Banker Jekyll Will Hyde Your Money - 13

Progress: It's that way ! ... No, it's this way !

I. One Person's Progress is

Another Person's Regression

I began this series in August of 2009 (Banker Jekyll Will Hyde Your Money).

It has covered a lot of ground since then (Banker Jekyll Will Hyde Your Money, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12).

I thought I would add another post to this series, since major tax legislation is in the works; one version passed in the House of Representatives and one version passed in the Senate.

The two bills are contrary to one another, so, as with any such bill it must go to a conference where elected politicians will struggle to make it unified.

If that takes place, then both houses will have to vote on it again before it can be sent to the president for final approval or disapproval (Another delicate challenge for Republicans: Reconciling House and Senate tax bills).

Members of both houses have spoken of "progress" when discussing this now bifurcated legislation, as have the bankers and citizen commentators (all Democrats in the Senate voted against this "progress" while all but one Republican in the Senate voted in favor of this "progress").

There has been "progress" ("a movement toward a goal") by Banker Jekyll who continues to want to Hyde our money, and there has also been "progress" by honesty-and-justice seeking working class members.

In other words, as I have said before, the word "progress" is a meaningless dog whistle,  a doublespeak word, which like a "coffee cup" can hold a refreshing beverage or a poisonous mixture that will kill anyone who drinks it.

The ambiguity in the word "progress" manifests because the word is bound, by definition, to "a goal."

As the dictionary link above reveals, in its core definition "progress" is "a movement toward a goal" (I sense that "one person's progress is another person's regression").

So, since the number of goals that exist in our universe is most likely infinite, the word has no real absolute meaning unless and until it is transparently linked to a goal.

The goal of the tax bill is not a goal that everyone seeks, thus there are several types of "progress" involved (The House and Senate tax bills, explained, From Tax Rates To Deductions: Comparing The House & Senate Bills To Current Law).

II. Deficit Considerations

The Congressional Budget Office (CBO) indicates that the tax cuts to corporations and the

Senators Hatch up a Grassley story

wealthy will generate an increase in the federal debt by some 1.4 trillion dollars (PRELIMINARY: 8:49PM, December 1, 2017, SUMMARY OF THE DEFICIT EFFECTS, PDF; cf. this and this).

According to Senators Hatch and Grassley, the reason the taxpayer money is being taken from the poor and given to the rich is because the poor spend all their money on booze and women. and, like Americans of Puerto Rico will not lift a finger to help themselves (The Guardian).

III. Corporate Tax Rate

The "progress" according to one group indicates that corporate rates will drop to 20% from 35%, ostensibly because corporations are better persons than poor people are (now that the Supremes have made a corporation a person).

A past Labor Secretary had a different view of this "progress" and its goal:

"But the tax plan gives American corporations a $2 trillion tax break, at a time when they’re enjoying record profits and stashing unprecedented amounts of cash in offshore tax shelters. And it gives America’s wealthiest citizens trillions more, when the richest 1 percent now hold a record 38.6 percent of the nation’s total wealth, up from 33.7 percent a decade ago.

The reason Republicans give for enacting the plan is “supply-side” trickle-down nonsense. The real reason is payback to the GOP’s mega-donors.

A few Republicans are starting to admit this. Last week, Gary Cohn, Trump’s lead economic advisor, conceded in an interview that 'the most excited group out there are big CEOs, about our tax plan.' Republican Rep. Chris Collins admitted that 'my donors are basically saying, ‘Get it done or don’t ever call me again.’ Republican Sen. Lindsey Graham warned that if Republicans failed to pass tax reform, 'the financial contributions will stop.' "

(Robert Reich). I am reminded of the song with the lyrics "freedom is just another word for nothing left to loose" by Janis "Pearl" Joplin.

IV. Conclusion

"What we gonna do when the money runs out?" - David Gray (@Nightblindness)

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The previous post in this series is here.

Civilization Not Busy Being Born is Busy Dying

The art of ice

One has to wonder how so many people saw civilization as a danger to the planet Earth.

How they saw that it was a danger to all life forms.

How they saw that the danger applied to the human species too.

It is not as difficult for "the many" who see that today even though the other "the many" do not see it.

Do you get miffed if people do not want to die the way you have heard is the proper way to die even though "nothing is certain except death and taxes" according to those possessed of the impulse to determine which is which?

Is death a tax or is a tax a death in the world of what you call life?

That debate is the basic McTell News rap of the past Ad Nauseum section of the current Anthropocene.

As regular readers know, I am fascinated with the prescience of those who see long into the future:

“One would say that [man] is destined to exterminate himself after having rendered the globe uninhabitable.” - Lamarck (1817)

“The end of the human race will be that it will eventually die of civilization.” - Ralph Waldo Emerson

"For then there will be great distress, unequaled from the beginning of the world until now — and never to be equaled again. If those days had not been cut short, no one would survive ..." - Jesus Christ (Matt. 24)

"Mayr, from the point of view of a biologist, argued that it's very unlikely that we'll find any [extraterrestrial intelligence]. And his reason was, he said, we have exactly one example: Earth. So let's take a look at Earth. And what he basically argued is that intelligence is a kind of lethal mutation ... you're just not going to find intelligent life elsewhere, and you probably won't find it here for very long either because it's just a lethal mutation" - Dr. Noam Chomsky paraphrasing Dr. Ernst Mayr

“Experience has shown that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” – Thomas Jefferson

(On The Origin of the Crusader Pathogen - 2). Some do the same thing as an art form which includes more abstraction:

I've stepped in the middle of seven sad forests,
I've been out in front of a dozen dead oceans,
I've been ten thousand miles in the mouth of a graveyard,
...
I heard the sound of a thunder, it roared out a warnin',
... the roar of a wave that could drown the whole world,
Heard one hundred drummers whose hands were a-blazin',
Heard ten thousand whisperin' and nobody listenin',
Heard one person starve, I heard many people laughin',
Heard the song of a poet who died in the gutter,
Heard the sound of a clown who cried in the alley,
...
I'm a-goin' back out 'fore the rain starts a-fallin',
I'll walk to the depths of the deepest black forest,
Where the people are many and their hands are all empty,
Where the pellets of poison are flooding their waters,
...
And it's a hard, and it's a hard, it's a hard, and it's a hard,
And it's a hard rain's a-gonna fall.

(Office of the Prescient of the U.S.). That even though there are those who argue that no one can see into the future.

Wrong ("he not busy being born is busy dying").

Civilization, in the form of society, habitually dies time and time again because of the myth that the future is unreachable by visionaries:

"In other words, a society does not ever die 'from natural causes', but always dies from suicide or murder --- and nearly always from the former, as this chapter has shown." - A Study of History, by Arnold J. Toynbee

(The Deceit Business - 3). The historians are loved as long as they flatter civilization, but fall into the darkness of civilization's ire when they do not.

Soon enough, thereafter, the society follows themselves into the darkness they were warned of.

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A Hard Rain ..., by Dylan (lyrics here)

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Why is It The Busiest Tax Court? - 2

The Month of The Taxman

April 15 is tax day and April 1 is April Fool's day.

Some say that is a distinction without a difference.

As usual some things tend to stick more solidly to the pages of history than other things tend to, thus, from time to time here at Dredd Blog we review what was posted on Dredd Blog in some of the pages that make up a small part of the history of it all.

On this date in 2009 the following text was posted to history:

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We recently pointed out that the landscape of US tax law is a murky place. Now we want to point out that the Federal District Court offers a jury trial by one's peers. But it is a place where only the wealthy, along with their expensive lawyers, tend to venture.

For the rest of us, the US Tax Court does from 85% to 95% of the tax cases, depending on the year.

The number of cases filed in The Tax Court, after 1999, has grown consistently:

# filed .......... year

31,450 .......... 2008
30,442 .......... 2007
26,993 .......... 2006
24,801 .......... 2005
24,931 .......... 2004
22,451 .......... 2003
20,291 .......... 2002
14,649 .......... 2001
13,545 .......... 2000

One wonders why, when a taxpayer's chances of winning in that court are extremely slim. Some reports show a 7 - 3, or even an 8 - 2 ratio (IRS wins 8 out of 10 cases, taxpayers win 2 out of 10 cases) in that court:

... an examination of raw numbers shows ... the taxpayer doing better in the general jurisdiction district court than in the specialized tax court. Some studies show that the taxpayer wins only 5% of the time in tax court as compared to 20% to 30% of taxpayers winning in the district court, with other studies acknowledging at least a 20% percent differential (Geier 1991. p. 998). The data used for this study show a 12% differential, with taxpayers winning 20% of the time in tax court and 32% of the time in the district court. These differential rates have led some scholars to argue that the tax court is ... biased in favor of the [IRS] ... Kroll 1996 ...

(Fed. Dist. Ct. vs Tax Court, PDF). My reading of the published cases over the past 10 years is not so promising, and I would say that it is more like 9 - 1. That is, IRS wins 9 out of 10 cases in the Tax Court.

But that ratio could be because the government needs money more at some times than it does at other times.

Which could mean that the pressure which deficits put on IRS and the Tax Court causes variation in decisions for taxpayers from time to time.

The US Tax Court is the court for the poor and middle class, and the US District Court is for the well to do:

Of course, litigating in the tax court is not the only option for the taxpayer. The major alternative to the tax court is the United States District Court, the court of general trial jurisdiction in the federal system. To sue in this court, the taxpayer must pay the disputed tax, and then sue for a refund in the United States Federal District Court ... The taxpayer files the claim, and the case is tried in the taxpayer’s local district. The taxpayer can, and usually does, request a jury trial. Decisions of these courts can be appealed to the circuit within which the court is located.

(ibid, emphasis added). The poor and middle class who can't afford a lawyer and who can't afford to pay the tax out front, then ask for it back in a District Court, must go to the tax court.

Once there most often they try to win pro se (representing themselves without a lawyer).

The middle class and the poor who go to the Tax Court can't have a jury decision. Instead they must rely on the Tax Court judges. The very Tax Court judges whom the scholars have said are biased in favour of the IRS:

These differential rates have led some scholars to argue that the tax court is ... biased in favor of the agency (Kroll 1996; but see Maule 1999). One scholar notes it is this potential for bias that has led Congress often to resist creating other specialized courts (Baum 1990). While most scholarship has failed to develop a coherent theory for why such bias exists, posited reasons include such factors as ideology, institutional design and structure, prior IRS work experience, the type of litigant, attorney representation, and even social and personal characteristics of the judge.

(ibid, emphasis added). Yesterday on the floor of the House of Representatives one of the Carolina representatives said that there was a surge in the increase of Boston Tea Party gatherings in his area.

He went on to say that taxpayers do not like it when their money, earned from hard work done before their shower, is taken from them and given to the banksters who work after their shower.

Why is that not surprising?

The answer to "why all the filings in the Tax Court?" is desperation. Both the government and the people are desperate for money.

Which has absolutely nothing to do with the fact that the tripling of tax cases in the tax court happened in the same years (2000-2008) that the Bush II regime ruled the roost (wink, wink).

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It appears, upon a cursory examination, that filings in the Tax Court have averaged in the neighborhood of 31,000 cases per year since 2008.

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Beatles, The Tax Man:

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Advance To The High Ground

The good winds of Change

Scientists are studying up on the skills required to properly convey an unpleasant but necessary message to the public.

They are concerned with informing the public without angering them or unduly alarming them, as those scientists reveal the dangers civilization faces in the wake of our damaged global climate system (Scientists Seek Strategy to Convey Seriousness of Sea-Level Rise).

That mission is not an easy task when people along the coast are told that their land is slowly going the way of the fabled Atlantis which sunk below the sea.

The scientists might point out that Atlantis went in an instant, without the kinds of warnings we have today, good and useful warnings to prepare to move and revolutionize history with the change necessary to kick the fossil fuel habit.

Perhaps those scientists could also tell the story of the towns that have relocated out of flood zones and who are happy they did so:

In the summer of 1993, the merciless Mississippi flooded Valmeyer not once but twice. The water rose to 20 feet, drowning homes, businesses and an entire town's way of life.

When the waters receded, the people of Valmeyer signed on for a bold experiment to move their entire town to higher ground. Over two years, Valmeyer was rebuilt only 2 miles to the east, but on land hundreds of feet higher.

Today, as towns north of Valmeyer struggle with crippling floods, Valmeyer stays dry.

(How a Flood Town Became a City on a Hill, see also NY Times). Those who relocated don't have to worry about the gyrations of the Mississippi River any more.

Mississippi River gyrations which this year reached record low water levels that eventually halted freight traffic, following last year's flooding that was so bad that the Army Corps of Engineers bombed levees to flood areas upstream so that cities downstream would not flood as badly.

These phenomena are not one-time events any more:

What we are doing, though, is we're forcing people to look at other options, and that they're not caught in the cycle of repetitively being flooded out, being damaged, having their personal lives just devastated, and then coming back and in a few years, having it happen again.

(NOVA Transcript). There is a better way than robbing Peter to pay Paul: build new environmentally sane communities with new infrastructure, new power designs, new smart grids, yes, technology and engineering designed to last for generations without damaging the global climate system (see Desertec).

This approach not only avoids the flooding by the inevitable sea level rise now, but it also faces and removes the cause of that sea level rise in the future - the pollution by green house gases.

The victims of Hurricane - Superstorms like Irene last year and Sandy this year can become yet another City on a Hill, another beacon that shows the rest of us the way forward, like Greensburg, Joplin, and Valmeyer (above) have done.

A national work project generating jobs like those that built the infrastructure of national highways and bridges during the depression era of the 1930's would boost the economy rather than tear it down by rebuilding in the same place only to have to rebuild again and again (Groundhog Day & The Climate of Fear).

You folks in the Northeastern U.S.A. have an opportunity to be a light on a hill, and we have an opportunity as a nation to help out big time by using our national tax dollars to Rebuild America instead of destroying foreign nations in fruitless, endless, and counterproductive wars.

The States of War Budgets - 3

In the first post of this series we touched upon the growing economic demise of states, and the source of that demise.

Later, in the second post of this series, we focused on the looming specter of sovereign failure of states to honor what they promised their citizens long after the citizens relied on, trusted in, then entered into agreements with those state governments.

Now we focus on the solution the united democrat republicans propose as a solution for the states: bankruptcy.

This series has focused on the dangers that MOMCOM's promiscuous war spending is bringing on the many sovereign entities described by the word "united".

The series shows that a more accurate word would be "bound" in place of "united", because even though the charge into invasion, occupation, and endless wars was led by the republican right wing neoCons, the democrats for the most part felt bound to go along, calling the state of affairs "united" nevertheless.

As we will soon see, in terms of economic damage, "The Bound States" is a more accurate description than "The United States", since the "solution" called state bankruptcy, unlike the wars that brought it on, is not something the lemmings want to jump off the cliff for.

The W direction has produced a condition which has turned the "united" world upside down, given new meaning that turns out to be "united we fall".

So the states are fighting to be free of this "united" economic thingy where they are bound to economic desperation caused by a MOMCOM desperate for war, lusting for war, and making a new religion of war.

The neoCons know that the holy warrior is here to stay, so long as the entities that are "united" in the war games (the "states") can survive this MOMCOM state of war.

The states are desperate not to be absorbed into "The United State of War", where there is only one state, not fifty:

No state is known to want to declare bankruptcy, and some question the wisdom of offering them the ability to do so now, given the jitters in the normally staid municipal bond market.

(United States of Bankruptcy). Desperate minds of MOMCOM are predictably trying to form a delusional solution:

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
...
For now, the fear of destabilizing the municipal bond market with the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.
...
Still, discussions about something as far-reaching as bankruptcy could give governors and others more leverage in bargaining with unionized public workers.

“They are readying a massive assault on us,” said Charles M. Loveless, legislative director of the American Federation of State, County and Municipal Employees. “We’re taking this very seriously.”

(ibid, United States of Bankruptcy). The democrat republican state of mind wants a way out of the obligations of the sovereign, but not out of the wars that are causing it, so expect an effort to glorify capitulation, calling it "bi-partisan privatization" or deceitful words to that effect.

They want states to be able to tell official lies retroactively, to go back on their word, to do a time travel morph into Bernie Madoff.

This "solution" is treating the effect, not treating the cause for the need to go bankrupt in the first place.

Which said cause is the stupid, nation killing, senseless, and now endless holy wars of the Circle W Cowboys, yes, the wars that are bankrupting the entire nation.

Rather than stop the wars, the terminally insane minions of MOMCOM think it will send a positive message (be good for the country) if states can file bankruptcy.

"Screw some more citizens out of their pensions, out of their financial future, yeah that's the ticket".

Like Pogo, the states have met the enemy to which they are bound.

Deciders: Nancy Pelosi & House Democrats - 2

In the first post in this series we noted that civics 101 counsels us to realize that the House of Representatives is still controlled by Democrats, and that Nancy Pelosi is still Speaker of The House.

The reason that is critical is that the House has the first say in budget matters under our federal constitution, and they must agree with the Senate, or no bill gets passed then sent to the President.

In that regard, we suggested that the Obama Tax Deal with the Republicans was not a done deal, because the House would be the final decider.

Evidently the House Democrats want no part of the Obama deal:

WASHINGTON -- House Speaker Nancy Pelosi (D-Calif.) is unlikely to bring up President Obama's tax cut deal to the floor for a vote in its current form in light of the Democratic caucus' rejection of the package Thursday morning, according to a key lawmaker involved in the discussions.

(Huffington Post). Good, now the President should do what he should have in the first place, and try to convince the 7 Democrats in the Senate (53 agree with Pelosi) to do the proper thing, instead of playing footsie with the Republicans to do the wrong thing.

Cut The Greatest Entitlements Now!

The military, the oil companies, and the media complex (MOMCOM) harbor a subconscious myth that they are the beautiful ones who bring the primitive citizenry its food, shelter, wisdom, and security.

Another of the more prevalent myths in today's neoCon cacophony, masking as a debate on national issues, is that wars are free, costing the nation no tax dollars.

The institution that gets the greatest entitlements is the military portion of MOMCOM.

Oil barons of the oil companies struggle to take over first place in that race for entitlements.

Additionally, the neoCon regime of the past decade gave the rich 1% of MOMCOM the greatest tax cuts, along with the greatest war profiteer contracts, covering all that up by not putting war costs in the budget figures.

It was covered up and hidden even from John McCain, who continually said "what economic problems?" up until the economy went over the cliff into oblivion, together with his and her presidential aspirations.

Voodoo Economics finally became well defined by Bush II and the neoCon elements who have infected the national thinking with deceitful propaganda up to this day.

It, the main stream media portion of MOMCOM, the wannabe water boy of despotism, dutifully carries the evil propaganda brew to the four corners of the Empire, yelling "take off your clothes, trust us."

But the changing of the diapers and the guard still must meet the smell test, which is simple arithmetic, not complex algebra.

The Red Sea Ink Corporation

I visited the IRS website on tax day, where I noticed that they use the term "tax products" to describe materials they produce, as if they were an industry selling toothpaste.

That reminded me of something the scholar Noam Chomsky said: "It's the same techniques that are used to market toothpaste."

One of the members of MOMCOM evidently purchased the right "tax products", because no taxes needed to be paid after all was said and done:

GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.

(CNN, GE: $0 U.S. tax bill). The government back door bailout "tax product" seems to be popular with IRS corporate customers eh?

GE has always been a mystery to investigative accountants who have compared GE accounting to AIG and Madoff.

The California Gold Blush

Soon enough Governor Schwarzenegger won't be back.

The question is, will California come back this time?

We have mentioned that some of California's problems are not going to be solved by political ideology because nature is not political.

The current financial crisis there is compounded because the people do not trust the government, even if the government is now telling the truth.

That is one of the consequences reaped when politicians act as if public service is like being a member of the mob.

The State of California is a big deal.

Thanks For The Bailout America - Dubai

We reported that Dubai received billions of dollars in TARP bailout money, while building some of the largest and most costly construction projects on earth.

Now they are purchasing many aircraft from Boeing.

We pointed out connections between that area, Swiss bank accounts, and AIG that are quite mysterious, unless of course you know how the robber barons were removed from the scene.

It would seem that children in Dubai, where Halliburton moved its headquarters, have a better upbringing than children in Afghanistan and Pakistan who are now fleeing and becoming refugees.

This is deja vu all over again, and reminds many of the mid-east curse one gives to an enemy: "may the bushies bring you freedom".

Bush II Eradicated The Robber Barons

"... and men plunder"

Modern U.S. History has a chapter concerning the Robber Barons.

Briefly, this is the gist of it:

Robber baron is a term that revived in the 19th century in the United States as a reference to businessmen and bankers who dominated their respective industries and amassed huge personal fortunes, typically as a direct result of pursuing various anti-competitive or unfair business practices. The term may now be used in relation to any businessman or banker who is perceived to have used questionable business practices or scams in order to become powerful or wealthy (placing them in power of everything having controlled most business affairs.)

(Robber Barons). How did the bushies remove the boogie man from under your bed, since that description sounds strangely like the banksters of recent "bailout" infamy?

How did they do that you may be asking? The answer is that they did it using what they think is the "Christian way".

The very Bible they profess to follow says: "... because law brings wrath. Where there is no law, there is no transgression of the law" (Romans 4:15). Now ask yourself, "what good robber baron wants 'wrath' for doing what comes naturally"?

So, when the bushies heard the preacher in church quoting Romans 4:15 their eyes twinkled so brightly folks in the pews around them thought that a meteorite was passing overhead.

It was like the conversion of the Apostle Paul, only in reverse. It was an epiphany of the sort that changes a nation from one age into another age.

They removed the law, which made taking money from the public trough in certain ways, robbery. Thus, no robbery law, no transgression of the law bringing wrath, and thus no more robber barons.

The U.S. then entered the age of the Plunder Barons, who after gorging themselves under Bush II and the republican controlled congress, are seeing if they can corrupt the new blood recently elected.

Yes, they are seeing if they can corrupt the newbies into the same ideology, so that the Age of Plunder can continue from election to election.

Now that kind of highway and other robbery no longer exist as crimes in our nation, evidently, just like torture really doesn't exist if they praise Allah while having their ahem reshaped. Your tax future is being reshaped, so praise the Lordy.

It boils down to official federal plunder, whether that plunder is a reaction to a prior regime's plunder or whether it is a newbie's own plunder.

Add state plunder, foreign government plunder, and private plunder, and we have the Age of Plunder.

Some plunderers are going to jail because they did not read the official memos that explain how to do it properly, like the memos that got the torture gang off.

In this New Age of Plunder the phrase "power to the people" has now morphed into "plunder to the people", as the diet has gone from brain food to drive through McNow Chow.

CNBC offers its solution for a free market America by urging us to buy stock in fat-to-thin plunder schemes, delusional thinking schemes, and dream on about your Saviour schemes.

The next post in this series is here.

Add It Up And It Still Smells

A simple hypothetical and some simple arithmetic show that something may be fishy in bankster land.

For sake of the hypothetical, assume that there are 2.5 million homes in foreclosure.

Further, assume $2,000 as the median monthly mortgage payment for each home.

In this hypothetical, to get money into banks, and to prevent foreclosure on those homes, assume further that we (government) as a financial rescue plan send a check with the home owner and the bank as payees. That is, both have to negotiate it.

The home owner signs the check and gives it to the bank as the mortgage payment.

It is deposited and thus it is in the bank. In this scheme, the home owner owes the U.S. that amount and will pay a small interest over time; and a lien attaches to the home. It can be paid off early if the home owner wants to do that.

Finally, assume that we will do this long enough to get the home owner through the recession; which we will assume will be a 3 year period of time.

The arithmetic on this hypothetical would be: 2,500,000 * $2,000 * 12 * 3 = $180 billion.

Hypothetical results: 1) the housing crisis would be substantially helped because foreclosures would go down and property values would be positively affected (even if the property value holds even); 2) money would go into the banks; 3) which the banks could then loan out; 4) and the government would have a lien on the property for security.

NOTE: the example is not for the purpose of advocating socialism or the like, it is simply to show a contrasting equation and methodology to assist in the housing crisis.

Instead, under the current bailout plan the government has given ten times that amount or more ($750 billion plus) directly to failing institutions.

Those institutions, which are already in trouble, then use substantial amounts of that bailout for bonuses, send it overseas, and other unknowns.

The government is not in a secure position on the debt either, and home owners have been bypassed and not included so no foreclosures are prevented.

As to the auto industry. Use the same formula for 7,000,000 vehicles a year with a $900 monthly median payment, and the arithmetic results in $226.8 billion going into the banks, and the auto industry sells 7 million cars a year.

So the total looks like $226.8 + $180 = $406.8 billion, which is about half of the give away bailout figure, and we will have put $406.8 billion into the banks, induced 21,000,000 vehicle sales, and saved 2.5 million homes as well.

Surely, then, there must be 50 ways to do it better than it is being done?

The next post in this series is here.

Why is It The Busiest Tax Court?

We recently pointed out that the landscape of US tax law is a murky place. Now we want to point out that the Federal District Court offers a jury trial by one's peers. But it is a place where only the wealthy, along with their expensive lawyers, tend to venture.

For the rest of us, the US Tax Court does from 85% to 95% of the tax cases, depending on the year.

The number of cases filed in The Tax Court, after 1999, has grown consistently:

# filed .......... year

31,450 .......... 2008
30,442 .......... 2007
26,993 .......... 2006
24,801 .......... 2005
24,931 .......... 2004
22,451 .......... 2003
20,291 .......... 2002
14,649 .......... 2001
13,545 .......... 2000

One wonders why, when a taxpayer's chances of winning in that court are extremely slim. Some reports show a 7 - 3, or even an 8 - 2 ratio (IRS wins 8 out of 10 cases, taxpayers win 2 out of 10 cases) in that court:

... an examination of raw numbers shows ... the taxpayer doing better in the general jurisdiction district court than in the specialized tax court. Some studies show that the taxpayer wins only 5% of the time in tax court as compared to 20% to 30% of taxpayers winning in the district court, with other studies acknowledging at least a 20% percent differential (Geier 1991. p. 998). The data used for this study show a 12% differential, with taxpayers winning 20% of the time in tax court and 32% of the time in the district court. These differential rates have led some scholars to argue that the tax court is ... biased in favor of the [IRS] ... Kroll 1996 ...

(Fed. Dist. Ct. vs Tax Court, PDF). My reading of the published cases over the past 10 years is not so promising, and I would say that it is more like 9 - 1. That is, IRS wins 9 out of 10 cases in the Tax Court.

But that ratio could be because the government needs money more at some times than it does at other times.

Which could mean that the pressure which deficits put on IRS and the Tax Court causes variation in decisions for taxpayers from time to time.

The US Tax Court is the court for the poor and middle class, and the US District Court is for the well to do:

Of course, litigating in the tax court is not the only option for the taxpayer. The major alternative to the tax court is the United States District Court, the court of general trial jurisdiction in the federal system. To sue in this court, the taxpayer must pay the disputed tax, and then sue for a refund in the United States Federal District Court ... The taxpayer files the claim, and the case is tried in the taxpayer’s local district. The taxpayer can, and usually does, request a jury trial. Decisions of these courts can be appealed to the circuit within which the court is located.

(ibid, emphasis added). The poor and middle class who can't afford a lawyer and who can't afford to pay the tax out front, then ask for it back in a District Court, must go to the tax court.

Once there most often they try to win pro se (representing themselves without a lawyer).

The middle class and the poor who go to the Tax Court can't have a jury decision. Instead they must rely on the Tax Court judges. The very Tax Court judges whom the scholars have said are biased in favour of the IRS:

These differential rates have led some scholars to argue that the tax court is ... biased in favor of the agency (Kroll 1996; but see Maule 1999). One scholar notes it is this potential for bias that has led Congress often to resist creating other specialized courts (Baum 1990). While most scholarship has failed to develop a coherent theory for why such bias exists, posited reasons include such factors as ideology, institutional design and structure, prior IRS work experience, the type of litigant, attorney representation, and even social and personal characteristics of the judge.

(ibid, emphasis added). Yesterday on the floor of the House of Representatives one of the Carolina representatives said that there was a surge in the increase of Boston Tea Party gatherings in his area.

He went on to say that taxpayers do not like it when their money, earned from hard work done before their shower, is taken from them and given to the banksters who work after their shower.

Why is that not surprising?

The answer to "why all the filings in the Tax Court?" is desperation. Both the government and the people are desperate for money.

Which has absolutely nothing to do with the fact that the tripling of tax cases in the tax court happened in the same years (2000-2008) that the Bush II regime ruled the roost (wink, wink).

It Is Not Wrong To Avoid Taxes

It is wrong to evade taxes.

Avoid and evade do not equate.

Our language has taken such a hit from business and other propaganda that it is no wonder an English professor at Rutgers wrote the book Why No One Knows What Anyone Is Saying Anymore.

Appeals Court Judge Learned Hand, one of our better known jurists, put it this way:

“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.”

(Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934) (Hand. J.), aff'd, 293 U.S. 465 (1935), emphasis added). That is an explanation of avoiding taxes.

But there are zones where one unwittingly evades when one intended in good faith to only avoid.

Judge Allegra of the Federal Circuit Court of Appeals pointed out that in many areas of our tax system there are shadow zones.

Zones where the courts have to pull out their judicial flash lights and magnifying glasses, then enter into the shadows where we can't see them. We can only hear their voices:

When does a taxpayer cross the fault line between the cheering fields of tax planning and the forbidding elevations of form over substance, far enough, at least, to require a transaction to be recharacterized for tax purposes? No map – statutory, regulatory or otherwise – precisely reveals this point of no return. Rather, in turn, the taxpayer, the government, and, ultimately, the judicial traveler are guided only by multi-factored analyses, balancing tests and other forms of ad hocery, which, if properly employed, serve hope that the terrain’s true character will be revealed. This tax refund suit presents not one, but two opportunities to exercise these faculties.

(Principal Life Insurance Co. v U.S., 2006). The shadow cast by the tax code makes long shadows indeed, and only those who can afford to hire CPA firms (the wealthy and the corporations) can venture into those shadowy zones.

That small percentage of taxpayers use specialized firms who have infra-red detectors and night goggles with which to venture into those shadowy zones.

Unfortunately, for the remainder of us, the moralist tax propagandists have injected fear into our minds. We of the middle class, increasingly, never even steer near those shadowy tax zones.

Like our ancestors who always steered clear of the well publicized and propagandised "edge of the earth", in tax matters we incessantly recite the mantra "err on the safe side".

Then there are the tax protesters. Those tax vandals and barbarians who rush headlong past every sign and warning, yelling and whooping with no consideration whatsoever of any tax norms.

Even though countless tax court decisions, for decades, have rejected their time-worn mantra ("there is no such thing as an income tax"). A mantra which they incessantly recite to judges who struggle with judicial patience, but who seem to always impose fines upon them.

Will this cacophony and lack of clarity, encrusted with the icing of "all is well that ends well", ever subside?

UnAmerican International Group

Yesterday we wondered about the "American" in AIG because AIG does not seem to care about what Americans think about it.

AIG China [hacked see wayback machine] has language on its home page that tells us as much about what is going on with AIG as the powers that be are telling us.

"We can't ..." is the only message at the moment that isn't greek.

We are being informed that AIG is sending bail out money to foreign nations or foreign banks.

What are the governments of those nations doing to help the AIG - Foreign ...

Why are US taxpayer dollars going to help foreign AIG's?

Here is a partial list of those getting US taxpayer dollars:

Deutsche Bank, Landesbank Baden-Wuerttemberg, Wachovia, Calyon, Rabobank, Société Générale, The Royal Bank of Scotland, Deutsche Zentral-Genossenschaftsbank, Dresdner Bank AG, UBS, Barclays, Bank of Montreal

Note that UBS is the one helping the very rich hide their money (thousands upon thousands of them) so they don't have to pay taxes like the rest of us.

When looking thru the Dresdner Bank AG info link you will come across The Carlyle Group fingerprints.

Which is Bush II family fingerprints going way back to Prescott Bush who did banking business with the NAZI party of Hitler's infamy.

The bottom line here is that taxpayer dollars are not flowing directly to US Companies who need it but out to foreign banks that have dealings with people who have caused our problems.

The past Treasury Secretary Paulson, who landed hundred of millions of dollars in capital gains from Goldman Sachs, without paying any taxes, directed how the TARP and AIG funds would begin to flow. This was just prior to the Bush II regime's end.

It seems like a payback or pay off or something of that nature that those taxpayer funds would flow to foreign banks and foreign locations that have been "good" to the Bush II regime and family business for decades.

2 4 U 1 4 me - Isn't That Tax Special?

The politicians who have been banksters are treated like royalty.

The people are treated like the subclasses when it comes to taxes sometimes.

Professor Caron notes:

This provision was extraordinarily valuable to Robert Rubin and Henry Paulson, both of whom had hundreds of millions of dollars in unrealized capital gains in Goldman Sachs stock. When they were appointed secretary of the Treasury, they were able to realize all the gains on their stock shares, saving them tens of millions of dollars in taxes, and diversify their portfolios at the same time.

What I have always found interesting about this obscure provision of the tax law is that it recognizes a principle that ought to apply to all taxpayers.

(TaxProf Blog, italics added). What, the tax laws are not even handed? Banksters are special? No way, not in my country!?