Taking Down The Elites At Davos And Fox News

After causing a stir at Davos for demanding the world’s richest people pay more taxes, Rutger Bregman, journalist and author of Utopia for Realists: How We Can Build the Ideal World (Little, Brown and Company 2017), was invited on Fox News to bash the liberal elite. Instead he came for Fox host Tucker Carlson, suggesting that he too was a pawn of the billionaire class. He explains why, when it comes to addressing global income inequality, the terms “liberal” and “conservative” don’t have much value.

“Since the early 90s, the vast majority of Americans have been in favor of higher taxes for the rich… these are mainstream ideas and positions, but if you watch Fox News it seems like it’s a crazy, lunatic idea,” says @rcbregman.
“Donald Trump, who doesn’t want to show his own tax returns, and who knows how many billions he has hidden away in the Cayman Islands… he was brought into power by this propaganda channel, Fox News,” says @rcbregman.
“It’s a very American idea…. If you want to make capitalism work, you got to ensure competition. If companies become too big, like it’s clearly the case with Amazon right now, you break them up, that’s what you do if you have a proper capitalist economy,” says @rcbregman.

How Can We Tax Footloose Multinationals?

Apple has become the poster child for corporate tax avoidance, with its legal claim that a few hundred people working in Ireland were the real source of its profits, and then striking a deal with that country’s government that resulted in its paying a tax amounting to .005% of its profit. Apple, Google, Starbucks, and companies like them all claim to be socially responsible, but the first element of social responsibility should be paying your fair share of tax. If everyone avoided and evaded taxes like these companies, society could not function, much less make the public investments that led to the Internet, on which Apple and Google depend.

.. Transfer pricing relies on the well-accepted principle that taxes should reflect where an economic activity occurs. But how is that determined? In a globalized economy, products move repeatedly across borders, typically in an unfinished state: a shirt without buttons, a car without a transmission, a wafer without a chip. The transfer price system assumes that we can establish arms-length values for each stage of production, and thereby assess the value added within a country. But we can’t.

The growing role of intellectual property and intangibles makes matters even worse, because ownership claims can easily be moved around the world. That’s why the United States long ago abandoned using the transfer price system within the US, in favor of a formula that attributes companies’ total profits to each state in proportion to the share of sales, employment, and capital there. We need to move toward such a system at the global level.

How that is actually done, however, makes a great deal of difference. If the formula is based largely on final sales, which occur disproportionately in developed countries, developing countries will be deprived of needed revenues, which will be increasingly missed as fiscal constraints diminish aid flows. Final sales may be appropriate for taxation of digital transactions, but not for manufacturing or other sectors, where it is vital to include employment as well.

Some worry that including employment might exacerbate tax competition, as governments seek to encourage multinationals to create jobs in their jurisdictions. The appropriate response to this concern is to impose a global minimum corporate-income tax. The US and the European Union could – and should – do this on their own. If they did, others would follow, preventing a race in which only the multinationals win.

.. Politics matters: the multinationals’ objective is to gain support for reforms that continue the race to the bottom and maintain opportunities for tax avoidance. Governments in some advanced countries where these companies have significant political influence will support these efforts – even if doing so disadvantages the rest of the country. Other advanced countries, focusing on their own budgets, will simply see this as another opportunity to benefit at the expense of developing countries.

Mounting legal threats surround Trump as nearly every organization he has led is under investigation

Two years after Donald Trump won the presidency, nearly every organization he has led in the past decade is under investigation.

  1. Trump’s private company is contending with civil suits digging into its businesswith foreign governments and with looming state inquiries into its tax practices.
  2. Trump’s 2016 campaign is under scrutiny by special counsel Robert S. Mueller III, whose investigation into Russian interference has already led to guilty pleas by his campaign chairman and four advisers.
  3. Trump’s inaugural committee has been probed by Mueller for illegal foreign donations, a topic that the incoming House Intelligence Committee chairman plans to further investigate next year.
  4. Trump’s charity is locked in an ongoing suit with New York state, which has accused the foundation of “persistently illegal conduct.”

.. However, there has been one immediate impact on a president accustomed to dictating the country’s news cycles but who now struggles to keep up with them: Trump has been forced to spend his political capital — and that of his party — on his defense.

.. Trump has denied he directed Cohen to break the law by buying the silence of former Playboy playmate Karen McDougal and adult-film star Stormy Daniels. He also said Cohen, as his lawyer, bore responsibility for any campaign finance violations.

“I never directed him to do anything wrong,” Trump told Fox News on Thursday. “Whatever he did, he did on his own.”

.. Prosecutors also revealed Wednesday they had struck a non-prosecution agreement with AMI, the company that produces the National Enquirer tabloid, for its role in the scheme.

The company admitted it had helped pay off one of Trump’s accusers during the campaign. It said it had done so in “cooperation, consultation, and concert with” one or more members of Trump’s campaign, according to court filings.

.. It is unclear whether prosecutors will pursue charges against campaign or Trump Organization officials as part of the case.

But at the White House, advisers have fretted that this case — and not Mueller’s — could be the biggest threat to Trump’s presidency. House Democrats have already indicated the campaign-finance allegations could be potential fodder for impeachment proceedings.

.. The nearly $107 million donated to Trump’s inaugural committee has drawn the attention of Mueller, who has probed whether illegal foreign contributions went to help put on the festivities.

The special counsel already referred one such case to federal prosecutors in Washington. In late August, an American political consultant, W. Samuel Patten, admitted steering $50,000 from a Ukrainian politician to the inaugural committee through a straw donor.

Patten pleaded guilty to failing to register as a foreign lobbyist and agreed to cooperate with prosecutors.

.. The Wall Street Journal reported this week that federal prosecutors in New York are examining whether the inaugural committee misspent funds. The Washington Post has not independently confirmed that report.

Officials with the committee, which was chaired by Trump’s friend Tom Barrack, said they were in full compliance “with all applicable laws and disclosure obligations” and have not received any records requests from prosecutors.

.. Trump also faces a pair of civil lawsuits alleging he has violated the Constitution by doing business with foreign and state governments while in office.

.. “What we want to do is be able to tie the flow of money from foreign and domestic sovereigns into Donald Trump’s pocketbook,” said Karl A. Racine (D), the D.C. attorney general. He called the emoluments clauses “our country’s first corruption law.”

.. The plaintiffs are seeking to have Trump barred from doing business with governments. But the more immediate threat for Trump and his company is the legal discovery process, in which the plaintiffs are seeking documents detailing his foreign customers, how much they paid — and how much wound up in the president’s pocket.

New York state inquiries

.. In New York, where Trump’s business is based, incoming Attorney General Letitia James (D) is preparing to launch several investigations into aspects of his company.

.. She said she wanted to look into whether Trump had violated the emoluments clause by doing business with foreign governments in New York and examine allegations detailed by the New York Times that Trump’s company engaged in questionable tax practices for decades.

New York state’s tax agency has also said it is considering an investigation into the company’s tax practices.

.. Earlier this year, New York Attorney General Barbara Underwood filed suit against Trump and his three eldest children, alleging “persistently illegal conduct” at the Donald J. Trump Foundation, a case spurred by reporting by The Post in 2016.

.. Trump is accused of violating several state charity laws, including using his charity’s money to pay off legal settlements for his for-profit businesses. He used the foundation to buy a portrait of himself that was hung up at one of his resorts. Trump also allegedly allowed his presidential campaign to dictate the charity’s giving in 2016 — despite laws that bar charities from participating in campaigns.

.. Meanwhile, a defamation suit against Trump by former “Apprentice” contestant Summer Zervos has also quietly advanced through the New York courts.

.. A judge has allowed Zervos to seek discovery — including possibly deposing the president — as the two sides wait for a panel of New York appellate judges to rule on Trump’s latest move to block the lawsuit.