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FreakinDJ's Journal
FreakinDJ's Journal
January 22, 2012

Transfer pricing is one of the most important issues in international tax

Transfer pricing happens whenever two related companies – that is, a parent company and a subsidiary, or two subsidiaries controlled by a common parent – trade with each other. This happens when, for instance, a US-based subidiary of Coca-Cola buys something from a French-based subsidiary of Coca-Cola. When the parties establish a price for the transaction, they are engaging in transfer pricing.

Transfer pricing is not, in itself, illegal or abusive. What is illegal or abusive is transfer mispricing, also known as transfer pricing manipulation or abusive transfer pricing. (Transfer mispricing is a form of a more general phenomenon known as trade mispricing, which includes trade between unrelated or apparently unrelated parties - an example is reinvoicing.)

It is estimated that about 60 percent of international trade happens within, rather than between, multinationals: that is, across national boundaries but within the same corporate group. Suggestions have been made that this figure may be closer to 70 percent.

Estimates vary as to how much tax revenue is lost by governments due to transfer mispricing. Global Financial Integrity in Washington estimates the amount at several hundred billion dollars annually. A March 2009 Christian Aid report estimated $1.1 trillion in bilateral trade mispricing into the EU and the US alone from non-EU countries from 2005 to 2007. The “Magnitudes ” section of our website contains a range of estimates and data.

January 21, 2012

Factories rev up, but hiring doesn't

John W. Schoen, Senior Producer

A healthy pickup in production of manufactured goods last month added to the gathering momentum for the U.S. economy. So far, that growth has done little to help the job prospects for the millions of factory workers still sidelined by the 2007 recession.

U.S. factories continued to ramp up production of manufactured goods in December as stronger demand for business equipment and vehicles followed other signs that the economic recovery gained steam in the last three months of 2011. The Federal Reserve said Wednesday that its widely followed manufacturing index rose by 0.9 percent in December, the biggest gain in a year. The overall output of the nation's factories, mines and utilities expanded by 0.4 percent in December; utilities cut back output as relatively warm weather held back demand for energy in much of the country.

Even if the pace of growth holds up, job prospects for factory workers haven’t kept pace with the pickup in factory output. Manufacturing output, as measured by the Fed’s industrial production index, has rebounded 14 percent since it bottomed at the end of recession. But employment levels for factory workers are up only 3 percent from the post-recession bottom.


January 21, 2012

Rescued La. black bear shot to death after release


A scrawny 2-year-old Louisiana black bear that was able to regain its health at a rescue center was shot to death in December, about eight months after it was released into the wild.

Tom MacKenzie of the U.S. Fish and Wildlife Service says it is extremely rare, at least in the Southeast, for something like this to happen.

The bear was shot in Amite County, Miss. Federal officials are investigating and say a man there could face charges because Louisiana black bears are protected under the Endangered Species Act.

The bear was named Kris because it arrived at the rescue center in Townsend, Tenn., shortly before Christmas 2010 after it was found going through trash in south Louisiana.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2012/01/20/national/a152926S44.DTL#ixzz1k4qUZJes

January 21, 2012

"Occupy" targets banks, corporate campaign spending

ReutersBy Laird Harrison and Lily Kuo | Reuters

Dozens of Occupy protesters chained themselves to doors at Wells Fargo bank headquarters in San Francisco on Friday, while across the United States hundreds more demonstrators rallied at federal courthouses against corporate campaign donations.

Activists in San Francisco aimed to disrupt the city's financial district as part of "Occupy Wall Street West" by targeting 22 bank branches and other financial industry offices.

At least 11 protesters who had chained themselves to a rear entrance to the Wells Fargo headquarters were removed and arrested for trespassing, but police allowed other protesters to remain chained to other doors of the building.

"It's peaceful and many banks have taken steps to mitigate the impact, so it's an ideal situation," said San Francisco Police Commander Richard Corriea. Wells Fargo told many employees to work from home, he said.

January 21, 2012

The real reason no one impersonates dead voters: High risk, little benefit

David Rothschild | The Signal

In an effort to demonstrate that the specter of voting fraud in America is real, the conservative agitator James O'Keefe and his group Project Veritas recently sent a handful of people into a voting center during the New Hampshire primary to obtain ballots on behalf of dead registered voters. (You may remember O'Keefe as the guy who dressed as a "pimp" in an undercover ACORN sting, or who made so much trouble for NPR.) Several were successful, as a selectively edited video from Project Veritas spoon-fed to the Daily Caller demonstrates.

The trend throughout the United States is to enact new laws that will make photo IDs a prerequisite for participating in the democratic process. Proponents of voter ID laws use voting in lieu of dead people as the main example of fraud, while opponents point out that there is no evidence of widespread fraud and significant evidence that such laws make it more difficult for students and those in lower-income brackets to vote. Lawmakers in South Carolina used the accusation that 957 dead people voted in the "recent elections" as proof of the need for voter ID laws—a claim the New York Times' Andrew Rosenthal points out is very poorly supported. (The Justice Department has blocked the measure in South Carolina, so voters on Saturday will not need a photo ID to vote.)

Voter ID laws do not stop people who have fraudulently registered as themselves. The vast majority of these cases are people who believed themselves to be eligible, notably felons that do not know they are ineligible to vote in a given state. States that bar felons, such as Florida, have traditionally been so vigilant in blocking felons that thousands of eligible voters have been inadvertently purged from the voter rolls in the state's fixation to ensure that felons do not vote. Nor would these laws stop non-citizens from voting as themselves. (Even so, investigations have found voting by non-citizens to be extremely rare; a study of 370,000 votes cast in Milwaukee from 1992-2000 showed 4 votes by non-citizens.)

January 21, 2012

Reaganomics guru Laffer praises Kansas Gov. Brownback's tax plan

Brad Cooper | The Kansas City Star

Enjoying almost Republican rock star status, the man who designed supply-side economic policies for Ronald Reagan toured the capitol Thursday touting Gov. Sam Brownback’s plan to cut taxes.

Art Laffer visited with tax committees in the House and the Senate as he lobbied for the Brownback plan that will slash tax rates and eliminate income taxes for thousands of small businesses.

During an hour-long hearing he occasionally dropped names of politicians (California Gov. Jerry Brown, for one) and country music star Larry Gatlin, while plugging his new book due out next month.

Engaging and affable, Laffer defended the governor’s plan to lower tax rates, while eliminating many tax credits and deductions that benefit the neediest Kansans.

Read more here: http://www.mcclatchydc.com/2012/01/20/136425/reaganomics-guru-laffer-praises.html#storylink=cpy
January 20, 2012

WaMu Ex-Officials Settle FDIC Lawsuit

Three former executives of Washington Mutual Inc. have agreed to settle a civil lawsuit stemming from the biggest-ever U.S. bank failure for less than 10% of the $900 million that was sought by federal regulators, according to people familiar with the situation.

The deal would mark the latest setback for the government in a high-profile, financial-crisis-related case. The lion's share of the payout, which is expected to total less than $75 million, would come from insurers and the bank's estate—not from the pockets of the former executives.

The FDIC, in a lawsuit filed in federal court in Seattle in March, accused former Chief Executive Kerry Killinger, ex-President Stephen Rotella, and David Schneider, the bank's former home-loans president, of taking gambles that sparked the thrift's collapse in 2008. The agency also accused the three, along with the wives of Messrs. Killinger and Rotella, of seeking to shield cash and their houses from legal claims. The three former executives received a total of $95 million in compensation between 2005 and 2008, the FDIC said in its lawsuit.

The defendants didn't admit or deny any wrongdoing in settling the suit.


January 19, 2012

America’s Dirty War Against Manufacturing

Carl Pope

“I’d love to make this product in America. But I’m afraid I won’t be able to.”

My host, a NASA engineer turned Silicon Valley entrepreneur, has just conducted a fascinating tour of his new clean-energy bench-scale test facility. It’s one of the Valley’s hottest clean-technology startups. And he’s already thinking of going abroad.

“Wages?” I ask.

His dark eyebrows arch as if I were clueless, then he explains the reality of running a fab -- an electronics fabrication factory. “Wages have nothing to do with it. The total wage burden in a fab is 10 percent. When I move a fab to Asia, I might lose 10 percent of my product just in theft.”

I’m startled. “So what is it?”

“Everything else. Taxes, infrastructure, workforce training, permits, health care. The last company that proposed a fab on Long Island went to Taiwan because they were told that in a drought their water supply would be in the queue after the golf courses.”


January 19, 2012

Romney Parks Millions in Cayman Islands


Although it is not apparent on his financial disclosure form, Mitt Romney has millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven.

A spokesperson for the Romney campaign says Romney follows all tax laws and he would pay the same in taxes regardless of where the funds are based.

As the race for the Republican nomination heats up, Mitt Romney is finding it increasingly difficult to maintain a shroud of secrecy around the details about his vast personal wealth, including, as ABC News has discovered, his investment in funds located offshore and his ability to pay a lower tax rate.

"His personal finances are a poster child of what's wrong with the American tax system," said Jack Blum, a Washington lawyer who is an authority on tax enforcement and offshore banking.


This JackArse is toast

Hope the RATpubliCONs put him up against Obama
January 17, 2012

Does tax code send U.S. jobs offshore?

Its an "Oldie but a Goodie" Folks - these same tax loopholes that Outsource American Jobs still exist and if a Republican is voted in will surely be expanded

Many analysts say it's true. "The U.S. tax system does provide an incentive to locate production offshore," says Martin Sullivan, a contributing editor to Tax Notes, a non-profit publication that tracks tax issues.

"If you had two companies in Pittsburgh that both were going to expand capacity and create 100 jobs, our tax code puts the company who chooses to put the plant in Pittsburgh at a competitive disadvantage over the company that chooses to move to a tax haven," says former White House economist Gene Sperling, a Clinton adviser.

The Democrats, saying the United States has overlooked the costs to working Americans in its rush to embrace globalization, have vowed to eliminate any tax incentive for further offshoring.

The deferral clause has been in the tax code for more than half a century and has outlasted numerous reform efforts. In April 1961, even as U.S.-backed rebels were dying at Cuba's Bay of Pigs, President Kennedy asked Congress to rewrite tax provisions that "consistently favor United States private investment abroad compared with investment in our own economy."


Obama would garner huge increases in the polls if he makes this a defining issue of the elections. Romney's Corporate Raiding was a major facilitator of this kind of American Job Destructing Behavior

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