Amendment directs the electors chosen by the states to meet and vote for president and vice president. Each state gets its equivalent in the 435-member House and the 100-member Senate. The District of Columbia gets the other three electors. Their certified tally sheets must be counted in Washington.
The low-key session was in sharp contrast to the drama in January 2001, when Vice President Al Gore, the loser in the disputed election, presided over the certification of an electoral count that gave the presidency to his rival, Republican George W. Bush. Gore had beaten Bush in the popular vote but lost the electoral count.
Months after the November election, the final official vote from all 50 states and the District of Columbia showed Obama with 65,899,660 votes, or 51.1 percent, and Romney with 60,932,152 votes, or 47.2 percent. Obama is the first president since Republican Dwight Eisenhower to win back-to-back presidential elections with more than 51 percent of the popular vote.
Chief Justice John Roberts will swear in Obama at noon on Jan. 20 at the White House in a private ceremony, and then administer the oath again on the West Front of the Capitol the next day. The Constitution requires that the inauguration take place on Jan. 20 but because it is a Sunday, the public session and the accompanying parade and festivities will occur on Monday.
Biden has asked Supreme Court Justice Sonia Sotomayor to swear him in for a second term. She will be the first Hispanic to administer either a presidential or vice presidential oath.
Copyright 2013 The Associated Press
http://www.huffingtonpost.com/2013/01/04/electoral-college-count_n_2410790.html [with comments]
===
On Filibuster Reform, Advocates Claim Momentum
By Sabrina Siddiqui and Ryan Grim
Posted: 01/03/2013 6:09 pm EST | Updated: 01/04/2013 1:08 pm EST
WASHINGTON -- The Senate postponed debate on reforming the filibuster Thursday, as advocates cited the support of 48 senators for eliminating the silent filibuster using the so-called constitutional option, a measure that requires 50 votes plus that of the vice president.
During a briefing on Capitol Hill, Sens. Jeff Merkley (D-Ore.) and Tom Udall (D-N.M.) updated reporters on their joint effort, which is also being shepherded by Sen. Tom Harkin (D-Iowa).
The remaining seven within the Democratic caucus who have yet to sign on are Sen. Carl Levin (D-Mich.), Sen. Mark Pryor (D-Ark.), Sen. Patrick Leahy (D-Vt.). Sen. Max Baucus (D-Mont.), Sen. Jack Reed (D-R.I.), Sen. Barbara Boxer (D-Calif.) and Sen. Dianne Feinstein (D-Calif.), a source familiar with the whip count told The Huffington Post.
A coalition of progressive groups is also keeping up the pressure for reform, such as advocacy group CREDO Action, which targeted wavering senators Wednesday.
Despite some opposition, Udall was confident about the proposal’s prospects, telling reporters, "Momentum is on our side -- my uncle Mo used to refer to the 'big mo.'" Udall's uncle, Mo Udall, was a longtime Arizona congressman. Udall said he anticipates having enough Democratic votes to pass reform using what advocates call the constitutional option, but what opponents refer to as the “nuclear option.”
“I believe we have 51 votes to utilize the constitution and go forward with rules change,” Udall said, implying that enough of the remaining seven would swing their way to push them over the top. If the chamber was deadlocked at 50-50, Vice President Joe Biden, who supports filibuster reform, would break the tie.
The main component of the Merkley-Udall approach is the talking filibuster, which still enables the minority to filibuster legislation but would require them to do so by actually standing and speaking on the floor. Additionally, the proposal would also streamline conference committee assignments and nominations, and eliminate the motion to proceed -- a motion typically offered by the majority leader to bring up a bill or other measure for consideration.
Their plan is currently in competition with a bipartisan plan [ http://www.huffingtonpost.com/2012/12/28/john-mccain-filibuster-reform-counterproposal_n_2375640.html ] more recently introduced by Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.), and backed by six other senators. Merkley told reporters the competing package “as put out, does nothing to take on the secret, silent filibuster that is haunting this body.” The Levin-McCain counterproposal, which was unveiled last week, has also come under attack [ http://www.huffingtonpost.com/2012/12/29/filibuster-reform-fix-the-senate-now_n_2381788.html ] by a large coalition of progressive and labor organizations.
Senate Majority Leader Harry Reid (D-Nev.) announced earlier on Thursday that he will recess the chamber at the close of the day’s proceedings, thereby extending the first legislative day of the new Congress to maintain his ability to reform the Senate’s filibuster rules later this month.
“The Senate is simply not working as it should,” Reid said on the Senate floor. “We will reserve the right of all Senators to propose changes to the Senate rules, and we will explicitly not acquiesce in the carrying over of all the rules from the last Congress.”
Merkley confirmed to HuffPost shortly after the briefing that the filibuster reform debate will begin on Jan. 22.
The 112th Congress, which was proclaimed the least productive [ http://www.huffingtonpost.com/2012/12/28/congress-unproductive_n_2371387.html ] since the 1940s, utilized the filibuster nearly 400 times.
A HuffPost/YouGov poll [ http://www.huffingtonpost.com/2012/11/30/filibuster-reform-poll_n_2218963.html ] conducted in late November found that 65 percent of Americans believe senators should have to participate in debate for the duration of a filibuster, while only 9 percent of those polled said that senators should be able to filibuster without being physically present.
Copyright © 2013 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2013/01/03/filibuster-reform-senate_n_2405008.html [with comments]
===
Washington's Deficit Obsession Is Insane, Chart Indisputably Proves
01/04/2013
http://www.huffingtonpost.com/2013/01/04/washington-deficit-obsession_n_2409978.html [with comments]
--
Battles of the Budget
By PAUL KRUGMAN
Published: January 3, 2013
The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House.
For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.
The fight over the fiscal cliff was just one battle in that war. It ended, arguably, in a tactical victory for Democrats. The question is whether it was a Pyrrhic victory that set the stage for a larger defeat.
Why do I say that it was a tactical victory? Mainly because of what didn’t happen: There were no benefit cuts.
This was by no means a foregone conclusion. In 2011, the Obama administration was reportedly willing to raise the age of Medicare eligibility, a terrible and cruel policy idea. This time around, it was willing to cut Social Security benefits by changing the formula for cost-of-living adjustments, a less terrible idea that would nonetheless have imposed a lot of hardship — and probably have been politically disastrous as well. In the end, however, it didn’t happen. And progressives, always worried that President Obama seems much too willing to compromise about fundamentals, breathed a sigh of relief.
There were also some actual positives from a progressive point of view. Expanded unemployment benefits were given another year to run, a huge benefit to many families and a significant boost to our economic prospects (because this is money that will be spent, and hence help preserve jobs). Other benefits to lower-income families were given another five years — although, unfortunately, the payroll tax break was allowed to expire, which will hurt both working families and job creation.
The biggest progressive gripe about the legislation is that Mr. Obama extracted less revenue from the affluent than expected — about $600 billion versus $800 billion over the next decade. In perspective, however, this isn’t that big a deal. Put it this way: A reasonable estimate is that gross domestic product over the next 10 years will be around $200 trillion. So if the revenue take had matched expectations, it would still have amounted to only 0.4 percent of G.D.P.; as it turned out, this was reduced to 0.3 percent. Either way, it wouldn’t make much difference in the fights over revenue versus spending still to come.
Oh, and not only did Republicans vote for a tax increase for the first time in decades, the overall result of the tax changes now taking effect — which include new taxes associated with Obamacare as well as the new legislation — will be a significant reduction in income inequality, with the top 1 percent and even more so the top 0.1 percent taking a much bigger hit than middle-income families.
So why are many progressives — myself included — feeling very apprehensive? Because we’re worried about the confrontations to come.
According to the normal rules of politics, Republicans should have very little bargaining power at this point. With Democrats holding the White House and the Senate, the G.O.P. can’t pass legislation; and since the biggest progressive policy priority of recent years, health reform, is already law, Republicans wouldn’t seem to have many bargaining chips.
But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions.
Now, the president has said that he won’t negotiate on that basis, and rightly so. Threatening to hurt tens of millions of innocent victims unless you get your way — which is what the G.O.P. strategy boils down to — shouldn’t be treated as a legitimate political tactic.
But will Mr. Obama stick to his anti-blackmail position as the moment of truth approaches? He blinked during the 2011 debt limit confrontation. And the last few days of the fiscal cliff negotiations were also marked by a clear unwillingness on his part to let the deadline expire. Since the consequences of a missed deadline on the debt limit would potentially be much worse, this bodes ill for administration resolve in the clinch.
So, as I said, in a tactical sense the fiscal cliff ended in a modest victory for the White House. But that victory could all too easily turn into defeat in just a few weeks.
© 2013 The New York Times Company
http://www.nytimes.com/2013/01/04/opinion/kurgman-battles-of-the-budget.html [with comments]
--
As tax hikes kick in for all, top earners pay growing share
By William La Jeunesse
Published January 03, 2013
FoxNews.com
Taxes are going up this week on almost everyone, but one group of top earners will feel the pinch far more than others. The .7 percent.
It's an exclusive club created by President Obama's new tax plan. Already the most progressively taxed nation in the world, the U.S. becomes more top heavy with the new tax code, analysts say.
With income tax hikes concentrated on only those individuals earning more than $400,000 and couples making more than $450,000, about 40 percent of all federal income taxes will now be paid by just .7 percent of all federal income tax returns, according to preliminary numbers from Tax Foundation Chief Economist William McBride.
"We are currently the reigning champion of progressivity. This deal will make our tax code even more progressive," said McBride. "We cannot sustain a situation where the top 1 percent pays 40 percent of the tax burden, while the bottom half roughly on average pays no income taxes."
Previous data showed about 37 percent of the federal income tax burden fell on the top 1 percent, while 41 percent had a zero or negative tax liability. The share of nonpayers, which has doubled since 1990, is expected to stay consistent for at least five years under the deal.
The tax plan approved this week raises the top marginal rate to 39.5 percent on those making over $400,000/$450,000 and their capital gains rate rises from 15 to 20 percent. Two other provisions also limit the value of their deductions. Taken together, McBride estimates the top .7 percent -- roughly 1.1 million of 143 million tax returns -- will pay about 40 percent of all federal income taxes.
"It creates huge divisions in society and breeds contempt. It's class warfare. It is also unsustainable because it disconnects voters. The bottom half of the population pays no income tax. That's hugely disruptive. Those folks now have an incentive to lobby for more federal spending and it disconnects them from the cost of the federal government."
While most taxpayers were shielded from increases in their income taxes, payroll taxes went up for everyone. The IRS issued new withholding guidelines for employers earlier this week. Some workers will see the higher deductions on Friday -- others next week.
Here are some examples.
-- for a single person earning $38,000 a year, the IRS told employers to withhold $5,437 a year. That's up $570, or $11 a week.
-- for someone earning $90,000, they will pay $19,885 -- or $2,443 more than last year.
-- for someone earning $185,000, the government will withhold $49,459 -- an increase of $5,977.
-- for someone earning over $400,000, payroll taxes will increase by $270 per week or $14,212 a year.
Still, payroll taxes (that's the FICA deduction on your paycheck) pay for Social Security and Medicare. That is money taxpayers eventually get back, and then some.
Over a lifetime, the average male worker pays $345,000 in FICA taxes, but gets back $417,000 in benefits, according to the nonpartisan think tank, The Urban Institute.
©2013 FOX News Network, LLC
http://www.foxnews.com/politics/2013/01/03/tax-hikes-start-this-week-for-all/
--
Ari Fleischer Says He'll Give Less To Charity Because Of New Limits On Tax Breaks
01/02/2013
http://www.huffingtonpost.com/2013/01/02/ari-fleischer-charity-tax-break_n_2397880.html [with embedded video report, and comments]
--
The new conservative purity test
The GOP may have rolled over on the "fiscal cliff," but its fight for entitlement cuts is just beginning
Jan 4, 2013
http://www.salon.com/2013/01/04/the_new_conservative_purity_test/ [with comments]
--
Joe Scarborough: 'The Seeds Are Being Planted For The Destruction Of The House Republican Majority'
01/03/2013
http://www.huffingtonpost.com/2013/01/03/joe-scarborough-seeds-planted-destruction-house-republican-majoirty_n_2402551.html [with video of Joe embedded, and comments]
--
Newt Gingrich: Debt Ceiling Is A 'Dead Loser'
01/04/2013
http://www.huffingtonpost.com/2013/01/04/newt-gingrich-debt-ceiling_n_2408764.html [with video of Newt embedded, and comments]
===
Former Navy Chaplain On Newt Gingrich Gay Marriage Stance: 'Worthy Of Death'
Former Navy chaplain Gordon Klingenschmitt believes that Newt Gingrich caved to "demonic voices" when he changed his stance on gay marriage. Here, the chaplain is during a hunger strike in front of the White House in 2006.
(AP)
Posted: 01/04/2013 12:12 pm EST | Updated: 01/04/2013 3:02 pm EST
A former Navy chaplain says that Newt Gingrich's stance on same-sex marriage was influenced by "demonic voices" and makes the former Republican presidential candidate "worthy of death."
Gingrich spoke about the issue of same-sex marriage [ http://www.huffingtonpost.com/2012/12/20/newt-gingrich-mitt-romney_n_2337895.html ] during an interview with The Huffington Post in December. Although he defended his belief that marriage is between a man and a woman, the former House Speaker said the GOP needs to progress with the times.
"It is in every family. It is in every community," he told HuffPost. "The momentum is clearly now in the direction in finding some way to ... accommodate and deal with reality. And the reality is going to be that in a number of American states -- and it will be more after 2014 -- gay relationships will be legal, period."
On Thursday, Right Wing Watch posted [ http://www.rightwingwatch.org/content/klingenschmitt-gingrich-under-influence-demonic-voice-gay-marriage-statement ] a video response to Gingrich's same-sex marriage comments made by Navy chaplain Gordon Klingenschmitt, according to Raw Story [ http://www.rawstory.com/rs/2013/01/03/former-navy-chaplain-gingrich-worthy-of-death-for-supporting-marriage-equality/ ]. In the video [ http://www.youtube.com/watch?v=ClVdy8ETLbY (above, as embedded)], the chaplain says Gingrich is wholly misguided in pandering to the left and "homosexual sin."
The chaplain cites a Bible passage from Romans, Chapter 1, which says “homosexual acts are worthy of death.”
“It’s not like Newt is personally engaging in homosexual activity, but the Bible condemns him now because he takes pleasure in those that do that sort of thing,” he explained. “When the Bible condemns his endorsement of homosexual sin then he has become one of the sinners condemned by Romans, Chapter 1.”
Klingenschmitt continued to say Gingrich is tempted by "demonic voices" that tell him "Okay, it's not really a sin. We ought to endorse this" simply to get more votes in a possible 2016 presidential run.
The chaplain, who belongs to an evangelical sect of the Episcopal Church and was disgraced in 2006 for disobeying an order [ http://www.washingtonpost.com/wp-dyn/content/article/2006/09/14/AR2006091401544.html ], is not the only one to speak out against Gingrich's evolved view on same-sex marriage. Frank Schubert, National Political Director for the National Organization for Marriage (NOM), called the politician's comments both "stupid" and "ridiculous."
Gingrich was previously vocal against same-sex marriage [ http://www.huffingtonpost.com/2012/01/26/newt-gingrich-gay-marriage-_n_1234955.html ]. He went so far as to compare it to paganism, saying, "The effort to create alternatives to marriage between a man and a woman are perfectly natural pagan behaviors, but they are a fundamental violation of our civilization." While running for the GOP presidential nomination, he also vowed to enforce the Defense of Marriage Act.
Copyright © 2013 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2013/01/04/newt-gingrich-gay-marriage-navy-chaplain-worthy-of-death_n_2409648.html [with comments]
--
Leading Conservative Religious Organization Warns That Christians Will Soon Be Treated Like Blacks In Jim Crow Era
By Scott Keyes on Jan 2, 2013 at 1:34 pm
The American Family Association, a top conservative Christian organization, emailed members today with a dire warning that, within 50 years, Christians will be treated like African Americans during the Jim Crow era.
In an email entitled “What will religion look like in the year 2060?”, the AFA warned about the coming onslaught against Christians, who currently make up over three-quarters [ http://www.gallup.com/poll/151760/christianity-remains-dominant-religion-united-states.aspx ] of Americans. The group’s predictions include that Christians will be brutally discriminated against like blacks before the Civil Rights Era, government will take children from parents at birth, and any city with “Saint” or other loosely-religious name will be forced to change.
The full email:
What will religion look like in the year 2060?
Conservative Christians will be treated as second class citizens, much like African Americans were prior to civil rights legislation in the 1960s.
Family as we know it will be drastically changed with the state taking charge of the children beginning at birth.
Marriage will include two, three, four or any number of participants. Marriage will not be important, with individuals moving in and out of a “family” group at will.
Churchbuildings will be little used, with many sold to secular buyers and the money received going to the government.
Churches will not be allowed to discuss any political issues, even if it affects the church directly.
Tax credit given to churches and non-profit organizations will cease.
Christian broadcasting will be declared illegal based on the separation of church and state. The airwaves belong to the government, therefore they cannot be used for any religious purpose.
We will have, or have had, a Muslim president.
Cities with a name from the Bible such as St. Petersburg, Bethlehem, etc. will be forced to change their name due to separation of church and state.
Groups connected to any religious affiliation will be forced out of health care. Health centers get tax money from the state, making it a violation of church and state.
Get involved! Sign THE STATEMENT.
Sincerely,
Donald E. Wildmon
As absurd as they may be, these 2060 predictions may not even rank among the AFA’s most extreme ideas. The group’s spokesman has called for kidnapping [ http://thinkprogress.org/lgbt/2012/08/08/655951/bryan-fischer-children-of-same-sex-couples-must-be-saved-through-underground-railroad-kidnapping/ ] the children of same-sex couples through a modern-day “Underground Railroad” system. When one man heeded this advice and aided a woman in kidnapping the daughter of a lesbian woman, the group advised him to flout American laws [ http://thinkprogress.org/lgbt/2012/08/15/692421/bryan-fischer-encourages-guilty-conductor-of-child-kidnapping-underground-railroad-to-flee-the-country/ ] and flee the country. AFA also organizes against any individual or company that shows the slightest tolerance for LGBT people, including Office Depot [ http://thinkprogress.org/lgbt/2012/07/23/569901/hate-group-attacks-office-depot-and-lady-gaga-because-homosexuality-is-a-poor-and-dangerous-choice/ ], Urban Outfitters [ http://thinkprogress.org/lgbt/2012/04/16/464875/conservative-group-whines-about-urban-outfitters-gay-advertising/ ], Home Depot [ http://thinkprogress.org/lgbt/2012/06/27/507005/abc-news-invents-fictional-anti-gay-oreo-boycott/ ], JC Penney [ http://thinkprogress.org/lgbt/2012/03/08/440404/anti-gay-group-abandons-failed-boycott-of-jc-penney-and-ellen-degeneres/ ], and Google [ http://thinkprogress.org/lgbt/2012/07/10/514036/anti-gay-group-plans-google-boycott-this-is-going-to-be-a-tough-one/ ].
The AFA’s ideas may be fringe, but their level of support is anything but. The group remains influential [ http://www.salon.com/2011/04/06/bryan_fischer_muslims_gop_candidates/ ] among both conservative grassroots and Republican politicians. The AFA’s former leader was heavily courted in the 2012 Republican presidential primary, ultimately endorsing [ http://thehill.com/blogs/blog-briefing-room/news/200447-gingrich-wins-endorsements-from-american-family-association-iowa-speaker ] Newt Gingrich and helping dissuade concerns about his multiple marriages and past infidelities.
© 2013 Center for American Progress Action Fund (emphasis in original)
http://thinkprogress.org/politics/2013/01/02/1386001/afa-christians-2060/ [with comments]
--
Marion Hammer, Ex-NRA President, Compares Assault Weapons Ban To Racial Discrimination
01/04/2013
http://www.huffingtonpost.com/2013/01/04/marion-hammer-nra_n_2411175.html [with comments]
--
Jemele Hill Racist Letter: ESPN Personality Tweets Racist Complaints From Listener
[ http://twitter.com/jemelehill/status/287204735742791681/photo/1/large , via https://twitter.com/jemelehill/statuses/287204735742791681 ]
01/04/2013
http://www.huffingtonpost.com/2013/01/04/jemele-hill-espn-racist-abuse_n_2410254.html [with comments], also
http://deadspin.com/5973132/lets-play-count-the-slurs-in-jemele-hills-hate-mail [with comments]
--
RUSH: Will Joy Behar Have To Wear A Burka Now That Al Jazeera Bought Current TV?
Find More @ http://www.DailyRushbo.com
http://www.youtube.com/watch?v=lfGUYMyhpYg
--
House GOP Lets Violence Against Women Act Passed By Senate Die Without A Vote
01/03/2013
http://www.huffingtonpost.com/2013/01/02/violence-against-women-act-_n_2398553.html [with embedded video report, and comments]
--
California Appeals Court Overturns Rape Conviction, Rules State Law Doesn't Protect Unmarried Women
01/03/13
http://www.huffingtonpost.com/2013/01/03/california-appeals-court-_n_2406167.html [with embedded video report, and comments]
--
Virginia Abortion, Contraception Bills Proposed In New Legislative Session
01/04/2013
http://www.huffingtonpost.com/2013/01/04/virginia-abortion-contraception_n_2410445.html [with comments]
--
Steve King Introduces Bill To Stop 'Anchor Babies'
01/04/2013
http://www.huffingtonpost.com/2013/01/04/steve-king-anchor-babies_n_2411989.html [with comments]
--
Conservative Group Attempts To Block New Hampshire's Bailout From Voting Rights Act
01/02/2013
http://www.huffingtonpost.com/2013/01/02/new-hampshire-voting-rights-act_n_2397801.html [with comments]
--
George Lucas, Mellody Hobson Engaged: 'Star Wars' Director, Businesswoman Set To Marry
01/03/2013
HuffPost Celebrity can report that filmmaker George Lucas and his girlfriend of seven years, businesswoman Mellody Hobson, are engaged.
The famed director, 68, and his longtime partner and president of a big-time Chicago-based investment management firm [ http://www.forbes.com/profile/mellody-hobson/ ], Ariel Investments LLC, 43, are no strangers to showcasing their relationship in the spotlight. The pair are often spotted hand-in-hand on the red carpet, everywhere from the Cannes Film Festival to Formula One Grand Prix races to the NAACP awards.
[...]
Lucas recently made headlines after donating $4 billion to an education foundation [ http://www.huffingtonpost.com/2012/11/02/george-lucas-donate-4-billion_n_2067145.html ] -- the amount he received after selling Lucasfilm Ltd. (which Lucas solely owned) to Disney.
[...]
http://www.huffingtonpost.com/2013/01/03/george-lucas-mellody-hobson-engaged_n_2404471.html [with comments]
===
(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82962315 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82965720 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82980412 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82984846 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82990236 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82991383 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82992473 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997498 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997721 (and any future following);
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82413821 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997812 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997984 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82998389 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82999309 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82999877 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83002579 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83002808 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83007521 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83027686 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83033740 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83038633 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83047987 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83066245 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83070201 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83075802 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83081749 and following
Posted: 01/03/2013 1:04 pm EST | Updated: 01/04/2013 3:32 am EST
NEW YORK (AP) — Switzerland's oldest bank became the first foreign bank to plead guilty in the United States to tax charges when it admitted Thursday that it helped American clients hide more than $1.2 billion from the Internal Revenue Service.
Wegelin & Co., founded in 1741, entered the plea in federal court in Manhattan, agreeing to pay $20 million in restitution to the IRS, a $22 million fine and an additional $15.8 million, representing the gross fees earned by the bank on the undeclared accounts of U.S. taxpayers between 2002 and 2011. U.S. authorities said the money, combined with an April forfeiture of more than $16.2 million by the bank, meant the U.S. had recovered about $74 million.
The bank had been accused of helping at least 100 U.S. clients conceal large sums of money from the federal tax collection agency in overseas accounts.
U.S. Attorney Preet Bharara said the bank became a haven for U.S. taxpayers looking to cheat on taxes through secret off-shore accounts.
"The bank willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from U.S. law enforcement," Bharara said.
He called it a "watershed moment in our efforts to hold to account both the individuals and the banks — wherever they may be in the world — who are engaging in unlawful conduct that deprives the U.S. Treasury of billions of dollars of tax revenue."
Wegelin, headquartered in St. Gallen, Switzerland, said in a statement that it had cooperated with the probe "within the bounds allowed for by Swiss law" since learning that it was under U.S. investigation.
U.S. authorities said Wegelin had no branches outside Switzerland but accessed the U.S. banking system through a correspondent bank account that it held at UBS AG in Stamford, Conn.
Prosecutors said Wegelin in 2008 and 2009 opened and serviced dozens of new accounts for U.S. taxpayers as it tried to capture clients lost by UBS after word surfaced that that UBS was being investigated for helping U.S. taxpayers evade taxes and hide assets in Swiss bank accounts.
Wegelin employees told U.S. taxpayer-clients that their undeclared accounts would not be disclosed to U.S. authorities because the bank had a long tradition of secrecy, prosecutors said. They added that the employees persuaded U.S. taxpayer-clients to move money from UBS to Wegelin by claiming that, unlike UBS, Wegelin did not have offices outside of Switzerland and would be less vulnerable to U.S. law enforcement.
Meanwhile, prosecutors said, Wegelin took additional steps to hide the accounts, including by putting them in the names of sham corporations and foundations formed under the laws of jurisdictions that included Hong Kong and Panama and by using code names and numbers to minimize references to the actual names of U.S. taxpayers on Swiss bank documents. They said the bank also was careful not to send account statements to U.S. clients in the United States and corresponded with clients through private email accounts.
In February 2009, UBS entered a deferred prosecution agreement with U.S. authorities and agreed to pay $780 million in fines, penalties, interest and restitution.
Copyright 2013 The Associated Press
http://www.huffingtonpost.com/2013/01/03/wegelin-co-pleads-guilty_n_2403572.html [with comments]
--
JPMorgan Faces Sanction for Withholding Madoff Documents
Eric Thorson, inspector general of the Department of the Treasury, is seen here at a hearing on Wall Street and the Financial Crisis in Washington, D.C. on April 16, 2010.
Andrew Harrer/Bloomberg
A man talks on his phone at JPMorgan & Chase Co. headquarters in New York.
Peter Foley/Bloomberg
By Robert Schmidt & Jesse Hamilton - Jan 4, 2013 11:28 AM CT
The U.S. Treasury Department’s inspector general has threatened to punish JPMorgan Chase & Co. (JPM) for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme.
Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege.
Thorson’s letter didn’t spell out what documents the OCC is seeking or the focus of its investigation. Madoff is serving a 150-year sentence after confessing to the fraud that once claimed to have $65 billion in customer assets.
The previously undisclosed OCC probe adds to the lender’s troubles in Washington, where several agencies and lawmakers are investigating the bank’s loss of at least $6.2 billion on botched derivatives trades. The losses have prompted regulators including the Federal Reserve to consider tightening proposed restrictions on proprietary trading.
Jennifer Zuccarelli, a JPMorgan spokeswoman, said the bank “will of course continue to work together with our regulators” on the investigation.
Confidential Guidance
“This dispute does not go to the merits of the matter but it does raise an important issue of principle: Whether we and other banks, large and small alike, have the fundamental right long recognized in this country to communicate freely with and seek confidential guidance from their lawyers,” Zuccarelli said in an interview.
Bryan Hubbard, an OCC spokesman, declined to comment on the agency’s inquiry.
In the letter sent to JPMorgan general counsel Stephen Cutler, the inspector general -- the Treasury’s internal watchdog -- dismissed JPMorgan’s arguments on attorney-client privilege, saying the OCC “could not do its work” if banks were allowed to withhold information on that basis. The OCC, an independent bureau of Treasury, asked the IG office to review the situation, Thorson said in the letter.
Failure to produce the records “will have to be seen as a continuing purposeful impediment to the authority of the OCC,” Thorson said in the letter, and would require “further action by our office.”
Trustee’s Claims
The trustee liquidating Madoff’s firm, Irving H. Picard, sued JPMorgan in December 2010, accusing the bank of aiding Madoff’s fraud. The lawsuit, eventually demanding $19 billion, the largest of Picard’s claims, has since been dismissed. Picard has appealed the ruling.
JPMorgan “had financial reports in its possession that clearly evidenced fraud,” David J. Sheehan, lead counsel for Picard and a partner at Baker & Hostetler LLP, said in a February 2011 statement. JPMorgan was the Madoff firm’s “primary banker for more than two decades,” Sheehan said.
JPMorgan benefited from Madoff accounts while it “helped perpetuate Madoff’s fraud by ignoring the red flags, and continuing to structure products and collect fees for their own enrichment,” according to the trustee’ lawsuit.
The bank would have made $398 million in pretax profit from Madoff deposits from 1986 to 2008, conservatively assuming no reinvestment gain, according to a 2011 study by Linus Wilson, an assistant finance professor at the University of Louisiana at Lafayette. The firm declined to comment on the study at the time.
Withdrawing Investments
The trustee’s claim also accused the bank of withdrawing $276 million in its own investments in Madoff-related feeder funds about three weeks before Madoff’s Dec. 11, 2008, arrest. JPMorgan described the withdrawals as part of “an across-the- board review of its exposure to hedge funds,” according to its court filings.
In responding to Picard’s suit, the bank issued a statement in 2011 saying it “did not know about or in any way become a party to the fraud” and called it an “unfounded claim” that JPMorgan earned substantial fees from Madoff’s account. JPMorgan also objected in court when the trustee sought more freedom to use confidential Madoff documents provided by the bank.
The OCC is also investigating the trading losses in the bank’s chief investment office and is preparing an enforcement action, according to a person briefed on the situation who asked not to be named because the matter isn’t public. The cease-and- desist order would require the bank to fix internal risk controls, the person said.
FERC Dispute
In a second dispute involving demands from federal regulators for documents, a federal magistrate judge in Washington ruled in November that JPMorgan could invoke attorney-client privilege to keep private e-mails requested by the Federal Energy Regulatory Commission.
The agency had accused a JPMorgan unit of making “factual misrepresentations” and omitting material information in communications with the California Independent System Operator, which operates the state’s power grid, and in filings to the commission. The FERC suspended the unit’s electricity-trading authority for six months starting April 1.
To contact the reporters on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net; Jesse Hamilton in Washington at jhamilton33@bloomberg.net
To contact the editors responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net; David Scheer at dscheer@bloomberg.net
©2013 BLOOMBERG L.P.
http://www.bloomberg.com/news/2013-01-04/jpmorgan-faces-sanction-for-refusing-to-provide-madoff-documents.html [with embedded video report, and comments]
--
What’s Inside America’s Banks?
Jamie Dimon, JPMorgan’s CEO, testifying last summer before the House Financial Services Committee about his bank’s sudden $6 billion loss.
Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.
January/February 2013 ATLANTIC MAGAZINE
http://www.theatlantic.com/magazine/archive/2013/01/whats-inside-americas-banks/309196/ [ http://www.theatlantic.com/magazine/archive/2013/01/whats-inside-americas-banks/309196/?single_page=true ] [with comments]
===
Powerful Tea Party Group's Internal Docs Leak—Read Them Here
FreedomWorks/Facebook [ http://www.facebook.com/FreedomWorks/photos_stream ]
FreedomWorks bills itself as a grassroots outfit, but it's bankrolled mostly by big-money donors.
By Andy Kroll
Fri Jan. 4, 2013 3:02 AM PST
FreedomWorks [ http://www.freedomworks.org/ ], the national conservative group that helped launch the tea party movement, sells itself as a genuine grassroots operation, and for years it has battled [ http://www.freedomworks.org/news/stages-of-denial ] accusations [ http://thinkprogress.org/politics/2009/04/14/37536/lobbying-clients-teaparties/ ] of "astroturfing [ http://www.youtube.com/watch?v=0W8BbJXjda8 (next below)]"
—posing as a populist organization while doing the bidding of big-money donors. Yet internal documents obtained by Mother Jones show that FreedomWorks has indeed become dependent on wealthy individual donors to finance its growing operation.
Last month, the Washington Post reported [ http://www.washingtonpost.com/politics/freedomworks-tea-party-group-nearly-falls-apart-in-fight-between-old-and-new-guard/2012/12/25/dd095b68-4545-11e2-8061-253bccfc7532_story.html ( http://www.washingtonpost.com/politics/freedomworks-tea-party-group-nearly-falls-apart-in-fight-between-old-and-new-guard/2012/12/25/dd095b68-4545-11e2-8061-253bccfc7532_print.html )] that Richard Stephenson, a reclusive millionaire banker [ http://www.cancercenter.com/press-center/leadership/richard-stephenson.cfm ] and FreedomWorks board member, and members of his family funneled $12 million [ http://www.opensecrets.org/outsidespending/contrib_all.php?cmte=C00499020&type=A&cycle=2012 ] in October through two newly created Tennessee corporations to FreedomWorks' super-PAC, which used these funds to support tea party candidates in November's elections. The revelation that a corporate bigwig like Stephenson, who founded [ http://www.cancercenter.com/press-center/leadership/richard-stephenson.cfm ] the Cancer Treatment Centers of America and chairs its board, was responsible for more than half of the FreedomWorks super-PAC's haul in 2012 undercuts the group's grassroots image and hands ammunition to critics [ http://thinkprogress.org/politics/2009/04/14/37536/lobbying-clients-teaparties/ ] who say [ http://www.youtube.com/watch?v=0W8BbJXjda8 (the same one just above)] FreedomWorks does the bidding of rich conservative donors.
Big donations like Stephenson's are business as usual for FreedomWorks. According to a 52-page report prepared by FreedomWorks' top brass for a board of directors meeting held in mid-December at the Virginia office of Sands Capital Management [ http://sandscapital.com/ ], an investment firm run by FreedomWorks board member Frank Sands [ http://www.freedomworks.org/about/board-of-directors ], the entire FreedomWorks organization—its 501(c)(3) and (c)(4) nonprofit arms and its super-PAC—raised nearly $41 million through mid-December. Of that total, $33 million—or 81 percent of its 2012 fundraising—came in the form of "major gifts," the type of big donations coveted by nonprofits and super-PACs. (FreedomWorks' nonprofit components do not have to disclose their funders.)
Well-heeled individual contributors ponied up $31 million—or 94 percent—of those major gifts, according to the FreedomWorks board book. Eight donors gave a half-million dollars or more; 22 donated between $100,000 and $499,999; 17 cut checks between $50,000 and $99,999; and 95 gave between $10,000 and $49,999. Foundations contributed $1.6 million in major gifts, and corporations donated $330,000. Corporations once accounted for more of FreedomWorks' hefty donations. In a memo included in the report, David Kirby, FreedomWork's vice president for development, and senior adviser Terry Kibbe wrote, "This year continued our trend of relying less and less on corporate support." At the same time FreedomWorks expanded its small donor ranks from 41,794 in 2011 to 81,081 in 2012. More than 30,000 of those small donors gave between a dollar and $99 this year.
According to ex-FreedomWorks chairman Dick Armey, when he joined the organization in 2003, FreedomWorks relied heavily on corporate donations. The group, he says, subsequently weaned itself off such underwriting and used direct-mail lists—some provided by Armey—to build up a base of small donors. But in the last year, there was a "big surge in private individual contributions," most of which Armey says he didn't know about. "The details were kept secret from me," he remarks.
FreedomWorks, flush with wealthy donors' money, took full advantage of the nation's lax campaign finance rules during the 2012 election cycle. The group's nonprofit side shifted millions [ https://www.opensecrets.org/pacs/pacgave2.php?sort=A&cmte=C00499020&cycle=2012&Page=1 ] of dollars [ https://www.opensecrets.org/pacs/pacgave2.php?sort=A&cmte=C00499020&cycle=2012&Page=2 ] in dark money to the FreedomWorks super-PAC, effectively hiding the true source of those funds. One campaign finance reform advocate blasted [ http://usatoday30.usatoday.com/news/politics/story/2012-02-05/undisclosed-pac-money/52978306/1 ] those internal money transfers as the "laundering of secret money." A FreedomWorks spokeswoman did not respond to requests for comment.
The December board report was prepared in the wake of a bitter internal battle between Armey and FreedomWorks president and CEO Matt Kibbe. As Mother Jones first reported [ http://www.motherjones.com/mojo/2012/12/dick-armey-resigns-freedomworks-tea-party ], Armey resigned in November after feuding with Kibbe over the direction of FreedomWorks. Armey accused [ http://www.motherjones.com/politics/2012/12/dick-armey-freedomworks-hostile-takeover-memo ] Kibbe of using FreedomWorks resources to write a book in a deal that awarded Kibbe the sales profits. Two board members allied with Armey in December launched a legal investigation [ http://www.motherjones.com/documents/549553-letter-from-c-boyden-gray-and-james-h-burnley ] into alleged wrongdoing at FreedomWorks. Kibbe, meanwhile, drafted a memo [ http://www.motherjones.com/politics/2012/12/dick-armey-freedomworks-hostile-takeover-memo ] charging that Armey tried to steer the group away from its tea party roots and toward a more mainstream GOP position. Four FreedomWorks staffers, including vice president for public policy and government affairs Max Pappas, resigned [ http://www.motherjones.com/mojo/2012/12/dick-armey-resigns-freedomworks-tea-party#update ] after news broke of Armey's resignation.
In 2012, according to the board book, FreedomWorks hosted 110 current and potential "investors" at a Jackson Hole, Wyoming, hotel for its second annual "Restore Liberty" donor retreat. The event resulted in a source pledging a $10 million matching grant; the board book does not name this source. In August 2013, FreedomWorks plans to fete donors at the four-star St. Regis resort [ https://plus.google.com/115474989738085320724/about?hl=en ] in Aspen, Colorado. (FreedomWorks also treats its board well, holding its August 2012 meeting at the Snake River Lodge and Spa in Teton Village, Wyoming, according to minutes taken at the meeting.)
In 2013, FreedomWorks plans to spend between $25 million and $30 million, according to the board book. Favored causes and projects include the annual Blog-Con convention, the right's answer to Netroots Nation; fly-ins for activists [ http://m.freedomworks.org/press-releases/freedomworks-grassroots-army-to-take-capitol-hill- ] to lobby members of Congress; briefings with lawmakers and their aides; and the recently launched FreedomWorks University [ http://www.freedomworksforamerica.org/posts/whats-next ]. FreedomWorks also plans to continue its financial support for Glenn Beck's media enterprise, including sharing a TV studio with and leasing office space to the Washington bureau of TheBlaze [ http://www.theblaze.com/ ], Beck's website and TV network.
The board book is chock full of strategy talk by the FreedomWorks' brass. In a memo to the board included in the report, CEO Kibbe panned GOP presidential nominee Mitt Romney as just another "old white guy." He acknowledged that his group's plan to help flip control of the US Senate to the GOP failed miserably ("We take our lumps with humility"), and he insisted that it's time to replace the aging image of the conservative movement with "younger, more diverse, more substantive voices for freedom in America." Kibbe asked: "Can liberty, personal responsibility, and doing things for yourself be the new 'cool'?"
Such a makeover, Kibbe wrote, can begin if FreedomWorks courts so-called "Ron Paul Millennials," the loud, loyal twentysomethings who in 2008 and 2012 followed the GOP libertarian presidential candidate from one stump speech to the next. Kibbe noted that FreedomWorks plans to reach out to blacks and Hispanics with a new "Black and Brown" tour, starring a Brazilian immigrant and tea party activist named Ana Puig. And he touted FreedomWorks' growing online presence, with 2.1 million members on its email list and 4 million Facebook fans.
Despite his organization's reliance on big-money donors, Kibbe stressed that the future of conservative politics is at the grassroots level. "Freedom is trending," he wrote to the board, "thanks to your willingness to keep up the fight."
Read FreedomWorks' Winter 2012 board book:
[complete 52-page document embedded, Scibd-style]
*
Support for Mother Jones' dark money reporting comes in part from the Puffin Foundation's First Amendment program.
Find all of our dark money reporting here:
http://www.motherjones.com/category/secondary-tags/dark-money
*
Copyright ©2013 Mother Jones and the Foundation for National Progress
http://www.motherjones.com/politics/2012/12/freedomworks-rich-donors-armey-kibbe-super-pac [with comments]
===
Electoral College Count Affirms Obama Win Over Mitt Romney
(Photo by Chip Somodevilla/Getty Images)
By DONNA CASSATA
01/04/13 08:00 PM ET EST
WASHINGTON — Congress made the obvious official on Friday. President Barack Obama has been re-elected.
In a joint session, Congress formally certified that Obama and Vice President Joe Biden were the winners in the November election with 332 electoral votes, well more than the 270 required. Republican Mitt Romney and his running mate, Rep. Paul Ryan of Wisconsin, won 206 votes.
It's a mostly ceremonial – yet constitutionally necessary – vote that's mostly intriguing to political junkies and policy wonks. The count Friday lacked the suspense of the drawn-out campaign and election but was steeped in tradition.
Biden and about a dozen senators trekked across the Capitol from the Senate to the House chamber, and the vice president joined House Speaker John Boehner, R-Ohio, on the rostrum. Senate pages carried two dark wooden boxes that contained the results of the electoral votes that had been counted in the state capitals last month. Clerks used silver letter openers to unseal the envelopes.
Taking turns, the leaders of the Senate Rules Committee – Chuck Schumer, D-N.Y., and Lamar Alexander, R-Tenn. – and the top members of the House Administration Committee – Reps. Candice Miller, R-Mich., and Robert Brady, D-Pa. – read the results from each state. Biden, who presided over the session, announced the final results to applause from the scattering of House and Senate members in the chamber.
The 12th Amendment directs the electors chosen by the states to meet and vote for president and vice president. Each state gets its equivalent in the 435-member House and the 100-member Senate. The District of Columbia gets the other three electors. Their certified tally sheets must be counted in Washington.
The low-key session was in sharp contrast to the drama in January 2001, when Vice President Al Gore, the loser in the disputed election, presided over the certification of an electoral count that gave the presidency to his rival, Republican George W. Bush. Gore had beaten Bush in the popular vote but lost the electoral count.
Months after the November election, the final official vote from all 50 states and the District of Columbia showed Obama with 65,899,660 votes, or 51.1 percent, and Romney with 60,932,152 votes, or 47.2 percent. Obama is the first president since Republican Dwight Eisenhower to win back-to-back presidential elections with more than 51 percent of the popular vote.
Chief Justice John Roberts will swear in Obama at noon on Jan. 20 at the White House in a private ceremony, and then administer the oath again on the West Front of the Capitol the next day. The Constitution requires that the inauguration take place on Jan. 20 but because it is a Sunday, the public session and the accompanying parade and festivities will occur on Monday.
Biden has asked Supreme Court Justice Sonia Sotomayor to swear him in for a second term. She will be the first Hispanic to administer either a presidential or vice presidential oath.
Copyright 2013 The Associated Press
http://www.huffingtonpost.com/2013/01/04/electoral-college-count_n_2410790.html [with comments]
===
On Filibuster Reform, Advocates Claim Momentum
By Sabrina Siddiqui and Ryan Grim
Posted: 01/03/2013 6:09 pm EST | Updated: 01/04/2013 1:08 pm EST
WASHINGTON -- The Senate postponed debate on reforming the filibuster Thursday, as advocates cited the support of 48 senators for eliminating the silent filibuster using the so-called constitutional option, a measure that requires 50 votes plus that of the vice president.
During a briefing on Capitol Hill, Sens. Jeff Merkley (D-Ore.) and Tom Udall (D-N.M.) updated reporters on their joint effort, which is also being shepherded by Sen. Tom Harkin (D-Iowa).
The remaining seven within the Democratic caucus who have yet to sign on are Sen. Carl Levin (D-Mich.), Sen. Mark Pryor (D-Ark.), Sen. Patrick Leahy (D-Vt.). Sen. Max Baucus (D-Mont.), Sen. Jack Reed (D-R.I.), Sen. Barbara Boxer (D-Calif.) and Sen. Dianne Feinstein (D-Calif.), a source familiar with the whip count told The Huffington Post.
A coalition of progressive groups is also keeping up the pressure for reform, such as advocacy group CREDO Action, which targeted wavering senators Wednesday.
Despite some opposition, Udall was confident about the proposal’s prospects, telling reporters, "Momentum is on our side -- my uncle Mo used to refer to the 'big mo.'" Udall's uncle, Mo Udall, was a longtime Arizona congressman. Udall said he anticipates having enough Democratic votes to pass reform using what advocates call the constitutional option, but what opponents refer to as the “nuclear option.”
“I believe we have 51 votes to utilize the constitution and go forward with rules change,” Udall said, implying that enough of the remaining seven would swing their way to push them over the top. If the chamber was deadlocked at 50-50, Vice President Joe Biden, who supports filibuster reform, would break the tie.
The main component of the Merkley-Udall approach is the talking filibuster, which still enables the minority to filibuster legislation but would require them to do so by actually standing and speaking on the floor. Additionally, the proposal would also streamline conference committee assignments and nominations, and eliminate the motion to proceed -- a motion typically offered by the majority leader to bring up a bill or other measure for consideration.
Their plan is currently in competition with a bipartisan plan [ http://www.huffingtonpost.com/2012/12/28/john-mccain-filibuster-reform-counterproposal_n_2375640.html ] more recently introduced by Sens. Carl Levin (D-Mich.) and John McCain (R-Ariz.), and backed by six other senators. Merkley told reporters the competing package “as put out, does nothing to take on the secret, silent filibuster that is haunting this body.” The Levin-McCain counterproposal, which was unveiled last week, has also come under attack [ http://www.huffingtonpost.com/2012/12/29/filibuster-reform-fix-the-senate-now_n_2381788.html ] by a large coalition of progressive and labor organizations.
Senate Majority Leader Harry Reid (D-Nev.) announced earlier on Thursday that he will recess the chamber at the close of the day’s proceedings, thereby extending the first legislative day of the new Congress to maintain his ability to reform the Senate’s filibuster rules later this month.
“The Senate is simply not working as it should,” Reid said on the Senate floor. “We will reserve the right of all Senators to propose changes to the Senate rules, and we will explicitly not acquiesce in the carrying over of all the rules from the last Congress.”
Merkley confirmed to HuffPost shortly after the briefing that the filibuster reform debate will begin on Jan. 22.
The 112th Congress, which was proclaimed the least productive [ http://www.huffingtonpost.com/2012/12/28/congress-unproductive_n_2371387.html ] since the 1940s, utilized the filibuster nearly 400 times.
A HuffPost/YouGov poll [ http://www.huffingtonpost.com/2012/11/30/filibuster-reform-poll_n_2218963.html ] conducted in late November found that 65 percent of Americans believe senators should have to participate in debate for the duration of a filibuster, while only 9 percent of those polled said that senators should be able to filibuster without being physically present.
Copyright © 2013 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2013/01/03/filibuster-reform-senate_n_2405008.html [with comments]
===
Washington's Deficit Obsession Is Insane, Chart Indisputably Proves
01/04/2013
http://www.huffingtonpost.com/2013/01/04/washington-deficit-obsession_n_2409978.html [with comments]
--
Battles of the Budget
By PAUL KRUGMAN
Published: January 3, 2013
The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House.
For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.
The fight over the fiscal cliff was just one battle in that war. It ended, arguably, in a tactical victory for Democrats. The question is whether it was a Pyrrhic victory that set the stage for a larger defeat.
Why do I say that it was a tactical victory? Mainly because of what didn’t happen: There were no benefit cuts.
This was by no means a foregone conclusion. In 2011, the Obama administration was reportedly willing to raise the age of Medicare eligibility, a terrible and cruel policy idea. This time around, it was willing to cut Social Security benefits by changing the formula for cost-of-living adjustments, a less terrible idea that would nonetheless have imposed a lot of hardship — and probably have been politically disastrous as well. In the end, however, it didn’t happen. And progressives, always worried that President Obama seems much too willing to compromise about fundamentals, breathed a sigh of relief.
There were also some actual positives from a progressive point of view. Expanded unemployment benefits were given another year to run, a huge benefit to many families and a significant boost to our economic prospects (because this is money that will be spent, and hence help preserve jobs). Other benefits to lower-income families were given another five years — although, unfortunately, the payroll tax break was allowed to expire, which will hurt both working families and job creation.
The biggest progressive gripe about the legislation is that Mr. Obama extracted less revenue from the affluent than expected — about $600 billion versus $800 billion over the next decade. In perspective, however, this isn’t that big a deal. Put it this way: A reasonable estimate is that gross domestic product over the next 10 years will be around $200 trillion. So if the revenue take had matched expectations, it would still have amounted to only 0.4 percent of G.D.P.; as it turned out, this was reduced to 0.3 percent. Either way, it wouldn’t make much difference in the fights over revenue versus spending still to come.
Oh, and not only did Republicans vote for a tax increase for the first time in decades, the overall result of the tax changes now taking effect — which include new taxes associated with Obamacare as well as the new legislation — will be a significant reduction in income inequality, with the top 1 percent and even more so the top 0.1 percent taking a much bigger hit than middle-income families.
So why are many progressives — myself included — feeling very apprehensive? Because we’re worried about the confrontations to come.
According to the normal rules of politics, Republicans should have very little bargaining power at this point. With Democrats holding the White House and the Senate, the G.O.P. can’t pass legislation; and since the biggest progressive policy priority of recent years, health reform, is already law, Republicans wouldn’t seem to have many bargaining chips.
But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions.
Now, the president has said that he won’t negotiate on that basis, and rightly so. Threatening to hurt tens of millions of innocent victims unless you get your way — which is what the G.O.P. strategy boils down to — shouldn’t be treated as a legitimate political tactic.
But will Mr. Obama stick to his anti-blackmail position as the moment of truth approaches? He blinked during the 2011 debt limit confrontation. And the last few days of the fiscal cliff negotiations were also marked by a clear unwillingness on his part to let the deadline expire. Since the consequences of a missed deadline on the debt limit would potentially be much worse, this bodes ill for administration resolve in the clinch.
So, as I said, in a tactical sense the fiscal cliff ended in a modest victory for the White House. But that victory could all too easily turn into defeat in just a few weeks.
© 2013 The New York Times Company
http://www.nytimes.com/2013/01/04/opinion/kurgman-battles-of-the-budget.html [with comments]
--
As tax hikes kick in for all, top earners pay growing share
By William La Jeunesse
Published January 03, 2013
FoxNews.com
Taxes are going up this week on almost everyone, but one group of top earners will feel the pinch far more than others. The .7 percent.
It's an exclusive club created by President Obama's new tax plan. Already the most progressively taxed nation in the world, the U.S. becomes more top heavy with the new tax code, analysts say.
With income tax hikes concentrated on only those individuals earning more than $400,000 and couples making more than $450,000, about 40 percent of all federal income taxes will now be paid by just .7 percent of all federal income tax returns, according to preliminary numbers from Tax Foundation Chief Economist William McBride.
"We are currently the reigning champion of progressivity. This deal will make our tax code even more progressive," said McBride. "We cannot sustain a situation where the top 1 percent pays 40 percent of the tax burden, while the bottom half roughly on average pays no income taxes."
Previous data showed about 37 percent of the federal income tax burden fell on the top 1 percent, while 41 percent had a zero or negative tax liability. The share of nonpayers, which has doubled since 1990, is expected to stay consistent for at least five years under the deal.
The tax plan approved this week raises the top marginal rate to 39.5 percent on those making over $400,000/$450,000 and their capital gains rate rises from 15 to 20 percent. Two other provisions also limit the value of their deductions. Taken together, McBride estimates the top .7 percent -- roughly 1.1 million of 143 million tax returns -- will pay about 40 percent of all federal income taxes.
"It creates huge divisions in society and breeds contempt. It's class warfare. It is also unsustainable because it disconnects voters. The bottom half of the population pays no income tax. That's hugely disruptive. Those folks now have an incentive to lobby for more federal spending and it disconnects them from the cost of the federal government."
While most taxpayers were shielded from increases in their income taxes, payroll taxes went up for everyone. The IRS issued new withholding guidelines for employers earlier this week. Some workers will see the higher deductions on Friday -- others next week.
Here are some examples.
-- for a single person earning $38,000 a year, the IRS told employers to withhold $5,437 a year. That's up $570, or $11 a week.
-- for someone earning $90,000, they will pay $19,885 -- or $2,443 more than last year.
-- for someone earning $185,000, the government will withhold $49,459 -- an increase of $5,977.
-- for someone earning over $400,000, payroll taxes will increase by $270 per week or $14,212 a year.
Still, payroll taxes (that's the FICA deduction on your paycheck) pay for Social Security and Medicare. That is money taxpayers eventually get back, and then some.
Over a lifetime, the average male worker pays $345,000 in FICA taxes, but gets back $417,000 in benefits, according to the nonpartisan think tank, The Urban Institute.
©2013 FOX News Network, LLC
http://www.foxnews.com/politics/2013/01/03/tax-hikes-start-this-week-for-all/
--
Ari Fleischer Says He'll Give Less To Charity Because Of New Limits On Tax Breaks
01/02/2013
http://www.huffingtonpost.com/2013/01/02/ari-fleischer-charity-tax-break_n_2397880.html [with embedded video report, and comments]
--
The new conservative purity test
The GOP may have rolled over on the "fiscal cliff," but its fight for entitlement cuts is just beginning
Jan 4, 2013
http://www.salon.com/2013/01/04/the_new_conservative_purity_test/ [with comments]
--
Joe Scarborough: 'The Seeds Are Being Planted For The Destruction Of The House Republican Majority'
01/03/2013
http://www.huffingtonpost.com/2013/01/03/joe-scarborough-seeds-planted-destruction-house-republican-majoirty_n_2402551.html [with video of Joe embedded, and comments]
--
Newt Gingrich: Debt Ceiling Is A 'Dead Loser'
01/04/2013
http://www.huffingtonpost.com/2013/01/04/newt-gingrich-debt-ceiling_n_2408764.html [with video of Newt embedded, and comments]
===
Former Navy Chaplain On Newt Gingrich Gay Marriage Stance: 'Worthy Of Death'
Former Navy chaplain Gordon Klingenschmitt believes that Newt Gingrich caved to "demonic voices" when he changed his stance on gay marriage. Here, the chaplain is during a hunger strike in front of the White House in 2006.
(AP)
By Cavan Sieczkowski
Posted: 01/04/2013 12:12 pm EST | Updated: 01/04/2013 3:02 pm EST
A former Navy chaplain says that Newt Gingrich's stance on same-sex marriage was influenced by "demonic voices" and makes the former Republican presidential candidate "worthy of death."
Gingrich spoke about the issue of same-sex marriage [ http://www.huffingtonpost.com/2012/12/20/newt-gingrich-mitt-romney_n_2337895.html ] during an interview with The Huffington Post in December. Although he defended his belief that marriage is between a man and a woman, the former House Speaker said the GOP needs to progress with the times.
"It is in every family. It is in every community," he told HuffPost. "The momentum is clearly now in the direction in finding some way to ... accommodate and deal with reality. And the reality is going to be that in a number of American states -- and it will be more after 2014 -- gay relationships will be legal, period."
On Thursday, Right Wing Watch posted [ http://www.rightwingwatch.org/content/klingenschmitt-gingrich-under-influence-demonic-voice-gay-marriage-statement ] a video response to Gingrich's same-sex marriage comments made by Navy chaplain Gordon Klingenschmitt, according to Raw Story [ http://www.rawstory.com/rs/2013/01/03/former-navy-chaplain-gingrich-worthy-of-death-for-supporting-marriage-equality/ ]. In the video [ http://www.youtube.com/watch?v=ClVdy8ETLbY (above, as embedded)], the chaplain says Gingrich is wholly misguided in pandering to the left and "homosexual sin."
The chaplain cites a Bible passage from Romans, Chapter 1, which says “homosexual acts are worthy of death.”
“It’s not like Newt is personally engaging in homosexual activity, but the Bible condemns him now because he takes pleasure in those that do that sort of thing,” he explained. “When the Bible condemns his endorsement of homosexual sin then he has become one of the sinners condemned by Romans, Chapter 1.”
Klingenschmitt continued to say Gingrich is tempted by "demonic voices" that tell him "Okay, it's not really a sin. We ought to endorse this" simply to get more votes in a possible 2016 presidential run.
The chaplain, who belongs to an evangelical sect of the Episcopal Church and was disgraced in 2006 for disobeying an order [ http://www.washingtonpost.com/wp-dyn/content/article/2006/09/14/AR2006091401544.html ], is not the only one to speak out against Gingrich's evolved view on same-sex marriage. Frank Schubert, National Political Director for the National Organization for Marriage (NOM), called the politician's comments both "stupid" and "ridiculous."
Gingrich was previously vocal against same-sex marriage [ http://www.huffingtonpost.com/2012/01/26/newt-gingrich-gay-marriage-_n_1234955.html ]. He went so far as to compare it to paganism, saying, "The effort to create alternatives to marriage between a man and a woman are perfectly natural pagan behaviors, but they are a fundamental violation of our civilization." While running for the GOP presidential nomination, he also vowed to enforce the Defense of Marriage Act.
Copyright © 2013 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2013/01/04/newt-gingrich-gay-marriage-navy-chaplain-worthy-of-death_n_2409648.html [with comments]
--
Leading Conservative Religious Organization Warns That Christians Will Soon Be Treated Like Blacks In Jim Crow Era
By Scott Keyes on Jan 2, 2013 at 1:34 pm
The American Family Association, a top conservative Christian organization, emailed members today with a dire warning that, within 50 years, Christians will be treated like African Americans during the Jim Crow era.
In an email entitled “What will religion look like in the year 2060?”, the AFA warned about the coming onslaught against Christians, who currently make up over three-quarters [ http://www.gallup.com/poll/151760/christianity-remains-dominant-religion-united-states.aspx ] of Americans. The group’s predictions include that Christians will be brutally discriminated against like blacks before the Civil Rights Era, government will take children from parents at birth, and any city with “Saint” or other loosely-religious name will be forced to change.
The full email:
What will religion look like in the year 2060?
Conservative Christians will be treated as second class citizens, much like African Americans were prior to civil rights legislation in the 1960s.
Family as we know it will be drastically changed with the state taking charge of the children beginning at birth.
Marriage will include two, three, four or any number of participants. Marriage will not be important, with individuals moving in and out of a “family” group at will.
Churchbuildings will be little used, with many sold to secular buyers and the money received going to the government.
Churches will not be allowed to discuss any political issues, even if it affects the church directly.
Tax credit given to churches and non-profit organizations will cease.
Christian broadcasting will be declared illegal based on the separation of church and state. The airwaves belong to the government, therefore they cannot be used for any religious purpose.
We will have, or have had, a Muslim president.
Cities with a name from the Bible such as St. Petersburg, Bethlehem, etc. will be forced to change their name due to separation of church and state.
Groups connected to any religious affiliation will be forced out of health care. Health centers get tax money from the state, making it a violation of church and state.
Get involved! Sign THE STATEMENT.
Sincerely,
Donald E. Wildmon
As absurd as they may be, these 2060 predictions may not even rank among the AFA’s most extreme ideas. The group’s spokesman has called for kidnapping [ http://thinkprogress.org/lgbt/2012/08/08/655951/bryan-fischer-children-of-same-sex-couples-must-be-saved-through-underground-railroad-kidnapping/ ] the children of same-sex couples through a modern-day “Underground Railroad” system. When one man heeded this advice and aided a woman in kidnapping the daughter of a lesbian woman, the group advised him to flout American laws [ http://thinkprogress.org/lgbt/2012/08/15/692421/bryan-fischer-encourages-guilty-conductor-of-child-kidnapping-underground-railroad-to-flee-the-country/ ] and flee the country. AFA also organizes against any individual or company that shows the slightest tolerance for LGBT people, including Office Depot [ http://thinkprogress.org/lgbt/2012/07/23/569901/hate-group-attacks-office-depot-and-lady-gaga-because-homosexuality-is-a-poor-and-dangerous-choice/ ], Urban Outfitters [ http://thinkprogress.org/lgbt/2012/04/16/464875/conservative-group-whines-about-urban-outfitters-gay-advertising/ ], Home Depot [ http://thinkprogress.org/lgbt/2012/06/27/507005/abc-news-invents-fictional-anti-gay-oreo-boycott/ ], JC Penney [ http://thinkprogress.org/lgbt/2012/03/08/440404/anti-gay-group-abandons-failed-boycott-of-jc-penney-and-ellen-degeneres/ ], and Google [ http://thinkprogress.org/lgbt/2012/07/10/514036/anti-gay-group-plans-google-boycott-this-is-going-to-be-a-tough-one/ ].
The AFA’s ideas may be fringe, but their level of support is anything but. The group remains influential [ http://www.salon.com/2011/04/06/bryan_fischer_muslims_gop_candidates/ ] among both conservative grassroots and Republican politicians. The AFA’s former leader was heavily courted in the 2012 Republican presidential primary, ultimately endorsing [ http://thehill.com/blogs/blog-briefing-room/news/200447-gingrich-wins-endorsements-from-american-family-association-iowa-speaker ] Newt Gingrich and helping dissuade concerns about his multiple marriages and past infidelities.
© 2013 Center for American Progress Action Fund (emphasis in original)
http://thinkprogress.org/politics/2013/01/02/1386001/afa-christians-2060/ [with comments]
--
Marion Hammer, Ex-NRA President, Compares Assault Weapons Ban To Racial Discrimination
01/04/2013
http://www.huffingtonpost.com/2013/01/04/marion-hammer-nra_n_2411175.html [with comments]
--
Jemele Hill Racist Letter: ESPN Personality Tweets Racist Complaints From Listener
[ http://twitter.com/jemelehill/status/287204735742791681/photo/1/large , via https://twitter.com/jemelehill/statuses/287204735742791681 ]
01/04/2013
http://www.huffingtonpost.com/2013/01/04/jemele-hill-espn-racist-abuse_n_2410254.html [with comments], also
http://deadspin.com/5973132/lets-play-count-the-slurs-in-jemele-hills-hate-mail [with comments]
--
RUSH: Will Joy Behar Have To Wear A Burka Now That Al Jazeera Bought Current TV?
Uploaded on Jan 3, 2013
Find More @ http://www.DailyRushbo.com
http://www.youtube.com/watch?v=lfGUYMyhpYg
--
House GOP Lets Violence Against Women Act Passed By Senate Die Without A Vote
01/03/2013
http://www.huffingtonpost.com/2013/01/02/violence-against-women-act-_n_2398553.html [with embedded video report, and comments]
--
California Appeals Court Overturns Rape Conviction, Rules State Law Doesn't Protect Unmarried Women
01/03/13
http://www.huffingtonpost.com/2013/01/03/california-appeals-court-_n_2406167.html [with embedded video report, and comments]
--
Virginia Abortion, Contraception Bills Proposed In New Legislative Session
01/04/2013
http://www.huffingtonpost.com/2013/01/04/virginia-abortion-contraception_n_2410445.html [with comments]
--
Steve King Introduces Bill To Stop 'Anchor Babies'
01/04/2013
http://www.huffingtonpost.com/2013/01/04/steve-king-anchor-babies_n_2411989.html [with comments]
--
Conservative Group Attempts To Block New Hampshire's Bailout From Voting Rights Act
01/02/2013
http://www.huffingtonpost.com/2013/01/02/new-hampshire-voting-rights-act_n_2397801.html [with comments]
--
George Lucas, Mellody Hobson Engaged: 'Star Wars' Director, Businesswoman Set To Marry
01/03/2013
HuffPost Celebrity can report that filmmaker George Lucas and his girlfriend of seven years, businesswoman Mellody Hobson, are engaged.
The famed director, 68, and his longtime partner and president of a big-time Chicago-based investment management firm [ http://www.forbes.com/profile/mellody-hobson/ ], Ariel Investments LLC, 43, are no strangers to showcasing their relationship in the spotlight. The pair are often spotted hand-in-hand on the red carpet, everywhere from the Cannes Film Festival to Formula One Grand Prix races to the NAACP awards.
[...]
Lucas recently made headlines after donating $4 billion to an education foundation [ http://www.huffingtonpost.com/2012/11/02/george-lucas-donate-4-billion_n_2067145.html ] -- the amount he received after selling Lucasfilm Ltd. (which Lucas solely owned) to Disney.
[...]
http://www.huffingtonpost.com/2013/01/03/george-lucas-mellody-hobson-engaged_n_2404471.html [with comments]
===
(linked in):
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82962315 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82965720 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82980412 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82984846 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82990236 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82991383 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82992473 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997498 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997721 (and any future following);
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82413821 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997812 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82997984 (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82998389 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82999309 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=82999877 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83002579 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83002808 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83007521 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83027686 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83033740 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83038633 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83047987 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83066245 and preceding (and any future following)
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83070201 and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83075802 and preceding and following
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=83081749 and following
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
