Wednesday, December 29, 2021
What will 2022 bring in the way of misinformation on social media? 3 experts weigh in: December 27, 2021 7.58am EST
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Pat Toomey: Mr. Irrelevant
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Critical infrastructure is most at risk of flooding in these 10 districts
Thursday, December 9, 2021
Does He Really Believe His Own Nonsense?
A Texas school district is reviewing 400 library books after a GOP lawmaker's inquiry December 8, 2021 Rachel Treisman
Michigan school shooting shows how violence can transition from online threats to real-world tragedy by Mia Bloom & Volkan Topalli
This conservative Republican just told an uncomfortable truth about the Trump wing in Congress (CNN) Analysis by Chris Cillizza, CNN Editor-at-large
Tuesday, December 7, 2021
Penobscots don’t want ancestors’ scalping to be whitewashed By DAVID SHARPDecember 4, 2021 AP
Wednesday, December 1, 2021
Young Americans are raising alarms about the state of U.S. democracy in a new poll NPR
Dr.Oz Running Right out the Door
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Potatoes and Science
Monday, November 29, 2021
Medicare premium increase is not due to inflation, despite Fla. senator’s claim
Facebook and Google Funding Misinformation
Take the time and check out this very interesting article. Be informed.
https://www.technologyreview.com/2021/11/20/1039076/facebook-google-disinformation-clickbait/
Logic for the Illogical
Saturday, November 27, 2021
Even after Biden tax hike, U.S. firms would pay less than foreign rivals y By Tom Bergin Reuters
Don't Let Big Corporations Fool You.
June 22 (Reuters) - U.S. companies pay less income tax than their overseas competitors and would likely continue to do so under a tax hike proposed by President Joe Biden, according to a Reuters analysis of filings by hundreds of U.S. and international firms.
The analysis undercuts arguments by some company executives and trade groups that Biden’s plan would leave U.S. firms paying some of the world’s highest taxes and struggling to compete against foreign rivals. Industry representatives have aggressively lobbied against the proposal, which would increase the corporate tax rate to 28%, from the current 21%. The president also wants a minimum tax of 21% on overseas income, up from 10.5%.
U.S. corporations typically pay less - sometimes much less - than those statutory rates because the U.S. tax code is unusually generous with tax breaks and deductions, and in allowing overseas tax planning, according to the Reuters analysis. The analysis was reviewed by four academics with experience in measuring corporate tax payments.
Reuters examined the effective tax rates – reflecting the actual tax payments companies reported – of 52 of the largest U.S.-based multinational firms, and then compared them to the rates paid by these companies’ main overseas competitors. The U.S. companies paid an average effective tax rate of 16% in 2020 compared to an average rate of 24% paid by 200 foreign companies that the U.S. firms named as their competitors in filings.
If Biden’s proposed tax rates were applied to the U.S. firms’ 2020 earnings, the companies would have paid effective rates averaging about five percentage points higher, or 21%, the Reuters analysis found.
That’s still lower than the average rate paid by their overseas competitors. Moreover, U.S. firms would likely retain a bigger tax advantage over their foreign rivals than the analysis shows, for two reasons. First, the Reuters calculations do not account for the impact of new tax breaks for U.S. firms that Biden proposes to encourage domestic manufacturing and clean-energy investments. Second, the Biden plan would also require foreign companies with U.S. operations to pay higher taxes on their U.S. income.
Business lobby groups have argued that the Biden proposal, which requires congressional approval, would leave domestic firms at the mercy of their foreign rivals.
“Such tax increases would make the United States uncompetitive as a place to do business and make U.S. companies uncompetitive globally,” said Joshua Bolten, chief executive of the Business Roundtable, which represents about 200 large U.S. companies, when the measures were first announced on March 31.
The trade group said comparisons of effective tax rates, as in the Reuters analysis, can be “informative” but are only one of many valid ways to analyze how taxes impact the global competitiveness of U.S. firms. The organization said that simpler comparisons of statutory tax rates among nations - without considering deductions, credits and overseas tax planning - also accurately reflect the incentives for firms to locate in one nation versus another.
Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, declined to comment on Reuters’ findings but said: “Higher taxes will hinder investment and competitiveness for U.S. businesses, ultimately hurting U.S. workers.”
Senator Ron Wyden, an Oregon Democrat and chairman of the Senate finance committee, dismissed such arguments. “The data are clear: U.S. mega-corporations are contributing far too little to federal revenues, particularly in comparison to foreign counterparts,” Wyden told Reuters.
Reuters ran its findings by Biden’s Treasury Department and the White House. The White House said in a statement: “This reporting highlights that the corporate tax code is broken. The largest corporations don’t pay their fair share in the United States, and pay less in other competitor countries.” Biden’s proposal, the White House said, is designed to address “the tax games and giveaways that underlie the rock-bottom tax rates described by this reporting.”
Republican leaders who have said the proposed hikes will damage U.S. firms’ competitiveness, including Senator Pat Toomey of Pennsylvania and Congressman Kevin Brady of Texas, declined to comment on the Reuters analysis. Senate Minority Leader Mitch McConnell, a Kentucky Republican, did not respond to requests for comment.
Democrats in Congress are pushing a bill to implement Biden’s plan. It could come up for a vote any time in the divided Senate. Its success may rely on the support of one Democrat Senator, Joe Manchin of West Virginia, who has pushed for lower tax rates than Biden wants. All Republican senators are expected to oppose it.
All of the 52 U.S. firms Reuters examined, and in most cases their overseas rivals, published detailed reconciliations explaining the deviation between their actual tax bill and the statutory tax rate in their home countries. These disclosures show that the U.S. firms’ relatively low effective tax rates stem from business-friendly provisions unique to the United States.
For example, U.S. tax breaks to encourage research and other activities generate bigger savings than similar breaks in other nations. The U.S. allows tax deductions for many expenses - such as client entertainment, stock-based compensation and certain legal costs - that are not typically deductible elsewhere. And U.S. companies can save far more money by shifting profits into tax-haven nations than, for instance, their rivals in Japan, Germany or France, whose governments limit such maneuvers.
RIDDLED WITH LOOPHOLES
Analyses cited by several business groups have said U.S. businesses currently face an average combined state and federal statutory tax rate of nearly 26% and that Biden’s plan would raise their rates to 32%.
Consultancy PricewaterhouseCoopers noted the average nominal tax rate among developed countries was 23% - lower than Biden’s proposed rate of 28% - and urged companies to lobby against the increases. Johnson & Johnson’s Chief Financial Officer Joseph Wolk told analysts in April that Biden’s plan would make the U.S. rate the highest among developed countries.
Such simplified comparisons, however, do not reflect actual taxes paid after deductions, credits and other advantages enjoyed by U.S. firms. Johnson & Johnson, for instance, paid an effective tax rate of less than 11% in 2020, according to the company’s annual report. The pharmaceutical giant did not comment on Reuters findings but said tax policy should create a “level playing field” for U.S. firms internationally.
PricewaterhouseCoopers declined to comment.
In another typical example, Activision Blizzard Inc (ATVI.O) – the California-based publisher of hit video games such as Call of Duty and World of Warcraft – reported paying an effective tax rate of 16% last year. Two of its main competitors, Sony Corporation (6758.T) and Nintendo Co Ltd (7974.T), are based in Japan and paid effective tax rates of 22% and 28%, respectively, according to their annual reports.
Activision declined to comment for this story.
The company slashed its tax payments through tax breaks and deductions and by operating subsidiaries in tax-haven nations. Activision has, for instance, saved hundreds of millions in taxes over the past decade, company filings show, by reporting billions of dollars in profits through a subsidiary based in Bermuda, an island with no corporate tax. Activision reported that it reduced its overall effective tax rate in 2020 by 4 percentage points because of the low tax rates paid by its foreign subsidiaries.
Activision rivals Sony and Nintendo each generate about three-fourths of their revenues outside of Japan, compared to about half for Activision. And yet Nintendo reported that taxes on overseas income reduced its effective tax rate by just 0.6 percentage points, while Sony reported a decrease of 2.4 percentage points.
Tax havens such as Bermuda don’t provide the same benefit to Japanese firms. Japan has a law that allows authorities to levy Japanese corporate taxes of about 30% on any income reported from operations in foreign jurisdictions with a tax rate of less than 20%. Similar rules are common in industrialized nations other than the United States.
STATE TAX BREAKS
Another reason Activision paid a relatively low effective tax rate is that its tax payments to U.S. states only increased the company’s total rate by 2 percentage points. That’s typical: On average, the effective rates of the 52 U.S. multinationals examined by Reuters were raised by just 1 percentage point by state tax payments. Business groups often cite 4% or 5% as the typical state tax burden, based on averages of statutory state rates that usually do not equate to actual taxes paid.
A host of factors lower companies’ state tax payments. States often lure companies with tax breaks, and compete with one another to offer the most generous incentives. Also, companies only pay state taxes on their U.S.-based income. And they can lower the bill further by apportioning earnings to relatively low-tax states.
At the federal level, companies drive down their tax bill through a host of deductions or credits that are often unavailable or limited in other nations. U.S. firms, for instance, can deduct the cost of share grants as compensation to executives and staff. Activision reported lowering its effective tax rate by 1 percentage point through such deductions. On average, the U.S. firms examined by Reuters reduced achieved savings of 2.6% from that provision.
The video game firm shaved an additional 3 percentage points off its tax bill by collecting tax credits for research and development spending. Its competitors Nintendo and Sony reported smaller tax savings from research credits.
Such credits are available to an array of U.S. firms, and not just in research-intensive sectors such as pharmaceuticals. Sport apparel giant Nike Inc (NKE.N), for instance, lowered its effective tax rate by 2 percentage points in 2020 through R&D credits. Two-thirds of the 52 U.S. companies Reuters examined reported similar benefits, with an average tax reduction of about 3 percentage points.
Research tax credits are common outside the United States, but typically worth less, often not enough to warrant company disclosure. Just 18 firms of the 200 foreign competitors to U.S. firms examined by Reuters reported benefits from research or other tax credits.
Some U.S. companies, to be sure, will take a bigger hit than others from Biden’s tax plan. But even if U.S. companies collectively sustain a bigger tax hit than foreseen, they would still be well-placed to compete, the analysis shows. On average, the 52 U.S.-based companies examined by Reuters had profit margins of 24%, well above than the average margin of 14% among their 200 foreign competitors.
“The argument on ‘competitiveness’ is code for ‘corporations should pay no taxes’,” said Senator Wyden, “and it doesn’t hold water.”
Wednesday, November 24, 2021
Get It Right Kevin!
Nov. 21, 2021 by Linda Qui- NYT
Representative Kevin McCarthy, Republican of California and the minority leader, mounted his case against President Biden’s social spending bill in a record-breaking speech that stretched for more than eight hours from Thursday to Friday.
Here’s a fact check of some of his remarks.
What Mr. McCarthy Said
“Just a few weeks ago, Congresswoman Abigail Spanberger said nobody elected Joe Biden to be F.D.R. This even spends more than F.D.R. while he was fighting a world war.”
This is misleading. Spending and tax cuts in the bill will add up to about $2 trillion over 10 years, and could snowball into $4 trillion if shortened programs are extended.
That is indeed a larger dollar amount than the New Deal programs passed under President Franklin D. Roosevelt, which cost about $800 billion after adjusting for inflation, according to a report from the Federal Reserve Bank of St. Louis. But World War II itself cost about $5 trillion.
Moreover, comparing New Deal programs with the social spending bill should account for the changes in the United States’ economy and population size. The report from the Federal Reserve Bank of St. Louis also noted that the cost of the New Deal amounted to 40 percent of annual gross domestic product.
In comparison, the $1.9 trillion stimulus package that Mr. Biden signed into law in March and his initial proposal for a $4 trillion economic plan — which became the whittled-down infrastructure measure and the social spending bill — together would amount to 28 percent of G.D.P.
What Mr. McCarthy Said
“You’re hiring 87,000 I.R.S. agents to come after them, 1.2 million more audits, and half of all those 1.2 are going after Americans who make $75,000 or less.”
This is misleading. The bill provides the I.R.S. with $80 billion in additional funding, including nearly $45 billion for enforcement. The Congressional Budget Office noted in September that the proposal would result in increased audit rates for everyone, with high-income earners facing the largest increase.
The bill does not contain any specifics directing how audits would be spread among taxpayers of different incomes, and the Biden administration and Republicans disagree on how it would play out.
The Treasury Department said in a May report about the proposal that tax audit rates would not rise for those earning less than $400,000 since the “compliance proposals are designed to ameliorate existing inequities by focusing on high-end evasion.”
A spokeswoman for Mr. McCarthy pointed to calculations from Republicans on the House Ways and Means Committee that compared historical audit data.
In the past decade, tax audit rates have fallen for higher-income earners and have stayed relatively stable for lower-income earners, which the Treasury Department attributed to the I.R.S.’s diminished resources and inability to retain specialized auditors needed to examine the filings of the wealthy.
The I.R.S. examined 1.4 million individual income tax returns in 2010, about 1 percent of the total number filed. In 2018, the latest year with available data, audits decreased to 370,000, or about 0.2 percent.
The Congressional Budget Office estimated that the bill would return enforcement to its 2010 levels. Doing so would indeed result in about 1.2 million more audits, and about 580,000 of those would affect people making less than $75,000.
But that is because a vast majority of tax filers — about 70 percent — make under that threshold. Looking at what fraction of returns are examined by income group, rather than the sheer number, shows that wealthier taxpayers would have a better chance of being audited than lower-income earners under the Democrats’ proposal.
Under 2010 levels of enforcement, about 0.5 percent of returns reporting between $1 and $75,000 in income would be audited, as would 1 percent of those with more than $75,000 in income. In comparison, those rates were 0.3 percent and 0.1 percent in 2018. For those making more than $10 million, more than 20 percent of returns would be examined under 2010 levels, compared with 5.3 percent in 2018.
What Mr. McCarthy Said
“All you have to do as an American is spend $28 and the I.R.S. is going to knock on your door.”
This is misleading. This was a reference to a proposal by the Treasury Department requiring banks to report aggregate annual flows of $10,000 or more in customer accounts to better tackle tax evasion. (A previous version of the proposal suggested monitoring flows of $600.) Wages and federal benefits are exempt from the reporting requirement, and banks will not report individual transactions. But this proposal did not make its way into the social spending bill.
In a fact sheet, the Treasury Department said it was a “misconception” that all Americans would face greater scrutiny under the proposal.
Michelle Nessa, an accounting professor at Michigan State University and expert on tax audits, said that the bank reporting requirement was “unlikely to meaningfully increase audit risk for most people.”
What Mr. McCarthy Said
“We’re going to take taxes from you so somebody who makes $800,000 can get a tax break to buy a Tesla.”
False. The Democrats’ bill would increase tax credits for electric vehicles to $12,500 from $7,500 if the car is made in the United States with union labor and if its battery is also produced domestically. The credits cover sedans that cost up to $55,000 and zero-emission vans, SUVs and trucks that cost up to $80,000, so the Tesla Model 3, which starts in the mid-$40,000s, would qualify.
But the hypothetical almost-millionaire in Mr. McCarthy’s example would not qualify, as only individuals making $250,000 or less (and joint filers making $500,000 or less) can claim the credits under the bill.
What Mr. McCarthy Said
“More than one million people who lost their job after President Biden was sworn in because he shut down a pipeline. ”
False. Early in his presidency, Mr. Biden rescinded the construction permit for the Keystone XL oil pipeline, and the company behind the project terminated it altogether in June. Mr. McCarthy wildly exaggerated the pipeline’s effect on employment.
The company itself has estimated that the pipeline would employ about 11,000 Americans. The State Department, in a 2014 report, estimated that it would support about 42,000 temporary jobs during two years of construction and 35 permanent employees after the initial phase.
Biden’s Social Policy Bill at a Glance
A narrow vote. The House passed President Biden’s social safety net and climate bill on Nov. 19. Democratic leaders must now coax the $2 trillion spending plan through the 50-50 Senate and navigate a tortuous budget process. Here’s a look at some key provisions:
Child care. The proposal would provide universal pre-K for all children ages 3 and 4 and subsidized child care for many families. The bill also extends an expanded tax credit for parents through 2022.
Paid leave. The proposal would provide workers with four weeks of paid family and medical leave, which would allow the United States to exit the group of only six countries in the world without any national paid leave.
Drug prices. The plan includes a provision that would, for the first time, allow the government to negotiate prices for some prescription drugs covered by Medicare.
Climate change. The single largest piece of the bill is $555 billion in climate programs. The centerpiece of the climate spending is about $300 billion in tax incentives for low-emission sources of energy.
Taxes. The plan calls for nearly $2 trillion in tax increases on corporations and the rich. The bill would also suspend a $10,000 cap on the SALT deduction, mostly to the benefit of wealthy Americans in liberal states.
Mr. McCarthy may have been referring to a 2020 analysis from the American Petroleum Institute, the oil and gas industry’s biggest trade group, that estimated that nearly one million jobs would be lost by 2022 if drilling were banned on federal lands — not from the cancellation of one pipeline.
Mr. Biden banned new oil and gas leases on federal lands but did not rescind existing leases. Moreover, in June, a federal judge blocked the administration’s suspension of new leases. The approval of leases has actually increased under Mr. Biden, as has employment in oil and gas extraction.
What Mr. McCarthy Said
“Biden terminated every successful immigration policy put into place by President Trump, triggering the largest wave of illegal immigration in of all history.”
This is exaggerated. Mr. Biden has indeed rescinded many of President Donald J. Trump’s immigration policies, but he also has kept a key policy intact.
While the Biden administration has rescinded the so-called Muslim ban, halted construction of Mr. Trump’s border wall and stopped conducting workplace immigration raids, it is continuing to use a public health rule that allows officials to turn away hundreds of thousands of migrants at the border.
Additionally, the Biden administration tried to end a Trump-era program that forced asylum seekers to wait in Mexico while their applications were being reviewed, but it was ordered to restart the program.
What Mr. McCarthy Said
“You’re providing money, $450,000, for people who came here illegally, and you’re taking it from American hardworking taxpayers.”
This is misleading. The bill itself does not provide hundreds of thousands of dollars for unauthorized immigrants. Rather, this was a reference to a proposal to provide monetary compensation for damage inflicted by a Trump-era immigration policy.
The American Civil Liberties Union and others have filed lawsuits on behalf of migrant families separated at the border by the Trump administration. About 5,500 children were separated from their parents. The Wall Street Journal reported that the lawsuits seek damages of varying ranges and average $3.4 million per family.
The Biden administration and lawyers for the families have been in negotiations to provide $450,000 for each family member affected, but The New York Times reported that only a minority of families would be eligible as many have not filed complaints against the government.
When asked about the figure this month, Mr. Biden said “that’s not going to happen.” A White House spokeswoman later clarified that the Justice Department had told plaintiffs that the $450,000 figure was “higher than anywhere that a settlement can land.”
What Mr. McCarthy Said
“Mr. Speaker, you might remember the Iron Dome. Your party actually defunded that.”
False. Despite some opposition from progressive Democrats to providing funding for Israel’s Iron Dome missile defense system, the House voted 420 to 9 in September to provide $1 billion in new funding. Democrats voted overwhelmingly for the funding.
Logic for the Illogical