“Clinton; Not A Scandal, Yet. But…”: The Right Is Going To Be Gunning For Her From Day One
So by now we’ve read every possible interpretation of why Hillary Clinton used a personal email account to conduct her State Department business. There’s a lot that isn’t clear, and a lot we still don’t know. The main thing we know that is the original Times story that broke the news was really slipshod, staggeringly so for such a major story in America’s best newspaper. After I and others noted this, you could tell the Times acknowledged as much, because the paper’s Day Two follow-up didn’t really have any new news, just facts and dates that should have been in the original article to begin with. It took reporters the better part of the day Tuesday to figure out exactly which regulation the Times piece was accusing Clinton of potentially violating.
Even Mark Halperin, nobody’s idea of a Clintonista, slammed the original article. “There are things in the Times story that if they’re not flat out wrong are really misleading and unfair to the Clintons,” he said on Bloomberg TV.
The Times’ overheated sloppiness does not mean, however, that Clinton is totally in the clear here. I didn’t say that (“Clinton still has some questions to answer,” I wrote Tuesday). The citizens on whose behalf she was conducting business obviously have the right to hear her explain why she opted to use a private account. And we have the right to know whether the private server was more secure than State’s or less, and whether any classified information was electronically transported across this server. (You may think it implausible that a private server could have been more secure than State’s, but remember, Wikileaks didn’t seem to find the State systems too impenetrable, and it is after all the federal government we’re talking about.)
If the answers to any of these questions turns out to be alarming, this could become a legitimate scandal. And of course, depending on the content of the emails, we may well be in for another, related Clinton “scandal.” She doesn’t have to have said anything self-incriminating in these emails. The way the other side is out to get her, one ill-considered verb could end up being hung around her neck for days or weeks.
But even if this story were to end right here, or right after she does a press conference about it, there are a couple of lessons Clinton ought to take away from this.
First, she desperately needs someone on her staff to serve as a kind of average person-common sense barometer, and this person has to have the stature to be able to give it to her straight, and she has to listen to this person. In this case, back in early 2009, this person might have said something like, “I don’t know, Hillary. When an average person gets a job at First Federal Bank, he gets a First Federal email address, and that’s the account through which he conducts his banking business. Anything other than that is just gonna look weird to people.”
Or, last year, on the topic of her paid public appearances: “No, Hillary, not Goldman Sachs. Avocado growers, I see no harm. American Association of Sheetrock Manufacturers? Fine, if you insist. But not Goldman!”
Or: “You know, maybe it’s not the world’s best idea for you to put your name on that foundation. Cuz then whenever a question arises about its funding sources you can say ‘Hey, it’s his foundation, not mine!’”
Or, more proactively: “I was thinking, Hillary, with all these millions you’ve now made, and coming out of State, why not start your own foundation? Help women around the world with microcredit and all that. Can’t lose.”
Yes, she ought to be able to make these calls herself, but it seems clear that she can’t. They’re obviously not Bill’s strong suit either. So since neither of them seems able to do it, they need to hire some help. Or maybe assemble a panel of actual average Americans, and when one of these decisions looms, her staff can video-tape the panel reacting, and she can watch.
The second thing she needs to get is this: If she does become president, the right is going to be gunning for her from Day One, sniffing around for impeachable offenses from the second she takes the oath. This kind of secrecy and defensiveness will only add fuel to the fire—and it will put the media on the right’s side. It will make it look—not just to Hillary-haters, but to average people—like she’s hiding something even when she doesn’t have anything she needs to hide. We’ve seen that movie many times.
If she’s president, she has to break that habit. The White House operates under far more onerous disclosure and accountability rules than the cabinet departments do, and if she doesn’t follow those rules and then some, she’s just going be handing those out to get her the proverbial match.
Old habits die hard as they say. We seemed to have reason to think that the Hillary Clinton who urged the stonewalling of The Washington Post on Whitewater documents back in 1994 had gone away. We never heard any such stories in her Senate or State years until now. But that Hillary is still around, apparently. The Tweet she sent out late Wednesday night doesn’t quite equate to transparency.
The other old habits that won’t die easily are 1) right-wing loathing of her and desire to discredit and even destroy her, and 2) the mainstream media’s reflexive, uncritical, and panting promotion of every charge the right levels against her (remember, though this story came through the Times, it obviously originated in Trey Gowdy’s Benghazi committee’s investigative staff). Clinton’s old habit just feeds these others, and it’s not a dynamic she or the country will need if she’s in the White House.
By: Michael Tomasky, The Daily Beast, March 6, 2015
“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
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