In an earlier post, I discussed all the ways that wealthy people can reduce the rate at which they pay taxes, using measures that are not available to ordinary people, and which results of them paying at much lower rates than middle class people do.

Mitt Romney had for a long time refused to release his tax returns and suspicions were that this was because he was in fact paying at a lower rate than most people because of those above methods. Under pressure he has (sort of) agreed to release his returns around (maybe) April, and conceded that he does pay only about 15%, the same rate as the marginal rate on people whose income is in the range $8,375 to $34,000, which is even below the media income.

But the additional tidbit that was tucked away in his statement about his income was when he said, “And then I get speakers’ fees from time to time, but not very much.” It turns out that his total income from speaking fees for 2010 was $374,327.62, for an average of $41,592 per speech.

When your fees per speech is close to the median household income, and your total income from speeches alone put you in the top 2% of income earners, and you consider it ‘not very much’, then you really are living in a different world.

I got this from The Progressive Review but since the site did not cite a source, I cannot vouch for the accuracy of the data used to generate it.

Update: See the comment by savannahbarnett below that suggests that the data is unreliable and out of date, although the link to better supported data shows that the ratio in the US is still very high, in the 185 to 325 range.

Many big corporations avoid paying US taxes by creating offshore subsidiaries and putting their profits into those companies. That money is often stored in banks in the US but are technically considered outside of the country. Of course, these companies and their executives would like to be able to use the money (which is currently running at more than $1.375 trillion) in the US to pay for their bonuses and the like but if they ‘bring it back’ (i.e., put it in their US books) they would have to pay the 35% tax that they avoided by using their foreign subsidiaries. So now an army of 160 lobbyists is pushing to allow a ‘temporary’ tax holiday under which the money can be repatriated to the US at a rate of only 5.25%, which would be a massive windfall to these companies and impoverish the government. This was also done back in 2004, creating a windfall then.
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It looks like Europe is following the lead of the US, with its equivalent of the Federal Reserve giving money to big banks at low interest rates and allowing them to buy government bonds at higher interest rates. So the European central bank is essentially borrowing back its own money, just like the Fed did here, the banks essentially risk-free easy profits.

If one wanted even more evidence of the power of the global financial oligarchy over governments, look at how they managed to oust the elected leaders of the government in Greece and Italy and replace them with unelected ‘technocrats’, i.e., people who would implement harsh austerity policies that squeeze the general public in order to pay back to the banks the risky loans that they gave out. Even Silvio Berlusconi, one of the most tenacious of politicians whose ability to cling on to the prime ministership was legendary, had to bow down to this superior power and resign.

Currently there is a congressional debate on whether to extend the payroll tax cut on Social Security. The Republican party, which wants to extend the Bush era tax cuts on the rich, ridiculously argues that those cuts would pay for themselves and do not require expenditure offsets. But it argues the reverse in the case of payroll tax cuts, requiring that the cuts, which benefit largely the middle class, be paid for by cuts in expenditure elsewhere. Their devotion to serving the interests of only the rich has never been so glaringly exposed.

I initially opposed the cuts in the payroll tax for three reasons. 1) If the economy needed to be stimulated, I preferred the government sending everyone earning below a fixed amount a check for the average amount of the cut, similar to what George W. Bush did. I felt that the effects of a payroll tax cut would be too subtle. 2) Because the tax is a fixed fraction of income up to a certain limit, the cut gives more back to higher income earners than lower ones. 3) It would cause a deficit in the Social Security trust fund that would be used by opponents to undermine the Social Security program.

It turns out that I was wrong on the third point. The legislation that cut the Social Security tax also required the government to make up the losses to the trust fund from general tax revenues. This is still problematic because it further breaks down the wall between the trust fund and general revenues and drags Social Security into budget debates by enabling opponents to claim that it is adding to the budget deficit. But at least on paper, the trust fund revenues are not affected.

Last week, I wrote about the revelation that the size of the bailout was $7.77 trillion, much larger than publicly revealed during the time. Via reader Mark, I read this article by former congressman Alan Grayson that says that the audit that was enabled by legislation that he and Ron Paul initiated reveals that the size of the Federal Reserve bailout of the big banks all over the world is now even greater than that, to the tune of $26 trillion, which is almost twice the size of the entire GDP of the US, which is a little over $14 trillion. Grayson explains the key numbers that the audit revealed:

Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.
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Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending — on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP.

These are staggering amounts. And it was all done under the radar, using the secrecy with which the Federal Reserve and the government use when it comes to serving the oligarchy.

Last Thursday, I wrote about how the Federal Reserve, in secret, committed itself to $7.77 trillion in support to the big banks. The Daily Show gives more details of the how the rip-off worked. It turns out that the Fed gave the banks money at interest rates of 0.01% (essentially free money) that the banks then used to buy US Treasury bonds. In essence the Fed was borrowing its own money back from the banks at much higher rates than it lent it out to the same banks. Any idiot could make money on such a deal and it should be no surprise that the banks made a quick $13 billion in profits, which they then doled out to their executives as huge bonuses as a reward for their business acumen.

The fact that there has been no outcry against Federal Reserve head Ben Bernanke shows how the entire government and the major media is in the tank for the banks. The secrecy under which the Federal Reserve acts must end. It is a public body that is supposed to work for the public interest. It should not be allowed to become the private slush fund of the oligarchy.

News reports are emerging that when the financial collapse was about to happen in the summer of 2008, Treasury Secretary Henry Paulson gave inside information on what the government was planning to do to a small group of insider investors who were in a position to take advantage of the news. Even they were shocked that he was telling them this.

He delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge-fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc., of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

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One in four American children now live in poverty. This report follows some who have been forced to live in cars and trucks. While the story is sad, what it reveals about the resilience of children, their ability to think positively and find ways to overcome their adversity, is heartening.

Well, another Thanksgiving holiday has come and gone and we get the usual reports of the shopping madness that has become customary. This year thankfully there do not seem to have been any actual deaths caused by crowds stampeding to get items, though shoppers at one place did ignore or step over a dying elderly man on the floor. (Incidentally, Kevin Drum says that ‘Black Friday’ got its name for darker reasons than the one that business public relations flacks have managed to foist on the public.)

But there have been shootings as people tried to rob shoppers of their purchases. There were also reports of riots in which police were called to quell unruly crowds and used the now-ubiquitous pepper sprays to disperse them. The report below also said that police picked up and slammed a grandfather to the ground in a store, thinking that he was a shoplifter. Why is such force necessary, even if their suspicions turned out to be correct?

Black Friday Brawl at Buckeye Walmart: MyFoxPHOENIX.com

A disturbing escalation was that of a shopper who, probably inspired by recent police actions, brought her own pepper spray and used it to disable her competitors for Xboxes and other high-demand items. She apparently escaped with her spoils but later turned herself in. Given the mentality of such shoppers, I worry that next year more people will copy her example or even escalate it, maybe bringing truncheons to fend off rivals or use tear gas and even tasers.

I have been trying to understand the mentality of these shopping melees. I can understand people in war-ravaged or famine-stricken areas rioting to get at meager relief supplies of food and water. But an Xbox is without doubt a luxury item, not a necessity, however much people may desire one. I have no idea how much an Xbox costs or what the sale price was but I find it hard to imagine that it was the size of the savings that drove someone to actually pepper spray her fellow human beings. After all, look at the scene below where people fought each other to get waffle irons that were on sale for $2. It is bizarre to think that people are willing to forego elementary courtesy and consideration towards others for waffle irons.

I blame reality TV for this development. I think what we are seeing is people shopping as if it were some kind of reality show of the kind seen on TV with themselves as contestants and in which the prizes are the goods on sale. The winners are those who snag the best deals and can then boast to their friends about it. And just like the shows, people are encouraged to do whatever it takes to ‘win’. One person reinforced this view by going so far as to describe the pepper-spraying woman as a ‘competitive shopper’, a benign euphemism for a person with a mean attitude to life.

The stores and the media feed this mentality, relentlessly hyping their sales with their publicity about the limited numbers at low prices and midnight store openings and the like, all contributing to a race-like mentality. Apparently after Walmart opened its stores at 10 pm on Thanksgiving, the sales in various sectors of the store begin at different times, with the items kept in pallets covered in plastic that are then removed at the sale time. It does not take a genius to predict that this will cause trouble as crowds of shoppers cluster around the pallets, salivating as they wait for the bell or whistle or whatever that signals that the race has begun.

On the one hand, one can dismiss this as the aberrations of a few people who have lost their sense of proportion. And as long as the numbers remain small, we can perhaps ignore it. But I worry about what the increasing numbers of people who are willing to shove aside, trample, and pepper spray their fellows in order to get at merchandise that they could well do without tells us about ourselves. It is not a good sign when the social fabric of concern for their fellow beings is torn apart in the desire to get some bauble.

I have little sympathy for those people who are choosing to subject themselves to bodily harm and insults to their dignity in this way. The people I feel sorry for are the low-level store workers who have no choice but to be there and risk getting hurt in the scrums. Because the stores are opening at midnight on Thanksgiving or, in the case of Walmart, even earlier, these workers do not get to enjoy the holiday. In these hard times, some may welcome the opportunity to get extra hours of work at overtime rates (at least I hope they get that) but I am sure there are many who would much rather forego that to spend a quiet holiday with their loved ones. There is even a petition to the Target department store company to ‘save Thanksgiving’ by not having these midnight openings.

I hope it catches on.