In an earlier post, I discussed all the ways that wealthy people can reduce the rate at which they pay taxes, using measures that are not available to ordinary people, and which results of them paying at much lower rates than middle class people do.

Mitt Romney had for a long time refused to release his tax returns and suspicions were that this was because he was in fact paying at a lower rate than most people because of those above methods. Under pressure he has (sort of) agreed to release his returns around (maybe) April, and conceded that he does pay only about 15%, the same rate as the marginal rate on people whose income is in the range $8,375 to $34,000, which is even below the media income.

But the additional tidbit that was tucked away in his statement about his income was when he said, “And then I get speakers’ fees from time to time, but not very much.” It turns out that his total income from speaking fees for 2010 was $374,327.62, for an average of $41,592 per speech.

When your fees per speech is close to the median household income, and your total income from speeches alone put you in the top 2% of income earners, and you consider it ‘not very much’, then you really are living in a different world.

I got this from The Progressive Review but since the site did not cite a source, I cannot vouch for the accuracy of the data used to generate it.

Update: See the comment by savannahbarnett below that suggests that the data is unreliable and out of date, although the link to better supported data shows that the ratio in the US is still very high, in the 185 to 325 range.

Many big corporations avoid paying US taxes by creating offshore subsidiaries and putting their profits into those companies. That money is often stored in banks in the US but are technically considered outside of the country. Of course, these companies and their executives would like to be able to use the money (which is currently running at more than $1.375 trillion) in the US to pay for their bonuses and the like but if they ‘bring it back’ (i.e., put it in their US books) they would have to pay the 35% tax that they avoided by using their foreign subsidiaries. So now an army of 160 lobbyists is pushing to allow a ‘temporary’ tax holiday under which the money can be repatriated to the US at a rate of only 5.25%, which would be a massive windfall to these companies and impoverish the government. This was also done back in 2004, creating a windfall then.
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It looks like Europe is following the lead of the US, with its equivalent of the Federal Reserve giving money to big banks at low interest rates and allowing them to buy government bonds at higher interest rates. So the European central bank is essentially borrowing back its own money, just like the Fed did here, the banks essentially risk-free easy profits.

If one wanted even more evidence of the power of the global financial oligarchy over governments, look at how they managed to oust the elected leaders of the government in Greece and Italy and replace them with unelected ‘technocrats’, i.e., people who would implement harsh austerity policies that squeeze the general public in order to pay back to the banks the risky loans that they gave out. Even Silvio Berlusconi, one of the most tenacious of politicians whose ability to cling on to the prime ministership was legendary, had to bow down to this superior power and resign.

Currently there is a congressional debate on whether to extend the payroll tax cut on Social Security. The Republican party, which wants to extend the Bush era tax cuts on the rich, ridiculously argues that those cuts would pay for themselves and do not require expenditure offsets. But it argues the reverse in the case of payroll tax cuts, requiring that the cuts, which benefit largely the middle class, be paid for by cuts in expenditure elsewhere. Their devotion to serving the interests of only the rich has never been so glaringly exposed.

I initially opposed the cuts in the payroll tax for three reasons. 1) If the economy needed to be stimulated, I preferred the government sending everyone earning below a fixed amount a check for the average amount of the cut, similar to what George W. Bush did. I felt that the effects of a payroll tax cut would be too subtle. 2) Because the tax is a fixed fraction of income up to a certain limit, the cut gives more back to higher income earners than lower ones. 3) It would cause a deficit in the Social Security trust fund that would be used by opponents to undermine the Social Security program.

It turns out that I was wrong on the third point. The legislation that cut the Social Security tax also required the government to make up the losses to the trust fund from general tax revenues. This is still problematic because it further breaks down the wall between the trust fund and general revenues and drags Social Security into budget debates by enabling opponents to claim that it is adding to the budget deficit. But at least on paper, the trust fund revenues are not affected.

Last week, I wrote about the revelation that the size of the bailout was $7.77 trillion, much larger than publicly revealed during the time. Via reader Mark, I read this article by former congressman Alan Grayson that says that the audit that was enabled by legislation that he and Ron Paul initiated reveals that the size of the Federal Reserve bailout of the big banks all over the world is now even greater than that, to the tune of $26 trillion, which is almost twice the size of the entire GDP of the US, which is a little over $14 trillion. Grayson explains the key numbers that the audit revealed:

Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.
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Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending — on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP.

These are staggering amounts. And it was all done under the radar, using the secrecy with which the Federal Reserve and the government use when it comes to serving the oligarchy.

Last Thursday, I wrote about how the Federal Reserve, in secret, committed itself to $7.77 trillion in support to the big banks. The Daily Show gives more details of the how the rip-off worked. It turns out that the Fed gave the banks money at interest rates of 0.01% (essentially free money) that the banks then used to buy US Treasury bonds. In essence the Fed was borrowing its own money back from the banks at much higher rates than it lent it out to the same banks. Any idiot could make money on such a deal and it should be no surprise that the banks made a quick $13 billion in profits, which they then doled out to their executives as huge bonuses as a reward for their business acumen.

The fact that there has been no outcry against Federal Reserve head Ben Bernanke shows how the entire government and the major media is in the tank for the banks. The secrecy under which the Federal Reserve acts must end. It is a public body that is supposed to work for the public interest. It should not be allowed to become the private slush fund of the oligarchy.