Wednesday, May 29, 2013

Meyerson on tax avoidance: More than one bad Apple

Meyerson reminds us that:

 ... the system of sovereign nation-states — a pretty impressive creation in its day — has become a plaything for big business in the age of globalization and digital communication. The world is full of places with dirt-cheap labor, low or no taxes and scant or non-existent regulation.

We call sovereign states' total submission to corporate puppeteers in this globalized system "the race to the bottom."

Meyerson also keenly notes that lowering U.S. corporate tax rates is not the solution for corporations' tax avoidance: 

Reducing the nominal tax rate on corporate profits in the United States to 25 percent, or 15 percent, from the current 35 percent won’t deter some future Apple from shifting profits to some future Ireland if the tax rate there is zero.

So what are the solutions?  Meyerson says we should consider: 1) replacing corporate profit tax with an increase on capital gains tax; or even 2) a tax on corporate sales revenue earned in the country, not corporate profit.

By Harold Meyerson
May 29, 2013 | Washington Post

Tuesday, May 28, 2013

Tea Parties, 9/11 and 'American exceptionalism'

What an insightful and refreshing meditation on 200 years of American history, and meanwhile, Americans' psychological relation to their history!  

To give you an example: Smith's fascinating recognition of the unlikely affinity of two American "losers" who could have re-shaped America's relation to the world: Republican Wendell Wilkie post-WWII; and Democrat Jimmy Carter post-Vietnam.

Now to summarize....

First, Smith argues, as I have, that the Tea Parties are about perpetuating a certain myth about American history, but he goes even further [emphasis and italics mine]:

Whatever the Tea Party’s unconscious motivations and meanings—and I count these significant to an understanding of the group—we can no longer make light of its political influence; it has shifted the entire national conversation rightward—and to an extent backward, indeed. But more fundamentally than this, the movement reveals the strong grip of myth on many Americans—the grip of myth and the fear of change and history. In this, it seems to me, the Tea Party speaks for something more than itself. It is the culmination of the rise in conservatism we can easily trace to the 1980s. What of this conservatism, then? Ever since Reagan’s “Morning in America” campaign slogan in 1984 it has purported to express a new optimism about America. But in the Tea Party we discover the true topic to be the absence of optimism and the conviction that new ideas are impossible. Its object is simply to maintain a belief in belief and an optimism about optimism. These are desperate endeavors. They amount to more expressions of America’s terror in the face of history. To take our country back: Back to its mythological understanding of itself before the birth of its own history is the plainest answer of all.

The Tea Parties' constant harking back to a mythical point in time that never existed is a mark of fear of the future, Smith believes, a fear that all Americans share to some extent, and yet to "win the future" (to stupidly quote Newt Gingrich) we must face this fear:

I do not see that America has any choice now but to face this long terror. America’s founding was unfortunate in the fear and apprehension it engendered, and unfortunate habits and impulses have arisen from it. These are now in need of change—a project of historical proportion. Can we live without our culture of representation, our images and symbols and allusions and references, so casting our gaze forward, not behind us? Can we look ahead expectantly and seek greatness instead of assuming it always lies behind us and must be quoted? Can we learn to see and judge things as they are? Can we understand events and others (and ourselves most of all) in a useful, authentic context? Can we learn, perhaps most of all, to act not out of fear or apprehension but out of confidence and clear vision? In one way or another, the dead end of American politics as I write reminds us that all of these questions now urgently require answers. This is the nature of our moment.

Smith thinks we Americans must face our psychological defeat suffered on 9/11/2001, the realization that they did not like us, and did not want to be like us:

What was it Americans reiterated through all the decades leading to 2001—and, somewhat desperately, beyond that year? It was to remake the world, as Condoleezza Rice so plainly put it. It was to make the world resemble us, such that all of it would have to change and we would not. This dream, this utopia, the prospect of the global society whose imagining made us American, is what perished in 2001. America’s fundamentalist idea of itself was defeated on September 11. To put the point another way, America lost its long war against time. This is as real a defeat as any other on a battlefield or at sea. Osama bin Laden and those who gave their lives for his cause spoke for no one but themselves, surely. But they nonetheless gave substantial, dreadful form to a truth that had been a long time coming:The world does not require America to release it into freedom. Often the world does not even mean the same things when it speaks of “freedom,” “liberty,” and “democracy.” And the world is as aware as some Americans are of the dialectic of promise and self-betrayal that runs as a prominent thread through the long fabric of the American past.

Look upon 2001 in this way, and we begin to understand what it was that truly took its toll on the American consciousness. Those alive then had witnessed the end of a long experiment—a hundred years old if one counts from the Spanish war, two hundred to go back to the revolutionary era, nearly four hundred to count from Winthrop and the Arbella. I know of no one who spoke of 2001 in these terms at the time: It was unspeakable. 

9/11 wasn't about killing, or even creating terror; it was their way of screaming, "We reject you!"

Does America have a democratic mission?  Was it meant to be a shining City on a Hill?  It never did; it never was, argues Smith, convincingly. Which seems obvious to most non-Americans, but a bit frightening for us born-and-bred Amuricans to mull over.  If we were not chosen, if we are not special, if we do not have any special mission -- and with it, special prerogatives -- then what about all that "bad stuff" in our history?  Didn't it mean anything?  Wasn't it all for a greater purpose?.... No, it was just about Power.

And here's what Smith has to say about U.S. power:

Power is a material capability. It is a possession with no intrinsic vitality of its own. It has to do with method as opposed to purpose or ideals—techne as against telos. It is sheer means, deployment. Power tends to discourage authentic reflection and considered thought, and, paradoxically, produces a certain weakness in those who have it. This is the weakness that is born of distance from others. In the simplest terms, it is an inability to see and understand others and to tolerate difference. It also induces a crisis of belief. Over time a powerful democracy’s faith in itself quivers, while its faith in power and prerogative accumulates. 

Power and strength are not the same; we should resolve to possess the latter, Smith avers:

To reflect upon those final years before 2001, it is not difficult to understand in our contemporary terms the distinction between a powerful nation and a strong one. Strength derives from who one is—it is what one has made of oneself by way of vision, desire, and dedication. It has nothing to do with power as we customarily use this term. Paradoxically, it is a form of power greatly more powerful than the possession of power alone. Strength is a way of being, not a possession. Another paradox: Power renders one vulnerable to defeat or failure, and therefore to fear. Strength renders one not invulnerable—no one ever is—but able to recover from defeats and failures. The history of the past century bears out these distinctions very clearly. Most of all, a strong nation is capable of self-examination and of change. It understands where it is in history—its own and humankind’s.

And here's Smith's call to action at the end of his remarkable essay:

I propose the taking of an immense risk. It is the risk of living without things that are linked in the American psyche: the protection of our exceptionalism, the armor of our triumphalist nationalism, our fantastical idea of the individual and his or her subjectivity. For Americans to surrender this universe of belief, emotion, and thought may seem the utmost folly. A century ago Americans flinched at the prospect. What followed was often called heroic, but in many cases it was just the opposite, for the American century was so often an exercise in avoidance of genuinely defined responsibility. True enough, it ended as it began, with uncertainty and choices. But the outcome need not be the same now, for there is too much more to be gained than lost this time.

Are we brave enough to change, or do we prefer to revert to a mythical childhood of ourselves that never was?

By Patrick Smith
May 26, 2013 | Salon

This is how the NRA will lose

No more Mr. (and Ms.) Nice Liberal, that's the moral of the story.  

Mixing "angry" + "moms" + "millions" is a formula guaranteed to scare the s**t out of Congress.

Now liberals and Congressmen are realizing that "the absolute power of the NRA is one of the oldest and least-tested assumptions in Washington."

Complementing millions of angry grassroots activists, Bloomberg and Giffords are ready to spend $ millions to oust Democrats who voted against background checks; they're going to single-issue Democrats first, Republicans second, the same way the NRA does.

There may just be hope for change!

By Alec MacGillis
May 28, 2013 | New Republic

Sunday, May 26, 2013

Junger: Spend more time listening to vets

This Memorial Day, keep in mind that what our troops did over there, they bring back home with them.  Do we really want to want to share that burden with them?

But the obscenity of war is not diminished when that conflict is righteous or necessary or noble. And when soldiers come home spiritually polluted by the killing that they committed, or even just witnessed, many hope that their country will share the moral responsibility of such a grave event.

Their country doesn’t. Liberals often say that it’s not their problem because they opposed the war. Conservatives tend to call soldiers “heroes” and pat them on the back. Neither response is honest or helpful. Neither addresses the epidemic of post-traumatic stress disorder afflicting our veterans. 

Junger suggests we spend less time showing our admiration of veterans and more time listening to them:

Civilians tend to do things that make them, not the veterans, feel better. Yellow ribbons and parades do little to help with the emotional aftermath of combat. War has been part of human culture for tens of thousands of years, and most tribal societies were engaged in some form of warfare when encountered by Western explorers. It might be productive to study how some societies reintegrated their young fighters after the intimate carnage of Stone Age combat. It is striking, in fact, how rarely combat trauma is mentioned in ethnographic studies of cultures.

Typically, warriors were welcomed home by their entire community and underwent rituals to spiritually cleanse them of the effect of killing. Otherwise, they were considered too polluted to be around women and children. Often there was a celebration in which the fighters described the battle in great, bloody detail. Every man knew he was fighting for his community, and every person in the community knew that their lives depended on these young men. These gatherings must have been enormously cathartic for both the fighters and the people they were defending.

But I wonder if we really want to know what they did and saw over there?  It's easier for us to hang yellow ribbons and give them a pat on the back than to try and comprehend the terrible, gut-wrenching things they did and experienced in our name, at our orders, to defend us.

By Sebastian Junger
May 25, 2013 | Washington Post

Saturday, May 25, 2013

Obama is a total failure

Obama is a total failure... as a crypto-Marxist.  We all know, despite his lies to the contrary, that he hates business deep down in his heart of hearts, that he really does everything he can to kill America's private enterprise, and yet, and yet... this.  Epic fail.

He gives us far-left ultra-liberals a bad name.  He desperately needs to brush up on his Engels and Saul Alinsky 101.
May 25, 2013 | Huffington Post

Krugman: 5 litmus tests for true conservatives?

Krugman is totally right about one's values determining one's view on the welfare state. (I would say it's more a question of aesthetics.)  It's not something you can really debate. Believe me, I've tried.

There really are people who believe in the "work or starve" / "let the devil take the hindmost" philosophy of social Darwinism, and they make up about 20 percent of the U.S. population and the core of the Tea Parties and Republican Party.

When it comes to the general welfare, they are not interested in outcomes, but rather in ideology, in establishing ideal, Randian rules of the game that don't impede the unlimited accumulation of wealth with no responsibility to give anything back.  For them that belief is ironclad; it's beyond argument.

Krugman offers 5 issues, on the other hand, that do hinge on results, on empirical evidence.  One side is definitely right or wrong.  For these issues it's not a question of values or what's "right," but rather what's provably correct.  Krugman observes that while liberals can and do disagree on these 5 issues, and still call themselves liberal without suffering ideological exile, conservatives must answer a certain way on all 5 or else be confined to an ideological reservation for "RINOs."

By Paul Krugman
May 25, 2013 | New York Times

1 airplane = 200 million Americans

I just thought of the perfect summary of this instructional video on U.S. wealth inequality:

"Enough is ENOUGH!  I am tired of these motherfucking billionaires on this motherfucking plane!"

Thursday, May 23, 2013

IRS and Congress must define 'political activity'

It's not the IRS's fault.  It's not even Tea Parties' fault, as I already said.  

Congress should give the IRS guidelines to help them determine what is "political" activity and what is not:

This issue was highlighted last Friday during a House hearing on IRS activity. Asked if he could define when a group applying for tax exemption as a 501(c)(4) “social welfare organization” is being too political, Steven T. Miller admitted that he could not say for sure. If the IRS’s former acting commissioner doesn’t know, it is impossible to expect front-line staff reviewing applications to know what to look for, nor for citizen advocacy groups to understand what rules govern their conduct.

By Gary D. Bass and Elizabeth J. Kingsley
May 24, 2013 | Washington Post

Simple chart shows unfairness of U.S. tax system

What's a fair amount of tax for corporations to pay?  I can't tell you because the answer might change over time, and everything is relative.

However, what's certain is that corporate taxes as a share of total U.S. tax revenue have gone down since the golden era of the 1950s, 60s and 70s.  This is a strong indication that something is out of whack.

Meanwhile, payroll taxes that hit the low and middle class the hardest have ballooned in size, relatively.

What I also find interesting is how individual income tax as a source of federal revenue has remained fairly steady, despite the fact that many businesses are now allowed to pay tax as individuals. You might think, for example, that as corporate tax receipts went down, individual income tax receipts would go up, but that is not the case.  This chart doesn't tell us enough to say why.  But recessions and Dubya's tax cuts probably have something to do with it.

federal revenue

By Mark Gongloff
May 22, 2013 | Huffington Post

Amphibians dying from pesticides, fertilizers, climate change

This is not good.  Amphibians are like canaries in a coal mine for the environment, since they cannot regulate their temperature and absorb everything into their skin.

This just goes to show, once again, that our actions can have unintended consequences.  What's good for people and businesses in the short run could kill us in the long run.

We rely on scientific research to show us the way.  

By Darryl Fears
May 23, 2013 | Washington Post

Wednesday, May 22, 2013

Historic TV moment: 'I'm actually an atheist'

Someday, somebody's going to look back at this moment on CNN and draw a "before and after" line in the history of the U.S. and religion.

All I can say is, thank God for this lady.  Oh wait, woops!  I mean, just thank this lady for being honest about the good fortune of her decision, but with tolerance and a sense of humor for those who want to chalk it up to an invisible, all-powerful ghost.  If only religious folks would show the same tolerance when faced with those who don't share their "wrong" beliefs!  

I'll say it again, I can't stand people saying, "Thank God," or "Thank the Lord" when they've survived some tragedy while many others died. That makes no fucking sense. Do they think God wanted them to live and everybody else to die, or what? What makes them so fucking special, do you think?  Or is it all just part of God's mysterious plan that they got lucky? [Spiritual shrug of the shoulders].  

Same deal with those killed in a tragedy.  Believers say, "It was God's will," or "It was their time to go," or "They're in a better place now."  Oh really?  Are you sure?  Has anybody ever managed to interview the dead people flattened by debris in tornadoes, drowned by floods, swept away by tsunamis, or swallowed by earthquakes, where they're actually at (besides a grave) and if indeed it's better than where we're at, alive?  The dead tell no tales, they say.  That's OK, we tell spiritual fairy tales for them.  

Well, I'm glad more & more folks are realizing how self-serving and presumptuous our rationalizing really is.

UPDATE: A friend of mine replied:

You are irritated at religious people who are intolerant, yet you go off in your blog about hating it when people thank God for not being killed when some kind of natural disaster happens.  Practice what you preach a little.
Besides, what people mean when they use phrases like "thank God", or "due to the grace of God", what they doing is acknowledging that it could have just as easily been them that were killed.  If they had the attitude you want to believe they did about being "special", they wouldn't be thankful for anything.
Stop being so intolerant and judgmental.  You like this lady because she is a brave atheist.  Great, be happy for her.  To use it as an opportunity to kind of give a middle finger to those people who lost their homes, but survived and who happen to believe in God, is pretty low class.  Coexist.
To which I replied:

Wolf Blitzer, who is allegedly part of the liberal media axis, pushed this woman whom he didn't know to thank the Lord she was alive.  That has been considered a normal, even appropriate reaction to tragic events. However she didn't cooperate. On live TV. That was historic.   
Imagine if the Blitzer had said, "It wasn't God or fate that saved you, but your own quick thinking!  Right?  Right??"  You and all the conservatives would be up in arms about the lib'rul media and the degradation and godlessness of modern culture.   
Just have a bit of honesty and admit that your side dominates the conversation, and it's a rare person who has the courage to stand up to people like you, for fear of offending your precious half-thought-out beliefs and being ostracized. 
I am precisely criticizing the thoughtlessness in the phrase "thank God!"  It means something!  It applies not only to the person saying it, if you follow it to its logical conclusion.  But no, you choose to leave it at that.  It's brainless.  I can and do coexist with thoughtless people, I have no choice, but I'm not going to ignore their flawed thinking.  If they -- you -- can't take my pointing out the crazy logic in their beliefs, it's not my problem, it's a problem with their logic.  Don't blame the messenger.

Sunday, May 19, 2013

Bad news

I'm not going to stop being a news junkie, but I have to admit there's a heckuva lot of truth in Dobelli's essay on the uselessness of news. According to him:
  • News misleads. 
  • News is irrelevant.
  • News has no explanatory power. 
  • News is toxic to your body.
  • News increases cognitive errors.
  • News inhibits thinking.
  • News works like a drug.
  • News wastes time.
  • News makes us passive.
  • News kills creativity.
The irony is, you have to be reading this news in order to find out the news is bad for you.

UPDATE (05.21.2013): I've been giving this article some more thought.  Why is it wrong, or at least, not entirely right? First, because of bloggers like me who do try to process and analyze the news.  This activity is not passive and it does involve thinking. 

Second, you could probably apply some of these same criticisms to reading literature or even a lot of popular non-fiction. Or just reading. I mean, nobody ever got rich reading Joyce or Nabokov.  It's hard to say how The Great Gatsby is relevant to my life.  And yet literature enriches the soul and deepens our understanding of and empathy with our fellow man.  Reading news can do the same, if we let it.  I mean, as a human being I think it's important to know, for example, when people elsewhere are suffering, and why.  It's important to crawl out of our own skin once in a while. This world isn't all about our own personal happiness, after all. 

Third, reading the news makes you a more interesting, engaging person. It least it makes me more interesting.  During just about any conversation I'll recall something I've read in the news.  I don't always bring it up, but I have the choice.  Now, I may sound like a liberal snob, but if a group of people around you are discussing, say, the civil war in Syria, and you have no clue what's going on there, do you really think they're going to think you're very smart?  I guess a certain type of person could take pride in not following the news; but then he ought to be extra clever when it comes to other things.  Otherwise he's just a willfully ignorant bore.  

Fourth, there's that whole Fourth Estate thing: you know, that myth that tough, brave journalism is necessary for a democratic polity to work.  If you think that democratic politics matters, and that you have an obligation to be part of it, then information matters.  Nowadays the news is more likely to mislead and offer us zero context, I admit, but it is still possible to find good information.  (If I could explain how to judge good information from bad, believe me, I would. I'd write a primer on it for my mom and Republican friends.) 

Without good information we have... only personal experience and anecdotal evidence with which to make judgments about the world around us... which is exactly what conservatives do. Yes, they seek confirmation in the news for their biases, but they usually seek out the anecdotal.  They seek out the journalistic equivalent of talking to one's buddy or barber. Whereas we liberals do rely on journalists to bring us empirical facts and statistics with which we make informed judgments.

By Rolf Dobelli
April 12, 2013 | Guardian

Saturday, May 18, 2013

MB360: US student debt grew 284% from 2004-13

The facts behind the mountain of student debt: 13 percent of students owe more than $50,000 and nearly 4 percent owe more than $100,000. Student debt grew by 284 percent from 2004 to 2013.
Posted by mybudget360 
May 18, 2013

Many Americans view a college education as a way to build a better life.  College is seen as an avenue for better prosperity and the ability to pull yourself up beyond your current circumstances.  In fact, after World War II programs like the G.I. Bill allowed many Americans the opportunity to pursue a college degree.  In many cases, the United States at this time developed the largest middle class the world had come to know.  This is still the case today but the economic trends show a shrinking middle class that is largely having a tough time competing in this quickly globalizing economy.  One fact that stands out is that back in 2004, student debt was the smallest portion of all non-housing related debt in the US.  Only a short nine years later, student debt is the largest portion of debt in non-housing related debt.  What happened in this short period of time and what information can we pull from the mountains of student debt information?

Student debt and the decade of massive growth

One could argue that every segment of the economy experienced a growth in debt over the last decade.  That is not true.  Let us examine non-housing related debt carefully:

non-housing debt and student debt

Source:  Federal Reserve, Equifax

This is an interesting chart.  What we find is that Auto debt was the largest debt segment in 2004.  This was followed up by credit card debt and then other debt.  Student loan debt at this time was $260 billion.  In total, student debt made up 12 percent of all non-housing related debt back in 2004.

Fast forward to where we stand today:

non-housing debt and student debt 2

Source:  Federal Reserve, Equifax

Student debt is now by far the largest portion of non-housing related debt in our economy.  Student debt is now well above $1 trillion.  The growth of student debt in this short window was 284 percent.  Student debt now makes up a stunning 36 percent of all non-housing related debt.  What is interesting then is when we compare this to the growth of the other segments of non-housing related debt:

Growth between 2004 and 2013
Non-housing related debt
Auto loans:       9%
Other:              -31%
Credit Card:     4.5%
Student Debt:  284%

In essence, nearly all the growth in non-housing related debt over this time has come from student debt growth.  This makes the following data more troubling regarding the amounts of student debt by tiers but also the rising number of delinquencies:

“(NY Times)  According to the Federal Reserve Bank of New York, almost 13 percent of student-loan borrowers of all ages owe more than $50,000, and nearly 4 percent owe more than $100,000. These debts are beyond students’ ability to repay, (especially in our nearly jobless recovery); this is demonstrated by the fact that delinquency and default rates are soaring. Some 17 percent of student-loan borrowers were 90 days or more behind in payments at the end of 2012. When only those in repayment were counted — in other words, not including borrowers who were in loan deferment or forbearance — more than 30 percent were 90 days or more behind. For federal loans taken out in the 2009 fiscal year, three-year default rates exceeded 13 percent.

America is distinctive among advanced industrialized countries in the burden it places on students and their parents for financing higher education. America is also exceptional among comparable countries for the high cost of a college degree, including at public universities. Average tuition, and room and board, at four-year colleges is just short of $22,000 a year, up from under $9,000 (adjusted for inflation) in 1980-81.”

Averages do hide a lot of the facts but what we can deduct is that the 13 percent that owe more than $50,000 and the 4 percent that owe more than $100,000 have largely come in the recent decade.  While the cost of tuition has soared in this short period of time a large part of it has not corresponded to actual earnings:

college grads and earnings

What is interesting about the above chart is that real tuition is up (with new data) by close to 70 percent while real earnings are roughly the same as they were back in 1991.  So over a 20 year period college costs have soared but the return doesn’t seem to justify the rise.  We also have the proliferation of non-profit schools that target lower income Americans and provide them a questionable level of education.  Yet this is only one small part of the larger issue.  The addiction to debt.  We have discussed how this recession has hit young Americans incredibly hard.  In the current marketplace it has become hyper-competitive and expensive while starting salaries have fallen behind when it comes to inflation.  The rising number of delinquencies also shows that many students are simply unable to pay their debts.

If student debt were to grow at the current rate, we would be at $3.84 trillion in student by 2023.  Do you think that is sustainable?  If not, something has to give.

Silver: Repugs NOT singled out for IRS audits

Silver's sober little analysis tickled my mental "Like" icon.  First, because it's a good lesson on how to be a critical consumer of news and information. Silver reminds us of the statistical principle that "a handful of anecdotal data points are not worth very much in a country of more than 300 million people."  That's too bad for many Republicans, whose political views are shaped by handpicked anecdotes.

Second, because it shows Republicans' criticisms of the "evil" IRS are usually baseless and stupid.

Statistics guru Nate Silver, (the political analyst who predicted with perfect precision how Obama would win the 2012 election), estimates that about 380,000 of Mitt Romney’s voters were audited last year vs. 480,000 of President Obama’s voters.  

Too bad Rush Limbaugh didn't see that before his Friday show when he agreed with a paranoid caller
This IRS thing, what's the message? The government's after us.  Conservatives have been put on notice here.  You think this is gonna stop?  This isn't going to stop.  They're just going to find new ways to do this.
And like David Cay Johnston, Silver reminds us that "one-third of [IRS] audits pertained to people who claimed the Earned Income Tax Credit, a benefit for low-income taxpayers."  Why?  Because it's easy for the IRS to check up on.  Auditing rich people and corporations is too hard.

The truth is, IRS employees are overworked and underpaid, and their agency is chronically underfunded because of far-right Republicans who equate tax collecting, no matter professionally done, with theft.  Then they turn around and moan about the deficit.

By Nate Silver
May 17, 2013 | New York Times

Greenwald: Elites debate, Is AUMF awesome or totally awesome?

Here's how Greenwald sums up the "Dr. Strangelove" absurdity of the AUMF hearings in Congress, and the thinktank-media-judicial-political elite that wants to keep and expand it:

Nobody really even knows with whom the US is at war, or where. Everyone just knows that it is vital that it continue in unlimited form indefinitely.

In response to that, the only real movement in Congress is to think about how to enact a new law to expand the authorization even further. But it's a worthless and illusory debate, affecting nothing other than the pretexts and symbols used to justify what will, in all cases, be a permanent and limitless war. The Washington AUMF debate is about nothing other than whether more fig leafs are needed to make it all pretty and legal.

The Obama administration already claims the power to wage endless and boundless war, in virtually total secrecy, and without a single meaningful check or constraint. No institution with any power disputes this. To the contrary, the only ones which exert real influence - Congress, the courts, the establishment media, the plutocratic class - clearly favor its continuation and only think about how further to enable it. That will continue unless and until Americans begin to realize just what a mammoth price they're paying for this ongoing splurge of war spending and endless aggression.

Like I said, Congress ought to have thought twice before it handed the Executive branch carte blanche and an undated, blank check to wage war on anybody all over the globe...including at home.  And we citizens should have been screaming at our Congress for years now.

By Glenn Greenwald
May 17, 2013 | Guardian

Big chart explains byzantine campaign finance regulation

Long-time readers (all three of you) know that campaign finance is one of my pet issues. If we had shorter, publicly financed campaigns, a whole slew of "unsolvable" political problems would solve themselves, because then politicians would have to pay attention to us voters, not campaign contributors and lobbyists who pay for favors.

Critics who call the U.S. tax code complex should take a look below at our Byzantine campaign finance system!  

And for the record, let me say again that the IRS was correct to pay special attention to groups applying for tax-exempt status with "tea party" in their name. That's party as in political party, as in political activity.  I for one refuse to wink at their open deceit like our stupid tax laws do.

By Sunlight Foundation 
May 17, 2013

The controversy over the Internal Revenue Service's handling of applications for non-profit status from Tea Party groups has put a spotlight on a subject with which we at the Sunlight Foundation Reporting Group are all too painfully familiar: The migraine-producing complexity of the nation's campaign finance system. To shed some light on the ongoing debate, we've decided to share what we know.

As often is the case with systems worthy of Rube Goldberg, it's easier to draw than to describe.

The graphic above shows why its so hard to track campaign money: Those who raise it report to one (or more) of three federal agencies, depending on how they raise the money, how they spend the money and how much of it they spend and raise.

The starting point for understanding what different kinds of organizations that spend money on politics can and cannot do is the Internal Revenue Code, which contains several sections defining different types of tax exempt organizations and outlining what these organizations can and cannot do if they are organized under a certain section of the Internal Revenue Code. Section 527, for example, defines in some 3,500 words what a political committee is, what types of its income are exempt from tax (contributions, transfers from other 527 committees), what sort of expenditures it can make, and what its tax exempt purpose is ("influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed").

But it doesn't end there: In addition to the Internal Revenue Code's definitions, these these organizations are regulated by federal law and state laws. For example, the Internal Revenue Code does not require nonprofits organized under section 501(c)4 to disclose their donors to the public. But the Bipartisan Campaign Reform Act called for such groups to disclose their donors if they ran "issue ads" (ones that mention a candidate without saying "vote for" or "vote against him--the FEC has a fuller definition here; it's worth noting it took a 2012 court ruling to force the Federal Election Commission to apply this rule).

Further complicating the picture: Organizations under one of the categories listed above can form sub-organizations under another category. For instance, a labor union or trade association can spawn a 501(c)4, a super PAC and a traditional PAC. Many major givers operate under three or four guises, making the financial influence they exercise over elections especially difficult to track.

Understanding who reports what to whom when is complicated, but here are some general guidelines of what federal agencies are involved in overseeing these organizations, their regulatory authority and the disclosures they require:

Internal Revenue Service

  • Regulates organizations for compliance with tax law.
  • Requires a limited number of 527s--those that do not register with the Federal Election Commission or a state election authority--to disclose information, including initial notices (form 8871), periodic reports of their fundraising and spending (form 8872), an annual information return (form 990) and a tax return if they have taxable income of more than $100 (form 1120-POL). Groups organized under section 527 that file with the Federal Election Commission or state election boards are not required to file with the IRS, unless they have more than $100 in taxable income.
  • Regulates nonprofits organized under section 501(c) of the Internal Revenue Code. These include social welfare organizations like Crossroads GPS (section c4), labor unions like the AFL-CIO (section c5) and trade associations like the U.S. Chamber of Commerce (section c6). Nonprofits file an initial application for tax exempt status (form 1024) and annual information returns (form 990). They disclose information on grants they make to other organizations, their boards of directors, salaries of their five highest paid employees and amounts paid to their five biggest outside contractors. They do not disclose information on donors.
  • Nonprofits that lobby to influence legislation must disclose the amount expended on lobbying on their 990 forms.

Federal Election Commission

  • Administers and enforces federal election law.
  • Oversees candidate committees, political party committees, political action committees and independent expenditure-only committees--also known as super PACs. All these types of committees are organized under section 527 of the Internal Revenue Code; because they disclose information to the FEC, they do not file disclosures with the IRS.
  • Requires that these political committees file periodic disclosures of their donors, expenditures, loans received and outstanding debts. Committees can choose either monthly or quarterly disclosures.
  • Requires disclosures of independent expenditures--that is, spending on advertising, get-out-the-vote or other activities that aim to either elect or defeat a candidate for federal office. These expenditures must be reported within 48 hours until 20 days before an election, when they must be reported within 24 hours. Anyone making an independent expenditure must file a report: 501c organizations, 527 political committees, individuals and for-profit corporations. Both 48 and 24 hour reports require disclosure of the candidate or candidates supported or opposed, the amount spent, the payee or payees, but do not disclose donations.
  • Adjusts for inflation the limits on the size of donations individuals can make to candidate, party and political action committees (but not super PACs, which can take contributions in unlimited amounts from individuals, corporations--including 501c4 nonprofits that don't disclose their donors--and labor unions).
  • Investigates violations of federal election law.

U.S. Department of Labor

Requires some labor unions (those that have private sector or federal employees, including U.S. Postal Service workers) to disclose information on the amount spent on political activities, including itemized spending. Labor unions that represent state and municipal employees are not required to file annual reports with DoL.

Not on the chart, but also peripherally involved in the regulation of political funding and disclosure, through the requirements it imposes on television advertisers:

Federal Communications Commission

Requires all organizations that purchase advertising on television, radio and cable outlets to disclose to the station, in a filing available for public inspection, to disclose the name of the organization, its officers, the amount spent and other information about the ad buy. Generally, these disclosures are only available to review at the offices of the stations, though in 2012, the FCC required the four biggest broadcast outlets in the 50 largest markets to post the disclosures--known as the station's political file--online at the FCC website. Sunlight makes this records readily searchable via our Political Ad Sleuth tool.

Wednesday, May 15, 2013

IRS 501(c)(4) 'social welfare' my ass!

This is a case where our stupid tax laws make us dumber. If we let them.  This is also an example of the logical fallacy of argument from authority, as in, the law says it is so, therefore it is so.

Does anybody think that 501(c)(4) Tea Party groups (or a much smaller number of liberal groups) are not primarily engaged in politics?

My mom is in a Tea Party group.  I get her alerts and chain e-mails.  When this Cincinnati-IRS "scandal" came out, I asked her, "What do you guys do, trade recipes and sing folks songs?"  Silence. Crickets chirping.  No, it's more like, "Obama hates America and wants to kill and enslave us all!"  That's what they're really about.

If you ask me, every 501(c)(4) organization should be audited, every year!  No party, no politics -- the IRS should look at what they really do and say!

And yet Republicans and the lamestream media would have us believe that we should give these partisan political groups tax-exempt status.  There's winking at something, there's putting on blinders, there's closing your eyes to the truth, and then there's being Helen Keller. 

The media and GOP are asking us to be Helen Keller and ignore what we all really know to be the truth: what these 501(c)(4) groups (Civic Leagues, Social Welfare Organizations, and Local Associations of Employees) are really doing, which is mostly to spew anti-Obama, anti-Democratic bile.  And they are demanding a tax break while they're at it.  

Here's a quick the IRS's definition of a 501(c)(4) organization:
  • Social welfare organizations: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, and
  • Local associations of employees, the membership of which is limited to the employees of designated person(s) in a particular municipality, and the net earnings of which are devoted exclusively for the promotion of social welfare.

Here's how the Washington Post sums it up: "These groups are allowed to to participate in politics, so long as politics do not become their primary focus. What that means in practice is that they must spend less than 50 percent of their money on politics." Neither do 501(c)(4) groups have to disclose their donors.

Gee, well, the evil Koch brothers spend less than 50 percent of their money on politics, so they must be interested only in social welfare.  Right? Wrong. Obviously wrong. We know this.

Indeed, our internal bullshit detectors immediately know what's what.  And yet our tax laws don't.  And yet because our IRS auditors in Cincinnati noted a more than 150% increase in applications for 501(c)(4) status among Tea Party groups year-on-year, and tried to find out why, (albeit clumsily), and yet did not deny a single application, this behavior by the IRS constitutes a "scandal." 

Forgive me if I refuse to participate in, or sanction, this political charade, but the problem is not the IRS, or even these Tea Party groups taking advantage of our stupid laws, the problem is our Supreme Court that made the wrong decision on "Citizens United," and our U.S. Congress.  

Meanwhile, do not ask me to forget what I know and fake outrage at the inconveniences imposed on fake social-welfare organizations.  I'm not a fool.  I hope you're not either.

UPDATE (05.16.2013): Peter Goodman at HuffPo agrees with me that the IRS, by noticing something odd was happening and taking steps to check it out, was doing what auditors are supposed to do: "The IRS Was Dead Right To Scrutinize Tea Party."  Auditors can never check everything and everybody; they have to trouble-spot and exercise judgment.