Wednesday, August 31, 2011

U.S. corporations and CEOs game the system

A new study by the Institute for Policy Studies reports that at least 25 top United States companies paid more to their chief executives in 2010 than they did to the federal government in taxes.

The companies — which include household names like eBay, Boeing, General Electric and Verizon — averaged $1.9 billion each in profits. Rather than paying taxes these firms each received more than $400 million in tax rebates.

The authors of the study, which examined the regulatory filings of the 100 companies with the best-paid chief executives, said that their findings suggested that current United States policy was rewarding tax avoidance rather than innovation.

“We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded. “On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”

It is outrageous that Republicans, like Wisconsin Senator Ron Johnson, are demanding huge cuts in federal discretionary spending, cuts to education, health care, research and development, local governmental services such as police and fire protection, and emergency federal disaster relief while they allow U.S. corporation's to manipulate the tax system to avoid contributing their fair share and reward CEO's with unconscionable salaries that have no relationship to performance.

The NY Times article is linked here. 

Monday, August 29, 2011

US Federal debt increases by U.S Presidents

Thursday, August 11, 2011

U. S. Department of Justice sues nation's 2nd largest for-profit college

The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Development Management Corporation (EDMC), the nation’s second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

An EDMC subsidiary,the Art Institute of Wisconsin, recently began operations in Milwaukee's Third Ward, in close proximity to the Milwaukee Institute of Art and Design (MIAD). It is one of several for-profit colleges, including the notorious Everest College, that have recently opened branches in the city.

The Art Institute of Wisconsin anchored a controversial development that received $6.5 million in federal New Market tax credits from the Milwaukee Economic Development Corporation. I had written a letter in opposition to subsidizing this development with New Market tax  credits because they are designed to promote development in poor communities, not gentrified areas like the Third Ward, and because of the large number of lawsuits against EDMC alleging unscrupulous business practices.

While the civil lawsuit filed earlier this week is one of many raising similar charges against the expanding for-profit college industry, the case is the first in which the government intervened to back whistle-blowers’ claims that a company consistently violated federal law by paying recruiters based on how many students it enrolled. The suit said that each year, Education Management falsely certified that it was complying with the law, making it eligible to receive student financial aid.

“The depth and breadth of the fraud laid out in the complaint are astonishing,” said Harry Litman, a lawyer in Pittsburgh and former federal prosecutor who is one of those representing the two whistle-blowers whose 2007 complaints spurred the suit. “It spans the entire company — from the ground level in over 100 separate institutions up to the most senior management — and accounts for nearly all the revenues the company has realized since 2003.”

Education Management, which is based in Pittsburgh and is 41 percent owned by Goldman Sachs, enrolls about 150,000 students in 105 schools operating under four names: Art Institute, Argosy University, Brown Mackie College and South University.

For more information go to this link.

August 9th elections: a step forward

The New York Times analyzes Wisconsin's recall elections writing: "...voters around the country who oppose the widespread efforts to undermine public unions — largely financed by corporate interests — should draw strength from Tuesday’s success, not discouragement."

" Republicans will not admit this, but the numbers showed significant strength for Democrats even in the districts they lost — strength that could grow if lawmakers continue cutting spending and taxes while reducing the negotiating rights of working families. In one rural senatorial district that had not elected a Democrat in a century, the Democratic candidate reached 48 percent of the vote. Another race was also close, and as Nate Silver noted in The Times, the overall results suggest that a contemplated statewide recall of Mr. Walker himself would be too close to call. (Two Democrats face recalls next week.)"

The editorial is linked here.