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by LAWYERS FOR POOR AMERICANS Wednesday, Jun. 30, 2010 at 11:48 PM







Senators Are Pushing To Cut Taxes For Paris Hilton

Should tax breaks be given to the richest percentile while unemployment continues?

Unemployment is near 10 percent. Long-term unemployment is at a record high. Teachers are being laid off across the country and state governments are slashing services to the bone. billion could do a lot of good addressing any of these problems.

However, the U.S. Senate is considering spending that much money on something else: cutting taxes for the richest 0.2 percent of households in the country.

For months, Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) have been on a quest to cut the estate tax, or the tax that the federal government levies on inheritance. And despite its serious impact on the budget and negligible effect on the electorate at large, their proposal is being taken seriously.

Before getting into the merits of their proposal, here’s some background. The 2003 Bush tax cut included a gradual phase-out of the estate tax, from its 2001 level of 55 percent with a million exemption to its complete repeal this year. However, to make the long-term cost of the cut seem less severe, the legislation stipulated that the tax come back in 2011 at the 2001 level. At the time, Bush’s team believed that Congress would never reinstate the tax, after having lived for at least one year without it.

Proving Bush’s strategy at least partially incorrect, the House of Representatives has already passed a bill permanently setting the estate tax at the 2009 level, which is a 45 percent rate with a .5 million exemption. But Kyl and Lincoln want to cut this to 35 percent with a million exemption. Their cut costs billion more than the House bill and 0 billion more than the budget baseline.

And all of that money would go to cut a tax that 99.8 percent of households in the U.S. will never pay. In fact, 62.5 percent of estate tax revenue comes from estates worth more than million. Another 35 percent of the revenue comes from estates worth between million and million. The simple fact is that only the ultra-wealthy — the Paris Hiltons of the world — are subject to the estate tax.

The estate tax receives so much attention because there is a significant amount of misinformation circulating about it. This is due to a concerted effort by conservatives and wealthy corporate families to re-label it the “death tax,” with the intent of fooling everyone into thinking that the IRS will be looming over them on their death bed, demanding payment. One organization in particular, the Policy and Taxation Group, has fueled this campaign, funded by money from the Gallo and Mars family fortunes.

Even Lincoln herself helped spread this tall tale, saying “I don’t think there’s any American out there who believes you should work all of your life to find that when you die, 55 percent of [your estate] has got to go to the government.”

I bet she’s right that no one believes that. But no one is trying to make it the law either.

Because the estate tax is levied on marginal income, it is only paid on the amount in excess of the exemption. To put it plainly, if the exemption is .5 million, the first .5 million of the estate is passed on entirely tax free. Tax is only paid on the first dollar above that amount. So an estate worth ,500,001 would have a tax bill of .45 cents under 2009 law.

The average effective rate — the amount paid as a percentage of the entire estate — for those subject to the estate tax is about 14 percent. There isn’t a mass of grieving widows who have to hand over half of everything they own to the government.

Critics of the estate tax also contend that it adversely affects small businesses and family farms. This, too, is untrue. If 2009 law were made permanent, only 140 estates that could be considered farms or small businesses will owe any tax at all, and “all but a handful would have sufficient liquid assets on hand (such as bank accounts, stocks, and bonds) to pay the tax without having to touch the farm or business,” according to the Center on Budget and Policy Priorities. The Lincoln-Kyl plan would spend tens of billions to cut this already small number down to 40.

Kyl and Lincoln have said that they plan to find spending offsets for the billion difference between their cut and the 2009 law, raising the prospect that Congress will actually increase revenues — which could be spent on any number of things — in order to cut taxes for the richest of the rich. It’s an absurd notion, but it garnered the attention of Sens. Max Baucus (D-MT) and Charles Grassley (R-IA), the chairman and ranking member, respectively, of the Senate Finance Committee.

Fortunately, some progressive lawmakers have started to push back against Lincoln and Kyl, with Sen. Bernie Sanders (I-VT) saying “the idea that we would make significant exemptions within the estate tax to give more tax breaks to the top three-tenths of 1 percent is nauseating.” And he’s absolutely right. Adopting the Lincoln-Kyl cut would be a sad indication of where Congress’ priorities truly are.

Pat Garofalo is the Economics Researcher and Blogger for WonkRoom.org at the Center for American Progress Action Fund. His writing has also appeared in The Nation, the Guardian, the Washington Examiner, and at AOL News.

Tags: Paris Hilton, Tax Cuts, Wealthy

Read more: www.businessinsider.com/senators-are-pushing-to-cut-taxes-for-paris-hilt



Submitted by LAWYERS FOR POOR AMERICANS (not verified) on Mon, 06/28/2010 - 1:18pm


Lincoln Intervenes for Arkansas Bank Article


Sen. Blanche Lincoln, one of the chief architects of the financial-regulation overhaul nearing completion in Congress, is pushing for a change that would benefit a bank in her home state of Arkansas.

The bank, Arvest Bank Group Inc., of Bentonville, Ark., is predominantly owned by the Walton family, of Wal-Mart Stores Inc. fame, perhaps the most influential family in the state and one of the richest in the U.S.

Sen. Blanche Lincoln is pushing for a change in the financial-overhaul bill that would benefit an Arkansas bank owned by the Walton family.

Under Ms. Lincoln's proposed change, Arvest would be excused from a provision that could require banks to raise more capital, in Arvest's case about 5 million. Other Senate Democrats had intended only to exempt banks with less than billion in capital from the provision. Ms. Lincoln wants to raise that to billion, a threshold that would exempt Arvest. It is the only bank in Arkansas with between billion and billion of assets, though there are some in other states.

White House officials have said they don't want changes that benefit specific companies, leery of the horse-trading that nearly sank their health-care overhaul. But the administration also can't afford to alienate Ms. Lincoln, head of the Senate Agriculture Committee, whose support on the broader overhaul is vital to its success.

Lawmakers routinely do things to benefit organizations in their home states, often seen as "constituent service." But Ms. Lincoln's move could cause headaches for other Democrats because Arvest is owned by such a wealthy and politically influential company. Other Democrats in Congress are considering making a change to satisfy the senator, people familiar with the matter said.

A spokeswoman for Ms. Lincoln said she was pushing the change to make sure "no Arkansas bank—no matter its owner—is punished" by the provision." She didn't discuss the issue with anyone from the Walton family but did meet with Arvest officials, her office said.

Experience WSJ professional Editors' Deep Dive: Financial Regulation WatchBEST'S INSURANCE NEWS

Conference Committee Agrees on Federal Insurance OfficeChicago Tribune

Auto Dealers Get a Pass in Reform BillNational Post

Canada as Derivatives HavenAccess thousands of business sources not available on the free web. Learn More Arvest officials and the Walton family declined to comment. The company is the largest of 96 bank holding companies in Arkansas and has more than 200 branches in four states.

Lawmakers from the House and Senate, including Ms. Lincoln, are currently hashing out a new financial-regulation bill.

The issue concerns dividend-paying instruments some banks issue to raise money called trust-preferred securities, a mix of debt and equity. Banks can convert them to capital for regulatory purposes.

The Senate version of the financial overhaul would bar the securities from being counted as part of banks' capital reserve, the cushion that absorbs losses when loans go bad. So some banks may have to raise fresh funds to meet capital minimums.

Senate Republicans last week proposed a provision, supported by House conferees, that would let all banks continue counting existing trust-preferred securities as capital. Ms. Lincoln broke with other Democrats on the conference committee and voted with the Republicans.

Journal Communitydiscuss“ This is exactly what is wrong with American politics today. ”

—David Stoneman Senate Democrats then proposed allowing banks with less than billion in assets to continue to count existing trust-preferred securities toward capital. What Sen. Lincoln is doing now is pushing to raise that threshold to billion.

This would include Arvest among banks "grandfathered." Arvest, with .3 billion in assets, is the only bank-holding company in Arkansas with more than billion in assets, and thus the only one that would benefit form such a change.

There are about 20 other banks in America with between billion and billion in assets that could also be helped.

Ms. Lincoln "believes the threshold should be high enough to ensure no bank in Arkansas is subject to these new rules on existing capital, which would hinder their ability to generate lending for consumers and businesses at a time when access to credit is already difficult to come by," said Ms. Lincoln's spokeswoman, Marni Goldberg, "These banks did not cause the near-collapse of our financial system and should not be punished for Wall Street's actions."

The change would benefit Arvest because of the way it has structured its capital. Of the 0.4 million Arvest held as capital at the end of March, about 5 million was in trust-preferred or similar securities, a high proportion compared with some other banks.

If the financial overhaul passes without any change, and Arvest can no longer count these securities as capital, the Walton family could be forced to raise fresh funds to fill the hole.

Arvest's chairman, chief executive and president is Jim Walton, one of the four children of the late Wal-Mart founder Sam Walton. From 1992 through the first quarter of 2010, Wal-Mart employees and the company's political-action committee have been among Ms. Lincoln's most generous supporters, giving her ,700, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign finance. The Waltons have owned Arvest for decades.

The provision barring banks from counting trust-preferred securities in their capital has the backing of Federal Deposit Insurance Corp. Chairman Sheila Bair, who says the securities do little to protect banks from losses during economic downturns.

Scramble to Finish Bank Rules This Week Auto Dealers Stand to Benefit in Financial Bill Sen. Susan Collins (R., Maine), sponsor of the provision to bar the securities from being counted in capital, is inclined to agree to raising the exemption threshold to win Ms. Lincoln's support, a spokesman for Ms. Collins said.

Ken Hammonds, chief executive of the Arkansas Bankers Association, said his group supports Ms. Lincoln's proposed change because it could also allow the state's smaller banks to merge and grow beyond billion in assets without being penalized.

This isn't the first time a lawmaker has pushed for changes that would help a home-state company. Sen. Ben Nelson (D., Neb.) inserted a derivatives-related provision into the Senate bill that had been pushed by Nebraska-based Berkshire Hathaway Inc. The change could have saved the company several billion dollars, according to analysts. It was removed after the lawmaker's involvement was disclosed in The Wall Street Journal.

Sen Scott Brown (R., Mass.), has said he'd vote against the financial-overhaul bill if it forces Massachusetts-based companies to stop certain asset-management practices.

—Dan Fitzpatrick contributed to this article

Write to Damian Paletta at damian.paletta (at) wsj.com

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved


Socialism okay for rich republicans


Published On: 06/28/2010

Republicans continue to slam Democrats for using healthcare reform, Wall Street reform and the gulf crisis to send America down a road toward socialism, yet socialism appears to be okay for rich Republicans.

Representative Michele Bachmann R-Minnesota, who is known as the Darling of the Tea Party movement, refers to the president, other democrats and everyone who disagrees with her as Socialists, Marxists or Communists.

She publically announced that the press should investigate the democrats in congress in order to reveal their anti-American beliefs.

She rails against the healthcare bill and any other program that offers aid to those who are less fortunate than she is, yet she did not seem to have a problem with socialism between 1995 and 2006 when her and her family received 1,973 in government farm subsidies, according to Gannet News Services.

While Bachmann receives these subsidies, she has constantly voted against aid for others in her role as a member of the House of Representatives.

Since the beginning of the current recession she has voted against extending unemployment benefits, and she voted against every bill aimed at foreclosure relief for struggling homeowners (while her district had the highest foreclosure rates in Minnesota), because it would be “rewarding the irresponsible while punishing those who have been playing by the rules.”

In other words, her constituents must be responsible, but is okay for her to enjoy the Socialist programs that she has railed against for years.

Michelle Bachmann is not the only member of congress receiving these subsidies. Senator Chuck Grassley, R-Kansas, who has said, “Whenever the government does more … that’s a movement toward socialism.”

He has warned of Obama’s “trend toward socialism”, yet over the 11 years from 1995 thru 2006, his family’s farm has received over million in farm subsidies.

It is ok for Chuck Grassley and his family to receive a million dollars in socialist subsidies, but a man or woman working three jobs that is still unable to provide their family with healthcare insurance is not worth of a subsidy that would insure the good health of their children. Does that not sound a little hypocritical to you?

Senator Sam Brownback, R-Kansas, and his family received over 0,000 in the same 11-year period. To be fair it is not just Republicans, the fiscally conservative Blue Dog Democrats are on board to receive the government dole. Senator Max Baucus, D-Montana, and his family received over 0,000, Senator Blanche Lincoln, D-Arkansas, and her family received 5,000 and Representative Stephanie Sandlin, D-South Dakota, and her family received 4,725 all over the same 11-year period.

The fact is farm subsidies are designed to maintain affordable food prices and assist struggling farmers, yet 75percent of farm subsidies go to the wealthiest 10percent of farmers.

These politicians who are the first to rail against programs designed to help the poor and indigent are first to stand in line to collect hundreds of thousands, even millions of dollars in welfare.

Based on their actions and their comments, none of these politicians are worthy of the people that they represent.

While they deny their constituents the aid that they need, they are still content to take the money that they pay in taxes in what they would call, if they were not receiving the money, socialist programs. These are the same type of programs that they have built their careers complaining about and voting against.

When a politician thinks that, they deserve more than the people that they represent. When a politician thinks that, they are better than the people they represent. It is time for the people that they represent to find someone else to represent them!

Note: To our knowledge, all of these congressional representatives are still receiving farm subsidies. However, we were only able to compile the dollar amounts through 2006.

Email: roncrumptons_opinion (at) live.com






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by LAWYERS FOR POOR AMERICANS Thursday, Jul. 01, 2010 at 4:20 PM


Who Will Fight for the Unemployed?

Published: June 29, 2010

Without doubt, the two biggest threats to the economy are unemployment and the dire financial condition of the states, yet lawmakers have failed to deal intelligently with either one.

Editorial Series

Jobs and Unemployment

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Readers shared their thoughts on this article.

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Federal unemployment benefits began to expire nearly a month ago. Since then, 1.2 million jobless workers have been cut off. The House passed a six-month extension as part of a broader spending bill in May, but the Senate, despite three attempts, has not been able to pass a similar bill. The majority leader, Harry Reid, said he was ready to give up after the third try last week when all of the Senate’s Republicans and a lone Democrat, Ben Nelson of Nebraska, blocked the bill.

Meanwhile, the states face a collective budget hole of some 2 billion, but neither the House nor the Senate has a plan to help. The House stripped a provision for billion in state fiscal aid from its earlier spending bill. The Senate included state aid in its ill-fated bill to extend unemployment benefits; when that bill failed, the promise of aid vanished as well.

As a result, 30 states that had counted on the money to help balance their budgets will be forced to raise taxes even higher and to cut spending even deeper in the budget year that begins on July 1. That will only worsen unemployment, both among government workers and the states’ private contractors. Worsening unemployment means slower growth, or worse, renewed recession.

So if lawmakers are wondering why consumer confidence and the stock market are tanking (the Standard & Poor’s 500-stock index hit a new low for the year on Tuesday), they need look no further than a mirror.

The situation cries out for policies to support economic growth — specifically jobless benefits and fiscal aid to states. But instead of delivering, Congressional Republicans and many Democrats have been asserting that the nation must act instead to cut the deficit. The debate has little to do with economic reality and everything to do with political posturing. A lot of lawmakers have concluded that the best way to keep their jobs is to pander to the nation’s new populist mood and play off the fears of the very Americans whose economic well-being Congress is threatening.

Deficits matter, but not more than economic recovery, and not more urgently than the economic survival of millions of Americans. A sane approach would couple near-term federal spending with a credible plan for deficit reduction — a mix of tax increases and spending cuts — as the economic recovery takes hold.

But today’s deficit hawks — many of whom eagerly participated in digging the deficit ever deeper during the George W. Bush years — are not interested in the sane approach. In the Senate, even as they blocked the extension of unemployment benefits, they succeeded in preserving a tax loophole that benefits wealthy money managers at private equity firms and other investment partnerships. They also derailed an effort to end widespread tax avoidance by owners of small businesses organized as S-corporations. If they are really so worried about the deficit, why balk at these evidently sensible ways to close tax loopholes and end tax avoidance?

House lawmakers made an effort on Tuesday to extend jobless benefits but failed to get the necessary votes, and it remains uncertain if an extension can pass both the House and Senate before Congress leaves town on Friday for a weeklong break. What’s needed, and what’s lacking, is leadership, both in Congress and from the White House, to set the terms of the debate — jobs before deficit reduction — and to fight for those terms, with failure not an option.

A version of this editorial appeared in print on June 30, 2010, on page A30 of the New York edition.





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