Category Archives: Blog

“Reducing complexity in the tax code”

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“Reducing Complexity in the Tax Code”

 

 

George W. Bush is naming a commission to study how to simplify the tax code, and “everything is on the table,” according to one spokesperson.

 

Forewarned is forearmed.  Any GWBush tax proposal will have one, and only one, goal:  to shunt any tax burden even more away from corporations and individuals of wealth, and even more onto the rest of the public.

 

The proposal can be used to gauge the impact of what David Brock calls “the Republican noise machine” on media outlets.  Any outlets (Fox News, the Rev. Moon’s Washington Times, and Clear Channel spring to mind) treating Bush’s proposals at face value as “reforms” are tainted or compromised.  Any outlets trying to be even relatively clear about regressive taxes are still trying to preserve some journalistic accuracy and integrity.

 

Meanwhile, in the public interest, it is important not only to point out gaps and distortions in prevailing representations (“reform”? from Bush?).  It is even more important to mount better proposals.

 

The grain of truth in the campaign to make our taxes yet more regressive is that the tax code is indeed long and unwieldy, and there are legitimate ways to simplify and clarify it.  These are precisely the ways the Bush team does not tackle and literally does not mention.

 

For example, one good way to simplify the tax code would be to simplify the corporate structure.  Every small-d democrat, true republican, and progressive should be looking at the raft of nefarious entities legally allowed in the USA today:  limited liability companies, limited partnerships, limited liability partnerships, holding companies, shell corporations closely related to dummy companies, off-shore subsidiaries – the list seems endless. 

 

All of these entities have purposes at odds with the public interest:  to serve as tax shelters, to allow companies and individuals to conceal assets and money, to occlude records that should be public, to inhibit transparency and accountability, etc.  They complicate the task of auditors, regulators and accountants.  They enrich corporate lawyers, bookkeepers (or corporate neglectors of bookkeeping), and PR sectors.  The financial aim of staving off taxes and scrutiny inevitably expands and develops to serve fraud and chicanery – and therefore ultimately to serve, for example, drug and weapons trade, child trafficking, money laundering, and terrorism.

 

Eliminating these unnatural and grotesque exhibits of greed and chicanery would also simplify the tax code, which has innumerable sections devoted to them.

 

Step One.  Here is a short list of the peculiar financial entities referred to above, with some web sources for quick definition and information:

 

“Limited Liability Partnerships”: 

http://www.mycorporation.com/Llp.htm

“Many attorneys and accountants find the LLP as a very attractive alternative since it shields the partners from vicarious liability, can operate more informally and flexibly than a corporation, and is accorded full partnership tax treatment. Note, in California, with certain exceptions, the LLP is only available to attorneys and accountants.”

 

http://business-law.freeadvice.com/liability_partnership.htm

“A Limited Liability Partnership or LLP is a relatively new creation that operates much like a limited partnership, but allows the members of the LLP to take an active role in the business of the partnership, without exposing them to personal liability for others’ acts except to the extent of their investment in the LLP. Many law and accounting firms now operate as LLPs.”

[Wonder whether limiting LLPs will be part of Bush’s “tort reform”? hahaha.]

 

“Limited Liability Companies”:

http://www.legalzoom.com/legalzip/LLCs/llc_procedure.html

“Limited liability companies, or LLCs, are becoming more and more popular, and it’s easy to see why. They combine the personal liability protection of a corporation with the tax benefits and simplicity of a partnership. In addition, they’re more flexible and require less on-going paperwork than corporations. We can help you quickly and easily set up a new LLC, or convert an existing business into an LLC. Below is our 3-step process . . .”

 

http://www.cbcgroupinc.com/entity_structuring.htm

“Companies may adopt a variety of different entity structures including sole proprietorships, partnerships, limited liability companies (LLC), S corporations and C corporations and making an appropriate decision can be difficult. Often, it is in a company’s best interest to have more than one entity, depending on the amount of assets that are owned.”

 

http://www.roninsoft.com/llc.htm

[Good over-all discussion of the pros and cons of LLCs.]

 

“Limited Partnerships”:

http://www.entrustadmin.com/investment_options/Limited_Partnerships.html

“Limited Partnerships may be purchased and sold by IRAs and Qualified Plans.  
Registered and unregistered interests in Limited Partnerships may be purchased and sold by IRAs and Qualified Plans.”

 

http://www.asiatradingonline.com/company.htm

[On setting up a Limited Partnership in Thailand.]

 

“Holding Companies”:

 (http://www.federalreserve.gov/generalinfo/fhc):

As of the end of 2004, bank holding companies are now allowed to be financial holding companies as well.

 

http://www.lowtax.net/lowtax/html/offon/canada/canhold.html:

[On setting up offshore holding companies, including in Canada.]

 

www.insinger.com/privateClients/securingYourFuture/investmentHoldingCompanies:

“Investment holding companies are an effective international vehicle for doing business, protecting assets and taxation planning.”

 

“Shell Corporations”:

http://www.budgetcorporaterenewals.com/html/shell_corporations.html:

“If you are looking for an aged corporate shell to buy or if you have an aged Nevada shelf corporation you want to sell . . .”

 

http://vcexperts.com/vce/library/encyclopedia/documents_view.asp?document_id=29:

“One of the newer and occasionally popular techniques for raising money is the shell game. The trick is to organize a shell corporation – no assets, no business – and take it public. Because of the unfortunate connotations of the term “shell” in the financial arena, sponsors have developed a more glamorous and respectable label – “Acquisition Companies” – Specified Purpose Acquisition Companies (SPACs). The sole purpose of a Shell/SPAC offering is to raise a relatively modest amount of money, and more importantly, to get a number of shares outstanding in the hands of the public.”

 

In summary:  not every individual who feels compelled to take advantage of these gargantuan tax loopholes is a crook.  However, it is noteworthy that corporate loopholes like these are most fully exploited by those who could well afford to pay taxes:  giant financial institutions, giant insurance companies, and George W. Bush’s relatives.  They are also freely indulged in by major military and security contractors – notwithstanding potential conflicts of interest and security breaches.

 

If we want reform, this is a good place to start.

David Brock’s The Republican Noise Machine

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Every academic in the USA should read David Brock’s The Republican Noise Machine.  Despite the title, this discussion of how right-wing media corrupt democracy is less about the GOP than about how a strange cadre of multimillionaires, impelled by loss of prestige on the wingnut right, set about years ago to change every aspect of public discourse in America.  The movement they have funded has set loud, blustering, well-paid bullies in media outlets around the country; has submitted thousands of what purport to be research articles and honest opinion pieces to print periodicals; and has “graduated” pseudo-journalists from bogus entities specially created to install them in major newspapers and television networks.  The individuals chiefly involved have also been reinforced with huge funding from interested corporations.

The result of this quiet and well-financed campaign behind the scenes over the past thirty years has been to skew public discourse.  Although this concerted movement to alter American news media has been coordinated with selected Republican politicians since the Nixon administration, even the older “conservative” and “Republican” entities are almost unrecognizable today.

This giant campaign also extends beyond the news media:

“In addition to underwriting the think tanks, conservative foundations and corporations have poured millions directly into the academy, chartering conservative research centers to advance policy objectives in foreign policy, economics, and the law.  In this way, the Right has been able to establish strategic beachheads at a host of elite universities, including Harvard, Columbia, MIT, and Stanford, gaining credibility for ideas that might not otherwise pass muster through the traditional means of judging scholarly merit, then promoting those ideas in the media.  University of Virginia Professor Patrick J. Michaels, for example, appears frequently on television, arguing against environmental measures to curb global warming.  Michaels is a senior fellow at the Cato Institute and has edited a publication funded by the Western Fuels Association, a coal producer and power cooperative.  Those associations are not typically mentioned in the broadcasts.”

It might be added that those associations are also typically not mentioned in regard to Condoleezza Rice (funded since 1980 by the ultra-right Hoover Institution, housed at Stanford).  Rice has typically received soft press treatment, while doing her part to boost the neocon and PNAC pet project of invading Iraq with a series of untruthful public statements.

In every topic of wide public import, discussion often tends to pit genuine journalists and overstretched news entities against highly paid ringers.  For those of us who wondered how or why someone like Ann Coulter could be making millions, Brock’s book elucidates:

“The think tanks provide cushy six-figure sinecures to movement ‘intellectuals,’ and to ex-government officials whose role it is to fan out in the media proselytizing for the conservative agenda, providing mainstream and right-wing media outlets with a steady stream of subsidized op-eds and talking heads.  These bought-and-paid-for conservative talkers face off in the media in debates that are made possible by right-wing financiers: If conservative special-interest money were to be eliminated from the equation, there wouldn’t be much of a conservative ‘side’ to hold up, and there would be few to do the talking.”

The reader or viewer, of course, is never told about financial connections that might lead to enlightened skepticism:

“While it may appear to readers and viewers that they are hearing hundreds of independent conclusions derived from each journalist’s research and reporting, they are really hearing from a handful of right-wing multimillionaires like Richard Mellon Scaife, whose money has gone into more than one-third of the think tanks, and from a few dozen corporations.”

Brock’s book will amply repay the time spent reading it.  One help is that it names some of the peculiar training schools for rightwing media personalities:  so, if you notice some of these characters popping up in your local media outlets, you can let your local newspaper, television station or radio station know that you know. 

News is fine.  Opinion is fine.  But when something purporting to be news or opinion is actually paid propaganda, the public has a right to know.

 

So They ‘Surveilled’ Financial Institutions? – You Don’t Say

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So they ‘surveilled’ financial institutions? – You don’t say

On July 29, the Democrats wound up their national convention and awaited the anticipated ‘bounce’ in the week’s opinion polls.  On August 2, the administration announced, with maximum fanfare, that U.S. financial institutions and locales in New York and Washington were under surveillance by terrorists.

 

Bush, Porter Goss

Some thoughts here:

(1) My own call on this one is that it demonstrates beyond a reasonable doubt that the Bush White House uses terror alerts as bludgeons in domestic politics, especially since–as it turns out–some of the purported information on terrorism was three years old.  It seems to have worked, too, at least for the capital’s pundits:  the following Sunday, Chris Matthews’ weekly opinion-experts’ panel voted that Bush had ‘won’ the week, and administration media shills including Charles Krauthammer gleefully proclaimed that Kerry had gotten no bounce.

(2) Unfortunately, along with the older information, the flamboyant items also involved some sensitive information.  The news released by the administration compromised a (rare) actual investigation by disclosing the name of an undercover intelligence asset, and was followed by an equally abrupt round-up of several suspects, with more risk and less stealth than law enforcement personnel would have preferred.  To call the media release cavalier would be charitable.

(3) The release was also timed fortuitously in another way:  old though some of the information was, it came just that little bit too late for the suspects and other witnesses to be interviewed by the 9/11 Commission or by congressional investigators.  Two of the suspects were relatives of alleged 9/11 planner Khalid Sheikh Mohamed.  Why weren’t they pulled in shortly after KSM’s capture, if not before?

(4) Anyone privileged to read about the CIA’s role in supporting the Taliban, through Pakistan’s Inter-Services Intelligence (ISI), has to be aware of Pakistan’s support for terrorism.  Much terrorist funding came (and still comes) from Saudi Arabia, more than ever now after the invasion of Iraq.  But mujahideen training, schooling, transportation and logistics have come extensively from Pakistan, as the administration knows:  the Osama bin Laden-ISI-Taliban triangle is an old story.  Presumably, the CIA and ISI could have pulled in the usual suspects earlier than summer 2003.

(5) One last, sad story.  Among the genuine 9/11 investigations short-changed and/or outright impeded by the administration are scientific investigations of the sites.  The National Science Foundation gave several special awards immediately after September 11, 2001, for expert investigation including a study of the World Trade Center debris by a much-credentialed engineering professor at Berkeley.  The result? –Mayor Giuliani and Governor Pataki had the debris hauled away immediately and destroyed; the authorities involved never gave the engineering researchers the videos, blueprints and other primary material requested; and wild conspiracy theories of ‘controlled demolition’ are floating around three years later, even though hundreds of people saw the planes hitting the towers.

Professor Astaneh’s own suggestion about the skyjackers is that they did not know the buildings would implode but intended the towers to topple onto the Stock Exchange, causing thousands more deaths and crippling the much-hated US financial sector.  It’s only a guess–as he points out, “there are not enough data for a hypothesis”–but it sounds like a good guess.

The item that purported assailants had financial institutions under surveillance sounds valid.  Three years ago, however, we were all barraged through corporate media outlets about an “attack on America.”  An attack on Wall Street and the Pentagon is still an attack on America, but it’s too bad the networks’ thrust had to be so aggressive on this point; I think the American people could have been trusted to draw the right conclusions on their own.  Surely, given all the deaths and injuries, the grief and heroism, we could safely have been allowed to hear that the hijackers thought they were dealing a crippling blow to US military and financial centers.  Couldn’t we?

 

Iraq WMD

But only now, safely after wars have been launched against pitiful Afghanistan and starved-and-strangled Iraq, are we allowed to hear widely that the assailants had financial institutions in their sights.

Afghanistan

Susan Lindauer arrested for doing what PNAC did

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They hit the ground running . . .

 

Susan Lindauer, a middle-aged peace activist in the DC suburb of Takoma Park, Md., just got arrested by the feds for “an unsuccessful attempt to influence United States foreign policy.”  Lindauer is a second cousin of White House Chief of Staff Andrew Card, who turned her name over to the FBI because she presented him with a letter from herself in January, 2003, offering her knowledge of Iraq and her services in an effort to prevent war.

Lindauer arrested

Card’s turning in his cousin was followed up by an FBI sting operation, in which an FBI agent disguised as a Libyan induced Lindauer to leave two packages of papers, said by the authorities to be non-sensitive, at “drop points” where they were later retrieved.  The sting, surely approved if not ordered by the White House, was followed by the arrest.  Lindauer is charged not with espionage but with acting as an “unregistered agent” for Iraq.

Card

Some observers feel that attempting to influence US policy is the kind of thing citizens are supposed to do.  Beyond any lapse in fundamental principles in this arrest, however, it is also apparent that the authorities find some unsuccessful attempts at influence acceptable.

The feds didn’t mind, for instance, when a DC-based network of rightwing think-tankers called the Project for a New American Century wrote a “Letter to President Clinton on Iraq” on January 26, 1998, insisting that Saddam Hussein should be forcibly removed from power.

Some background:

The Project for a New American Century (PNAC) is a group of military hardliners, mostly without military service, who boost an extremely hawkish U.S. foreign policy.

“Established in the spring of 1997, the Project for the New American Century is a non-profit, educational organization whose goal is to promote American global leadership. The Project is an initiative of the New Citizenship Project (501c3); the New Citizenship Project’s chairman is William Kristol and its president is Gary Schmitt.”

William Kristol is the editor of the Rupert Murdoch-owned Weekly Standard and appears as a weekly commentator on Fox News, also owned by Murdoch.  According to his PNAC biography,

“Before starting the Weekly Standard in 1995, Mr. Kristol led the Project for the Republican Future, where he helped shape the strategy that produced the 1994 Republican congressional victory.  Prior to that, Mr. Kristol served as chief of staff to Vice President Dan Quayle during the Bush Administration and to Secretary of Education William Bennett under President Reagan.”

Gary Schmitt was a GOP congressional staffer in the early 1980s and served on an intelligence advisory board under Reagan.  He has held numerous positions in think tanks, academia and consultancy.

The letter to Clinton supports only one objective, ousting Saddam Hussein:

“We urge you to . . . to enunciate a new strategy that would secure the interests of the U.S. and our friends and allies around the world.  That strategy should aim, above all, at the removal of Saddam Hussein’s regime from power.  We stand ready to offer our full support in this difficult but necessary endeavor.”

Asserting the now-familiar vague threat of “weapons of mass destruction,” the letter continues,

“The only acceptable strategy is one that eliminates the possibility that Iraq will be able to use or threaten to use weapons of mass destruction.  In the near term, this means a willingness to undertake military action as diplomacy is clearly failing.  In the long term, it means removing Saddam Hussein and his regime from power.  That now needs to become the aim of American foreign policy.”

This central aim of American foreign policy (removing Saddam), is to be pursued at all costs, regardless of risk:

“We urge you to articulate this aim, and to turn your Administration’s attention to implementing a strategy for removing Saddam’s regime from power. This will require a full complement of diplomatic, political and military efforts. Although we are fully aware of the dangers and difficulties in implementing this policy, we believe the dangers of failing to do so are far greater. We believe the U.S. has the authority under existing UN resolutions to take the necessary steps, including military steps, to protect our vital interests in the Gulf.”

It is chilling to read in this statement, dated January 1998, the exact arguments megaphoned by the Bush White House and its paid media supporters in the buildup to the invasion of Iraq in 2003.  Every indication is that Bush came into office in January 2001 with exactly the intention stated in the letter.

From his first days, Bush demonstrated an eagerness to appoint the letter’s signers to government positions.  Indeed, he announced signer Donald Rumsfeld as his Secretary of Defense on December 28, 2000, and signer Robert B. Zoellick as US Trade Representative (the President’s principal trade policy advisor) on January 11, 2001, before his inauguration.  Bush then announced signer and notable hawk Paul Wolfowitz as his Deputy Secretary of Defense on February 5; signer Richard L. Armitage, an old CIA hand, as his Deputy Secretary of State on February 12; and signer John R. Bolton as his Undersecretary for Arms Control and International Security Affairs on February 21.  Thus, before the end of one month in the White House, Bush had solidified almost every pertinent position in the Executive branch in the hands of hawks with a none-too-subtle agenda of entering Iraq, intervening in its internal affairs, and replacing its government.

None of this was made broadly known to the public, either by the administration or by major media outlets.  Only the New Republic (February 5, 2001) mentioned that “Vice President Dick Cheney has quietly been stocking the Defense Department with outspoken interventionists. . . Cheney has effectively created his own foreign policy apparatus, installing his proteges (and, in the case of Donald Rumsfeld, his mentor) at the Defense Department and the White House.”  The article further notes that “many of Cheney’s proteges are known for their willingness to use military force.”

The hiring pattern continued through spring 2001.  The selection of Iraq letter signer Paula J. Dobriansky was announced for Under Secretary for Global Affairs (State) on March 12, and of Peter W. Rodman as Assistant Secretary for International Security Affairs (Defense) on May 14.  Dr. Zalmay Khalilzad was appointed “Special Assistant to the President and Senior Director for Gulf, Southwest Asia and Other Regional Issues, National Security Council,” on May 28, 2001.  Khalilzad has since been named US Ambassador to Afghanistan.  Iraq letter signatory Elliott Abrams was also appointed by Bush to the National Security Council, in June 2001.

These individuals are not just any Iraq hawks.  Khalilzad, for instance, had worked in the first Bush administration in the Defense department and then went to work for the Rand Corporation, a major military contractor, in the 1990s.  Born in Afghanistan, he was also a consultant to US oil company Unocal, which for several years had attempted to launch a giant pipeline project in Afghanistan.

Elliott Abrams, an Assistant Secretary of State under Reagan, was indicted in 1991 by the special prosecutor in the “Iran-Contra” scandal, for giving false testimony before Congress.  He pled guilty to two lesser offenses, but was pardoned by President George H. W. Bush, along with other Iran-Contra defendants, on Christmas, 1992.  He participated in a number of rightwing Washington think tanks throughout the 1990s.

Peter W. Rodman was a Special Assistant to Dr. Henry Kissinger in the Nixon and Ford administrations and has since worked with Dr. Kissinger on his memoirs.  Rodman also served in the State department and the NSC in the Reagan and first Bush administrations, and “was most recently Director of National Security Programs at the Nixon Center (1995-2001),” according to his official Defense department biography.

This January 1998 letter was not the Project for a New American Century’s only call to arms regarding Iraq.  On May 29, 1998, most of the same signers wrote another letter to GOP congressional leaders Trent Lott and Newt Gringrich, wrathful over a supposed “capitulation to Saddam” when Clinton cooperated with the UN rather than removing Saddam from power.  This letter again asserted an unspecific danger from “weapons of mass destruction.”

Barely over a week after the attacks of September 11, 2001, the group hit the ground running with another letter.  Again, there was a reminder not to overlook the possibility of intervening in Iraq’s internal affairs, regardless of justification:  “It may be that the Iraqi government provided assistance in some form to the recent attack on the United States.  But even if evidence does not link Iraq directly to the attack, any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power in Iraq.”  This letter suggested a less direct engagement:  “The United States must therefore provide full military and financial support to the Iraqi opposition.  American military force should be used to provide a ‘safe zone’ in Iraq from which the opposition can operate.  And American forces must be prepared to back up our commitment to the Iraqi opposition by all necessary means.”  (September 20, 2001)

Signers of other PNAC letters also hold positions under Bush.  Aside from working in government, in think tanks, and on corporate and other advisory boards, or writing to the White House or Congress directly, the group also operates through the media, including the major television networks and the op-ed pages of major newspapers.

On July 22, 2002, the PNAC itself, in a memorandum to “Opinion Leaders,” kicked off the political campaign to drum up a war against Iraq.  The memo  flagged an article titled “The Coming War with Saddam,” in William Kristol’s Weekly Standard magazine.  Starting then, either the Weekly Standard or PNAC, or occasionally a ‘freelancer’ in league with them writing for the Washington Post, ran an article once a week for the next 16 weeks, pushing an Iraq war.

In spite of the fact that there was no new cataclysm in Iraq, the ground for war was prepared, and obviously (in hindsight) through cooperation with the White House.  On August 26, Vice President Cheney gave a speech to the Veterans of Foreign Wars, arguing for “preemptive military action.”  The point here is not just that a wildly new “policy” was enunciated that no previous vice president or president had ever supported, one that many actual veterans oppose.  The point is that a whole stream of writers and consultants of a sort, in league with dubious and murky factions compensating them in undisclosed ways, operated in concert with one branch of one administration, the Bush White House.

Their influence in the ‘mainstream’ media was immense.  That month, still without any new crisis in Iraq to justify the topic, commentators George F. Will and Charles Krauthammer alone put out seven columns, aside from television commentary, pushing war.  They followed up with similar columns for weeks afterward.

Radio hosts Rush Limbaugh and Bill O’Reilly also weighed in pro-Iraq-war in August 2002.  Like Will and Krauthammer, they kept up the barrage of commentary throughout August and on into fall.  That same fall, in the weeks leading up to the congressional elections, the reverends Jerry Falwell and Pat Robertson also swung into Islam-bashing and administration-opposition-bashing.

These media personalities were joined by a stream of lesser known talk hosts and op-ed writers, organized and otherwise, some supported by the Rupert Murdoch, Reverend Moon, and Clear Channel news empires which also funded lavish overall pro-war displays.

Although not all media commentators who share the PNAC’s views are members of the group, some are.  Syndicated columnist Charles Krauthammer, for example, signed the September 20, 2001, letter to Bush.

Over-all, there seems to be an almost unending pipeline of vaguely credentialed, partly scholarly, mostly non-veteran “consultants,” commentators, writers of a sort, minor government officials and advisors or staffers ready to pour out a cornucopia of reasons to bomb another country.  Most of these figures do not seem disinterestedly eager for bloodshed for its own sake.  More often, there is a whiff of financial motive in the picture.

Vice President Cheney’s former company, Halliburton, got contracts both from Saddam and Saddam’s downfall.  The PNAC’s Richard Perle recently resigned his position with the Defense Policy Board, a military advisory group, partly because of his ties to military contractors.  Zalmay Khalilzad’s individual interest in Unocal and Afghanistan has already been mentioned, above.  William Kristol’s publications and public forum are supported by Australian mega-media mogul Rupert Murdoch.  The notoriously anti-labor Murdoch benefits financially every time a militaristic foreign policy undermines the public sector, regardless of which country he’s investing in.

It goes without saying that the entities hiring this kind of expensive talent also contribute lavishly to political campaigns, and hire equally expensive lobbyists to Congress and the state legislatures. They also control a lot of people’s jobs to start with. Seldom, meanwhile, do invididuals in this cloudy network have family members liable to be sent to Iraq.  Seldom, indeed, do they have genuine expertise, credentials, experience or personal stake in the issues they handle.

It would probably be a mistake to call this syndication ‘conservative.’  Rather, it is basically a synchronized corporatist party, whose members are given careers of manufactured prominence and dominate agendas and topics in the media.  It is also consistently in league with the Bush White House, regardless of the national interest.

In retrospect, it looks as though the public never had much of a fighting chance.  It also looks as though Bush’s pretense that war was a last resort was deception.

 

[This article, deleted by the system among hundreds of articles and blog posts in summer 2011, is re-posted using archives and Word files.]