As the November election approaches, there will a lot of noise about taxes and the so-called ‘Buffett rule‘, named after Warren Buffett who has been saying that it was wrong that rich people like him should pay taxes at a lower rate than people who earn much less, like his secretary for example. This will intensify as the end of the year approaches and the Bush tax cuts are set to expire. [Read more…]

I live in the Cleveland suburb of Shaker Heights. It is a fairly small residential community of about 5 square miles and 30,000 people. It has long been proud of the quality of life and services offered to its residents, and of its public school system which both our daughters attended throughout the K-12 years. In order to maintain this without a significant commercial base means that we have one of the highest tax rates in the state. [Read more…]

Mitt Romney’s candidacy has opened up a whole new discussion about offshore tax shelters. I had assumed that this was something that was quite complicated to set up, and thus only wealthy people with armies of expensive accountants and lawyers could take advantage of them. [Read more…]

Princeton University professor of politics Martin Gilens has a new book Affluence & Influence: Economic Inequality and Political Power in America that spells out something that many of us instinctively sense, that America is a one-party state in which the rich get their own way, while the rest are shut out to an extent that threatens democracy itself. [Read more…]

The Troubled Asset Relief Program (TARP) was the massive $700 billion dollar bailout that was rushed through government with almost no public discussion in the fall of 2008, when everyone was being panicked by alarms that there was the danger of a massive meltdown of the financial system. [Read more…]

The saga over Mitt Romney’s finances keeps getting more complex. The latest involves his Individual Retirement Account.

The IRA was introduced as a means to encourage people to save for their retirement by putting away some money each year that was tax-deductible (up to a certain income level) and where the accrued interest was tax-exempt. The idea was that when you started withdrawing the money in your retirement, your tax rate would be lower because you were now in a lower income bracket. For most people, it is their IRA, coupled with the Social Security income, that they depend upon in their later years. [Read more…]

As we should all be aware of by now, there is a concerted effort to destroy Social Security by changing its investments away from US Treasury bonds and divert that money into the stock market. This has not been an easy sell because who would you like to take care of your retirement: an efficient, safe, and secure government agency or the looters in the financial sector who think nothing of gambling with your money while pocketing huge salaries and bonuses and walking away with golden parachutes when they get caught? [Read more…]

The rich are different from you and me, as F. Scott Fitzgerald famously observed. For one thing, they grow up learning to be secretive about how they make their money and how much they make.

The very rich also have many devices for hiding their wealth and avoiding paying taxes that are unavailable to ordinary people. Most of the time, these are kept secret from the rest of us so we have little idea of what is going on. The few times the veil of secrecy is lifted is when they are taken to court by people who were once close to them and know the secrets but have had a falling out, such as in business disputes or messy divorces. [Read more…]

The scandal involving Barclays bank and its finagling of the LIBOR rate has been huge news in the UK but not much here. For those interested, Matt Taibbi has been posting frequent updates explaining what is going on. The latest revelation indicates collusion between Barclays and the British government to lie about interest rates. This should not be surprising. What is surprising is that it is coming out in public. [Read more…]