Thursday Afternoon Rant

So a week after writing my checks to the black hole government
and reading about the implications of this chart supplied by the IRS

I have to read that our friends over at General Electric
paid zero-zip-zilch in corporate 2010 income tax even though they had worldwide revenues of 14.2 billion.

Tax Avoidance at Work
OUTRAGE and envy still ripple from a report in The New York Times that General Electric, the nation's largest corporation, paid no U.S. corporate taxes in 2010.



GE did not break the law, but the bill it successfully avoided was picked up by the rest of us, or put on the national credit card.


The top U.S. corporate rate is 35 percent, but virtually no one pays that. GE's tax rate is about a third of what other companies pay, and that the company is vulnerable to pay any taxes is hypothetical. GE would have to return profits to these shores from places it set up to avoid taxes.


Policymakers in Washington, D.C., need to reassess rates to bring them into line with the financial realities of the nation and basic equity. Set lower, unavoidable rates that do not complicate job creation, and have a statutory imperative to collect them. As it is now, the higher the rate, the more creative the credits, shelters and loopholes to avoid compliance.


GE has a team of 975 gilded tax-avoidance professionals in a department working to ensure that the rest of America picks up its tab. Oh, and that default jobs-creation rationale? The Times report also noted that since 2002, GE has eliminated a fifth of its work force in the U.S.

All of this is legal of course.
Here we have Jeff Immelt, the CEO of GE explaining it all to our President.

And on the topic of our POTUS
Guess who's coming for dinner?
Well not with me but with a group of his Hollywood friends paying $38,000 each for the honor.
I am totally fine with the Los Angeles Entertainment  money paying the big bucks to start off Obama's 2012 campaign....but did they have to do it here? 
Couldn't they have all jetted off to Washington DC for the event....
I mean they all have their own jets don't they?
Pretty much the entire Westside from Beverly Hills to Brentwood is going to be in a traffic standstill. 
Traffic here is bad enough without shutting down Wilshire and the 405, one of the busiest intersections in the entire US.

And if that isn't enough to annoy me
there is the small matter of US debt



Can I move to Australia?

Real or Fake?

Watch to the end
and I just can't wait until the tax cuts get rescinded so that more of our tax dollars can go to China, the world's 2nd largest economy.

Billionaires Behaving Badly or Those Pesky Problems With Yachts

Oh those yachts....they can be such headaches!

First we have John (taxes are for the little people) Kerry and his brand new $7,000,000 yacht 'Isabel' which he chose to dock in Rhode Island instead of his home state of Massachusetts in order to save $500K in taxes.
If the Isabel were kept at the 2004 Democratic presidential nominee's summer vacation home on Nantucket or in Boston Harbor near his city residence, he would be liable for $437,500 in one-time sales tax. He would also have to pay $70,000 in annual excise taxes.

Pretty little sloop, isn't she?
I do love this quote from Boston.com
"While we can fault the senator for his hypocrisy on taxes or having his boat built halfway around the world instead of here in the USA, John Kerry proves an important point that taxes in Massachusetts are too high. If they are too high for someone as rich as Senator Kerry, they are absolutely too high for working-class taxpayers who are being squeezed at every turn," said a statement issued by party Chairwoman Jennifer Nassour.

And then we have billionaire US Democratic Senate Candidate, Jeff Greene and his yacht 'Summerwind'.

From Tampabay.com
Summerwind — like a 14-story building turned on its side — accommodates about 10 guests in five suites. Greene boasted to Forbes in 2008 that he practically stole it for $6 million in 2002. It may have been a bargain purchase, but it costs about $100,000 to fill up the tank on Summerwind, which burns about 50 gallons of fuel an hour.
Apparently tax savvy Jeff Greene registered his yacht in the tax haven Marshall Islands instead of in his home state of Florida.

God, I so hate hypocrisy and the 'Do as I say, not as I do' politicians who vote for taxes for everyone else, yet avoid paying their own.
And...while I'm on a rant...as if the US House isn't already enough of an embarrassment
WASHINGTON – House Democrats and Republicans have put aside their differences this year to honor the likes of golfer Phil Mickelson, the Chicago Blackhawks hockey team, NASCAR driver Jimmy Johnson and the Penn State women's volleyball team.

But when it came time this week to memorialize the start of the 142nd season of the Saratoga race course in New York, one freshman lawmaker decided he'd had enough.
"It's an absolute embarrassment," said Rep. Jason Chaffetz of Utah, announcing on the House floor a vow to vote against all future sports resolutions.
Why is it the business of the US House of Representatives to honor or memorialize any sports related person or event?  Is that was they were voted into office to do?
Apparently last year in the House there was a vote to commemorate the 2560th anniversary of the birth of Confucius...why is that deemed worthy of the time of our elected leaders?

Wouldn't you think that they would be more concerned with dealing with the $1.47 trillion deficit  or the fact that The median duration of unemployment is higher today than any time in the last 50 years. That's an understatement. It is more than twice as high today than any time in the last 50 years.

And don't even get me started on the $604K spent on bottled water or the $563K spent on new carpets, the $317K spent on new drapes and the $2.5 million spent on new furniture for the US House...during a recession
What Congress Bought Itself With Your $1 Billion
 
OK, rant over....I'm going to go read fashion blogs now and think happy thoughts

The Scam Of The Century

If you haven't already read this book, I highly recommend that you do. Go now and order it from Amazon or download it onto your ipod. No one, and I really mean no one, could tell this story like Michel Lewis.

You don't need to know all the details about collateralized debt obligations and credit default swaps to understand that something was indeed very, very wrong. From the ratings agencies such as Moody's to the whales on Wall Street, only a handful of people truly understood the underlying risk of the sub-prime backed debt and its shockingly wrong AAA rating, and how to hedge against it.
Until Solomon Brothers led the way for the big firms to go public, effectively transferring the risk from the firm's partners to the shareholders, these kind of prop trading debacles couldn't have happened. Finally, when the whole system broke down, the cost of Wall Street's bad bets, and they were indeed bets, in fact pure speculation, not reasoned investments, the taxpayer had to foot the bill with TARP funding. OK, so there was a little shuffling. Bear Stearns was sold to JP Morgan for $2 a share. Bank of America was forced to take over Merrill Lynch. Lehman Brothers went all the way under. Morgan Stanley got absorbed into Citigroup.
Meanwhile, the Wall Street whales still got their huge bonuses at the expense of the taxpayer.

Was fraud committed, well that depends on how you define "fraud". Surely CDSs weren't being marked to market by Goldman Sachs and Morgan Stanley in an equitable way and CDOs were purposefully overvalued. Did Goldman Sachs take trading positions against their clients, well that depends on your definition of "trading positions" and "risk management". Goldman's smart guys clearly acquitted the firm in their Senate testimony.

By the way, if all of these financial scams are reminding you of the 1920s, we all have Sandy Weill and Robert Rubin to thank for the repeal of the Glass-Steagall act. Thanks guys for enriching your posse and leaving the little people to pick up the bill.

Around Town - Sunday at the Skirball

I've always wanted to check out the architecture at the Skirball Cultural Center which sprouts out of the hills on the west side of the canyon between Bel Air and Brentwood and yesterday I finally had an event to attend there.

The Skirball Center, contains a concert hall, theater, amphitheater, auditorium, gallery space, conference center and various other areas of terraces and courtyards. Even with all of these features the overall structure, designed my Moshe Safdie, seems intimate because it was created as a series of interconnected low buildings punctuated by gardens.

At any rate it was the perfect venue for a lecture by Pulitzer Prize winning historian, David Kennedy and Hoover Institute Fellow, Thad Kousser, titled "What's The Matter With California". The lecture was Sponsored by the Bill Lane Center for the American West of Stanford University, which obviously deals with issues specific to this region.

The lecture focused on the political problems of California stemming from a gridlocked legislative process. Let's just say that the gist of the matter is that California desperately needs legislative and constitutional reform. But as we all know we seldom get the government that we want, unfortunately we get the government that we deserve.

While I do think that California, the 8th largest economy in the world...or something like that, will eventually recover from this cyclical recession, I'm skeptical of long term progress in terms of political reform.

When the best and the brightest from the brainiacs at Stanford and the University of Rochester can come up with this astounding conclusion in their report from last February

When a state legislature is not dominated by one party, and the salaries are modest, legislators waste less time on bills that benefit only their own districts, according to researchers at Stanford and the University of Rochester.

That doesn't leave me too hopeful. Because as astute as this statement is, any person of average intelligence would have rationally come up with the same conclusion...you know without a full on study. Is this the best that these professors have to offer?

Well apparently not, because they've got CaliforniaChoice.org which aims to educate the State's citizenry on constitutional and political reform.

Yeah, good luck with that.

At any rate after coming to grips with the fact that the California of my parents and grandparents, of fragrant orange groves between benign suburbian sprawl, has long been gone and is never coming back, I was happy take my focus from the political to the personal and to sip some sauvignon blanc and listen to some soft jazz at Vibrato Grill high up in the hills of Bel Air.

Even with all of the problems of the State, at least we don't have volcano eruptions...yet.

Paying Attention To The Pork Report

Do you ever wonder where all that money that you cheerfully pay each April 15th to the Federal Government actually goes?

Well you can get a basic idea on how the Government spends it from this book

Here's an example:

XI. State and Foreign Operations

Once again the House and Senate certified the fiscal year 2010 State and Foreign Operations Appropriations Act as “earmark free.” Unfortunately for taxpayers, there are seven earmarks and they were not free – they cost $209.4 million. This is a 56.3 percent decrease in projects from fiscal year 2009, when there were 16 projects, and an 18.2 percent decrease in dollars from the $256 million in fiscal year 2009.

$17,000,000 added by the House for the International Fund for Ireland (IFI). According to information on IFI’s website, the program was established in 1986 to promote economic and social advance and encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland. In a review of a glowing book about IFI released in January 2009, author Sean Donlon admitted, “While the fund will continue its work for the next couple of years it would be unreasonable to expect external support thereafter, especially in the current relatively stable political and security situation in Northern Ireland.” On June 17, 2009, Rep. Jason Chaffetz (R-Utah) introduced H.R. 2915, which would prohibit funding for the program amid indications from supporters that IFI will be phased out in the near future. Language in the conference report indicated that fiscal year 2010 would be the last year the United States would contribute to the program. CAGW has identified $281 million for this project since 1995. It appears that only if taxpayers find a four leaf clover will this unnecessary program die.

$17,000,000 this year for dialogue in Ireland....really? $281 million over the last 15 years???

No wonder I'm going to need a shot of this tonight after I write that check.