Double Taxation

(Via Felix Salmon)

I was enjoying the gnashing of teeth spawned by Warren Buffett's Op Ed/PR stunt about taxes for the wealthy - and I ran across Daniel J Mitchell whining about how Buffett has it all wrong. The highest tax bracket has it rough, you see. What with their tax rates plummeting to less then half of what they were only three decades ago.

The horror!

But he was useful in that he regurgitated one of the lamer talking points on raising the capital gains tax - It's Double Taxation!!

You see, investors bought stock and were taxed, then the investment barfed out more money and it was taxed again. That's not fair..!

Salmon beats all over that, then pulls in some backup to wail on it more. By far the best 'graph I've read on this yet was from the Citizens for Tax Justice, who point out the very selective nature of objections to multiple taxation:

It’s striking that hardly anyone in Washington talks about how the wage income of middle-class Americans is subject to “multiple taxes.” For the typical American, all income consists of wages and all of it is subject to the Social Security tax, and much or most of it to the income tax. Then when people spend their income, a great deal of the purchases are subject to sales taxes. Apparently, taxing income multiple times is something that concerns economists and politicians only when it affects the wealthy investor class.

As in - hello... whiny little investor b!tches? You think double taxation is a bad thing- I don't hear you crying over how everyone else's paycheck money gets wrung out twice to pay the feds, then stretched again for virtually every transaction its used for.

But taxing capital gains is a shameful double taxation? Oh shut the hell up, already.

He Fought the Law

(Via Naked Capitalism and 4ClosureFraud.com)

[NY homeowner Sunny] Sheu’s ordeal began over 10 years ago when a bank representative knocked on his door and said he was there to inspect the house for its new owner. The problem was that Sheu had never sold the house. It turns out that someone had forged critical documents and used them to illegally sell the property.

Sheu alerted all relevant authorities; including the police, the bank that held the mortgage, and the title insurer of the property. Eventually the parties involved in forging the documents were prosecuted, pleaded guilty to forgery, and went to jail.

Sheu hoped that with all the evidence in his favor, the matter would be quickly resolved–it was actually only the beginning of his nightmare.

But Centex Home Equity, the bank that held the original mortgage, acted as if the fraudulent sale had been legitimate, ignoring all the documentation submitted by Sheu regarding the fraud, including the police report he’d filed.

Centex filed a lawsuit on December 12, 2001, against Sheu in State Supreme Court, in Queens County. The bank wanted a default judgment on the property and foreclosure, claiming that the "new owners" were delinquent on mortgage payments. In reality, of course, there was never any legal "new owner".

The Centex case against Sheu went before Judge Golia, in Queens County. Sheu said he was stunned when Judge Golia also ignored the obvious fact that the "sale" had been fraudulent, which would obviate the claim against him. Instead of immediately restoring Sheu's rightful ownership, he said, Golia allowed the lawsuit to proceed, eventually leading to the foreclosure of Shue's home.

Mr. Sheu investigated the conduct of the judge, hoping to get him removed from the case.

On April 9th of 2010, he recorded the following statement:

Hi my name is Sunny Sheu. I have filed a complaint to the FBI and the New York State Unified Court Ethics Committee about Judge Joseph Golia [who] falsified his financial disclosure statement. And I have submitted evidence to the FBI recently. [The] FBI sent me [a] copy of the evidence that I sent to the FBI.


And today, April 9th, the Unified Court ethics director, Janice Howard, she called me [that] Judge Joseph Golia already amended his Financial disclosure statement. This means my evidence is true. At least that he was forced to amend (misrepresentations) on his financial disclosure statement.


For the security issues, for the security concerns, I make this recording, that if anything wrong goes to me, it should be come from Judge Golia and his people because before I had been kidnapped by his people, and threatened and intimidated by his people not to file a complaint against Judge Golia.


So I make this recording for safety. For protection. If anything wrong please go to Judge Golia and his people.


Thank you very much.

Two months later. Sunny Sheu was dead.

(H/t Trainreq)

What's Missing?

Eli Pariser wants you to know that personalized content = a reality filter that you probably don't control, or even notice.



(H/t E)

We Didn’t Move The Paper. No One Moved The Paper.

If what you say is true, we’re f*cked. We didn’t move the paper. No one moved the paper.

So sayeth the head of one of the major subprime loan originators - speaking about the legal consequences of his industry not moving the paper - the mortgages and assigned notes - in the way that current law requires.

Hardly breaking news, but the fact is the "we're f*cked" scenario and its implications are a trillion dollar question writ large across the nation's residential mortgage market. What can be done to fix a situation that (on the face of it) appears to invalidate mortgages & their derived securities nationwide? Lenders like Countrywide appear to have held onto loan documents they were legally obligated to deliver to firms purchasing those loans.

The bonus round was banks presenting notes at time of foreclosure that were improperly endorsed - that is, they weren't signed over to the foreclosing party, yet were submitted by that party as evidence in support of a foreclosure proceeding. (emphasis added)

Although law enforcement should be able to answer the delivery question easily -- [Countrywide employee] DeMartini['s testimony] indicated that Bank of America has FedEx tracking records for each note -- it's impossible for the public to check. But the endorsement of notes is easy to test. In every foreclosure, the bank must give the court the note or an accurate copy of it. And those notes are either properly endorsed or they're not.

To check DeMartini's testimony, Fortune examined the foreclosures filed in two New York counties (Westchester and the Bronx) between 2006 and 2010. There were 130 cases where the Bank of New York (BK) was foreclosing on behalf of a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide; the other 26 were made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide – they included only the original borrower's signature. Two-thirds of the loans made by other banks also lacked bank endorsements.

As numerous observers have pointed out, this is not a small thing, since -

• who holds the note determines who can foreclose
• who can (or can't) foreclose impacts whether or not a loan is secured or not; and
• whether a loan is secured or not determines whether or not it has value if the borrower has defaulted.

Add to that the percentage of home borrowers in default (around 9%) and those who owe more than their house is worth (around 23%) and you have the recipe for a very big mess heading toward this nation's bankruptcy courts.

Which is not to say, wow look at this breaking bit of news - but more like. How the F*ck is this time bomb still ticking away?

So... Which is it Ramona?

When it comes to Democratic Canvassers discussing the discovery of the Waukesha County error that swung the WI Supreme Court race back to Prosser - what a difference 4 days makes...

Ramona Kitzinger on April 7:

Everything that we went over yesterday afternoon and today, it jibed up, and we're satisfied that it's correct. And I'm with the Democratic Party, vice-chair of Waukesha County, so i'm not gonna stand here and tell you something that's incorrect.

Ramona Kitzinger on April 11:

On Thursday, I then showed up as per normal procedure at 9am and the canvass again went normally and concluded sometime between 4pm and 5pm. During the course of the day, the issue of minor vote corrections in New Berlin and Lisbon came up, but again nothing of a historic nature or reflecting glaring irregularities. In fact, the matter of vote totals in Brookfield City came up specifically during the course of Thursday s canvass. In retrospect, it seems both shocking and somewhat appalling there was no mention of discovery of this 15,000 vote human error that ultimately had the potential to tip the balance of an entire statewide election. How is this possible?

Once the canvass had been completed and the results were finalized, I was called into Kathy s office along with Pat (the Republican observer) and told of an impending 5:30pm press conference. It was at that point that I was first made aware of an error Kathy had made in Brookfield City. Kathy told us she thought she had saved the Brookfield voter information Tuesday night, but then on Wednesday she said she noticed she had not hit save. Kathy didn t offer an explanation about why she didn t mention anything prior to Thursday afternoon s canvass completion, but showed us different tapes where numbers seemed to add up, though I have no idea where the numbers were coming from. I was not told of the magnitude of this error, just that she had made one. I was then instructed that I would not say anything at the press conference, and was actually surprised when I was asked questions by reporters.

The reason I offer this explanation is that, with the enormous amount of attention this has received over the weekend, many people are offering my statements at the press conference that the numbers jibed as validation they are correct and I can vouch for their accuracy. As I told Kathy when I was called into the room I am 80 years old and I don t understand anything about computers. I don t know where the numbers Kathy was showing me ultimately came from, but they seemed to add up. I am still very, very confused about why the canvass was finalized before I was informed of the Brookfield error and it wasn t even until the press conference was happening that I learned it was this enormous mistake that could swing the whole election. I was never shown anything that would verify Kathy s statement about the missing vote, and with how events unfolded and people citing me as an authority on this now, I feel like I must speak up.

W.T.F?

"I"m Not a Caller, But I Play One on the Radio"

CJR's Liz Cox Barrett nabs a nice one about a company called Premier On Call.

They've taken their page down now - this image was from Google's cache - but here's the relevant bit:

Premiere On Call is our new custom caller service. We supply voice talent to take/make your on-air calls, improvise your scenes or deliver your scripts.

Using our simple online booking tool, specify the kind of voice you need, and we'll get your the right person fast. Unless you request it, you won't hear that same voice again for at least two months, ensuring the authenticity of your programming for avid listeners.

A loose translation would be "Would you like callers to your radio shows to say what you want, rather than what they want? All it takes is money and a complete lack of integrity!"

Liz has asked Premier on Call which of their shows use the service.

I'd imagine they're going to decline to answer - but wouldn't that be a fine slice of information for their listeners to have? It's one thing to stage a call for a prank - it is quite another to fake a call to support your ideology, or to appear popular.

Pathetic.

"We're not aware of a single case so far of a substantive error"

ProPublica's Marian Wang puts together a tidy summary of reasons why people might be in foreclosure that undermine the infamous WSJ assertion that the foreclosure scandal is all a big misunderstanding.

I'm sure we've all heard about people with paid off homes getting foreclosed on, but Ms. Wang nicely summarizes a few other scenarios that grab less ink, but are just as ridiculous:

1) Homeowners were not in default but faced foreclosure.
2) Homeowners who were told that to be eligible for a loan modification, they needed to fall behind on their mortgage—and subsequently found themselves on the path to foreclosure.
3) Homeowners were behind on their mortgage but could have caught up if not for additional fees.
4) Mistaken foreclosures due to dual track of foreclosure and loan modification processing.
5) Foreclosures in which the bank can’t prove it has standing to foreclose.

Here's the full post.

Less and Less Representative

Other than pointing out that the chart on the left starts at $840K, and the one on the right tops out at $150K
- I have nothing to add.

(Via CJR and Jesse's Café Américain)

The Latest Development in the War on Vampires

Electricity vampires that is...

Behold, Belkin's partial solution to electronic appliances that draw power for no reason when they have been turned off:

It's a plug that cuts off all power after a set interval (30 min, 3 hours, or 6 hours).

The good: Put it on the end of your Wii plug - and save $25 bucks a year.

The bad: Why do I have to buy something in order to NOT use electricity?

(H/t Good blog)

Taxes for Thee, but not for Me

(Via CJR Yves Smith, and Loren Steffy)

Because this just rocked:

Dear IRS: Please note that beginning this year, I am no longer earning an income. From now on, I am compensated through what I like to call column interest. It isn't pay. It's a capital gain that I receive in exchange for providing about 2,000 words a week to this newspaper. Please lower my tax rate accordingly.

Hey, you can't blame me for trying. After all, a similar strategy has worked for years for money managers at hedge funds and private equity firms. In fact, now that Congress is threatening to close that loophole, the private equity world has erupted with an anguished wail. Such is the reaction when the privileged few are asked to pay their fair share.

Gitmo in Brief

(Via ProPublica)

So far, only 24 of the 779 men held at Guantánamo at some point have been charged with a crime to be heard by a military commission. Four of them have been convicted. Only one detainee, Ahmed Khalfan Ghailani, has been moved from Guantánamo to face charges in a civilian court; that case is currently unfolding in federal court in New York.

For those of you keeping score at home, that would be 3% of those ever held at Gitmo end up getting charged - and 17% of those charged so far have been convicted.

The Phantom Menace of Social Security

There's an oddly comforting discussion posted at Columbia Journalism Review.

Yale Professor Ted Marmor lets the air out of a few of the more common depictions of Social Security.

Trudy Lieberman: What do you say to young people who believe that Social Security won’t be there for them?

Ted Marmor: They are being misled. If the proportion of Americans living beyond sixty-five is rising, as is the case, and if their voting strength will increase, as will be the case, why should their promised pensions be endangered? Put another way, if Social Security is a sacred cow, why will it be sacrificed when its worshippers are more numerous?

Interesting stuff.

Ultimate Betrayal

Just adding these two items up in my head.

One:

The US and Russia have taken part in the biggest spy swap since the Cold War, in an exchange at Vienna airport. One plane brought 10 Russian agents deported from the US after a court hearing at which they admitted being agents for a foreign country. The other was said to have brought four people convicted of spying in Russia but given a presidential pardon after they signed to admit their guilt. Both planes took off again after about 90 minutes.

and two:

It is not clear what will happen to ...the 7- and 11-year-old daughters of Vladimir and Lydia Guryev (Richard and Cynthia Murphy)...

Cripes. If the BBC is right, these kids were not on the plane - so their parents were (suprise!) spies - and they've been flown out of the country. If Elian was any example - we can expect these kids to join their parents - but wow, talk about paying for your parents sins...

That's just sick.

Whose Side Are You On?

(Via the Reality Based Community)

While the recent walkbacks on financial regulation demonstrate that Congress bows to corporate pressure regardless of who is in charge - this recent DNC ad nicely demonstrates that the GOP is particularly shameless when it comes to saying who they work for on the record:



And that isn't even the highlight reel. Anybody else remember Romney's convention speech where he promised the faithful that McCain would "take a weed whacker" to excessive regulation on Wall Street (right before the economy imploded).

There's got to be an avalanche of stupid quotes out there just looking for a home in one of these ads.

Commensurate With The Threat

(Via Newshoggers)

Found this interesting - via Thoreau (not that one, this one):

The feds have arrested 10 people charged with spying for Russia. I do not know the validity of the evidence, so I cannot comment on that. I can, however, note that these people were charged with crimes in a court of law.

Now, charging people with crimes in an open court of law is perfectly fine if we’re merely talking about people accused of acting at the behest of a nuclear power with a global intelligence network, a navy and airforce, oil, natural resources with which they play politics with neighbors, and a $1.2 trillion GDP. Sure, they may have some resources behind them, but at least the threat is manageable.

On the other hand, if we’re talking about a small network of guerrilla fighters whose leader lives in caves and whose fighters are armed with at best shoulder-mounted rocket launchers, well, you simply cannot charge them in an open court. The risks are far too great.

He shoots, he scores.

Random Sip From the Firehose II

• This just in: Robin Givhan is a total idiot.
  
• Trudy Lieberman finds USA Today knows more about health care than we do.
  
• Round the World: Forest Labratories makes Lexapro in the US, yet somehow manages to avoid over a third of its tax liability
  
• Do the shareholders lawyers know this? The Yakuza scammed Lehman brothers out of $350 million dollars
  (It's in the podcast, at about 8:40 in)
• Too right:The Onion says all that needs to be said about media coverage of social networking sites.
  
• Ryan Chittum to Wall Street: Stop acting like small banks are a problem. The money quote:
  "[H]ow about putting it yet another way: There are 775 “problem banks” in the country right now, according to the FDIC. Total assets? $431 billion. Or less than one-fifth the assets of Bank of America alone. If you took all those 775 problem banks, rolled them together into a gigantic ball of suck, they’d still only be the eighth biggest bank in the country."

What's Behind the Rise in Food Allergies?

Maybe it's crappy methodology... at least if you believe Dr. Marc Riedl's new study in the Journal of American Medicine Association.

Here's a nice bit from the NYT's writeup:

For their report, Dr. Riedl and his colleagues reviewed all the papers they could find on food allergies published between January 1988 and September 2009 — more than 12,000 articles. In the end, only 72 met their criteria, which included having sufficient data for analysis and using more rigorous tests for allergic responses.

“Everyone has a different definition” of a food allergy, said Dr. Jennifer J. Schneider Chafen of the Department of Veterans Affairs’ Palo Alto Health Care System in California and Stanford’s Center for Center for Primary Care and Outcomes Research, who was the lead author of the new report. People who receive a diagnosis after one of the two tests most often used — pricking the skin and injecting a tiny amount of the suspect food and looking in blood for IgE antibodies, the type associated with allergies — have less than a 50 percent chance of actually having a food allergy, the investigators found.

Lovely.

Oh, and accepted dogma? You're next:

Authors of the new report — and experts on the guidelines panel — say even accepted dogma, like the idea that breast-fed babies have fewer allergies or that babies should not eat certain foods like eggs for the first year of life, have little evidence behind them.

Regulatory Capture > Regulatory Exemption > DeepWater Horizon

Here's a fun series of dots, I wonder if they connect in any way:

Greg Palast on Truthout.org

Before the Exxon Valdez grounding, BP's Alyeska group claimed it had these full-time, oil spill response crews. Alyeska had hired Alaskan natives, trained them to drop from helicopters into the freezing water and set booms in case of emergency. Alyeska also certified in writing that a containment barge with equipment was within five hours sailing of any point in the Prince William Sound. Alyeska also told the state and federal government it had plenty of boom and equipment cached on Bligh Island.

But it was all a lie. On that March night in 1989 when the Exxon Valdez hit Bligh Reef in the Prince William Sound, the BP group had, in fact, not a lick of boom there. And Alyeska had fired the natives who had manned the full-time response teams, replacing them with phantom crews, lists of untrained employees with no idea how to control a spill. And that containment barge at the ready was, in fact, laid up in a drydock in Cordova, locked under ice, 12 hours away.

Nola.com -Federal regulators let BP avoid filing blowout plan for Gulf oil rig

Petrochemical giant BP didn't file a plan to specifically handle a major oil spill from an uncontrolled blowout at its Deepwater Horizon project because the federal agency that regulates offshore rigs changed its rules two years ago to exempt certain projects in the central Gulf region, according to an Associated Press review of official records.

The Minerals Management Service, an arm of the Interior Department known for its cozy relationship with major oil companies, says it issued the rule relief because some of the industrywide mandates weren't practical for all of the exploratory and production projects operating in the Gulf region.

The blowout rule, the fact that it was lifted in April 2008 for rigs that didn't fit at least one of five conditions, and confusion about whether the BP Deepwater Horizon project was covered by the regulation, caught the attention of Interior Secretary Ken Salazar.

That'd be the Minerals Management Service exempting BP from a regulation in April of 2008, right? I think I remember hearing something about the MMI in that year.

Now what was that?

Sex, Drug Use and Graft Cited in Interior Department

The report says that eight officials in the royalty program accepted gifts from energy companies whose value exceeded limits set by ethics rules — including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game.

The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

Oh yeah, them.

Of course, not filing a plan is different from not HAVING a plan. But to take Mr. Palast's point, having a plan is also very different from actually implementing the plan.

Here's Palast again:

In the end, this is bigger than BP and its policy of cheaping out and skiving the rules. This is about the anti-regulatory mania, which has infected the American body politic. While the tea baggers are simply its extreme expression, US politicians of all stripes love to attack "the little bureaucrat with the fat rule book." It began with Ronald Reagan and was promoted, most vociferously, by Bill Clinton and the head of Clinton's deregulation committee, one Al Gore.

Americans want government off our backs ... that is, until a folding crib crushes the skull of our baby, Toyota accelerators speed us to our death, banks blow our savings on gambling sprees and crude oil smothers the Mississippi.

Then, suddenly, it's, "Where was hell was the government? Why didn't the government do something to stop it?"

The answer is because government took you at your word they should get out of the way of business, that business could be trusted to police itself. It was only last month that BP, lobbying for new deepwater drilling, testified to Congress that additional equipment and inspection wasn't needed.

(H/t trainreq)

Role Reversal, Tea Party Edition

Tim Wise goes off on the Tea Party, with the simple thought experiment "what if the Tea Party activists were black?"

Imagine that hundreds of black protesters were to descend upon Washington DC and Northern Virginia, just a few miles from the Capitol and White House, armed with AK-47s, assorted handguns, and ammunition. And imagine that some of these protesters —the black protesters — spoke of the need for political revolution, and possibly even armed conflict in the event that laws they didn’t like were enforced by the government? Would these protester — these black protesters with guns — be seen as brave defenders of the Second Amendment, or would they be viewed by most whites as a danger to the republic?...Because, after all, that’s what happened recently when white gun enthusiasts descended upon the nation’s capital, arms in hand, and verbally announced their readiness to make war on the country’s political leaders if the need arose....

Imagine that a rap artist were to say, in reference to a white president: “He’s a piece of shit and I told him to suck on my machine gun.” Because that’s what rocker Ted Nugent said recently about President Obama.

Yes, let's imagine how that would have played out in the media.

(H/t Good blog)

Spread The Wealth

I love this.

Short version - FiveThirtyEight.com abuses the notion that the US tax code takes from the rich to give to the poor.

He uses a stat called the GINI Coefficient (which measures how evenly the wealth of a nation is distributed.)

For those unfamiliar with the Gini Coefficient, it is a measure of the distribution of income (or wealth), bounded between 0 and 1, with zero meaning equal distribution across all citizens and 1 meaning that all the income/wealth belongs to the one, richest person. That is, the lower the number the more evenly--though not necessarily fairly, which is a normative judgment for each person to make for herself--income is distributed prior to (or after) government activity in the form of taxes and/or transfers.

As you can see, the before-taxes-and-transfers Gini Coefficient for the United States (.46) is very close to the average for all nations of the OECD (.45). Put another way, the ex ante maldistribution of income here is about the same as for comparable nations. To see what the net effect of those government policies are, we need to look next at the after-tax-and-transfer Gini Coefficients.

Here are the relevant visuals (being the the right of these charts means having more wealth concentrated in the hands of a few)

 Before Taxes:

and after taxes:

So, the current US tax code is actually moving wealth into the hands of a few.

I suppose you could take the viewpoint that ending tax cuts to the wealthy IS wealth redistribution – so people making that argument have a leg to stand on – but the idea that the wealthy are currently being impoverished by their high taxes is dead on arrival.

So to those claiming that letting the Bush tax cuts expire amounts to class warfare – I’d say, Yeah, but you started it. And now you want a truce after you drew first blood?

I don’t think so.