Archive for July, 2015

July 24, 2015

Happy 118th Birthday Amelia Earhart

Women rule. Especially when they are from Kansas.

Waldina

Today is the 118th birthday of aviatrix Amelia Earhart.  Mystery surrounding her last trip exists to this day, with theories and evidence leading to the belief that she survived the on an island well off her intended course.  The world is a better place because she was in it and still feels the loss that she has left.

NAME: Amelia Earhart
OCCUPATION: Pilot
BIRTH DATE: July 24, 1897
DEATH DATE: c. January 05, 1939
EDUCATION: Hyde Park High School, Columbia University

BEST KNOWN FOR: Amelia Earhart was the first female pilot to fly across the Atlantic and the first person to have flown both oceans. Her mysterious disappearance occurred in 1937.

Amelia Earhart was born on July 24, 1897, in Atchison, Kansas, in America’s heartland. She spent much of her early childhood in the upper-middle class household of her maternal grandparents. Amelia’s…

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July 21, 2015

Europe’s Vindictive Privatization Plan for Greece – Project Syndicate

The long view of privatization, is transferring public wealth legitimate?

Yanis Varoufakis

For the Project Syndicate site click here. Or…

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July 3, 2015

Nine Myths About the Greek Crisis – by James K. Galbraith

Yanis Varoufakis

Click here for the original Politico site, or read on…

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July 2, 2015

BP’s $18.7 Settlement Today for Gulf Spill Appears to Be Mostly Tax Deductible : Oil Giant Will Likely Write Off $13.2 Billion as an Ordinary Business Cost

Outrageous and hidden corporate tax giveaway as part of BP’s final big settlement for the Gulf spill today: a $4.6 billion tax windfall for the oil giant.

For Immediate Release

July 2, 2015

Contact: Phineas Baxandall, Ph.D.

Senior Analyst for Tax and Budget Policy

U.S. Public Interest Research Group

phineas@pirg.org

(857) 234-1328

BP’s $18.7 Settlement Today for Gulf Spill Appears to Be Mostly Tax Deductible

Oil Giant Will Likely Write Off $13.2 Billion as an Ordinary Business Cost

Today’s announcement by the U.S. Department of Justice of a $18.7 billion out-of-court settlement with BP to resolve charges related to the Gulf Oil spill failed to indicate whether the deal will allow the oil giant to write portions off as an ordinary tax deduction – thus, greatly reducing the public value of these payments.

“A judge had declared the oil spill was the result of gross negligence. It is outrageous for BP to treat any portion of these payments as an ordinary business expense. We call on the company to promise that it will not write these payments off as tax deductions,” said Phineas Baxandall, Senior Analyst for Tax and Budget Policy at the U.S. Public Interest Research Group. “We also call on the Justice Department to make public the full language of the settlement on its website.”

Often settlements are posted alongside press releases on the Department of Justice website, but the DOJ had failed to do this on their press statement at the time of this release. Instead, they provide a fact sheet that gives troubling indications that the true after-tax value of today’s settlement with the federal government, five states and 400 local entities may actually be far less than the $18.7 billion trumpeted in the headline of the DOJ statement:

  • Only $5.5 billion is indicated explicitly as a penalty under the Clean Water Act. The federal government could have received as much as a $13.7 billion penalty under that Act based on a recent finding by a New Orleans judge that the spill was the result of “gross negligence.” Penalties are not tax deductible by law, as opposed to ordinary business compensation or restitution. But 80 percent of this sum is also indicated as heading to states for restoration efforts, which could allow BP to treat it as deductible, unless the settlement language forbids it.
  • $13.2 billion of today’s settlement is not categorized as a penalty, indicating that it will almost certainly become a tax deduction, unless the settlement explicitly forbids it. If so, this non-penalty portion of the settlement will have an after-tax value of only $8.58 billion, and the whole deal would be worth only $14.08 billion to the public.
  • The Justice Department fact sheet indicates that the $8.1 billion earmarked for natural resource damages “includes $1 billion already committed for early restoration,” thus indicating a billion dollars of today’s announcement is actually just repackaging an earlier concession by the company.
  • Because the payments will be made over 18 years, the real value of latter payments will have significantly eroded. Depending on inflation, the value of a billion dollars paid 18 years from now will be far less than a billion dollar payment today.

A bipartisan bill in Congress, The Truth in Settlements Act, in the House and Senate would require federal agencies to be explicit whether large out-of-court settlements are tax deductible and would require companies to disclose in their SEC filings whether they use settlements as tax deductions.

Some agencies, such as the Consumer Financial Protection Bureau, promptly post all their settlements online and are very explicit about forbidding payments to be tax deductible. Since 2013, standard practice at the Environmental Protection Agency has been to make explicit in their settlements that agreed costs of undergoing future clean up or paying into clean up funds are also non-deductible.

Said Baxandall, “Americans expect that when companies pay settlements for terrible acts like oil spills or mortgage scams, it is to atone for their misdeeds and to discourage future violations of public law. It sends the wrong message to allow payments for misdeeds to be a tax write off. Moreover, every dollar that BP receives as a tax windfall for deducting this settlement will be a dollar that ordinary taxpayers will need to shoulder in the form of more national debt, higher tax rates or cuts to public programs. Allowing this settlement to be a tax write-off subsidizes bad behavior.”

You can read U.S. PIRG’s research report on settlement deductions here (link).

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Phineas Baxandall, Ph.D.

Senior Analyst and Program Director

U.S. Public Interest Research Group

(617) 747-4351

phineas@pirg.org

http://www.uspirg.org/staff/xxp/phineas-baxandall

— Twitter: @PBaxandall

— Skype: phineas.baxandall

— LinkedIn: http://tinyurl.com/Phineas-LinkedIn

July 2, 2015

brutal logic of contemporary capitalism -saskia sassen

July 2, 2015

US Senator Bernie Sanders Blasts Greece’s Creditors

Terms no one can live with. Let’s get real.

Yanis Varoufakis

Sen. Bernie Sanders (I-Vt.) attacked the International Monetary Fund and European authorities on Wednesday for imposing what he called excessive austerity measures on Greece in negotiations over the country’s debt payments. [Click here for the Huffington Post site, or read on]

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