Know your BFEE: Social Security is a Side Show while Banksters Walk and You Pick Up the Tab [View all]

[Octafish]

The great debate about Social Security is vitally important to me and most all the non-millionaires I know. However, its sudden rise to prominence seems to be deflecting discussion of the greater economic reality. First, SS has zero to do with the budget deficit and should not be part of any budget "compromise." Secondly, the real issue that is causing the budget deficit is the simple fact that the super-rich and the corporations they own and control are not paying their fair share, if anything, in taxes.

Here are some things to know and consider:

The nation at the heart of the offshore scandal: Britain

Britain's relationship with its overseas territories means it could – if it wanted – easily tackle offshore global secrecy

James Ball
guardian.co.uk, Friday 5 April 2013

EXCERPT...

But such a stance ignores that one nation in particular has ties to offshore havens everywhere. It's a veritable nexus of offshore influence, related to havens in the Caribbean, and much closer to home. That nation is, of course, the United Kingdom.

The clue is quite often in the name. The British Virgin Islands are perhaps rivalled only by Switzerland as a global capital for the offshore industry, with more than 1m offshore companies registered on the Caribbean island (population 31,900). Plaques for registration agents, solicitors and more line almost every wall of the islands' tiny capital.

The islands are a British Overseas Territory: legally under the jurisdiction of the UK (and with a British governor), but in practice self-governed. Other havens with this UK imprimatur include the Cayman islands, Gibraltar, and the Turks and Caicos Islands.

Closer to home, the UK wields even more control over the crown dependencies: Jersey, Guernsey and the Isle of Man, whose role in legal tax avoidance techniques has been documented time and again for decades.

Even within the UK itself, little is done against tricks of the offshore trade that have been known for decades. In 1999, Sark islander Philip Croshaw was struck off as a UK director for acting as a "nominee" – a sham director who hides a company's real controllers – for thousands of companies in the UK.

CONTINUED...

http://www.guardian.co.uk/commentisfree/2013/apr/05/offshore-industry-britain

So, why don't they? Seems Big Business and those super-popular High Net Worth Individuals who largely own them are Transnational players who pledge allegiance to their secret numbered bank accounts.

Report: Big business no stranger to offshore tax havens

CBS News
April 3, 2013

As millions of Americans get ready to file with the IRS, some big companies will pay little or no taxes this year - thanks to loopholes in U.S. tax laws. Firms can legally avoid paying taxes on money made in America by shifting profits offshore to countries with minimal or no taxes - places like Bermuda and the Cayman Islands.

According to a new report from U.S. Public Interest Research Group, 83 of the nation's 100 largest publicly traded corporations take advantage of these so called tax havens, costing the country billions in lost revenue. "Tax dodging is not a victimless offense," says U.S. PIRG analyst Dan Smith. "When companies use accounting gimmicks to move their profits to tax haven shell companies, the rest of us have to pick up the tab."

The consumer group's report, entitled "Picking up the Tab 2013: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens" estimates "tax haven abuse costs the United States approximately $150 billion in tax revenues every year." That amounts to an average of $1,026 per taxpayer and $3,067 for small businesses, which typically cannot afford to use accounting tricks and may face a competitive disadvantage as a result.

The U.S. PIRG report also notes that Ugland House, a five-story office building in the Cayman Islands, is the registered address for more than 18,000 companies -- yet about half of these firms are U.S. subsidiaries using the location as a post office box.

Top 25 corporate tax dodgers

Among the major corporations cited in the report for using tax havens are:

General Electric: GE has "more money parked offshore than any other U.S. company," with $108 billion and 18 subsidiaries in tax haven countries, according to its most recent SEC filing. Four years between 2002 and 2011, "the company paid no federal income tax while receiving subsidies from the government."

SNIP...

Pfizer: Pfizer is ranked second among U.S. multinational corporations with the most revenue offshore, with 172 subsidiaries and $73 billion in tax haven states, according to its most recent SEC filing. U.S. PIRG's report concludes, "The world's largest drug maker made over 40 percent of its sales in the U.S. between 2010 and 2012, but managed to report no federal taxable income in the U.S. for the past five years."

SNIP...

Microsoft: The software giant "pays its Puerto Rican subsidiary 47 percent of the revenue generated from its American sales, despite the fact that those products were developed and sold in the U.S." According to its most recent SEC filing, Microsoft has five subsidiaries and the third highest amount offshore, $60.8 billion, which is "70% of the company's cash." The report estimates Microsoft "would owe $19.4 billion on that income if it had to pay U.S. tax."

SNIP...

Citigroup: This bank bailed out by U.S. taxpayers in the 2008 financial crisis "ranks eighth for most money sitting offshore," with 20 subsidiaries and $42.6 billion in tax haven countries, according to its most recent SEC filing, "on which it would owe $11.5 billion in taxes."

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http://www.cbsnews.com/8301-201_162-57577914/report-big-business-no-stranger-to-offshore-tax-havens/

Here's a nice summary of where we are and what the prospects are for, pardon the expression, change:

Obama Finally Lays His Cards on the Table

Eric Zuesse
Huffington Post Posted: 04/05/2013 10:53 pm

EXCERPT...

On 16 January 2009, four days before Obama was inaugurated, Michael D. Shear headlined in the Washington Post, "Obama Pledges Entitlement Reform," and he reported about "a wide-ranging 70 minute interview with Washington Post reporters and editors," in which Obama endorsed efforts by Republicans and conservative "Blue Dog" Democrats in the Senate to cut Social Security and Medicare. Progressives were already disturbed at what their friends in Congress were leaking to them about Obama's strong commitment to doing this, and so a few blog posts were issued to ring alarm bells publicly about it. Paul Rosenberg at openleft.com headlined on January 17th (three days before Obama's Inauguration), regarding "Obama's 'Mandate' To Slash Medicare, Medicaid & Social Security," and he presented polls showing that the public not only didn't want to cut any of these programs, but that 74% wanted Medicare and Medicare spending increased, and 62% wanted SS spending increased. Even 65% of self-declared "conservative" Americans wanted the medical programs increased, and 62% of them wanted SS spending increased. To Obama, his plan to cut Social Security, Medicare, and Medicaid, was an act of political courage. It was his long-term plan, even though the polls showed widespread opposition to it by the public.

Obama has long socialized with top Wall Street and hedge fund executives. He likes their company, and personally identifies with them. He truly respects them. He cannot stand the idea that they would be sent to prison for any crimes. To him, they are good people.

On 3 April 2009, Politico bannered innocuously (and deceptively, given the shocking core that was buried here - Obama's statement), "Inside Obama's Bank CEOs Meeting." Eamon Javers reported Obama telling Wall Street's CEOs, inside the White House, "My administration ... is the only thing between you and the pitchforks." (This essentially secret meeting, and the comment itself, had occurred on 27 March 2009, but Javers failed to cite the date, which was indicated only under the accompanying AP wire photo of the CEOs coming out of this publicly unannounced event.) Obama's remark was implicitly analogizing here: he implied that he was protecting these people not from prosecutions for crimes (which he actually was), but instead from angry irrational mobs outside, who were driven by blind hatred (like the lynch mobs were in the Old South). Obama was metaphorically siding here with the plantation owners, not with the slaves; with the KKK, not with their victims. This elite Black was telling them that he would protect them from prosecution. He wasn't going to protect the public - which he here analogized to simply a hate-obsessed mob of bigots.

The crimes that these elite men had committed had, indeed, crashed the U.S. economy. Shahien Nasiripour, at huffingtonpost, bannered, on 16 May 2011, "Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers," and he reported that the Inspector General of the U.S. Department of Housing and Urban Development had carried out audits of Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial, and found, in each case, that they had swindled the Federal Government. "The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges" under "the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government." All of "the audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes ... using defective and faulty documents." Yet again - as with Goldman's Lloyd Blankfein, and with Countrywide Financial's Angelo Mozilo, and with the Republican former Senator John Ensign - the Obama "Justice" Department was being challenged to prosecute banksters and conservative politicians. Nearly three years into his Presidency, Obama hadn't pursued even a single one of them.

The men who were in the White House at that secret meeting had made billions by deceiving mortgage-borrowers at one end, and by defrauding investors in mortgage backed securities (MBS) at the other end, taking enormous sales commissions and bonuses for themselves along the way, while they bankrupted their banks, which U.S. taxpayers then bailed out. Obama was telling these people that he would let them get away with it, and that they would keep their loot.

SNIP...

Obama has refused to prosecute even a single one of these "control fraudsters," as criminologist William K. Black calls them. In fact, the prosecutions of all white-collar crimes under the Obama Administration are at a record low, lower even than they were under George W. Bush, who was the previous record-holder for this coddling of the corrupt.

CONTINUED...

http://www.huffingtonpost.com/eric-zuesse/obama-finally-lays-his-ca_b_3025743.html

So. Seeing how the sheriffs are all, er, indisposed, isn't it time we organize a posse of citizens?