Tax Jujitsu -- a People's Tax Cut
Crocodile Dundee Paul Hogan grounded over tax bill
| Rich people are targeted by taxists while rich banks are not. Large banks rake in billions, small banks struggle. Yet bank income is mostly unearned while the fortune of a celebrity is earned in competition without coercion. We trim, blend, and append three 2010 articles from: (1) BBC, Aug 25 on Dundee; (2) TruthOut, Aug 24 on a tax cut at Robert Reich's Blog; and (3) AP, Aug 31 on banks by Marcy Gordon. |
by BBC, by Robert Reich, and by Marcy Gordon
- Crocodile Dundee Paul Hogan grounded over tax bill
Crocodile Dundee actor Paul Hogan has been barred from leaving Australia over an unpaid multi-million dollar tax bill, his lawyer has said.
The Australian Taxation Office (ATO) served the US-based actor with the order when he returned to Sydney recently for his mother's funeral. The actor now lives in Los Angeles with his wife, Crocodile Dundee co-star Linda Kozlowski.
A popular Australian TV comedian, Hogan hit international fame as Mick "Crocodile" Dundee in the 1986 film, which went on to become Australia's most successful film ever.
The 70-year-old is alleged to have put AUS$37.6m (£21.4m) of film royalties in offshore tax havens.
Hogan denies the claim, saying he had "paid plenty of tax" in Australia. The tax office reportedly served Hogan with the tax bill for undeclared income last month after a five-year long wrangle.
Lawyer Andrew Robinson said Hogan has filed objections which have not been the subject of any response.
"The process of detaining Paul in Australia away from his wife and child has devastated him and he hopes that discussions between us and the ATO will lead to a prompt resolution allowing him to return to his family," Mr Robinson added.
JJS: Does earning a lot of money oblige one to pay some to the government? Of course, everyone should contribute some wealth or service to their society. But who should decide what, how much, and to whom that contribution should go?
- Tax Jujitsu: a "People's Tax Cut"
The top 3% of US households rake in almost a third of total income (the highest portion since 1928).
Extending the Bush tax cut to these richest Americans would give them a $36 billion bonus next year. ($31 billion of this would go to billionaire households.)
It wouldn't even stimulate demand and jobs, because the very rich save (rather than spend or invest) more of their disposable income than the rest of us.
Republicans understand the art of tax demagoguery: Put the other side on the defensive by forcing them to explain why a "tax increase" is warranted and they lose regardless.
So instead of playing defense, Democrats should go on the attack.
Accuse Republicans of being shills for the rich.
Democrats should propose cutting taxes on the first $20,000 of income.
Because lower-income people would get most of the benefit, it's likely to be spent.
Lost revenues could be made up by applying payroll taxes to income exceeding $250,000. As it is now, the Social Security payroll tax doesn't apply to any income over $106,000. Having the tax kick in again at $250,000 would draw on the top 3%.
Call it the People's Tax Cut, and let Republicans explain why they're against it.
JJS: Individuals amass a fortune when their businesses amass a fortune. Some of those fortunes are earned by applying one’s labor and capital intelligently (and perhaps with luck). Other fortunes are amassed with a huge assist from politicians. Government could cut all the taxes on income it wants and suffer no shortfall in the least if it were to quit subsidizing and favoring insiders. Instead it’d recover the socially-generated values of land and resources and privileges.
- Large banks earn billions, small banks struggle
US banks are making money again, although a split picture of the industry has emerged since the financial bubble burst.
The largest banks are thriving, mostly because they can borrow on the cheap and have rid themselves of bad debt. Yet smaller banks lack those advantages and are failing at the fastest pace in years.
Overall, banks made $21.6 billion in net income in the April-to-June quarter. It was the highest quarterly level since 2007.
Banks with more than $10 billion in assets -- only 1.3% of the industry -- accounted for $19.9 billion of the total “earnings”.
At the same time, the number of banks on the FDIC's confidential "problem" list increased by 54 in the quarter -- growing to 829 from 775 in the first quarter. That's a little more than 10% of the 7,830 federally insured US banks.
Most of the biggest banks have recovered with help from federal bailout money, record-low borrowing rates from the Federal Reserve, and the ability to earn big profits from fees on banking services and investment fees. They also have been able to cut back on lending in troubled parts of the country, such as Florida and Nevada.
Smaller and regional banks, however, have less flexibility. They depend heavily on making loans for commercial property and development. Those sectors have suffered huge losses. Companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans.
Last year, 140 federally insured institutions failed and were shut down by regulators. It was the highest annual number since 1992, when the savings and loan crisis hit its peak. Last year's failures extended a string of collapses that began in 2008, triggered by loan defaults [on mortgages].
JJS: Banks get most of their profit from mortgages and most of the value of mortgages is the land not the building. And the value of location is generated not by the owner but by the surrounding society. If society shared what they generated, then banks would not get it.
Further, when land comes with a tax or dues, then owners do not speculate feverishly, blowing up ground rents into a bubble that inevitably bursts, dragging down small local lenders into bankruptcy.
The other source of enormous profit for banks are credit cards. Why do consumers need so much credit? Because wages are low and mortgages high. So, why not de-tax wages and recover then share site values? This geonomic policy would force banks to earn their profits and de-volve back into community institutions.
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Editor Jeffery J. Smith runs the Forum on Geonomics.
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Also see: In New Zealand, Australia, and Canada …
Jobless: 10 percent is tougher than it used to be
Why Pay the Privileged our Public Money? |
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