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Thursday, 3 January 2013

Fiscal Cliff Deal. Why Goldman Sachs Won and America Lost. Updated 01/05

Posted on 04:28 by Unknown

Corporate welfare was protected while marginal and middle class taxpayers got a huge tax hike.

The "TaxPayer Relief Act" should more truthfully be called the "Corporate Welfare Protection Act" because that's what it does.


The sum total of the fiscal cliff deal is to take an additional $200bn or so a year in taxes from the middle classes without touching the $1tn+ of annual Corporate Welfare.
The bill itself is stuffed full of Corporate Pork totalling around $69bn a year.
77% of taxpayers are going to be paying more in taxes.

Middle earners are going to be hit harder than those earning $200,000 to $500,000
http://www.dailymail.co.uk/news/article-2256972/Middle-earners-hit-hardest-revealed-workers-making-30-000-bigger-hit-earning-500-000-new-fiscal-deal.html

A US recession is now GUARANTEED for 2013.

This is an abomination of a "deal" and goes in completely the WRONG direction for America to recover from it's financial mess.

This deal is going to hurt small and medium sized businesses.
People will have less money to spend because they are paying more in taxes.
Small and medium sized businesses are the true job and wealth creators.
Unemployment is going to be higher than it would otherwise be, because of this deal.



Corporate welfare was protected while marginal and middle class taxpayers got a huge tax hike.

How to save over $1tn a year from Corporate Welfare
http://ian56.blogspot.co.uk/2012/11/it-is-very-easy-to-cut-1tn-from-federal.html

The large subsidies to the oil industry were not touched.
Neither were the special tax breaks or the juicy contracts for the arms industry.
The big pharmaceutical companies are very happy with the fiscal cliff deal. Government gifts to them have not been touched.
Wall St is extremely happy - their subsidies and privileges were not touched.

Corporate profits were protected, even though they are at record levels.
Corporations are to share none of the pain.
The top 0.1% derive most of their income directly from Corporate profits. So the income of the top 0.1% was protected too. 

Facebook kept their 0.34% Corporation Tax rate.
Google can keep diverting US generated profits to Bermuda to pay almost no Corporation tax.
There are many ways for multinationals to pay very little or zero Corporation Tax - just about all  multinationals do it. 

Closing these Corporation Tax loopholes would have brought in far more revenue than the expiry of the Payroll Tax break.

Update 01/04 GE and Citibank get huge tax breaks plus other items of Corporate Welfare - Ben Swann.
http://www.fox19.com/story/20499683/ge-and-citi-bank-get-huge-tax-breaks-out-of-fiscal-cliff-deal#.UObJsYM4rYw.twitter 

Update 01/04 Shocking details of Fiscal Cliff deal break. Moody's threatens downgrade of US debt
http://thelibertypaper.org/2013/01/04/shocking-details-of-fiscal-cliff-begin-to-leak-another-credit-downgrade-looms/

Mitt Romney's low tax rate was protected. He was a winner too.
Talk of higher taxes for dividend payments went nowhere. Carried Interest was not even mentioned.

Mitt Romney's donations to the Mormons are still to be treated as tax deductible.

There are NO spending cuts planned 
While there was much hand-wringing over the “draconian” cuts that would be imposed by sequestration, in fact sequestration does not cut spending at all. Under the sequestration plan, government spending will increase by 1.6 trillion over the next eight years. Congress calls this a cut because without sequestration spending will increase by 1.7 trillion over the same time frame. Either way it is an increase in spending.

Yet even these minuscule cuts in the “projected rate of spending” were too much for Washington politicians to bear. The last minute “deal” was the worst of both worlds: higher taxes on nearly all Americans now and a promise to revisit these modest reductions in spending growth two months down the road.

Sequestration imposed a tiny $24bn or 2% cut on military spending in 2013. This could of been found from petty cash. 
Even this has now been taken off the table.
Military spending is planned to rise significantly every year from 2014. 




The sum total of the fiscal cliff deal was to take an additional $200bn or so a year from the 99% without touching the $1,000bn+ of annual Corporate Welfare.
77% of taxpayers are going to be paying more in taxes.

Linking Social Security (and other government expenses) to chained cpi is now part of the public consciousness.
It needs time to permeate in - it was way too early to actually implement it. Public Opinion is against it at the moment.
They will keep working on ways to cut Social Security and bring it up again at some future date.

To rub salt into the wound, the fiscal cliff deal was stuffed with even more Corporate Pork.

"Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.

$9.4B Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.”

Tax credits for foreign subsidiaries – Sec. 323 is an extension of the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This gibberish sounding provision cost $1.5 billion from 2010 and 2011, and the US Chamber loves it. It’s a provision that allows US multinationals to not pay taxes on income earned by companies they own abroad.

Bonus Depreciation, R&D Tax Credit – These are well-known corporate boondoggles. The research tax credit was projected to cost $8B for 2010 and 2011, and the depreciation provisions were projected to cost about $110B for those two years, with some of that made up in later years. "

The 99% get a 2% increase in taxes while these corporate pigs go oink, oink, oink.

Fiscal Cliff Deal Sneaks In Wall Street Gifts, NASCAR Perk
http://www.huffingtonpost.com/2013/01/02/fiscal-cliff-wall-street_n_2397933.html


From NASCAR to rum, the 10 weirdest parts of the Pork Laden #FiscalCliff bill
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/02/from-nascar-to-rum-the-10-weirdest-parts-of-the-fiscal-cliff-deal/


Senators got 3 minutes to read the 154 page bill before voting on it.

More details on what the Fiscal Cliff deal actually means.
America and Americans have just been thrown under the bus and sold down the river.
http://ian56.blogspot.co.uk/2013/01/america-and-american-workers-have-just.html
http://ian56.blogspot.co.uk/2013/01/what-fiscal-cliff-deal-actually-means.html

What does it take to wake people up?
http://ian56.blogspot.co.uk/2013/01/i-beleive-i-have-dream-i-have-dream.html
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