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“Feigning Outrage”: Outraised By Grimes, McConnell Rethinks Money-As-Speech

Kentucky Secretary of State Alison Lundergan Grimes (D) has once again outraised Senate Minority Leader Mitch McConnell (R) in their 2014 Senate race — and all of a sudden, McConnell no longer seems so enthusiastic about the use of money as free speech.

In the first three months of 2014, Grimes raised $2.7 million, edging McConnell’s $2.4 million haul. McConnell still holds a decisive financial advantage in the race; his campaign has almost $10.4 million in cash on hand, more than double Grimes’ total.

That said, McConnell’s campaign has already spent more than $7 million in the 2014 election, only to see a slight decline in his polling numbers. And it seems that the new fundraising totals have made the Republican leader’s campaign defensive.

“The very same ultra-rich liberal elite who bankrolled Barack Obama into the White House are pulling out all the stops for Alison Lundergan Grimes,” spokeswoman Allison Moore told the Louisville Courier-Journal. “Kentuckians know darn well her entire campaign is funded by those who seek to destroy Kentucky values and our way of life and the only way they can accomplish that is by getting rid of the man responsible for stopping them, Mitch McConnell.”

Moore’s implication — that Grimes is wrong for taking money from wealthy out-of-state donors — is rather ironic, considering that few politicians raise money from the “ultra-rich elite” better than McConnell does. According to the Wall Street Journal, as of December 31, 80 percent of McConnell’s campaign contributions came from donors outside of Kentucky (good for a total of more than $9.3 million). And the top donors to his campaign committee — which include Citigroup, JPMorgan Chase, and Goldman Sachs — don’t exactly scream “Kentucky values.”

McConnell has also benefited from outside groups that have jumped directly into the race; $3.4 million has already been spent in support of the Republican, according to GOP ad-tracking firm SMG Delta.

Although McConnell’s campaign is now feigning outrage that Grimes has raised big sums from “Obama’s liberal Hollywood friends” like Jeffrey Katzenberg, the senator is generally one of the nation’s most outspoken defenders of outside money in politics. In 2012, McConnell led the opposition to the DISCLOSE Act, which would have required political groups to disclose campaign contributions of more than $10,000. At the time, the minority leader argued that full disclosure could be used as a “political weapon,” enabling the government to unleash “harassment and intimidation tactics” against those who donate to opposition candidates.

Today, it appears that McConnell would like to turn the weapon against the “liberal elite” backing Grimes.

 

By: Henry Decker, The National Memo, April 16, 2014

April 18, 2014 Posted by | Campaign Financing, Mitch Mc Connell | , , , , , | Leave a comment

“Me, Pay Taxes?”: How Wall Street Avoids Paying Its Fair Share in Taxes

Like many Americans, you’ve probably just spent a good bit of time figuring out how much you owe in taxes. Most of us fill in the forms and follow the rules. But the rules are a lot more flexible for the largest U.S. corporations, and especially for the major Wall Street financial institutions and their top executives and owners. Banks and financial companies capture more than 30 percent of the nation’s corporate profits, but manage to pay only about 18 percent of corporate taxes while contributing less than 2 percent of total tax revenues, according to the Bureau of Economic Analysis and the International Monetary Fund.

What’s more, the owners and senior managers of our major financial institutions can exploit the loopholes in our individual income tax on a far greater scale than the rest of us. Below is a short guide to a few of the major ways that Wall Street avoids paying its fair share.

But I earned it in the Cayman Islands!: American corporations have developed a panoply of ways to route income through low-tax foreign subsidiaries. This practice goes well beyond the financial sector. Indeed, the latest publicized example involves a manufacturing firm, Caterpillar. Because of the inherently “placeless” nature of many financial transactions, however, financial institutions and their investors are among those in the best position to move income around in this fashion. The major Wall Street banks have thousands of subsidiaries in dozens of countries, all capable of engaging in transactions that enjoy the full guarantee of the U.S. parent company even as they take advantage of the tax or legal advantages of their foreign incorporation. Transactions in the multi-trillion dollar global derivatives market, for example, can pretty much be relocated anywhere in the world with the touch of a computer keyboard.

A way to crack down on the massive potential for tax avoidance this creates would be to simply rule that financial transactions backed up by a U.S. firm are in effect U.S. transactions and subject to U.S. tax law. Whatever international tax rules are designed to protect real manufacturing activity in other jurisdictions from inappropriate taxation should not apply to the passive income gained from financial activities that can easily be transacted from anywhere in the world. For some years U.S. tax law attempted to follow this principle, but starting in 1997 an “active financing” loophole made it much easier for multinationals to avoid taxation on financial transactions by moving profits to low-tax foreign subsidiaries. Combined with so-called “look through” provisions, these international tax loopholes mean that U.S. multinationals get to look around the world for the cheapest places to locate their earnings.

It’s not work, it’s investment!: The U.S. taxes capital gains on investments much more lightly than it taxes ordinary income. The details get complicated, but in general the profit on investments is only taxed at a maximum 15 to 20 percent rate, as opposed to a rate of almost 40 percent for high levels of ordinary income. Though its stated goal is to encourage investment and saving, a tax differential of this size can be seen as a subsidy to financial speculation, since it penalizes wage work compared to trading profits, and accrues to any investment held longer than a year, whether or not it can be shown to actually create jobs. In addition to the broad impact of the tax differential, the gap in rates creates a windfall for wealthy Wall Street executives in a position to maximize its benefits. Those who work for big hedge and private equity funds are in the very best position to do that, as they take much of their work income from the investment returns of the fund. Since they are legally permitted to classify this “carried interest” income as capital gains, they can cut their tax rates effectively in half – a windfall that costs the federal government billions of dollars a year, and means that some of the wealthiest individuals in America pay a lower tax rate on their earnings than an upper-middle-class family might.

Who, me, sales tax?: It’s easy to forget at this time of year when we’re all working on our income tax, but the sales tax is also one of the major taxes you pay each year. State and local governments take in more than $460 billion a year through sales taxes charged on everything from cars to candy bars. But Wall Street speculation isn’t charged a sales tax at all. Indeed, you’ll pay more sales tax for your next pack of gum than all the traders on Wall Street will pay for the billions of transactions they undertake every year. The non-partisan Joint Tax Committee of the U.S. Congress estimates that a Wall Street speculation tax of just three basis points – three pennies per $100 of financial instruments bought and sold in the financial markets – would raise almost $400 billion over the next decade. What’s more, such a fee would significantly discourage the kind of predatory trading strategies recently highlighted by author Michael Lewis, strategies that depend on trading thousands of times in a second in order to manipulate stock markets and extract tiny profits from each trade.

This only starts the list of ways Wall Street financial institutions and the people who run them manipulate the system and avoid paying their fair share; there are plenty more, including the use of complex financial derivatives to shelter individual income, the variety of techniques used by hedge and private equity fund partners to avoid effective IRS enforcement, and the continuing tax deductibility of corporate pay above $1 million, as long as it is sheltered under a so-called “performance incentive.” Tax time would be a good time for our elected representatives to get to work closing some of these gaps and loopholes, and leveling the playing field.

 

By: Marcus Stanley, Economic Intelligence, U. S.News and World Report, April 16, 2014

April 18, 2014 Posted by | Corporate Welfare, Tax Loopholes, Tax Revenue | , , , , , , | Leave a comment

“Dopey Media Whiffs Again”: No, Dems Aren’t “Playing Politics” By Exposing GOP Idiocy

Lazy Beltway pundits have discovered a new Obama scandal: The president is telling his base the truth about how Republicans are making their lives worse, and he must be stopped.

Last week, Obama was accused of ginning up his base’s anger over voting rights: The New York Times reduced his Friday speech on the issue to an effort “to rally his political base,” while the Washington Post depicted the Democrats’ focus on voting rights as mere partisan strategy, calling it the party’s “most important project in 2014.”

Then came the National Journal’s James Oliphant, declaring that “Democrats are giving Republicans a run for their money in practicing the politics of grievance.” Oliphant accused Democrats of cynically exploiting anger over voter ID laws and the failure of bills to hike the minimum wage, reform the immigration system and help women achieve pay equity, for political gain.

Slate’s John Dickerson has topped them all, however, with “Obama trolls the GOP,” his Thursday column accusing the president of lying about the wage gap between men and women in order to win votes. Dickerson is the one doing the trolling, as he sort of admits upfront, blaming the Internet for rewarding columns that call the president names and make an argument without nuance.

But the essence of Dickerson’s argument is of a piece with the lazy “grievance” meme spreading among his peers: Obama is doing something wrong by telling a component of his coalition, in this case women, that Republican policies are hurting them. In other words, telling the truth while also, yes, practicing politics.

We can certainly debate which number we should use when debating pay equity, but the notion that Obama is deliberately lying to create “stray voltage” by choosing the wrong number seems cynical or worse. Dickerson relies on a Major Garrett column that relies on an older Major Garrett column in which White House adviser David Plouffe explained his theory of “stray voltage” – how any controversy, even ones that seem to hurt Obama, can be put to good political use when “stray voltage” from said outrage sparks the ire of Obama’s base.

Supposedly, the controversy around the White House continuing to use the Census Bureau figure – that women make 77 cents to a man’s dollar – even though other studies find a smaller gap, cements the impression that Republicans oppose measures to close the gap, and may create “stray voltage” to galvanize women voters in 2014 and 2016. Oliphant likewise relies on the pay-gap flap, and the Democrats’ embrace of the doomed Paycheck Fairness Act, as an example of unfair “grievance politics.”

But Republicans do oppose virtually all measures that might close the gap. It’s not just the Paycheck Fairness Act; take the minimum wage. Republicans (and others) say that 77 percent figure exaggerates the pay gap between equally qualified men and women, because women are clustered in low-wage fields. Raising the minimum wage would be a great way to get at that particular pay-gap widener, since two thirds of minimum wage workers are women. But of course, Republicans oppose not only the Paycheck Fairness Act, but an increase in the minimum wage as well.

Oh, but Democrats continuing to agitate for a minimum wage hike? That’s also unfair “grievance politics,” according to Oliphant, because “it may animate minority voters.” Concern about traditional low turnout in midterm elections, he writes:

… has forced the party to find reasons for people to come out and vote, and they’ve selected issues that target slices of the electorate. Hence, equal pay, an issue that especially resonates with single women; the minimum wage, which may animate minority voters; and immigration reform, which galvanizes Hispanics. And likely coming soon to a [Harry] Reid press availability near you: student-loan modification, teed up for the hard-to-get youth vote.

So let me make sure I understand. Telling your voters, accurately, that Republicans are trying to make it harder for them to vote, and are blocking action on pay equity, the minimum wage and immigration reform is unfair “grievance politics”? Likewise, any effort to deal with the scandal of $1 trillion in student loan debt? Oliphant compares it to the grievance politics practiced by Republicans under Richard Nixon and Ronald Reagan. But that form of grievance politics mainly relied on inflaming white voters’ fears of cultural and racial change with false or highly exaggerated claims about Democrats.

I would also argue that when one party’s leaders declare upfront that they’re going to block everything the other party’s president tries to do, and when that party even retreats from solutions to problems that it once favored – in the GOP’s case, that includes the individual mandate, immigration reform, cap and trade, the Voting Rights Act, and periodic increases to the minimum wage — the cultivation of anger in order to turn out voters is an excellent and entirely defensible strategy. In fact, Republican obstructionism seems designed at least partly to demoralize the Obama coalition — many of them occasional voters already discouraged by the political process. If you can convince young people, Latinos and women that voting changes nothing, you can make up for your reliance on aging white voters.

This new story line also reinforces a core Republican claim about Obama and the Democrats: that they’re trying to buy off the electorate with “gifts,” to use sore-loser Mitt Romney’s term. When rich people use the political process to make their lives better, that’s just the way things work. When people who aren’t rich do so, they’re looking for a handout. This new “grievance politics” story line is just one more way mainstream journalism’s weakness for false equivalence, which is intellectually lazy, politically rewards Republicans.

 

By: Joan Walsh, Editor at Large, Salon, April 17, 2014

April 18, 2014 Posted by | Journalism, Media, Republicans | , , , , , , , | Leave a comment

“Conservative Crybabies Lose Again”: The Right’s Laughable New Obamacare Conspiracies, Officially Debunked

If you click through a few conservative news websites, you’ll learn all about the latest and most nefarious bit of lawless chicanery from the Obama administration as it tries to paper over the Affordable Care Act’s obvious failures. Jumping off from a New York Times report that the Census Bureau “is changing its annual [healthcare] survey so thoroughly that it will be difficult to measure the effects of President Obama’s health care law in the next report,” conservatives have put two and two together and come up with CONSPIRACY.

Megan McArdle asks, “Is Obama cooking the Census books for Obamacare?” Townhall’s Guy Benson suspects this change was implemented to boost Democratic fortunes for the midterms: “The brand new survey questions will unquestionably ‘reveal’ a dramatic decrease in the uninsured population, bureau experts say, which will deliver Democrats a super handy talking point. And oh-by-the-way, the artificially improved numbers will be released … this fall.” Mediaite’s Noah Rothman writes that the conservatives who argle-bargled in 2009 about the White House politicizing the census now look prescient. “The fears of some that the Census Bureau could be corrupted by the imperatives of the political operatives in the White House was today proven accurate.”

Nonsense. The timing of the switch is obviously not ideal, though, as Vox’s Sarah Kliff notes, the new methods will be used to collect data for 2013, before the state marketplaces went up and the Medicaid expansion took effect. The suggestion of political interference from the White House, however, is a bombshell accusation that, despite Rothman’s insistence, is nowhere near being “proven.” Evan McMorris-Santoro of BuzzFeed talked to a census official who said that the White House had precisely zero involvement in the changes implemented, and that the bureau had been discussing the shift “way before the ACA was an idea.”

Regardless, it’s a big story on the right, and not just because conservatives love a good conspiracy. In the past week or so, conservatives have seen their reliable avenues for attacking the Affordable Care Act evaporate right in front of them.

The announcement that Kathleen Sebelius was stepping down as Health and Human Services secretary sparked a brief round of schadenfreude and some enthusiastic sand-kicking at Ezra Klein, but ultimately Sebelius’ departure means that Republicans and conservatives have lost one of their favorite ACA punching bags. Her successor-in-waiting, Sylvia Mathews Burwell, is an experienced administrator and the rarest of rare things: an Obama administration official who is actually on good terms with key Republicans in Congress. They’ll have a tough time painting her as controversial, and (assuming she’s confirmed) Burwell will assume control of Obamacare as it swings upward from its functional and political nadir.

Speaking of which, as conservatives are trying to suss out White House manipulation of the Census Bureau, Obamacare keeps on doing exactly what it was intended to do. This week the Congressional Budget Office found that Obamacare will cover more people for less money than initially estimated, and that insurance premiums likely will not spike next year, thus driving a stake through three core conservative attacks on the health law.

Health insurers, who just last month were floating anonymous warnings of massive premium increases, are now starting to warm to the state health exchanges. “At least two major national insurers intend to expand their offerings,” reported Politico on April 16, “although a handful of big players like Aetna, Humana and Cigna, are keeping their cards close for now. None of the big-name insurers have signaled plans to shrink their presence or bail altogether after the first rocky year. And a slew of smaller health plans are already making moves to join more states or get into the Obamacare business for the first time.”

And, in a development that should shock no one, Gallup found that in states that embraced Obamacare (i.e., set up their own health exchanges and expanded Medicaid) the rate of uninsured adults declined three times faster than in those states that rejected the Medicaid expansion or had the feds set up their insurance marketplace. All told, Gallup’s findings translate to about 10 million newly insured Americans.

Obamacare works in states that want it to work, and the tangible benefits of that success are putting pressure on Republicans who have to date been antagonistic toward the law. As Greg Sargent observed, Republican Senate candidates are now suddenly reticent when it comes to discussing the Medicaid expansion. Most notable among them is Tom Cotton in Arkansas, where Medicaid was expanded under a compromise measure in which federal dollars are used to purchase private plans. Cotton supports the full repeal of Obamacare, but won’t comment specifically on Arkansas’ “private option” for Medicaid, amusingly dismissing it as “a state-based issue.”

I certainly don’t want to leave the impression that the Affordable Care Act has been neutralized as a political issue or that it won’t face problems down the road – a looming increase in healthcare costs, for example. But for now Obamacare is shoring up some of its biggest political vulnerabilities, leaving conservatives to sputter about census conspiracies.

 

By: Simon Maloy, Salon, April 17, 2014

 

April 18, 2014 Posted by | Affordable Care Act, Conservatives, Obamacare | , , , , , | Leave a comment

“The Circle Of Scam Keeps Turning”: In The Conservative World, Everybody Gets Rich At Some Stage Of The Game

A couple of times in the past I’ve written about what I call the conservative circle of scam, the way so many people on the right are so adept at fleecing each other. Here’s a piece about high-priced consultants milking the Koch brothers for everything they can get, and here’s one about my favorite story, the way that, in 2012, Dick Morris played ordinary people who wanted to see Barack Obama driven from office (he solicited donations to a super PAC for that purpose, laundered the money just a bit, and apparently kept most of it for himself without ever spending any of it on defeating Obama). The essence of the circle of scam is that everybody gets rich at some stage of the game, with the exception of the rank-and-file conservatives who fuel it all with their votes, their eyeballs, and their money.

Today there are two new media stories showing that the circle of scam is humming along nicely. The first comes from Michael Calderone at Huffington Post, who reports on an interesting relationship between Sean Hannity and the Tea Party Patriots. Here’s how it works: TPP is a sponsor of Hannity’s radio show. Then Hannity appears in TPP’s fundraising appeals, and some of the money generated inevitably goes back to Hannity’s radio show. Then Hannity goes on his Fox News show and talks about the terrific work the Tea Party Patriots are doing. Everybody wins!

The details of Hannity’s contract with his syndicate have never been made public, so I have no idea if he shares in the show’s advertising revenue. But even if he doesn’t, he benefits from keeping that revenue high. Last year he moved from Cumulus, where he reportedly made $20 million a year, to Premiere Radio Networks, which, one would presume, pays him something similar.

The second story comes from Kenneth Vogel and Mackenzie Weinger of Politico, who report that it isn’t just Hannity. A bunch of conservative media figures are in on the action, none gaining more than Glenn Beck, who has been paid an astounding $6 million by the Tea Party group FreedomWorks in recent years to promote its efforts. As Dick Armey, who was ousted as FreedomWorks chief in a recent coup, says, this kind of arrangement “compromises the integrity of the pundit-guru, as it were, and it’s an undignified expenditure of the part of the outfit that’s mining the attention.” Well put, Dick. One does need one’s pundit-gurus to have integrity. But even if they don’t, they’ve still got authority, and that’s what the organizations are paying for: the hosts’ ability to tell their audiences: “This is where you should send your money.” And send it they do.

What’s most interesting is that all of this expenditure is fueling an occasionally vicious internecine battle within the conservative movement. Sure, all these hosts spend much of their time bashing Barack Obama. But they’ve been successfully enlisted on one side of the war between the Republican establishment and the ultra-conservative Tea Party, a war that still rages even if the Tea Party is having somewhat less success ousting incumbent Republicans than it did in 2010 or 2012. Instead of conservative media being a force for unity, one that educates the base on what they should be angry about and where to focus their energy, they’re fomenting division and strife within the conservative coalition.

Would the likes of Hannity and Beck be doing so anyway even if they weren’t getting paid? Maybe, maybe not. But it’s certainly something to see. Remember when the right was a smoothly functioning, terrifyingly unified monolith of opinion and action? I wonder if they’ll ever get that back.

 

By: Paul Waldman, Contributing Editor, The American Prospect, April 17, 2014

April 18, 2014 Posted by | Conservative Media, Conservatives, Tea Party | , , , , , , | Leave a comment

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