Category Archives: Taxes

Piketty, Saez and Stantcheva: Taxing the 1% – Why the Top Tax Rate Could be Over 80%

Yves here. By happy coincidence, a mere day after Jamie Dimon offered yet another misleading defense of the 1% (among other howlers, claiming that their marginal tax rates were their effective tax rates), the gurus of income inequality, Thomas Piketty and Emmanuel Saez, say there is no good case for coddling the rich. Their analysis shows that top marginal tax rates could rise to near Eisenhower administration levels (the top tax rate then was 91%) and not hurt growth.

By Thomas Piketty, Professor, Paris School of Economic, Emmanuel Saez Professor of Economics, University of California, Berkeley and Stefanie Stantcheva, PhD candidate in Economics, MIT. Cross posted from VoxEU

The top 1% of US earners now command a far higher share of the country’s income than they did 40 years ago. This column looks at 18 OECD countries and disputes the claim that low taxes on the rich raise productivity and economic growth. It says the optimal top tax rate could be over 80% and no one but the mega rich would lose out.

Tom Ferguson: Democratic Governance Is Becoming Discredited

I suspect many Naked Capitalism readers would regard “democratic governance” as something of an oxymoron in the US. Our favorite curmudgeon, political scientist Tom Ferguson, discussed the failure of the supercommittee negotiations and what it means for politics and the economy. He sees the danger of government by technocrats, meaning experts who are really fronts for banking interests, as rising.

Employers Diss Obama Job Plan

Wow, this is just embarrassing. A raspberry from businesses, the object of Obama’s tender ministrations. And the reason? Basically, too little demand, something that tax cuts won’t remedy

Philip Pilkington: The Irish Establishment – Mad as Goats?

By Philip Pilkington, a journalist and writer living in Dublin, Ireland

Learn to say the same thing
What defeats people is a double confession
One time they will confess one thing
And the next they will confess something else
Talk to them, they will say:
Learn to say the same thing
Let us hold fast to saying the same thing”
– Cat Power, ‘Say’

In Ireland we used to measure our economic performance based on GDP (GNP actually, but we won’t go into that). Pretty standard fare for any advanced economy, really. Not so anymore. These days we measure our economic performance based on the government’s ability to extract tax revenue out of the general populace to pay for extortionate loans to our EU masters.

25 Big Corp CEOs Made More Than Their Companies Paid in Federal Taxes

In case you doubted that America needs more progressive taxation, the case in its favor has just been made in a study, “Executive Excess 2011: The Massive CEO Rewards for Tax Dodging,” by the Institute of Policy Studies (hat tip readers aet and Vlad via the International Business Times). The report found that the CEOs of 25 major companies paid themselves more than their companies paid in Federal income taxes. Exhibit 1 on page 31 names and shames them (well, assuming they are capable of shame), and they include John J. Donahoe of eBay, Robert Coury of Mylan Labs, Jeff Immelt of GE, and Robert Kelly of Bank of New York. The New York Times article on the report elicited some not-convincing rebuttals.

State Officials Starting to Question Securitization Fail, Whether States Should Tax RMBS

This letter (hat tip Daniel Pennell) by Virginia delegate Bob Marshall is another indicator that mortgage backed securitization issues are not going away any time soon. Notice that the questions are sophisticated and show familiarity with recent litigation.

And look at question 10. I’ve been wondering when cash strapped states might look to the apparent failure of mortgage securitizations to adhere to REMIC rules as a possible trigger for tax assessments.

JP Morgan is Foreclosing on the US Treasury

I am not making this up. Hat tip reader Deontos.

Here is the high level story: JP Morgan Chase and Northwest Trust foreclosed on a property in Hillsboro, Oregon. Treasury (more accurately, the IRS) has a tax lien on the property.

Philip Pilkington: European Citizens are Not Being Taxed to Fund the Bailouts

By Philip Pilkington, a journalist and writer based in Dublin, Ireland

We hear it time and time again: EU taxpayers are paying for the bailouts in the European periphery. The problem with this statement? As popular as it may be in the media right now, it’s not quite true – at least, it’s not true if you take a proper macroeconomic perspective on the crisis rather than looking at it through the crass lens of nationalism.

Tom Ferguson on the Debt Deal: Debt Ceiling Deal All Cuts No Taxes

Our favorite astute political observer (and curmudgeon) Tom Ferguson weighs in on the debt deal. The bottom line is that the deflationary impact starts relatively soon, what appears to be $300 billion starting in October.

“Is Standard and Poor’s Manipulating US Debt Rating to Escape Liability for the Mortgage Crisis?”

By Scarecrow and Jane Hamsher. Cross posted from FireDogLake

The Politico headline says it all: U.S. credit downgrade worries Obama, Congress more than default

It’s not the default that strikes the most fear in the White House and Congress these days. It’s the downgrade

As Robert Reich notes, Standard and Poors is the “biggest driver in the deficit battle.” Why would anyone care what the corrupt and disgraced organizations who quite nearly brought down the world economy think about anything at this point? And yet, that is where elite opinion is focused right now:

[W]hat really haunts the administration is the very real prospect, stoked two weeks ago by Standard & Poor’s, that Barack Obama could go down in history as the president who presided over his country’s loss of its gold-plated, triple-A bond rating.

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Financial analysts say such a move would hit Americans with more than $100 billion a year in higher borrowing costs, but it’s not just that. It would be a psychic blow to a nation that already looks over its shoulder at rising economic powers like China and wonders, what’s gone wrong? And it would give the president’s Republican rivals a ready-made line of attack that he’s dragging the country in the wrong direction.

This rumbling has been coming from Capitol Hill for a while, which made us start asking questions about what was really going on with Standard and Poors. It felt like there’s a story-behind-the-story driving S&P’s actions in the debt ceiling debate, which appear inexplicable at face value and go way beyond what Moody’s or Fitch have done. And the more we looked at the timeline of events, the more we wondered how the intertwining dramas of a) S&P downgrade threats, b) the liability that the ratings agencies may have for their role in the 2008 financial meltdown, and c) the GOP’s attempts to insulate the ratings agencies from b) are all impacting each other.

Get Ready for TARP 2.0

Washington DC appears to be readying itself for a repeat of the TARP, namely, the passage of unpopular legislation to appease the Market Gods (and transfer even more income from ordinary Americans to the Masters of the Universe). It isn’t yet clear whether this drama will be played out via generating bona fide financial market upheaval or mere threat-mongering (the Treasury market seems pretty confident that well-trained Congresscritters will fall into line). But unlike the TARP, which was a classic example of well-placed interests finding opportunity in the midst of upheaval, this reprise is a far more calculated affair.

More Proof That Obama is Herbert Hoover

Not only is Obama assuring that he will go down as one of the worst Presidents in history, but for those who have any doubts, he is also making it clear that his only allegiance is to the capitalist classes and their knowledge worker arms and legs.

You don’t need to go further than the first page of today’s New York Times for proof.