Faceoff: OWS vs TeaParty

iVillage Member
Registered: 07-11-2006
Faceoff: OWS vs TeaParty
62
Tue, 11-15-2011 - 4:22pm

There is a visual aide (Infographic) that compares the OWS and TeaParty. It's interesting. I wish I had time to verify its accuracy.

http://timiacono.com/index.php/2011/11/14/occupy-wall-street-vs-the-tea-party/

Same thing, different link:

http://www.freerepublic.com/focus/f-news/2807662/posts

http://www.accelerated-degree.com/faceoff-occupy-wall-street-vs-tea-party-movement-infographic/

Sorry that this is just a link, but I think its worth checking out.

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iVillage Member
Registered: 07-11-2006
Sat, 11-19-2011 - 10:13pm

Their behavior makes them morons.

Protesting makes people morons? Or should I say morans?

Their lack of knowing why they're doing what they're doing makes them morons.

iVillage Member
Registered: 03-02-2009
Sat, 11-19-2011 - 11:25pm
nisupulla wrote:

Their behavior makes them morons.

Protesting makes people morons? Or should I say morans?

Their lack of knowing why they're doing what they're doing makes them morons.

"Resist, we much. We must, and we much. About that, be committed."

iVillage Member
Registered: 09-30-2011
Sun, 11-20-2011 - 12:04am

Their behavior makes them morons.

Protesting makes people morons? Or should I say morans?

No, attacking people, murder, public defication and urination, destruction of property, drug use, rape, etc makes them morons.

iVillage Member
Registered: 10-25-2006
Mon, 11-21-2011 - 9:56am
lizzie_B wrote:

No "gimmies?"

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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 11-20-2011
Mon, 11-21-2011 - 10:10am

janetiz wrote:

(Taxing the rich is not a gimme, it's an "owme")

iVillage Member
Registered: 10-25-2006
Mon, 11-21-2011 - 12:52pm

Too bad for us if only the top 1% can afford to pay millions in fees to skirt IRS regs, right?

.Logo_post_b

U.S. Billionaires Avoid Reporting Cash to IRS
By Jesse Drucker - Nov 21, 2011

When billionaire Billy Joe “Red” McCombs, co-founder of Clear Channel Communications Inc., reported a $9.8 million loss on his tax return, he failed to include about $259 million from a lucrative stock transaction.

After an audit, the Internal Revenue Service ordered him to pay $44.7 million in back taxes. McCombs, who is worth an estimated $1.4 billion and is a former owner of the Minnesota Vikings, Denver Nuggets and San Antonio Spurs sports franchises, sued the IRS, settling the case in March for about half the disputed amount.

McCombs’s fight with the IRS illustrates an overlooked facet in the debate over tax rates paid by the nation’s wealthiest. Billionaires -- from McCombs to Philip Anschutz to Ronald S. Lauder -- who derive the bulk of their wealth from stock appreciation are using strategies that reap hundreds of millions of dollars from those valuable shares in ways the IRS often doesn’t classify as taxable income, securities filings and tax court records show.

“The 800-pound gorilla is unrealized appreciation,” said Edward J. McCaffery, a professor of law, economics and political science at the University of Southern California in Los Angeles.

While Warren Buffett has generated attention with his complaints that he and his fellow billionaires pay federal income taxes at a lower rate than his secretary -- about 17 percent -- the real figure is often smaller, said David S. Miller, former chair of the tax section of the New York State Bar Association and a partner at Cadwalader, Wickersham & Taft LLP in New York.

“The problem is not that people like Warren Buffett pay tax at a 17 percent rate, it’s that they can use complex transactions not available to most Americans to get cash from their appreciated stock without paying any taxes at all,” Miller said.

Tip of Iceberg

The rate at which the 400 U.S. taxpayers with the highest adjusted gross income actually paid federal income taxes --their so-called effective tax rate -- fell to about 18 percent in 2008 from almost 30 percent in 1995, IRS data show. That’s the tip of the iceberg, since much of their wealth never converts into income on a tax return, McCaffery said.

In the McCombs case, the billionaire entered into transactions known as variable prepaid forward contracts. He received about $259 million for lending an investment bank his Clear Channel shares with a promise to deliver the stock for good a few years later. The arrangement enabled McCombs to defer paying capital gains tax because he hadn’t sold his shares, lawyers for the billionaire said. The IRS deemed the transaction a sale since the bank paid McCombs cash and got the use of his stock almost immediately.

Taxes on Millionaires

Transactions like these may complicate plans by U.S. President Barack Obama to help close the federal deficit by increasing taxes on millionaires. Obama has said the tax code should contain a “Buffett Rule” to ensure that millionaires pay taxes at least at the same rate as middle-class Americans. Republicans have said they prefer lowering tax rates for businesses and the wealthy. Buffett declined to comment.

In the past two years, some of the wealthiest executives in the U.S. have used deals similar to McCombs’s to reap returns while deferring the taxes without running afoul of IRS rules, securities filings show.

Dole Food Co. Chairman David H. Murdock received about $228.6 million in 2009 against his Dole shares -- tax-free until he is scheduled to deliver shares in November 2012, a filing shows.

Starr International

Starr International Co., the investment vehicle run by Maurice “Hank” Greenberg -- forced from his position as chairman and chief executive officer of American International Group Inc. (AIG) in 2005 -- utilized a prepaid forward agreement last year to receive $278.2 million from an investment bank, according to a March 2010 regulatory filing. The investment vehicle isn’t slated to deliver the AIG stock until 2013.

Lauder received $72.9 million in June as part of a variable prepaid forward sale and is scheduled to deliver the Estee Lauder Cos. shares in June 2014, according to a filing with the U.S. Securities and Exchange Commission.

Spokespersons for Lauder, Murdock and Starr International declined to comment.

Realized Gains

While the tax treatment of these plans isn’t disclosed in the filings, “there’s no other reason to enter into such a convoluted arrangement,” said Robert Willens, an independent tax accounting analyst in New York. These arrangements can cost several million dollars in fees, according to tax planners.

Taxes on capital gains are triggered when assets like appreciated shares are sold -- a process called realization. What constitutes a realized, taxable sale is a frequent bone of contention between the IRS and the clients of tax planners.

Transactions intended to pull cash out of appreciated assets tax-free aren’t limited to stock. Boston real estate developer Arthur M. Winn exited his interest in a piece of real estate by converting his stake into a share of a partnership free of any capital gains tax, court filings show.

The IRS objected and claimed Winn and his partner should have reported a $12 million taxable gain. A U.S. Tax Court judge sided with Winn on one aspect of the deal; others were settled with the government. The details haven’t been disclosed.

Winn, who earlier this month pleaded guilty to making illegal campaign contributions, has retired from WinnCompanies. He did not respond to messages left with his attorney and with the company.

Mark-to-Market

Miller, the former chair of the tax section of the New York State Bar Association, has proposed a so-called mark-to-market system to tax the annual appreciation in the stock holdings of the top 1/10th of 1 percent of taxpayers. That would essentially tax gains in a given year regardless of whether the shares are sold. In a 2005 article in the journal Tax Notes he estimated this approach would raise between $490 billion and $750 billion over a decade.

Borrowing against appreciated stock and real estate is a popular tax deferral strategy particularly as interest rates plummet, said Randy Beeman, a private wealth manager at The Wise Investor Group in Reston, Virginia, a unit of Robert W. Baird & Co. The interest rate on loans to some wealthy individuals has hovered around 1 percent.

Vikings Purchase

McCombs, ranked 312 on the most recent Forbes 400 list of the richest Americans, made his fortune in automobiles, real estate, and then by building Clear Channel into a large radio station operator and outdoor advertising business. He is now the chairman of Xe Services LLC, the military security contractor formerly called Blackwater Worldwide.

In the late 1990s, McCombs borrowed about $300 million to finance the purchase of the National Football League’s Minnesota Vikings. By 2002, the Clear Channel shares pledged as collateral were falling in value and McCombs faced margin calls from lenders. He didn’t want to sell his shares, partly because of “a strong emotional attachment to his ownership in the company,” according to a filing by his lawyers in U.S. Tax Court.

Instead, he entered into a series of variable prepaid forward contracts, receiving about $259 million from JPMorgan Chase & Co. (JPM) in exchange for an agreement to deliver his Clear Channel stock in one to three years. The transaction was structured to limit his potential losses by varying how many shares he would deliver at the end of the transaction.

He loaned those shares to JPMorgan in the interim. That allowed the New York-based bank to short the stock -- selling the borrowed shares to hedge against any decline in the price of the stock it would eventually receive from McCombs.

Lawyers said the cash received up front didn’t have to be reported as income because it wasn’t a taxable sale until McCombs turned over those shares for good.

The IRS said the transaction was a cash sale of the shares, generating taxable income of as much as $213 million.

Benefits and Burdens

Over the years, the IRS has tried to crack down on such deals. In 2006, the agency declared that including a share loan meant these types of transactions were sales, triggering an immediate income tax obligation. In McCombs’s case, his lawyers contended that the share loan was separate from the first part of the transaction, and thus didn’t transfer the so-called “benefits and burdens” of owning the stock. He settled his case for $23 million in back taxes plus interest.

In 2010, a U.S. Tax Court judge found Philip Anschutz, the entertainment, oil and media investor, owed $94 million in taxes after he used transactions similar to the ones used by McCombs. Anschutz, identified by Forbes as the 39th richest man in the U.S., is appealing the decision.

‘More Hostile’

“The IRS shifted its view and threatened a legitimate business practice and that will have a dampening effect on investment,” said a spokesman for Anschutz.

The IRS has “gotten more hostile toward these transactions over the years,” through its various technical pronouncements and litigation, said Willens, the accounting analyst. Since 2006, such transactions haven’t included the interim loan of shares to the investment bank, he said.

“It’s still desirable to defer the tax and wind up with an interest free loan from the government,” he said. “Chances are you don’t get audited and if it does get challenged the odds are good you’ll have a settlement for some fraction of the amount you saved. Who wouldn’t want that?”

To contact the reporter on this story: Jesse Drucker in New York at jdrucker4@bloomberg.net

To contact the editor responsible for this story: Jonathan Kaufman at jkaufman17@bloomberg.net

http://www.bloomberg.com/news/print/2011-11-21/billionaires-duck-buffett-17-tax-target-avoiding-reporting-cash-to-irs.html

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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 11-20-2011
Mon, 11-21-2011 - 1:02pm

Interesting that the article mentions "people like Warren Buffet" but fails to mention that Warren Buffet's company owes BILLIONS in taxes and he is suing the feds NOT to pay it.

You would think that if Warren Buffet was going to spout how rich people "like him" should pay more in taxes that he would actually PAY the taxes he owes.

iVillage Member
Registered: 10-25-2006
Mon, 11-21-2011 - 4:43pm

"The lawsuit filed Monday by four NetJets units contended that the Internal Revenue Service mistakenly assessed a "ticket tax" meant to apply only to passengers who buy seats on commercial or charter aircrafts....

-----------------------------------------------
http://www.pnhp.org/news/2009/october/meet_the_new_health_.php

http://www.youtube.com/watch?v=DQTBYQlQ7yM

iVillage Member
Registered: 09-30-2011
Mon, 11-21-2011 - 5:18pm

They are asking for fewer gimmes than the corporations and big banks demand.

You'd have to be more specific for a fair comparison.

iVillage Member
Registered: 11-20-2011
Mon, 11-21-2011 - 5:19pm

Yes, the courts will decide.

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