Today's Teamster News 01.31.13

Libor Lies Revealed in Rigging of $300 Trillion Benchmark   Bloomberg  ...the manipulation of Libor stands out for its breadth and audacity. Details are only now revealing just how far-reaching the scam was...
Activists shine a light on secretive Trans-Pacific Partnership talks  The Straight  ...“We are talking about allowing, basically, a parallel system that would undermine national sovereignty...It would allow conglomerates to sue citizens, threaten citizens, and remove [Internet] content that they disagree with or that they think is infringing on their intellectual property.”...
GOP's Electoral Vote Scheme Already on Life Support  Talking Points Memo  ...Key Republican officials in Virginia, Ohio, Florida, and Michigan are coming out against a RNC-backed scheme to rig the electoral vote in Democratic-leaning states in order to boost Republican presidential candidates. That leaves just Pennsylvania and Wisconsin ...
States Tax The Richest 1 Percent At Half The Rate Of The Poor  Think Progress  ...The poorest Americans are subject to a tax rate at the state and local level that is twice as high as the tax rate paid by the wealthiest earners... Middle-class taxpayers also pay higher effective rates than the wealthy....
Right-to-work bill back before N.H. Legislators  Associated Press  ...Legislation that would excuse nonunion employees from contract-negotiation fees is up for discussion once again before lawmakers, after two recent failed attempts...
UAW, salaried Chrysler workers receiving bonuses or profit sharing checks  Michigan Live  ...All eligible Chrysler Group LLC’s salaried and hourly workers will receive either a performance bonus or a profit-sharing check ... the Auburn Hills-based automaker’s turnaround ... included a $1.7 billion profit, up from $183 million in 2011...
Hoffa Statement On The Decline In U.S. Gross Domestic Product  IBT   ...the U.S. economy is shrinking due to a fall in government spending. That should tell us that government austerity is not just wrong, it's bad economic policy...
Hoffa Statement On President Obama's Immigration Reform Proposal  IBT ...We're especially concerned that the final result truly protects all workers and isn't reminiscent of guest worker programs of the past...
Nowak Sworn In As New President of Michigan Teamsters Joint Council 43  IBT ...Determined to chart a new course for Michigan Teamsters during the challenging months and years ahead, Teamsters Local 1038 President Greg Nowak was sworn in today...
Durham, Teamsters Negotiate on School Bus Driver Salaries  Mount Pleasant Patch   ...A Durham School Services spokesman said Wednesday the company is offering school bus drivers a 3 percent raise in response to their request for a 12 percent raise, ABC News 4 reported...In response to Durham's press conference Wednesday, Teamsters 509 released this statement: Durham School Services initially told us they did not want to negotiate this contract through the media. We have honored their request despite the fact that they have not done the same...
Sanitation workers end strike against Republic Services  The Commercial Appeal  ...The 180 members of Teamsters Local 984 still don't have a contract with Republic Services; it expired last fall. But they decided to end a three-day strike after learning the company is handing over bonus checks that were two weeks late...
Workers at Avis Budget Group in Florida Join Teamsters Local 385  IBT  ...by a 15-7 vote, workers at the Avis Budget Group chose to join Local 385 in Orlando, Florida. There are 27 workers in the bargaining unit, located at Orlando International Airport...
Arkansas Best Corp. Reports Loss, Seeks End to Teamsters Talk  Arkansas Business Online  ...ABF Freight System Inc. expects contract negotiations with the International Brotherhood of Teamsters to be resolved by a March 31 deadline, but the CEO of its parent company said Wednesday that the firm is exploring options in case a new agreement can't be reached...
Union: We offered to suspend NYC school bus strike, but Bloomberg said 'no'  Staten Island Advance ...The striking workers of Amalgamated Transit Union Local 1181 say they've offered a two-to-three-month "cooling off" period where they would return to their school bus routes...

Mitt Romney's tax dodges, Part IX

Rolling Stone's thorough reporting allowed us to present what we thought was an eight-part series about Mitt Romney's tax dodges. But yesterday we read a Bloomberg report about another one. So today we bring you the charitable remainder trust tax-avoidance scheme.

THE CHARITABLE REMAINDER TRUST DODGE

According to Bloomberg, 

In 1997, Congress cracked down on a popular tax shelter that allowed rich people to take advantage of the exempt status of charities without actually giving away much money. 

Individuals who had already set up these vehicles were allowed to keep them. That included Mitt Romney, then the chief executive officer of Bain Capital, who had just established such an arrangement in June 1996 

...Romney used the tax-exempt status of a charity -- the Mormon Church, according to a 2007 filing -- to defer taxes for more than 15 years. At the same time he is benefiting, the trust will probably leave the church with less than what current law requires, according to tax returns obtained by Bloomberg this month through a Freedom of Information Act request.

Bloomberg explains that Romney was basically renting his favorite charity's tax-exempt status. Here's how it works:

When individuals fund a charitable remainder unitrust, or “CRUT,” they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity.

As trusts and estates attorney Michael Arlein said,

The Romneys get theirs off the top and the charity gets what’s left. So by definition, if it’s not performing as well, the charity gets harmed more.

Mitt Romney's tax dodges, Part VIII

Here is what we thought would be the last installment of an eight-part series about Mitt Romney's tax dodges, compliments of Rolling Stone. But today we got a surprise from a different publication about another Romney tax dodge. So we bring you the penultimate installment in a nine-part series showing how Mitt Romney fails to pay his fair share of taxes.

Today it's the Tax-Free Trust.

TAX-FREE TRUST

Romney has shifted enormous wealth – as much as $100 million – into a family trust, a fortune he doesn't include in the $250 million estimate of his net worth. His campaign admits he paid no gift taxes in transferring assets to the trust, even though individual gifts above $13,000 are subject to taxation. A direct gift of $100 million would have incurred a tax hit of at least $29 million, according to Michael Graetz, a former Treasury official under George H.W. Bush.

How did Romney skirt the limits on gifts? Tax experts believe that he made his contributions to the trust in the form of the carried interest he received from his Bain funds. For income-tax purposes, the assets were technically valued at zero, because the gains would not be taxed until the fund's investments were cashed out years later. In reality, though, Romney could have sold his carried interest to a third party for millions – making it absurd for him to pretend that his gift had no market value. Yet even if the move was illegal, Romney has nothing to fear: Tax returns on gifts are almost never audited, and they can't be challenged at all after three years.

Romney also used a scheme called an "intentionally defective grantor trust" to dodge the gift tax. Instead of having the trust pay taxes on its profits, Romney pays the tax bill himself. That keeps more money in the trust – amounting to another massive transfer of wealth that evades the gift tax. Even worse, the trust is exempt from the estate tax – meaning Romney's heirs will eventually pocket some $31 million they would have owed in taxes had he not siphoned off his fortune into the trust, tax-free.

Read the whole thing here.

Mitt Romney's tax dodges, Part VII

It's taking us more than a week to share Rolling Stone's report all the ways Mitt Romney avoided paying taxes on the fortune he made harvesting companies at Bain Capital. This one's a little complicated. But note the practices described in Part VII were investigated by New York's attorney general.

FEE FAKERY

Not content with the carried-interest boondoggle, Bain also uses a scheme known as fee conversion to transform smaller management fees – which are supposed to be taxed as regular earnings – into investment income taxed at only 15 percent. A Bain manager simply "waives" his right to his fee and is instead staked an investment of equal value in the private equity fund. Because the manager can then cherry-pick from the fund's investments, he is virtually guaranteed a rich return – flouting the spirit of the lower tax rate on capital gains, which is designed to reward investors who take risks with their money. "Because they didn't receive the cash, they claim that it's not a taxable event," says Fleischer. "It's not legal." New York's attorney general has launched a criminal investigation into the practice.

Romney denies he took part in such waivers, which may have robbed the Treasury of up to $220 million. But according to Fleischer, Romney's financial records suggest he "benefited personally from fee conversion." He also served as the sole shareholder in the firm that set up the deals, making him legally responsible for determining how Bain structured them.

Read the whole thing here.

Mitt Romney's tax dodges, Part VI

The nice thing about being superrich is that you don't have to play by the same rules that everybody else does. Mitt Romney pays taxes at a lower rate on his fortune than nurses or law enforcement officers pay on their middling incomes.

Here we bring you an explanation of how Romney gets away with it, thanks to Rolling Stone.


A BIG LOOPHOLE

For political purposes, Romney claims his investments are held in a blind trust that he doesn't actively manage. (In fact, the trust sees just fine: It's managed by a close friend and is invested heavily in his son Tagg's hedge fund.) But if Romney told the IRS he were merely a passive investor, he wouldn't qualify for his most notorious tax break: the loophole for carried interest.

Here's how it works: Bain partners earn a cut of the profits from the investments they manage – usually 30 percent. This "carried-interest" is not a return on any personal investment they made – it's just another form of compensation, like an ordinary paycheck. Yet under the carried-interest loophole, the earnings are taxed at the capital gains rate of 15 percent, rather than the income-tax rate of 35 percent. (They're also completely exempt from payroll taxes, which support Social Security and Medicare.) "When Romney says, 'I have a low tax rate because most of my income comes from investments,' that's not really true," says Fleischer. "He's receiving carried interest in exchange for past services."

Indeed, more than a decade after he left Bain, Romney is still booking carried interest as though he were actively leading the firm. Ann Romney's blind trust also claims carried interest, for allegedly "performing services" for a Bain fund in the Caymans. In the past two years alone, the loophole has allowed the Romneys to dodge $2.6 million in taxes.

Read the whole thing here.

Mitt Romney's tax dodges, Part V

Now that we've told you about four countries where Mitt Romney hides money, we are moving on to his U.S.-based, er, techniques.

We are indebted to Rolling Stone for bringing us this eight-part series on ways the Republican presidential candidate avoids paying his fair share of taxes. So if you think he's the guy to make sure the benefits of our economy go to regular working and middle-income families -- well, good luck with that.

Today, thanks to Rolling Stone, we bring you Romney's retirement tricks.

RETIREMENT TRICKS

Romney has stockpiled as much as $87 million in his IRA – even though contributions to such retirement accounts are limited to just $30,000 a year. "Congress never intended IRAs to be used to accumulate that kind of wealth," says Wilkins. To get around the limits, Romney appears to have directed his IRA to invest in a special class of Bain stock. By assigning an artificially low value to the shares, Bain ensured that any returns would be wildly inflated – as much as 30 times the initial investment. By buying rigged stock with his limited IRA dollars, Romney got to reap the bonanza tax-free.

Romney also padded his IRA by investing in "blocker funds" that Bain has set up in the Caymans. Such funds attract tax-exempt investors – like college endowments or Romney's IRA – that want to avoid paying the Unrelated Business Income Tax, a 35 percent penalty designed to prevent tax-exempt investors from having an unfair advantage over for-profit businesses in private-equity deals. But by buying shares in offshore blocker funds that then invest in Bain and other takeover artists, investors like Romney bilk the Treasury out of $100 million a year. "It's an absurdly easy escape," says Shaviro.

Read the whole thing here.

Mitt Romney's tax dodges, Part IV

No tax dodge would be complete without the Cayman Islands, and you can bet Mitt Romney took advantage of it!

Rolling Stone brings us the eight ways Mitt Romney avoids paying his fair share of taxes. Here we bring you Part IV:

Cayman Cash

Romney has nearly $30 million stashed in at least a dozen Bain funds in the Cayman Islands, where, as one filing boasts, investments are free from "income, estate, transfer, sales, or other Cayman Islands taxes."

But because some of those funds are directly invested in U.S. companies, they likely disclose their investors to the IRS, making them unattractive to tax cheats. So Bain also raises capital for its deals by selling shares in "feeder funds" – intermediary entities that invest in Bain's official funds, but don't have to make disclosures to the IRS. "If you want to cheat, they've rolled out the red carpet for you," says Wilkins.

Has Romney paid all his taxes on the shady funds? Only he and the IRS know for sure. But even if Romney never cheated personally, the feeder funds he appears to have invested in cater to tax criminals, making it easier for him and his Bain partners to raise capital and rake in big management fees.

Romney is profiting from one form of tax evasion in the Caymans: equity swaps. Under this racket run by top Wall Street banks, American firms pay out their profits – tax-free – to investment funds based in the Caymans. According to a Senate investigation, the purpose of these complex instruments is "to dodge payment of U.S. taxes on U.S. stock dividends." Romney has more than $1.25 million invested in four funds that profit from equity swaps – including two managed by Goldman Sachs.

Read the whole thing here. And thanks to Rolling Stone!

Mitt Romney's tax dodges, Part III

We bring you part III in the eight-part series on Mitt Romney's tax dodges. Rolling Stone first published them earlier this month. We are deeply grateful.

This one, the Luxembourg Shelter, is short but sweet -- for Mitt.

Luxembourg Shelter

In 2000, when Romney was CEO of Bain, the firm hit the jackpot: A $40 million investment in the Italian yellow pages during the tech boom returned an astonishing $1 billion. Romney himself reportedly ended up with $50 million – a cut larger than Bain's initial investment. To evade taxes on the gains, Romney steered the profits through Bain subsidiaries in Luxembourg, Europe's most notorious tax shelter, where the money would be exempt from foreign taxes. In 2009, as a board member for Marriott, Romney also helped the hotel chain use the same tax tricks to shelter more than $200 million in Luxembourg. Marriott wound up paying less than half the corporate tax rate – just 16.9 percent.

Read the whole thing here.

Mitt Romney's tax dodges, Part II

Rolling Stone provides us with a helpful guide to Mitt Romney's tax-avoidance schemes. Yesterday we brought you Part I, "Bermuda Shell Game." Today we bring you the second installment in this eight-part series, "Swiss Secrecy."

Thanks again to the good people at RS.

Swiss Secrecy

On his 2010 tax return, Romney disclosed that his wife Ann's trust held $3 million in a Swiss bank account at UBS, which had just been busted by the IRS for abetting criminal tax evasion by U.S. citizens. As part of a $780 million settlement, UBS was forced to turn over the names of thousands of its long-secret clients, who were then offered a partial amnesty: disclose their hidden assets, pay penalties and avoid prosecution. Romney – who had omitted the Swiss account on previous financial disclosures – suddenly came clean. Did he reveal his secret account to avoid prosecution for tax evasion? "He's not quite denied that," says Daniel Shaviro, a professor of tax law at NYU. The record of paying an IRS penalty on the Swiss account could explain why Romney has been so determined to keep his 2009 tax return under wraps.

Read the whole thing here.

Mitt Romney's tax dodges, Part I

The good folks at Rolling Stone recently published an expose of the way Mitt Romney hides his fortune. That lets him avoid paying taxes. Though Romney is worth at least $250 million (and possibly much more), he pays taxes at a 14 percent rate. That's lower than many teachers and firefighters.

Tim Dickinson brings us the gory details of his tax dodges. We will bring them to you one at a time so you can fully absorb their impact.

We'll start with the Bermuda Shell Game. Dickinson tells us,

Romney has buried an unknown, and perhaps significant, chunk of his wealth in what SEC filings describe as "a Bermuda corporation wholly owned by W. Mitt Romney" – driving speculation that the candidate is worth far more than he has disclosed publicly. Wealthy Americans frequently launder investments through such offshore shell companies, passing themselves off as foreign investors – a scam that makes them exempt from paying U.S. taxes, even on profits from American deals. Romney created his shell company, Sankaty High Yield Asset Investors, in 1997 and reportedly involved it in many of Bain's biggest deals, including the takeover of Domino's Pizza. Yet he failed to report its existence on any financial disclosures prior to his 2010 tax return, even though it is under his control. "What is this corporation? What does it do? Why was it set up in a tax haven?" asks (Rebecca) Wilkins (senior counsel at Citizens for Tax Justice). "There's a reason why it's in Bermuda."

You can read the whole thing here.

Today's Teamster News 11.24.11

As Work Goes Global, Will Holidays Disappear?  Bloomberg   ...With more and more business conducted across borders, workers find it increasingly difficult to rest on national or religious holidays...
Teamsters sue to keep Mexican trucks out  Detroit News   ..."Opening the border to these dangerous, dirty trucks is an attack on highway safety, an attack on American truckers and warehouse workers, an attack on border security and an attack on our environment," said Teamsters General President Jim Hoffa...
Wisconsin led nation in Oct job losses  The Cap Times   ...No press release from the Governor's office on this one...
Fatalism and the American Dream  New York TImes   ...(A) report, which examined economic and social mobility in 10 Western countries, found that Americans actually appear to have less control over their success in life than their counterparts do...
The Average Bush Tax Cut For The 1 Percent This Year Will Be Greater Than The Average Income Of The Other 99 Percent  Think Progress   ... congress’ fiscal super committee failed to craft a deficit reduction package due to Republican refusal to consider tax increases on the super wealthy...
Live Blog for #Occupy Movement: Protests, Events Planned for Black Friday & Thanksgiving  firedoglake   ...With many encampments still setup around the country, it is to be expected that there will be stories of occupations having Thanksgiving at their camps...

Today's Teamster News 08.04.11

Scott Walker took his anti-union marching orders from Americans for Prosperity  Blogging Blue   ...Americans For Prosperity has taken to sending out fraudulent mailers to Democratic voters in two Republican State Senate districts (districts 8 & 10), urging those voters to send in their absentee ballots by August 11, which is two days after those recall elections will have been decided...
Ballot language for Senate Bill 5 approved after hours-long meeting  Cleveland Plain Dealer   ...The Republican-controlled Ohio Ballot Board unanimously ruled that a "no" vote would go toward repealing SB 5 while a "yes" vote would go toward upholding the law...
Nixon: Special session is best chance to reform tax credits  St. Louis Post-Dispatch   ...Gov. Jay Nixon used a speech to school administrators today to press his case for reducing state tax credits that go to housing developers and historic preservationists...
Voters give Corbett positive job approval rating  Pittsburgh Post-Gazette   ...The Republican governor is enjoying a 44-36 percent job approval, his first noticeable boost since he took office in January, according to a Quinnipiac University poll...
Record Numbers Are Receiving Food Stamps  Bloomberg News   ...The number of Americans receiving food stamps rose to a record 45.753 million in May, up 2.5 percent from the previous month, the Department of Agriculture said...
Odds of U.S. Recession Seen Rising by Academic Panel Majority  Bloomberg News   ...The two-year-old U.S. recovery’s staying power may be diminishing as consumers and the government pare spending, say five of the nine economists on the academic panel that dates recessions...

Stop the corporate freeloaders (video)

If corporations can be treated as individuals under election law, why aren't they required to pay the same percentage of taxes that individuals pay under tax law?

Teamster friend Sen. Bernie Sanders of Vermont told us last week that 10 of the biggest corporations in thw country pay no taxes. On top of that, the IRS gives THEM money.

Economic Populist listed the corporations that Sanders mentioned in the speech featured here:

1. Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2. Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3. Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4. Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

5. Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

6. Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7. Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

8. Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

10. Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.