New Leadership
Barney Frank, D-MA gave an interview yesterday to several reporters on his upcoming service as Chairman of the House Finance Committee. Watching this socially responsible and amazingly bright incoming leader gives me a great deal of hope for the return of that social contracts that used to be the basis of government.
Citing a recent conversation with Alan Greenspan, Frank recalled the former Federal Reserve Director admitted that while cutting tax rates was often excused for the sake of creating more revenues, the concept was 'theoretically possible, but it never happened in my lifetime.'
Rep. Frank repeated an observation he made some time ago, in the February 27th Business Week article on his views;
". . .Inequality is not a bad thing in a free market economy; indeed, it’s essential if we’re to benefit from the incentives and efficiencies that make the market so effective a producer of wealth. But left entirely to its own devices, the free market will produce more inequality than is necessary for efficiency or a healthy society. That’s especially true in an economy marked by globalization, the increased use of information technology, and the rapid flow of capital across borders. Alan Greenspan said as much when he told Congress’ Joint Economic Committee in 2004 that nearly all the benefits of recent productivity growth were going to corporate profits, resulting in “a marked fall” in employees’ share of the gains.[emphasis added]
"Nothing in the past two years has alleviated that problem. Real wages for the average worker have eroded, and health and pension benefits have faded. Meanwhile, corporate profits and pay for the top 2% of the population have soared.
"For many of us, this is morally objectionable because it means that a large majority of people live at a lower standard of living than we think Americans ought to. But the counterargument, supported by many in Corporate America, is that focusing on inequality is a mistake, so long as the absolute level at which the majority lives is acceptable. So any reduction in inequality can only be won by a majority that includes people who do not share my values-based objections.
It is tremendously comforting to know that decisions being made on the living standards of the American public are going to be under an intelligent and socially responsible leader like Rep. Frank and maybe to some extent, his Senate counterpart, Sen. Max Baucus, who although his rating with unions is only 62%, has a more promising legislative record - except that he is cosponsoring a renewal of the GOP tax cuts with Grassley, I see.
Recently, (April), former Treasury Secretary Snow made a typically misleading announcement that wages had risen by 3.8% over the past 12 months, to which Rep. Frank responded by questions that brought out the fact that living costs had risen by more than that, totally wiping out the ‘gains’ that the administration was trying to hype.
The bias against hardworking taxpaying American workers has led to a plethora of tax dodges employed by the very wealthy and by corporations, including the offshoring of corporate headquarters that businesses use to avoid taxes.
According to Taxpayers for Common Sense, because of this and other special tax breaks and loopholes, "many of the biggest corporations in the U.S. pay few or no taxes on their profits."
A study by the Institute on Taxation and Economic Policy of the 250 larrgest corporations in the country found that the corporations paid an average of 20.1 percent on their 1996-1998 profits. That is close to half the "required" 35 percent corporate rate demanded by the U.S. tax code.
These largest companies should have owed $257 billion, but in fact paid $159 billion. Some of the most profitable companies in the period got tax refunds of $3.2 billion. The biggest winner in tax breaks was General Electric. Cisco Systems, second.
Most profitable had $2.7 billion in net earnings and paid no taxes. Texaco reported $3.4 billion in profits and received $304 million in rebates. Oil companies in general are major dodgers of normal income taxes.
Following the Enron, Tyco and other financial scandals, the Sarbanes/Oxley Act in 2002 imposed strict reporting and compliance regulations that businesses have found chafing, and have accused of driving investors away from the U.S. businesses they affect. Of course, the opposing point of view is that because of the enforced trustworthiness of U.S. business under S/O, many more investors are confident enough of their basic worth to invest in U.S. businesses. However, led by the ever vigilant guardians of corporate profits, this administration is working on proposals to weaken the investor protections.
Christopher Cox, the Securities and Exchange Commission (SEC) Chairman , said Monday that regulators were still working on revisions to its rule requiring companies to adopt internal controls and procedures for financial reporting but said he was “confident” that the result would “improve the reliability of public company financial statements and better protect investors,” the Washington Post reports. The SEC will issue its proposed revision on December 13. Mark Olson, Chairman of the Public Company Accounting Oversight Board (PCAOB), said last week that his agency would issue its own changes to the implementation standard some time before Christmas.
Trade groups and members of Congress have been pushing for changes in the standard because implementation has proved so costly for many companies. The U.S. Chamber of Commerce, community bankers and organizations representing small-cap and mini-cap businesses that have not yet implemented the standard – “think biotech” says BusinessWeek.com -- have been leading the effort.
As of this fiscal year, in the U.S., taxes on businesses have dipped below 20% of the total of taxes paid. As businessmen know, even that amount is ultimately passed on to the consumer in pricing. The ultimate free marketer argues, therefore, that any tax on business is not really valid, and is only another indirect cost to the consumer.
Hopefully, the movement to take away public interest provisions will be overseen by a savvy leadership in the Congress, and I am confident that the movement to overturn the Sarbanes/Oxley protections, (which former Clinton harasser Ken Starr is promoting), will be seen for what it is, thoroughly anti-consumer legislation.
Citing a recent conversation with Alan Greenspan, Frank recalled the former Federal Reserve Director admitted that while cutting tax rates was often excused for the sake of creating more revenues, the concept was 'theoretically possible, but it never happened in my lifetime.'
Rep. Frank repeated an observation he made some time ago, in the February 27th Business Week article on his views;
". . .Inequality is not a bad thing in a free market economy; indeed, it’s essential if we’re to benefit from the incentives and efficiencies that make the market so effective a producer of wealth. But left entirely to its own devices, the free market will produce more inequality than is necessary for efficiency or a healthy society. That’s especially true in an economy marked by globalization, the increased use of information technology, and the rapid flow of capital across borders. Alan Greenspan said as much when he told Congress’ Joint Economic Committee in 2004 that nearly all the benefits of recent productivity growth were going to corporate profits, resulting in “a marked fall” in employees’ share of the gains.[emphasis added]
"Nothing in the past two years has alleviated that problem. Real wages for the average worker have eroded, and health and pension benefits have faded. Meanwhile, corporate profits and pay for the top 2% of the population have soared.
"For many of us, this is morally objectionable because it means that a large majority of people live at a lower standard of living than we think Americans ought to. But the counterargument, supported by many in Corporate America, is that focusing on inequality is a mistake, so long as the absolute level at which the majority lives is acceptable. So any reduction in inequality can only be won by a majority that includes people who do not share my values-based objections.
It is tremendously comforting to know that decisions being made on the living standards of the American public are going to be under an intelligent and socially responsible leader like Rep. Frank and maybe to some extent, his Senate counterpart, Sen. Max Baucus, who although his rating with unions is only 62%, has a more promising legislative record - except that he is cosponsoring a renewal of the GOP tax cuts with Grassley, I see.
Recently, (April), former Treasury Secretary Snow made a typically misleading announcement that wages had risen by 3.8% over the past 12 months, to which Rep. Frank responded by questions that brought out the fact that living costs had risen by more than that, totally wiping out the ‘gains’ that the administration was trying to hype.
The bias against hardworking taxpaying American workers has led to a plethora of tax dodges employed by the very wealthy and by corporations, including the offshoring of corporate headquarters that businesses use to avoid taxes.
According to Taxpayers for Common Sense, because of this and other special tax breaks and loopholes, "many of the biggest corporations in the U.S. pay few or no taxes on their profits."
A study by the Institute on Taxation and Economic Policy of the 250 larrgest corporations in the country found that the corporations paid an average of 20.1 percent on their 1996-1998 profits. That is close to half the "required" 35 percent corporate rate demanded by the U.S. tax code.
These largest companies should have owed $257 billion, but in fact paid $159 billion. Some of the most profitable companies in the period got tax refunds of $3.2 billion. The biggest winner in tax breaks was General Electric. Cisco Systems, second.
Most profitable had $2.7 billion in net earnings and paid no taxes. Texaco reported $3.4 billion in profits and received $304 million in rebates. Oil companies in general are major dodgers of normal income taxes.
Following the Enron, Tyco and other financial scandals, the Sarbanes/Oxley Act in 2002 imposed strict reporting and compliance regulations that businesses have found chafing, and have accused of driving investors away from the U.S. businesses they affect. Of course, the opposing point of view is that because of the enforced trustworthiness of U.S. business under S/O, many more investors are confident enough of their basic worth to invest in U.S. businesses. However, led by the ever vigilant guardians of corporate profits, this administration is working on proposals to weaken the investor protections.
Christopher Cox, the Securities and Exchange Commission (SEC) Chairman , said Monday that regulators were still working on revisions to its rule requiring companies to adopt internal controls and procedures for financial reporting but said he was “confident” that the result would “improve the reliability of public company financial statements and better protect investors,” the Washington Post reports. The SEC will issue its proposed revision on December 13. Mark Olson, Chairman of the Public Company Accounting Oversight Board (PCAOB), said last week that his agency would issue its own changes to the implementation standard some time before Christmas.
Trade groups and members of Congress have been pushing for changes in the standard because implementation has proved so costly for many companies. The U.S. Chamber of Commerce, community bankers and organizations representing small-cap and mini-cap businesses that have not yet implemented the standard – “think biotech” says BusinessWeek.com -- have been leading the effort.
As of this fiscal year, in the U.S., taxes on businesses have dipped below 20% of the total of taxes paid. As businessmen know, even that amount is ultimately passed on to the consumer in pricing. The ultimate free marketer argues, therefore, that any tax on business is not really valid, and is only another indirect cost to the consumer.
Hopefully, the movement to take away public interest provisions will be overseen by a savvy leadership in the Congress, and I am confident that the movement to overturn the Sarbanes/Oxley protections, (which former Clinton harasser Ken Starr is promoting), will be seen for what it is, thoroughly anti-consumer legislation.
Labels: Budget; Economy, Labor
posted by Ruth at 10:54 AM
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