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JHB

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Member since: 2001
Number of posts: 20,273

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The Professional Left podcast with Driftglass & Bluegal (Aug 24, 2012)

Not mine, just passing the info along

Ep 142 Spastic Tubes and Netflix Queues (50:23)

Download the MP3

Date: August 24, 2012

By: Driftglass and Blue Gal

Description: We discuss the Akin Abortion A-hole-ery and recommend three old movies that help explain the current political extremeism, even though they’re from the sixties. More at ProfessionalLeft.blogspot.com

Another Fat Cat threatens to 'Go Galt'

There's a full-page ad in the New York Times today (on page A5, no less) titled "Why this fat cat likes Obama's tax plan". Signed by one Norman Lizt of La Jolla CA (PO Box 1423 - right there in the ad), it's six paragraphs of "boastful humility" (he "certainly doesn't qualify for the Forbes 400 Richest Americans, but has had "income averaging close to eight figures annually for the past seven years").

(It's a print ad, and I can't find a link to an electronic version, but I'm sure someone will scan or transcribe it soon enough. I'm only going to type out so much right now.)

"Assuming Barack Obama wins reelection and successfully achieves his redistributionist tax agenda (with 39+% marginal rates plus a 3.8% tax on investment income plus substantially higher dividend and capital gains rates), I will find myself, when my high California taxes are added in, at a marginal rate of taxation well over 50%. This represents the crossing of an invisible threshold to me and is entirely unacceptable."

The rest is saying how he would then shutter his private equity firm, buy short-term treasuries which currently have low interest and thus would create little income for him to tax, how his poor, poor highly-paid employees would be let go, cut his charitable giving, and basically take his marbles and go home, so there!

I say, let him! If his business is really doing so well, someone will go after that money, even if it isn't quite so lucrative as "close eight figures annually". That's still multiple millions. I'm sure someone will pursue those opportunities. That's a little thing we call capitalism.

Unless there is more than one highly successful private equity firm in La Jolla run by a man named Norman Lizt, he's around 70 years old and has been in this business for a long time, long enough that he was in his 40s before Federal income taxes fell to levels he now calls "redistributionist", before Bush pushed through his budget-breaking cuts.

So Go Galt, Mr. Lizt! If you're getting into a snit because it becomes a little harder to redistribute wealth into your pockets, then by all means do so. You've gouged enough.

On edit: corrected the part regarding what "nearly eight figures" meant. Doesn't change my point in any significant way.

I propose the 'Romney Nose Mars Clock'

A countdown to when Romney's outright lies in this campaign will have his Pinocchio nose catch up with the Curiosity probe.

His first TV ad used an Obama quote that editied out the fact that Obama was himself quoting the McCain campaign staff. His "You Built This" theme is based on taking an X-Acto knife to extract one sentence with a grammatical glitch from a talk nearly indistinguishable from speeches Romney himself has given. The "they just send you your welfare check" ad folds, spindles,and mutilates facts in order to push the "welfare queen" hot button, and there's a host of lower level comments.

His entire campaign is based on horseshit. And you can bet hell take a tax deduction for that too. I bet he outsources too: those guys who used to put out the Soviet Pravda need jobs. That would also explain why his foreign policy guy still talks about the Soviet Union.

Simply calling him liarliarliar gets old, because it's politics' big surprise that a politician lies, right?

But the scale of it is ... well, comparable to Romney's money compared to everyone else.

So to better call attention to the naked, sustained, fogbank-of-steam-rising-off-a-mountain-of-bullshit lying, let's take a cue from the Doomsday Clock or the Debt Clock and have the Romney Nose Mars Clock:

How close is Romney's Pinocchio-nose to reaching Mars?

Rachel Maddow, are you listening?

You know what one of the best things about the Curiosity landing is?

That these guys:





are not the only ones who are into it:






Hey, Mitt! Wasn't April 15th MONTHS ago? Where's your 2011 tax return?

I think a point brought up by progressivebydesign in another thread deserves an OP
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=1068356

I understand there can be extensions to the tax deadline, but Jesus Christmas, how long does it take? It's August already! Aren't you done yet, for pete's sake?

Aren't you retired? Wouldn't that make things a little bit simpler? Or maybe be a job creator and hire a little more manpower to help the peons/////people who do the dirty work of figuring out your taxes?

Ordinary American rule of thumb: if it takes you over seven months to figure out your taxes, you are evading taxes. It may be legalized evasion, but it's still dirty money.

Stop skipping and pay your share of the damn tab.

The Mitt Method

How Uncle Sam Helped Mitt Romney Build His Fortune

Via Crooks and Liars
http://crooksandliars.com/jon-perr/how-uncle-sam-helped-romney-build-his-fortune
Private equity owes its success in no small part to that uniquely American provision of the corporate tax code. The New York Times recently helped explain why:
Companies can finance investment from either debt or equity. Companies can finance investment from either debt or equity. But profit on an investment financed with equity -- stock issued by the company -- is taxed. In contrast, if the project is financed with debt, then only the profit after interest payments are made is taxed. This means debt-financed investments are cheaper than equity.

And not just a little cheaper. As the Treasury Department recently explained, "The effective corporate marginal tax rate on new equity-financed investment in equipment is 37 percent in the United States. At the same time, the effective marginal tax rate on the same investment made with debt financing is minus 60 percent--a gap of 97 percentage points." The result:
This creates a bias by corporations toward debt.

Or, for the likes of Mitt Romney, a business model.

For the leveraged buyout (LBO) kings of the 1970's and 1980's, that was the pot of the gold at the end of the rainbow. Because the same interest deduction applied whether debt was taken on for a new factory or just to pay investors, Josh Kosman detailed in The Buyout of America, the early corporate raiders and their private equity successors could almost mint money as they bought firms for a fraction of the overall deal size:
Kohlberg saw a way to make debt far less onerous for the company being acquired. He would have the company treat its debt the way businesses handle capital expenditures--as operating expenses deduced from profits through the depreciation tax schedules, thereby greatly reducing taxes. With far less to pay the government, his companies could use the money that formerly went to Uncle Sam to retire these huge loans at an unusually fast rate. Bear's equity would rise with every dollar the companies paid back in debt, even if the value of the businesses only remained the same. The final step in the plan was to sell these companies, usually within four to six years.


This isn't just about Mitt. Everything I've read about this sort of finanvial wheeling and dealing notes that much of it wouldn't have made financial sense without obscure provisions like this.

It's not "punishing success", and never was. It's about re-aligning incentives with desired outcomes, not incentivizing destructive ones. And exploiting a tax loophole, destroying good-paying jobs to free up enough money to make deductible payments on the debt you incurred, then cashing out for huge profit is not a desired outcome for anyone but the vultures taking the profits on it.

How Uncle Sam Helped Mitt Romney Build His Fortune

...or, "How I made millions and millions and millions by gaming the system (corporate debt interest tax deduction edition)".

Via Crooks and Liars
http://crooksandliars.com/jon-perr/how-uncle-sam-helped-romney-build-his-fortune
Private equity owes its success in no small part to that uniquely American provision of the corporate tax code. The New York Times recently helped explain why:
Companies can finance investment from either debt or equity. Companies can finance investment from either debt or equity. But profit on an investment financed with equity -- stock issued by the company -- is taxed. In contrast, if the project is financed with debt, then only the profit after interest payments are made is taxed. This means debt-financed investments are cheaper than equity.

And not just a little cheaper. As the Treasury Department recently explained, "The effective corporate marginal tax rate on new equity-financed investment in equipment is 37 percent in the United States. At the same time, the effective marginal tax rate on the same investment made with debt financing is minus 60 percent--a gap of 97 percentage points." The result:
This creates a bias by corporations toward debt.

Or, for the likes of Mitt Romney, a business model.

For the leveraged buyout (LBO) kings of the 1970's and 1980's, that was the pot of the gold at the end of the rainbow. Because the same interest deduction applied whether debt was taken on for a new factory or just to pay investors, Josh Kosman detailed in The Buyout of America, the early corporate raiders and their private equity successors could almost mint money as they bought firms for a fraction of the overall deal size:
Kohlberg saw a way to make debt far less onerous for the company being acquired. He would have the company treat its debt the way businesses handle capital expenditures--as operating expenses deduced from profits through the depreciation tax schedules, thereby greatly reducing taxes. With far less to pay the government, his companies could use the money that formerly went to Uncle Sam to retire these huge loans at an unusually fast rate. Bear's equity would rise with every dollar the companies paid back in debt, even if the value of the businesses only remained the same. The final step in the plan was to sell these companies, usually within four to six years.


This isn't just about Mitt. Everything I've read about this sort of financial wheeling and dealing notes that much of it wouldn't have made financial sense without obscure provisions like this. And it's not as if this problem was unrecognized: once upon a time ordinary could deduct for credit card debt. Once everyone started getting cards and people discovered that by maxing out their cards they could cut their taxes, that was ended. Not so for other (corporate) forms of the same rule-exploitation.

This isn't about "punishing success", and never was. It's about re-aligning incentives with desired outcomes.

Mitt's Salt Lake City Olympics pins: why does his chin...

...have a bustline?





Pics via Digby's Hullabaloo. Post on the pins (first executive to be on a pin!):
http://digbysblog.blogspot.com/2012/07/heroes-in-their-own-minds.html

Stay classy, Mitt

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