The Brad Blog: American Law Institute, the 'only intellectually respectable support' for capital punishment in the U.S., abandons support for it

The Hunting of the Snark: Let's clear out the deadwood

Capital Eye: Stakeholders in the health insurance debate gave big to congress critters

Pruning Shears: The OLC does not have a head. Does it need a body?

Democracy Now!: Why is the whistleblower who exposed the massive UBS tax evasion scheme the only one heading to prison?

VetVoice: Bob Barr to Republicans: STFU

It is curious that this AP article left out one giant aspect of the UBS scandal -- the role former GOP Senator Phil Gramm may have played in their illegal activity.

MIAMI – Swiss bank UBS AG "systematically and deliberately" violated U.S. law by dispatching private bankers to recruit wealthy Americans interested in evading taxes and must be forced to reveal the identities of 52,000 of those clients, the Justice Department said in a court filing Tuesday.

The filing, which comes amid several published reports that the case may be near settlement, urges U.S. District Judge Alan S. Gold to hold UBS accountable for conducting years of illegal business on U.S. soil — business that earned the bank more than $100 million in fees but cost the U.S. hundreds of millions of dollars in unpaid taxes.

"It is time for UBS to face the consequences that it has brought upon itself," said Justice Department tax attorney Stuart Gibson in the 55-page filing. "The United States has proven its case for enforcement."

As Jon Perr wrote earlier this year, Gramm was instrumental in handcuffing the IRS while he was in the Senate, and may have paved the way for UBS to commit their crimes once he became their Vice Chairman in 2002.

And apparently phony, to boot! I don't know about you, but I'm feeling even better about writing AIG that blank check. Joe Cassano was the head of AIG's financial products division who insured all those bad CDOs - you know, the ones that helped trigger this global meltdown?

The Feds are closing in on a criminal fraud case against Joseph Cassano, reports ABC News, which tracked down the former AIG Financial Products czar wearing blue spandex and a sheepish expression outside his home in London. And before you wonder why a Brooklyn College educated swaps dealer with a name like Joe Cassano lives in London again, the answer is probably "taxes" -- and decimating taxes, it may not shock you to know, is fast emerging as the cornerstone of the AIG business model.

An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.

Continue reading »

Joe Conason writes this week about how companies keep their corporate interests offshore - to evade paying their fair share of taxes:

According to the Government Accountability Office, nearly all of America's top 100 corporations maintain subsidiaries in countries identified as tax havens. As the GAO notes, there could be reasons other than avoiding the IRS to set up branches in places such as Singapore, Luxembourg and Switzerland, where taxes are light or nonexistent and keeping clients' illicit secrets is considered a matter of national pride.

But what reason other than evasion could there be for Goldman Sachs Group to set up three subsidiaries in Bermuda, five in Mauritius, and 15 in the Cayman Islands? Why did Countrywide Financial need two subsidiaries in Guernsey? Why did Wachovia need 18 subsidiaries in Bermuda, three in the British Virgin Islands, and 16 in the Caymans? Why did Lehman Brothers need 31 subsidiaries in the Caymans? What do Bank of America's 59 subsidiaries in the Caymans actually do? Why does Citigroup need 427 separate subsidiaries in tax havens, including 12 in the Channel Islands, 21 in Jersey, 91 in Luxembourg, 19 in Bermuda and 90 in the Caymans? What exactly is going on at Morgan Stanley's 19 subs in Jersey, 29 subs in Luxembourg, 14 subs in the Marshall Islands, and its amazing 158 subs in the Caymans? And speaking of AIG, why does it have 18 subs in tax-haven countries? (Don't expect to find out from Fox News Channel or the New York Post, because News Corp. has its own constellation of strange subsidiaries, including 33 in the Caymans alone.)

Continue reading »

Poynter:

Why did Washington Times Foundation give $1M to Houston

"One Rev. Sun Myung Moon-watcher's theory: The donation was made to the Greater Houston Community Foundation to help persuade President Bush to grant Moon a pardon for a 1982 felony tax evasion conviction that had put him in prison for 13 months."

Fish Bowl DC:

"That's one theory thrown out there by the Houston Chroni(what?)cle's Rick Casey and it's worth a read to see Casey's construction of a potential back channel donation of nearly a million dollars from The Washington Times Foundation to the George Bush Presidential Library. Was it an attempt to persuade Bush 43 to grant Moon a pardon for his 1982 felony tax conviction (that one that had him behind bars for 13 months)?

enlarge

Credit: CNN Money

For any American concerned about the federal budget deficit, job one must be to collect all of the tax revenue owed to the United States Treasury. That's why supposed Republican deficit hawks simply aren't serious about the national debt. After all, a new report confirmed that steep GOP budget cuts at the Internal Revenue Service (IRS) are hurting customer service, delaying refunds and costing Uncle Sam billions of dollars annually. Thanks to the never-ending Republican war on the IRS dating back to the late 1990's, tax evasion and cheating are now depriving the U.S. of $400 billion each year.

In April, Congressional Republicans extracted $600 million in cuts from the IRS in return for a spending deal with President Obama, reductions which at the time were forecast to cost the Treasury $4 billion in lost revenue. Now, the annual report to Congress from the National Taxpayer Advocate shows, "IRS is not adequately funded to serve taxpayers or collect revenue." As the AP explained:

The Internal Revenue Service can't keep up with surging tax cheating and isn't sufficiently collecting revenue or helping confused taxpayers because Congress isn't giving it enough money to do its job, a government watchdog said Wednesday...

Congress cut the IRS budget to $11.8 billion this year. That is $300 million less than last year and $1.5 billion below the request by President Barack Obama, who argued that boosting the agency's spending would fatten tax collections and provide better service to taxpayers.

President Obama, of course, was right. As a stunned Ezra Klein of the Washington Post summed up the GOP's penny-wise, pound-foolish spending cuts" in March:

"Converting dollar bills into $10 bills is an excellent way to pay off your credit card. Except, it seems, if you're a House Republican...

As the Associated Press reported, "every dollar the Internal Revenue Service spends for audits, liens and seizing property from tax cheats brings in more than $10, a rate of return so good the Obama administration wants to boost the agency's budget." It's an easy way to reduce the deficit: You don't have to cut heating oil for the poor or Pell grants for students. You just have to make people pay what they owe."

Now, just nine months after Jonathan Cohn highlighted the Republicans' "pro-tax evasion, pro-deficits" position, National Taxpayer Advocate Nina E. Olson confirmed the trend underway for years continues to worsen. "Inadequate funding," the agency web site reported, "means the IRS cannot adequately pursue unpaid tax liabilities":

The report points out that the IRS functions as the "accounts receivable" department of the federal government, as it collects more than 90 percent of all federal revenue and therefore provides the funds that make almost all other federal spending possible. On a budget of $12.1 billion, the IRS collected $2.42 trillion in FY 2011. In other words, for every $1 that Congress appropriated for the IRS, the IRS collected about $200 in return. However, current federal budgeting rules do not take into account that a dollar appropriated for the IRS typically generates substantially more than a dollar in additional tax collections, leaving the agency substantially underfunded to do its job and limiting its ability to close the tax gap and thereby help reduce the federal budget deficit.

The report points out that the size of the tax gap raises important equity concerns, because compliant taxpayers end up carrying a disproportionate share of the tax burden. For 2001, the most recent year for which a complete tax gap estimate existed when the report was written, the IRS estimated it was unable to collect $290 billion in taxes. Since there were then 108 million households in the United States, the average household paid a "noncompliance surtax" of almost $2,700 to enable the federal government to raise the same revenue it would have collected if all taxpayers had reported their income and paid their taxes in full. "That is not a burden we should expect our nation's taxpayers to bear lightly," the report says. [Last week, the IRS released updated tax gap estimates. For 2006, the IRS estimated it was unable to collect $385 billion in taxes when there were 114 million households, producing an updated "noncompliance surtax" of nearly $3,400 per household.]

But with the taxpayer population now at 141.2 million, economist Benjamin Harris of the Brookings Institution estimated the gross tax gap could range from $410 billion to $500 billion. The implications for America's $3.8 trillion annual budget and $1 trillion deficit are clear. "You could go a long way toward solving our budget mess by closing the tax gap," Harris said, "But the problem is, it's not easily closed."

Especially if, as Republicans insist, the government doesn't even try.

Continue reading »