Wealthy Hiding Nearly $8 Trillion
$7.6 trillion of global wealth hidden in tax havens. NYT: "[Economist Gabriel] Zucman estimates — conservatively, in his view — that $7.6 trillion — 8 percent of the world’s personal financial wealth — is stashed in tax havens. If all of this illegally hidden money were properly recorded and taxed, global tax revenues would grow by more than $200 billion a year, he believes. And these numbers do not include much larger corporate tax avoidance, which usually follows the letter but hardly the spirit of the law. According to Mr. Zucman’s calculations, 20 percent of all corporate profits in the United States are shifted offshore, and tax avoidance deprives the government of a third of corporate tax revenues. Corporate tax avoidance has become so widespread that from the late 1980s until now, the effective corporate tax rate in the United States has dropped from 30 percent to 15 percent, Mr. Zucman found, even though the tax rate hasn’t changed ... The idea of the rich world’s indebtedness is 'an illusion caused by tax havens,' Mr. Zucman wrote..."
Congress can't pay for highways with corporate tax cuts, argues EPI's Josh Bivens in WSJ's Think Tank: "Arithmetic sticklers among us should think that’s odd to imagine that spending can be 'paid for' by cutting taxes ... most estimates show that repatriation tax 'holidays' do indeed boost tax collections in the short run. But because these profits were going to come back to the U.S. at some point, allowing them to come in at a preferential rate means that the Treasury loses money in the longer run ... This sort of disconnect–expressions of concern over deficits and the national debt but actions that don’t reflect that–can be seen in other areas ... what does it say when Congress balks at spending $6 billion on extending unemployment compensation but is willing to spend more than $40 billion in tax extenders in one year alone?"
Elections Ignoring Economy
Midterms elections aren't yet focusing on "bread and butter" concerns, to GOP advantage, argues W. Post's E. J. Dionne: "The 2014 campaign is being waged against a backdrop of national news dominated by everything except the core economic worries of most Americans. Benghazi and Sgt. Bowe Bergdahl have been getting more attention than job opportunities and student borrowing costs. We are said to be a nation focused on the home front, yet the foreign policy news — from Ukraine, Syria, Afghanistan and now, with extraordinary drama, Iraq — has been relentless ... Bread-and-butter concerns are the stuff of Democratic victories because the polls show that most voters still think of the GOP as more protective of the interests of the wealthy than of their own. The less we hear about economics, the better it is for Republicans."
Manufacturing decline causing income gap. AP: "The downfall of manufacturing in the U.S. has done more than displace workers and leave communities searching for ways to rebuild devastated economies. In Reading and other American factory towns, manufacturing’s decline is a key factor in the widening income gap between the rich and everyone else, as people ... have been forced into far lower-paying work. It’s not that there’s a lack of jobs, but gains often come at either the highest end of the wage spectrum — or the lowest ... Globalization, automation and recession destroyed nearly 6 million manufacturing jobs between 2000 and 2009."
Graham Warns GOP Against Immigrant-Bashing
Primary winner Sen. Lindsey Graham urges GOP to embrace immigration reform. The Hill: "'If we keep playing this game that self deportation is the only answer for the Republican Party, we will have destroyed our chances in 2016 and dealt a death blow to our party because by 2050 the majority of the country is going to be African American, Hispanic and Asian,' he said on CBS’s 'Face the Nation.'"
Hispanics disenfranchisement complicates chances for immigration reform. NYT's Nate Cohn: "Hispanics make up about 17 percent of the population of the United States. In the Senate races likely to determine whether Democrats or Republicans control the chamber, Hispanic voters will probably make up less than 3 percent of the electorate ... only 49 percent of Hispanics are eligible to vote, compared with 74 percent of non-Hispanics ... half of all Hispanics live in just 65 of the nation’s 435 congressional districts. In districts held by House Republicans, Hispanics represent only 6.7 percent of eligible voters ... Hispanics are earning more clout in presidential elections. It is in those elections, not in the fight for Congress, where Hispanics could ultimately force the hand of Republicans."
Breakfast Sides
Ignore the pundits, Obama is having a good year, says NYT's Paul Krugman: "...there’s a very good chance that 2014 will go down in the record books as one of those years when America took a major turn in the right direction ... health reform is now a reality — and despite a shambolic start, it’s looking like a big success story ... Then there’s climate policy ... by far the most important environmental initiative since the Clean Air Act ... financial reform, although it’s much weaker than it should have been, is real — just ask all those Wall Street types who, enraged by the new limits on their wheeling and dealing, have turned their backs on the Democrats. Put it all together, and Mr. Obama is looking like a very consequential president indeed."
California Assembly passes budget that protects high-speed rail, expands pre-school. Reuters: "The vote followed months of political wrangling among Democrats seeking to restore spending on social programs cut during the recession ... The Senate still has to vote on the measure ... California faces the upcoming fiscal year, which begins July 1, in good financial shape, thanks to new taxes approved by voters and the resurgent economy ... [Gov. Jerry] Brown's high-speed rail project, a $68 billion effort opposed by Republicans, will receive $250 million in funding from the state's cap-and-trade program ... Other compromises included an expansion of public pre-kindergarten for low-income 4-year-olds..."
