New Study Shows Capital Gains Tax Cuts Biggest Contributor to Income Inequality

Original Link: http://www.policyshop.net/home/2013/2/21/new-study-shows-capital-gains-tax-cuts-biggest-contributor-t.html

By Mijin Cha

A new study looking at changes in wages and salaries, capital income, and in taxes found that capital gains and dividends made the largest contribution to income inequality. As the study states:

By far, the largest contributor to this increase (in income inequality) was changes in income from capital gains and dividends. Changes in wages had an equalizing effect over this period as did changes in taxes. Most of the equalizing effect of taxes took place after the 1993 tax hike; most of the equalizing effect, however, was reversed after the 2001 and 2003 Bush-era tax cuts.

Capital gains were already the largest contributor to income inequality in 1991. But by 2006, the contribution of capital gains to income inequality almost doubled. Capital gains contributes so much to income inequality because of the large increase in their share of after-tax income. Continuously cutting the tax rate meant that more after-tax income came from capital gains and dividends.

The rise in income inequality is due more to changes at the top of the income distribution than at the bottom. While income for all Americans grew 25 percent from 1996 to 2006, it grew 74 percent for the top 1 percent and 96 percent for the top 0.1 percent. A large part of this was again driven by continuous cuts to income and capital gains taxes.

In short, the affluent have been keeping more and more of their income while ordinary Americans have faced stagnant wages and disappearing benefits.

Unmasking the most influential billionaire in U.S. politics

Original Link: http://www.latimes.com/business/la-fi-hiltzik-20121003,0,376906.column

By Michael Hiltzik

he most influential billionaire in America is Peter G. Peterson, whose misleading campaign to 'reform' traditional social welfare programs has subtly set the terms of the Washington debate.

Who's the most influential billionaire business figure in national politics?

If you answered one of the Koch brothers (Charles or David) or George Soros, you're wearing your partisan blinders. The former are known for their devotion to conservative causes, the latter to liberal. In either case, you're wrong.

The most influential billionaire in America is Peter G. Peterson. The son of Greek immigrants, Peterson, 86, served as Commerce secretary under President Nixon, then became chairman and chief executive of Lehman Bros. Subsequently, he made his big money as co-founder of the Wall Street private equity firm Blackstone Group.wealthy liberals commit $10 million to Dem 'super PACs'a beating, but billionaires rake in the cash

Peterson doesn't attract venom from the left like the Koch family or bile from the right like Soros. In Washington, he's treated with sedulous respect as a serious thinker about public policy willing to support earnest public discussion with cold cash. His money backs a large number of think tanks across the political spectrum; he has started a news outlet churning out articles about fiscal matters and is funding a high school curriculum aimed, according to its creators at Columbia University, at "teaching kids about the national debt."

Peterson's views are subtly infiltrating the Washington debate — which is why Americans should start getting worried about him.

He isn't content merely to express concern about the federal deficit. His particular targets are Social Security, Medicare and Medicaid, which he calls "entitlement" programs and which he wants to cut back in a manner that would strike deeply at the middle class.
Many beneficiaries of Peterson grants are, like the high school syllabus, initiatives sounding the alarm on the federal deficit. And although everyone agrees that too much borrowing can be bad for the country, the real question is what to do about it.

It's a measure of Peterson's achievement that for Washington Republicans and Democrats alike, the idea that social insurance programs such as Medicare and Social Security desperately and urgently need "reform" has become a foundation stone of the debate, even though Peterson's evidence can be misleading and his contentions questionable. That points to the question of whose interests Peterson is really promoting when he talks about ratcheting back programs that were designed from their inception as universal benefits.

Peterson hasn't flown entirely under the radar; indeed, some of his beneficiaries have started to play down their associations with him. That's the case with the Comeback America Initiative, an anti-deficit program founded by David Walker, a former U.S. comptroller general who headed the Peter G. Peterson Foundation from 2008 to 2010. A significant portion of the group's budget comes from a three-year $3.1-million Peterson Foundation grant. But when Walker embarked on a nationwide bus tour to sound the deficit alarm, he took pains to insist that Peterson had nothing to do with funding it, even though the tour is running under the Comeback America banner.

The reason: "Pete's a great man, he's done great work, but he's also a lightning rod," Walker told me.
Walker attributes some of the lightning to Peterson's background as a Republican and a Wall Street billionaire. He adds, "Pete's focused on reforming social insurance programs, and that's gotten some elements of the left exercised."

Still, Peterson's influence in national politics stems largely from his ability to make his interests appear eclectic and nonpartisan. That allows intellectuals and luminaries of all political creeds to feel comfortable in the Peterson Foundation's capacious shade, displaying their public spirit as if it's a perk of eminence. The foundation's advisory board includes as members former New York Gov. Mario Cuomo; Facebook Chief Operating Officer Sheryl Sandberg; former Secretary of State George Shultz (a Republican) and former Treasury Secretary Robert Rubin (Democrat); former Federal Reserve Chairman Paul Volcker; and "60 Minutes" correspondent Leslie Stahl.

The foundation's roster of grant recipients has been similarly eclectic: the right-wing Heritage Foundation and the liberal Brookings Institution. The progressive Center for American Progress, the free-market American Enterprise Institute and the pro-union Economic Policy Institute. The independent public interest news organization ProPublica.

It might be churlish to say these organizations have been co-opted by Peterson money; let's just observe that sowing largesse so widely may help ensure that any criticism of Peterson's activities remains respectful and judicious.

On the other hand, his connections can be hard to keep straight: In 2009, for example, the Washington Post published a news article talking up an ostensibly independent effort to create a bipartisan deficit-cutting commission in Washington. The piece included approving comments from Robert L. Bixby, executive director of the "nonpartisan" Concord Coalition. What wasn't disclosed is that the Concord Coalition was funded and co-founded by Pete Peterson, and that the article itself had been provided to the Post by Fiscal Times, the news outlet launched by, yes, Pete Peterson.

The avoidance of overt political partisanship enables Peterson to engage in something more insidious: economic partisanship. That's what makes it worthwhile to examine his approach to Social Security, Medicare and Medicaid, and how it has spread.

Peterson declined to be interviewed for this column. But his views on "entitlement reform" have been set forth in writing often, perhaps most clearly in a 1994 article in the New York Review of Books. There he praised President Clinton for his budget-cutting but damned him for promising Americans "broad new entitlements in health, employment, retirement and education." Peterson urged instead "putting an end to the vast and largely unearned windfall we now give to the more affluent half of all American households."

That prescription encompasses several feats of legerdemain. For one thing, most recipients of Social Security and Medicare have spent their lives earning the benefits through payroll taxes. For another, the fiscal issues faced by Social Security and Medicare are distinguishable — Social Security is not facing an immediate crisis and may not for decades; Medicare's crisis stems entirely from the externality of rising healthcare costs. Finally, "more affluent" is not synonymous with "affluent": the "more affluent half" of U.S. households in 1994 were those earning $32,000 or more, according to the Census Bureau. That would be $48,418 in today's dollars. Today, the median figure is about $50,000, which shows that the average American family hasn't progressed much over that time.

Nevertheless, Peterson argued that too much money was going to the "middle class." He defined that segment as households earning $30,000 to $200,000, "which, however, hard-pressed, cannot claim to be destitute." He observed that cutting off entitlement outlays to these recipients "would balance the budget, and would so with a comfortable surplus to spare."

Peterson still argues that the typical person bearing such cuts would scarcely feel them. In a video interview posted on the foundation website, he states, "A substantial part of these retirement payments go to people like me."

Well, not really. The $1.14 billion in Social Security payments that went to recipients earning $1 million or more in 2009 amounted to 17-hundredths of 1% of all benefits paid out.

Walker says Peterson has refined his approach to the deficit over time: "He's diversifying. He's funded things dealing with defense and other spending, and he recognizes now that healthcare costs are the main driver" of federal deficits. Walker, whose organization plainly remains part of the Peterson family circle (notwithstanding the bus tour), says that "it's flat not true that his desire is to slash the social safety net.... But he recognizes, as does any knowledgeable person, that you've got to reform those programs as part of a comprehensive grand fiscal bargain."

Walker's own initiative, like others carrying the Peterson imprimatur, properly acknowledges that fiscal responsibility requires tax increases as well as spending cuts, though people can argue in good faith about how to balance the two. But the hallmark of Peterson's worldview is to view social insurance programs such as Social Security and Medicare strictly as fiscal expense items, ignoring their roots as moral commitments to American citizens that cross generations and unite economic classes.

These programs form the warp and woof of the American fabric. Portraying them, as Peterson does, as "safety net" initiatives that have outlived their relevance for all but the most destitute Americans is an artful way of destroying their universal appeal.

The danger in the economic debate in Washington comes from treating our fiscal problems as if they spring from the structure of our emblematic public social insurance programs, when the truth is that ill-advised tax cuts and unrestrained military spending have played a more important role.

The shame of Washington, on the other hand, comes from the fact that almost every organization promoting the grand fiscal bargain in which those programs will be on the table has accepted, somewhere and somehow, money from Pete Peterson.

Pete Peterson’s “Fix the Debt” Astroturf Supergroup Detailed in New Online Resource at PetersonPyramid.org

Original Link: http://www.prwatch.org/news/2013/02/11990/pete-peterson%E2%80%99s-%E2%80%9Cfix-debt%E2%80%9D-astroturf-supergroup-detailed-new-online-resource-publ

One of the most hypocritical corporate PR campaigns in decades is advancing inside the beltway, attempting to convince the White House, Congress, and the American people that another cataclysmic economic crisis is around the corner that will destroy our economy unless urgent action is taken. Soon this astroturf supergroup may be coming to a state near you.

“We would not be here if it wasn’t for the Peterson Foundation and Pete Peterson. They laid the groundwork and we stand here on their shoulders.” – Fix the Debt Co-Founder Erskine Bowles
Today the Center for Media and Democracy launches a new wiki resources on the funding, leaders, partner groups and lobbyists of the Campaign to Fix the Debt, see it here at PetersonPyramid.org.

Move over David Koch and George Soros! The effort is being bankrolled by one of the wealthiest men in the nation. Peter G. Peterson made a fortune at the Blackstone Group on Wall Street. He conveniently cashed out with $2 billion shortly before the 2008 financial meltdown and now has pledged to spend $1 billion of that payout to convince Americans -- who overwhelmingly want to keep and strengthen Social Security and Medicare -- that these programs threaten our very existence as a nation.

His task is a tough one.

After Mitt Romney picked famed “deficit hawk” Paul Ryan for vice-president, the two barnstormed the country warning audiences that U.S. debt and deficits were like a “prairie fire” moving ever closer to our “homes and our children.” To save our kids from conflagration, America needed to rein-in out-of-control spending.

Voters sent the deficit scolds packing. Economists warned that austerity during an economic downturn was a recipe for disaster and polls consistently showed that jobs were America’s top priority with the deficit trailing well down the list.

To overcome this wall of opposition, Peterson needed a new strategy. For years, he had funded think tanks, seminars, national tours, town hall meetings, TV ad campaigns, college TV, school curricula, online media and even a motion picture -- all in an effort to convince America that deficits would one day sink the economy. Now Peterson needed something bigger and better than before -- and the Campaign to Fix the Debt was born.

Peterson rallied the crème de la crème of the 1% to his cause. Hiding their self-serving motives and wrapping themselves in patriotic language of “shared sacrifice,” 127 CEOs have signed up to his Campaign to Fix the Debt. Accompanied by elder “statesmen” (many of whom have gone through the revolving door and have undisclosed financial ties to firms that lobby for tax loopholes and other corporate welfare that contribute to the deficit), plus four PR firms, 80 full-time staff members, 23 phony state chapters, and a raft of Peterson-funded “partner organization,” Fix the Debt has targeted a budget of $60 million in "the first phase."

Key to the strategy is ginning up a crisis. In lockstep, the CEOs, politicians, and partner organizations stormed the media last fall warning of the looming disaster of the so-called “fiscal cliff.” Breaching the fiscal cliff “will lead to chaos,” warned Erskine Bowles; “derail the fragile recovery,” said Goldman Sachs CEO Lloyd Blankfein; generate a "shock to the financial markets and a painful return to the recession,” said the CEO of Morgan Stanley.

But this chorus of calamity was pure hype. One Fix the Debt steering committee member, former Tennessee governor Phil Bredesen, let slip that the strategy was to create an “artificial crisis” that would force Congress to act.

Their goal is to achieve a Simpson-Bowles style “grand bargain” on an austerity agenda for the United States by the nation’s 237th birthday on July 4, 2013.

But the Founding Fathers would be outraged at the shenanigans of these summer soldiers and phony patriots.

Many Fix the Debt firms pay a very low or even a negative average tax rate, contributing to the nation's deficit. Fix the Debt is secretly pushing for a major tax break that would exempt profits earned overseas by U.S. firms from taxation and encourage the offshoring of U.S. jobs. While the Fix the Debt CEOs call for cuts to Social Security, many of the publicly-traded Fix the Debt firms underfund their employee pension plans -- making their workers even more dependent on the popular social insurance plan that American workers pay into with each paycheck.

Plus, Fix the Debt steering commitee members have extensive ties to corporations lobbying to preserve dozens of costly tax breaks (such as the "carried interest loophole" that made Pete Peterson a rich man) that are not disclosed in their Fix the Debt bios. (Click here to see a chart of these conflicts (PDF) and share it with your local news producers and reporters every time you spot a Fix the Debt talking head.)

The reality is that the nation’s budget deficit is not caused by overspending; it is largely due to the collapse of the $8 trillion housing bubble. But fear mongering over the deficit “is preventing us from giving the same boost to the economy that got us out of the Great Depression,” says economist Dean Baker.

The Center for Media and Democracy tracks the PR industry, front groups, and corporate spin. We launched the award-winning ALECexposed investigation in 2011. Rarely have we seen such a well-financed astroturf supergroup as Fix the Debt.

New Online Resource on Campaign to Fix the Debt

Today, CMD is pleased to unveil -- in partnership with The Nation -- a new resource on the Campaign to Fix the Debt for the public and the media, that exposes the leaders, the Peterson-funded partners, the phony state chapters, the lobbyists and the stunt men (who convinced Alan Simpson to dance Gangnam Style) behind this massive PR effort.

Abolish The Income Tax: You Won't Believe Who Is Getting Away …

Original Link: http://taxes-info.com/abolish-the-income-tax-you-wont-believe-who-is-getting-away.html

The sovereign income taxation is a bad fun and it needs to be abolished. All over a nation, tough operative American families are being positively dejected by rough levels of taxation, and a politicians are constantly coming adult with new ways to remove income from all of us any singular year. Meanwhile, many ultra-wealthy Americans and many of a many essential companies in a republic compensate small to 0 in taxes. In fact, as we will see below, there are dozens of really distinguished companies that make billions of dollars in increase and nonetheless don’t compensate a dime in taxes. Tax deterrence has turn a multi-billion dollar attention in a United States. Those that have a resources to “play a game” use bombard companies, offshore taxation havens and a thousands of loopholes in a taxation formula to minimize their taxation burdens as many as possible.

Meanwhile, a rest of us get positively hammered. This is essentially unfair. The sovereign income taxation complement is irreversibly damaged during this point, and it is time to annul it. If we consider that a sovereign income taxation complement can be “fixed”, afterwards we substantially have never difficult it. Our taxation formula is scarcely 4 million difference prolonged and it is positively riddled with thousands of loopholes that preference immeasurable companies and a ultra-wealthy. We should come adult with a better, fairer approach to account a government. The United States once prospered severely nonetheless a sovereign income tax, and it could do so again.

Many people simply do not trust that it is probable for companies inside a United States to make billions of dollars in increase any year and not compensate a dime in income taxes.

Well, according to a news put out by Public Campaign, that is accurately what is happening. Posted subsequent are numbers that come directly from their report. 30 immeasurable companies are listed, and 29 of them had a taxation weight for 2008 by 2010 that was reduction than 0 even nonetheless they all done huge profits. And all 30 of them spent some-more on lobbying than they did on taxes.
The numbers that we are about to see are for 2008, 2009 and 2010 combined. For “taxes paid”, greatfully note that for 29 of a companies a negative series is given. That means that a net taxation guilt for 2008 by 2010 was indeed reduction than zero.

After saying these numbers, is there anyone out there that is still peaceful to explain that a taxation complement is “fair”?…

General Electric
U.S. Profits: $10,460,000,000
Taxes Paid: ‐$4,737,000,000

PGE Corp.
U.S. Profits: $4,855,000,000
Taxes Paid: ‐$1,027,000,000

Verizon Communications
U.S. Profits: $32,518,000,000
­Taxes Paid: ‐$951,000,000

Wells Fargo
U.S. Profits: $49,370,000,000
­Taxes Paid: ‐$681,000,000

American Electric Power
U.S. Profits: $5,899,000,000
­Taxes Paid: ‐$545,000,000

Pepco Holdings
U.S. Profits: $882,000,000
­Taxes Paid: ‐$508,000,000

Computer Sciences
U.S. Profits: $1,666,000,000
Taxes Paid: ‐$305,000,000

CenterPoint Energy
U.S. Profits: $1,931,000,000
Taxes Paid: ‐$284,000,000

NiSource
U.S. Profits: $1,385,000,000
­Taxes Paid: ‐$227,000,000

Duke Energy
U.S. Profits: $5,475,000,000
­Taxes Paid: ‐$216,000,000

Boeing
U.S. Profits: $9,735,000,000
Taxes Paid: ‐$178,000,000

NextEra Energy
U.S. Profits: $6,403,000,000
­Taxes Paid: ‐$139,000,000

Consolidated Edison
U.S. Profits: $4,263,000,000
­Taxes Paid: ‐$127,000,000

Paccar
U.S. Profits: $365,000,000
­Taxes Paid: ‐$112,000,000

Integrys Energy Group
U.S. Profits: $818,000,000
Taxes Paid: ‐$92,000,000

Wisconsin Energy
U.S. Profits: $1,725,000,000
Taxes Paid: ‐$85,000,000

DuPont
U.S. Profits: $2,124,000,000
Taxes Paid: ‐$72,000,000

Baxter International
U.S. Profits: $926,000,000
­Taxes Paid: ‐$66,000,000

Tenet Healthcare
U.S. Profits: $415,000,000
Taxes Paid: ‐$48,000,000

Ryder System
U.S. Profits: $627,000,000
­Taxes Paid: ‐$46,000,000

El Paso
U.S. Profits: $4,105,000,000
­Taxes Paid: ‐$41,000,000

Honeywell International
U.S. Profits: $4,903,000,000
­Taxes Paid: ‐$34,000,000

CMS Energy
U.S. Profits: $1,292,000,000
­Taxes Paid: ‐$29,000,000

Con-­way
U.S. Profits: $286,000,000
Taxes Paid: ‐$26,000,000

Navistar International
U.S. Profits: $896,000,000
­Taxes Paid: ‐$18,000,000

DTE Energy
U.S. Profits: $2,551,000,000
­Taxes Paid: ‐$17,000,000

Interpublic Group
U.S. Profits: $571,000,000
­Taxes Paid: ‐$15,000,000

Mattel
U.S. Profits: $1,020,000,000
­Taxes Paid: ‐$9,000,000

Corning
U.S. Profits: $1,977,000,000
­Taxes Paid: ‐$4,000,000

FedEx
U.S. Profits: $4,247,000,000
Taxes Paid: $37,000,000 (a rate of reduction than 1%)

Total
U.S. Profits: $163,691,000,000
­Taxes Paid: ‐$10,602,000,000

Just demeanour during that sum sum again.

Those 30 companies had sum increase of some-more than 163 billion dollars during those 3 years, and nonetheless a sum net taxation guilt of those companies was negative 10.6 billion dollars.
I wish we could make my taxes demeanour like that.

Another association that is creation headlines given of their taxes these days is Facebook.
It turns out that Facebook done some-more than a billion dollars in 2012 nonetheless did not compensate a singular dime in sovereign or state income taxes. The following is from a news that was usually expelled by Citizens for Tax Justice…

Earlier this month, a Facebook Inc. expelled a initial “10-K” annual financial news given going open final year. Hidden in a report’s footnotes is an extraordinary admission: notwithstanding $1.1 billion in U.S. increase in 2012, Facebook did not compensate even a dime in sovereign and state income taxes.

Instead, Facebook says it will accept net taxation refunds totaling $429 million.

According to Businessweek, Facebook has an additional 2 billion dollars in taxation credits that it will be means to use in destiny years…

Facebook says that it anticipates shortening a taxation guilt in a destiny by an additional $2.17 billion by regulating serve net handling detriment carry-forwards that it has banked.

And of march when it comes to abusing a taxation system, a big Wall Street banks are some of a misfortune offenders. The following is an mention from a news put out by a bureau of U.S. Senator Bernie Sanders…

Here are usually a few examples of how a companies and Wall Street banks these CEOs work for have significantly spoiled a economy and a sovereign budget:

1. Bank of America CEO Brian Moynihan

Number of Offshore Tax Havens in 2010? 371.

In 2010, Bank of America operated 371 subsidiaries incorporated in offshore taxation havens. 204 of these subsidiaries are incorporated in a Cayman Islands, that has a corporate taxation rate of 0%.
Amount of sovereign income taxes Bank of America would have due if offshore taxation havens were eliminated? $2.5 billion.

Bank of America has stashed $18.5 billion in offshore taxation havens to equivocate essential U.S. income taxes. Bank of America would owe an estimated $2.5 billion in sovereign income taxes if a use of offshore taxation deterrence was eliminated.

Amount of sovereign income taxes paid in 2010? Zero. $1.9 billion taxation refund.

Bank of America perceived a $1.9 billion taxation reinstate from a IRS in 2010, even nonetheless it done $4.4 billion in profits.

Taxpayer Bailout from a Federal Reserve and a Treasury Department? Over $1.3 trillion.
During a financial crisis, Bank of America perceived a sum of some-more than $1.3 trillion in probably 0 seductiveness loans from a Federal Reserve and a $45 billion bailout from a Treasury Department.

2. JP Morgan Chase CEO James Dimon

Number of Offshore Tax Havens in 2010? 83.

In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore taxation havens.
Amount of sovereign income taxes JP Morgan Chase would have due if offshore taxation havens were eliminated? $4.9 billion

JP Morgan Chase has stashed $21.8 billion in offshore taxation breakwater countries to equivocate payng income taxes. If this use was outlawed, it would have paid $4.9 billion in sovereign income taxes.

Taxpayer Bailout from a Federal Reserve and a Treasury Department? $416 billion
During a financial crisis, JP Morgan Chase perceived a sum of some-more than $391 billion in probably 0 seductiveness loans from a Federal Reserve and a $25 billion bailout from a Treasury Department, while Jamie DImon served as a executive of a New York Federal Reserve.

3. Goldman Sachs CEO Lloyd Blankfein

Amount of sovereign income taxes paid in 2008? Zero. $278 million taxation refund.

In 2008, Goldman Sachs perceived a $278 million reinstate from a IRS, even nonetheless it warranted a distinction of $2.3 billion that year.

Number of offshore taxation havens in 2010? 39.

In 2010, Goldman Sachs operated 39 subsidiaries in offshore taxation breakwater countries.
Amount of sovereign income taxes Goldman Sachs would have due if offshore taxation havens were eliminated? $3.32 billion.

Goldman Sachs has stashed $20.63 billion in offshore taxation breakwater countries to equivocate essential income taxes. If this use was outlawed, it would have paid $3.32 billion in sovereign income taxes.

Taxpayer Bailout from a Federal Reserve and a Treasury Department? $824 billion.
During a financial crisis, Goldman Sachs perceived a sum of $814 billion in probably 0 seductiveness loans from a Federal Reserve and a $10 billion bailout from a Treasury Department.
—–
Are we starting to get a picture?

The immeasurable banks and a immeasurable companies make billions, nonetheless they compensate 0 or subsequent to nothing.

The rest of us bust a behind ends to try to get ahead, and we get gouged by dozens of opposite taxes.
Over time, a commission of a altogether taxation weight shouldered by companies has gotten smaller and smaller.

Back in 1950, corporate taxes accounted for about 30 percent of all sovereign revenue. In 2012, corporate taxes accounted for reduction than 7 percent of all sovereign revenue.

These days, immeasurable companies have turn comprehensive masters during avoiding taxes. In fact, there are many general taxation havens that are doing a sepulchral business in environment adult sham domicile for U.S. corporations. For example, a city of Zug, Switzerland usually has a race of 26,000 people nonetheless it is a domicile for 30,000 companies.

But companies are not a usually ones doing this kind of thing.

The ultra-wealthy have also mastered a art of legally not essential taxes.

As we mentioned in a previous article, it has been reported that a tellurian chosen have adult to 32 TRILLION dollars stashed in offshore banks around a globe.

With that volume of money, we could compensate off a whole U.S. inhabitant debt and still have adequate income left over to buy any product and use constructed in a United States during an whole year.

It is time to acknowledge that a taxation complement is broken.

Congress has had decades to repair it, and nonetheless a abuses usually keep removing worse.
What we are doing is not working.

We need to annul a income tax.

If we are still not assured that a sovereign income taxation is an wickedness and that we need to annul it, here are some some-more intolerable contribution about a taxation complement from one of my prior articles about taxes…

1 – The U.S. taxation formula is now 3.8 million difference long. If we took all of William Shakespeare’s works and collected them together, a whole collection would usually be about 900,000 difference long.
2 – According to a National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with sovereign taxation requirements. Imagine what a multitude would demeanour like if all that time was spent on some-more economically essential activities.
3 – 75 years ago, a instructions for Form 1040 were dual pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to a taxation formula over a final decade. It is impossibly dear to change taxation software, taxation manuals and taxation instruction booklets for all of those changes.
5 – According to a National Taxpayers Union, a IRS now has 1,999 opposite publications, forms, and instruction sheets that we can download from a IRS website.
6 – Our taxation complement has turn so difficult that it is roughly unfit to record your taxes correctly. For example, behind in 1998 Money Magazine had 46 opposite taxation professionals finish a taxation lapse for a suppositious household. All 46 of them came adult with a opposite result.
7 – In 2009, PC World had 5 of a many renouned taxation credentials program websites ready a taxation lapse for a suppositious household. All 5 of them came adult with a opposite result.
8 – The IRS spends $2.45 for any $100 that it collects in taxes.
9 – According to The Tax Foundation, a normal American has to work until Apr 17th usually to compensate federal, state, and internal taxes. Back in 1900, “Tax Freedom Day” came on Jan 22nd.
10 – When a U.S. supervision initial implemented a personal income taxation behind in 1913, a immeasurable infancy of a race paid a rate of usually 1 percent, and a tip extrinsic taxation rate was usually 7 percent.
11 – Residents of New Jersey compensate $1.64 in taxes for any $1.00 of sovereign spending that they get back.
12 – The United States is a usually republic on a world that tries to taxation adults on what they acquire in unfamiliar countries.
13 – According to Forbes, a 400 tip earning Americans compensate an normal sovereign income taxation rate of usually 18 percent.
14 – Warren Buffett had an effective taxation rate of usually 17.4 percent for 2010.
15 – The tip 20 percent of all income earners in a United States compensate approximately 86 percent of all sovereign income taxes.
16 – Sadly, as Bill Whittle has shown, we could take every singular penny that any American earns above $250,000 and it would usually account about 38 percent of a sovereign budget.
Please share this essay with as many people as we can. We have now entered a time of a year when tens of millions of Americans will be stuffing out their taxation returns, and a pain of going by that routine will make people even some-more receptive than normal to a law about how damaged a complement is.

So what do we think?

Do we consider that it is satisfactory for a ultra-wealthy and hugely essential companies to get divided with essential 0 taxes while we get hammered?

Do we trust that it is time to annul a income tax?

Please feel giveaway to post a criticism with your thoughts below…

Equal Opportunity, Our National Myth

Original Link: http://opinionator.blogs.nytimes.com/2013/02/16/equal-opportunity-our-national-myth/

By JOSEPH E. STIGLITZ

President Obama’s second Inaugural Address used soaring language to reaffirm America’s commitment to the dream of equality of opportunity: “We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own.”

The gap between aspiration and reality could hardly be wider. Today, the United States has less equality of opportunity than almost any other advanced industrial country. Study after study has exposed the myth that America is a land of opportunity. This is especially tragic: While Americans may differ on the desirability of equality of outcomes, there is near-universal consensus that inequality of opportunity is indefensible. The Pew Research Center has found that some 90 percent of Americans believe that the government should do everything it can to ensure equality of opportunity.

Perhaps a hundred years ago, America might have rightly claimed to have been the land of opportunity, or at least a land where there was more opportunity than elsewhere. But not for at least a quarter of a century. Horatio Alger-style rags-to-riches stories were not a deliberate hoax, but given how they’ve lulled us into a sense of complacency, they might as well have been.

It’s not that social mobility is impossible, but that the upwardly mobile American is becoming a statistical oddity. According to research from the Brookings Institution, only 58 percent of Americans born into the bottom fifth of income earners move out of that category, and just 6 percent born into the bottom fifth move into the top. Economic mobility in the United States is lower than in most of Europe and lower than in all of Scandinavia.

Another way of looking at equality of opportunity is to ask to what extent the life chances of a child are dependent on the education and income of his parents. Is it just as likely that a child of poor or poorly educated parents gets a good education and rises to the middle class as someone born to middle-class parents with college degrees? Even in a more egalitarian society, the answer would be no. But the life prospects of an American are more dependent on the income and education of his parents than in almost any other advanced country for which there is data.

How do we explain this? Some of it has to do with persistent discrimination. Latinos and African-Americans still get paid less than whites, and women still get paid less than men, even though they recently surpassed men in the number of advanced degrees they obtain. Though gender disparities in the workplace are less than they once were, there is still a glass ceiling: women are sorely underrepresented in top corporate positions and constitute a minuscule fraction of C.E.O.’s.

Discrimination, however, is only a small part of the picture. Probably the most important reason for lack of equality of opportunity is education: both its quantity and quality. After World War II, Europe made a major effort to democratize its education systems. We did, too, with the G.I. Bill, which extended higher education to Americans across the economic spectrum.

But then we changed, in several ways. While racial segregation decreased, economic segregation increased. After 1980, the poor grew poorer, the middle stagnated, and the top did better and better. Disparities widened between those living in poor localities and those living in rich suburbs — or rich enough to send their kids to private schools. A result was a widening gap in educational performance — the achievement gap between rich and poor kids born in 2001 was 30 to 40 percent larger than it was for those born 25 years earlier, the Stanford sociologist Sean F. Reardon found.

Of course, there are other forces at play, some of which start even before birth. Children in affluent families get more exposure to reading and less exposure to environmental hazards. Their families can afford enriching experiences like music lessons and summer camp. They get better nutrition and health care, which enhance their learning, directly and indirectly.

Americans are coming to realize that their cherished narrative of social and economic mobility is a myth.

Unless current trends in education are reversed, the situation is likely to get even worse. In some cases it seems as if policy has actually been designed to reduce opportunity: government support for many state schools has been steadily gutted over the last few decades — and especially in the last few years. Meanwhile, students are crushed by giant student loan debts that are almost impossible to discharge, even in bankruptcy. This is happening at the same time that a college education is more important than ever for getting a good job.

Young people from families of modest means face a Catch-22: without a college education, they are condemned to a life of poor prospects; with a college education, they may be condemned to a lifetime of living at the brink. And increasingly even a college degree isn’t enough; one needs either a graduate degree or a series of (often unpaid) internships. Those at the top have the connections and social capital to get those opportunities. Those in the middle and bottom don’t. The point is that no one makes it on his or her own. And those at the top get more help from their families than do those lower down on the ladder. Government should help to level the playing field.

Americans are coming to realize that their cherished narrative of social and economic mobility is a myth. Grand deceptions of this magnitude are hard to maintain for long — and the country has already been through a couple of decades of self-deception.

Without substantial policy changes, our self-image, and the image we project to the world, will diminish — and so will our economic standing and stability. Inequality of outcomes and inequality of opportunity reinforce each other — and contribute to economic weakness, as Alan B. Krueger, a Princeton economist and the chairman of the White House Council of Economic Advisers, has emphasized. We have an economic, and not only moral, interest in saving the American dream.

Policies that promote equality of opportunity must target the youngest Americans. First, we have to make sure that mothers are not exposed to environmental hazards and get adequate prenatal health care. Then, we have to reverse the damaging cutbacks to preschool education, a theme Mr. Obama emphasized on Tuesday. We have to make sure that all children have adequate nutrition and health care — not only do we have to provide the resources, but if necessary, we have to incentivize parents, by coaching or training them or even rewarding them for being good caregivers. The right says that money isn’t the solution. They’ve chased reforms like charter schools and private-school vouchers, but most of these efforts have shown ambiguous results at best. Giving more money to poor schools would help. So would summer and extracurricular programs that enrich low-income students’ skills.

Finally, it is unconscionable that a rich country like the United States has made access to higher education so difficult for those at the bottom and middle. There are many alternative ways of providing universal access to higher education, from Australia’s income-contingent loan program to the near-free system of universities in Europe. A more educated population yields greater innovation, a robust economy and higher incomes — which mean a higher tax base. Those benefits are, of course, why we’ve long been committed to free public education through 12th grade. But while a 12th-grade education might have sufficed a century ago, it doesn’t today. Yet we haven’t adjusted our system to contemporary realities.

The steps I’ve outlined are not just affordable but imperative. Even more important, though, is that we cannot afford to let our country drift farther from ideals that the vast majority of Americans share. We will never fully succeed in achieving Mr. Obama’s vision of a poor girl’s having exactly the same opportunities as a wealthy girl. But we could do much, much better, and must not rest until we do.

Secrets of the Rich

Original Link: http://www.monbiot.com/2013/02/18/secrets-of-the-rich/

By George Monbiot

Billionaires are hiding behind a network of “independent” groups, who manipulate politics on their behalf.

By George Monbiot,

Conspiracies against the public don’t get much uglier than this. As the Guardian revealed last week, two secretive organisations working for US billionaires have spent $118m to ensure that no action is taken to prevent manmade climate change(1). While inflicting untold suffering on the world’s people, their funders have used these opaque structures to ensure that their identities are never exposed.

The two organisations – the Donors’ Trust and the Donors’ Capital Fund – were set up as political funding channels for people handing over $1m or more. They have financed 102 organisations which either dismiss climate science or downplay the need to take action. The large number of recipients creates the impression that there are many independent voices challenging climate science. These groups, working through the media, mobilising gullible voters and lobbying politicians, helped to derail Obama’s cap and trade bill and the climate talks at Copenhagen. Now they’re seeking to prevent the US president from trying again(2).

This covers only part of the funding. In total, between 2002 and 2010 the two identity-laundering groups paid $311m to 480 organisations(3), most of which take positions of interest to the ultra-rich and the corporations they run: less tax, less regulation, a smaller public sector. Around a quarter of the money received by the rightwing opinion swarm comes from the two foundations(4). If this funding were not effective, it wouldn’t exist: the ultra-rich didn’t get that way by throwing their money around randomly. The organisations they support are those which advance their interests.

A small number of the funders have been exposed by researchers trawling through tax records. They include the billionaire Koch brothers (paying into the two groups through their Knowledge and Progress Fund) and the DeVos family (the billionaire owners of Amway)(5). More significantly, we now know a little more about the recipients. Many describe themselves as free market or conservative think tanks.

Among them are the American Enterprise Institute, the American Legislative Exchange Council, the Hudson Institute, Competitive Enterprise Institute, Reason Foundation, Heritage Foundation, Americans for Prosperity, Mont Pelerin Society and the Discovery Institute(6). All of them pose as learned societies, earnestly trying to determine the best interests of the public. The exposure of this funding reinforces the claim by David Frum, formerly a fellow of the American Enterprise Institute, that such groups “increasingly function as public-relations agencies”(7).

One name in particular jumped out at me: American Friends of the IEA. The Institute of Economic Affairs is a British group which, like all the others, calls itself a free market thinktank. Scarcely a day goes by on which its staff are not interviewed in the broadcast media, promoting the dreary old billionaires’ agenda: less tax for the rich, less help for the poor, less spending by the state, less regulation for business. In the first 13 days of February, its people were on the BBC ten times(8).
Never have I heard its claim to be an independent thinktank challenged by the BBC. When, in 2007, I called the institute a business lobby group, its then director-general responded, in a letter to the Guardian, that “we are independent of all business interests”(9). Oh yes?

The database, published by the Canadian site desmogblog.com, shows that American Friends of the IEA has received (up to 2010) $215,000 from the two secretive funds(10). When I spoke to the IEA’s fundraising manager, she confirmed that the sole purpose of American Friends is to raise money for the organisation in London(11). She agreed that the IEA has never disclosed the Donors’ Trust money it has received. She denied that the institute is a sockpuppet organisation: purporting to be independent while working for some very powerful US interests.

Would the BBC allow someone from Bell Pottinger to discuss an issue of concern to its sponsors without revealing the sponsors’ identity? No. So what’s the difference? What distinguishes an acknowledged public relations company taking money from a corporation or a billionaire from a so-called thinktank, funded by the same source to promote the same agenda?

The IEA is registered with the Charity Commission as an educational charity(12). The same goes for Nigel Lawson’s climate misinformation campaign (the Global Warming Policy Foundation(13)) and a host of other dubious “thinktanks”. I’ve said it before and I’ll say it again: it is outrageous that the Charity Commission allows organisations which engage in political lobbying and refuse to reveal their major funders to claim charitable status(14).

This is the new political frontier. Corporations and their owners have learnt not to show their hands. They tend to avoid the media, aware that they will damage their brands by being seen to promote the brutal agenda that furthers their interests. So they have learnt from the tobacco companies: stay hidden and pay other people to do it for you(15).

They need a network of independent-looking organisations which can produce plausible arguments in defence of their positions. Once the arguments have been developed, projecting them is easy. Most of the media are owned by billionaires, who are happy to promote the work of people funded by the same class(16). One of the few outlets they don’t own – the BBC – has been disgracefully incurious about the identity of those to whom it gives a platform.

By these means the ultra-rich come to dominate the political conversation, without declaring themselves(17,18). Those they employ are clever and well-trained. They have money their opponents can only dream of. They are skilled at rechannelling the public anger which might otherwise have been directed at their funders: the people who have tanked the economy, who use the living planet as their dustbin, who won’t pay their taxes and who demand that the poor must pay for the mistakes of the rich. Anger, thanks to the work of these hired hands, is instead aimed at the victims or opponents of the billionaires: people on benefits, the trade unions, Greenpeace, the American Civil Liberties Union.

The answer, as ever, is transparency. As the so-called thinktanks come to play an ever more important role in politics, we need to know who they are working for. Any group – whether the Institute of Economic Affairs or Friends of the Earth – which attempts to influence public life should declare all donations greater than £1000. We’ve had a glimpse of who’s paying. Now we need to see the rest of the story.

Secret funding helped build vast network of climate denial thinktanks

Original Link: http://www.guardian.co.uk/environment/2013/feb/14/funding-climate-change-denial-thinktanks-network

By Suzanne Goldenberg

Anonymous billionaires donated $120m to more than 100 anti-climate groups working to discredit climate change science.
Conservative billionaires used a secretive funding route to channel nearly $120m (£77m) to more than 100 groups casting doubt about the science behind climate change, the Guardian has learned.

The funds, doled out between 2002 and 2010, helped build a vast network of thinktanks and activist groups working to a single purpose: to redefine climate change from neutral scientific fact to a highly polarising "wedge issue" for hardcore conservatives.

The millions were routed through two trusts, Donors Trust and the Donors Capital Fund, operating out of a generic town house in the northern Virginia suburbs of Washington DC. Donors Capital caters to those making donations of $1m or more.

Whitney Ball, chief executive of the Donors Trust told the Guardian that her organisation assured wealthy donors that their funds would never by diverted to liberal causes.

"We exist to help donors promote liberty which we understand to be limited government, personal responsibility, and free enterprise," she said in an interview.

By definition that means none of the money is going to end up with groups like Greenpeace, she said. "It won't be going to liberals."

Ball won't divulge names, but she said the stable of donors represents a wide range of opinion on the American right. Increasingly over the years, those conservative donors have been pushing funds towards organisations working to discredit climate science or block climate action.

Donors exhibit sharp differences of opinion on many issues, Ball said. They run the spectrum of conservative opinion, from social conservatives to libertarians. But in opposing mandatory cuts to greenhouse gas emissions, they found common ground.

"Are there both sides of an environmental issue? Probably not," she went on. "Here is the thing. If you look at libertarians, you tend to have a lot of differences on things like defence, immigration, drugs, the war, things like that compared to conservatives. When it comes to issues like the environment, if there are differences, they are not nearly as pronounced."

By 2010, the dark money amounted to $118m distributed to 102 thinktanks or action groups which have a record of denying the existence of a human factor in climate change, or opposing environmental regulations.

The money flowed to Washington thinktanks embedded in Republican party politics, obscure policy forums in Alaska and Tennessee, contrarian scientists at Harvard and lesser institutions, even to buy up DVDs of a film attacking Al Gore.

The ready stream of cash set off a conservative backlash against Barack Obama's environmental agenda that wrecked any chance of Congress taking action on climate change.

Graphic: climate denial funding
Those same groups are now mobilising against Obama's efforts to act on climate change in his second term. A top recipient of the secret funds on Wednesday put out a point-by-point critique of the climate content in the president's state of the union address.

And it was all done with a guarantee of complete anonymity for the donors who wished to remain hidden.

"The funding of the denial machine is becoming increasingly invisible to public scrutiny. It's also growing. Budgets for all these different groups are growing," said Kert Davies, research director of Greenpeace, which compiled the data on funding of the anti-climate groups using tax records.

"These groups are increasingly getting money from sources that are anonymous or untraceable. There is no transparency, no accountability for the money. There is no way to tell who is funding them," Davies said.

The trusts were established for the express purpose of managing donations to a host of conservative causes.

Such vehicles, called donor-advised funds, are not uncommon in America. They offer a number of advantages to wealthy donors. They are convenient, cheaper to run than a private foundation, offer tax breaks and are lawful.

That opposition hardened over the years, especially from the mid-2000s where the Greenpeace record shows a sharp spike in funds to the anti-climate cause.

In effect, the Donors Trust was bankrolling a movement, said Robert Brulle, a Drexel University sociologist who has extensively researched the networks of ultra-conservative donors.

"This is what I call the counter-movement, a large-scale effort that is an organised effort and that is part and parcel of the conservative movement in the United States " Brulle said. "We don't know where a lot of the money is coming from, but we do know that Donors Trust is just one example of the dark money flowing into this effort."

In his view, Brulle said: "Donors Trust is just the tip of a very big iceberg."

The rise of that movement is evident in the funding stream. In 2002, the two trusts raised less than $900,000 for the anti-climate cause. That was a fraction of what Exxon Mobil or the conservative oil billionaire Koch brothers donated to climate sceptic groups that year.

By 2010, the two Donor Trusts between them were channelling just under $30m to a host of conservative organisations opposing climate action or science. That accounted to 46% of all their grants to conservative causes, according to the Greenpeace analysis.

The funding stream far outstripped the support from more visible opponents of climate action such as the oil industry or the conservative billionaire Koch brothers, the records show. When it came to blocking action on the climate crisis, the obscure charity in the suburbs was outspending the Koch brothers by a factor of six to one.

"There is plenty of money coming from elsewhere," said John Mashey, a retired computer executive who has researched funding for climate contrarians. "Focusing on the Kochs gets things confused. You can not ignore the Kochs. They have their fingers in too many things, but they are not the only ones."

It is also possible the Kochs continued to fund their favourite projects using the anonymity offered by Donor Trust.

But the records suggest many other wealthy conservatives opened up their wallets to the anti-climate cause – an impression Ball wishes to stick.

She argued the media had overblown the Kochs support for conservative causes like climate contrarianism over the years. "It's so funny that on the right we think George Soros funds everything, and on the left you guys think it is the evil Koch brothers who are behind everything. It's just not true. If the Koch brothers didn't exist we would still have a very healthy organisation," Ball said.

Donors use charity to push free-market policies in states

Original Link: http://www.publicintegrity.org/2013/02/14/12181/donors-use-charity-push-free-market-policies-states

By Paul Abowd

Nonprofit group lets donors fly 'totally under the radar'.

In 2009, a network of online media outlets began popping up in state capitals across the nation, each covering the news from a clearly conservative point of view. What wasn’t so clear was how they were funded.

“The source is 100 percent anonymous,” said Michael Moroney, a spokesman for the Franklin Center for Government and Public Integrity, the think tank that created the outlets.

In fact, 95 percent of Franklin’s revenue in 2011 came from a charity called Donors Trust, according to Internal Revenue Service records.

Conservative foundations and individuals use Donors Trust to pass money to a vast network of think tanks and media outlets that push free-market ideology in the states — $86 million in 2011 alone. The arrangement obscures the identity of the donors wishing to keep their charitable giving private, especially “gifts funding sensitive or controversial issues,” according to the group’s website.

The $6.3 million donation to the Franklin Center was the second-largest gift made in 2011 by the group, a tax-exempt “public charity” that takes tax-deductible donations from donors “dedicated to the ideals of limited government, personal responsibility, and free enterprise,” according to its website.

Donors Trust includes 193 contributors, the majority of whom are individuals. “A lot of donors are flying totally under the radar,” says president and CEO Whitney Ball.
 

Donor-advised fund

Since its founding in 1999, Donors Trust and its affiliated organization, Donors Capital Fund, have distributed nearly $400 million, becoming major vehicles for tax-exempt giving from wealthy conservatives such as billionaire industrialist Charles Koch.

Koch is among an exclusive pool of donors who have used Donors Trust as a “pass-through,” says Marcus Owens, the former director of the IRS Exempt Organizations Division, now in private legal practice. “It obscures the source of the money. It becomes a grant from Donors Trust, not a grant from the Koch brothers.”

Ball helped found Donors Trust in 1999 as a “donor-advised” fund. Donors can open an account and protect their identity from the public and even the recipient of their grants.

In addition, donor-advised funds offer contributors an extra level of control over where their money ends up, which seeks to remedy what Ball sees as the tendency for foundation money to “drift left.”
This was a chief concern of Daniel Searle, the late philanthropist and pharmaceutical executive who was one of Donors Trust’s early board members.

In 1998, with help from Donors Trust co-founder and board chairman Kim Dennis, Searle established an endowment called the Searle Freedom Trust, now worth $114 million, which has in turn given generously to Donors Trust.

Following the Donors Trust money trail

Donors Trust and Donors Capital FundGrants in 2011: $86 million
Assets: $62 million

Money Flowing In: Foundations

Donors Trust has injected nearly $400 million into free-market causes, thanks in large part to contributions by dozens of private foundations run by wealthy executives or their families. These foundations have often sought anonymity by passing their grants through Donors Trust, but a Center for Public Integrity review of IRS records reveals some of the largest backers of Donors Trust in recent years.

Money Flowing Out: Think Tanks

Donors Trust has given grants to three national organizations that coordinate free-market policy and media efforts in the states: the American Legislative Exchange Council, the State Policy Network, and the Franklin Center for Government and Public Integrity. In addition to these umbrella organizations, Donors Trust has directly funded at least 51 state-based think tanks in nearly every state since 2007.

‘Great guys’

The Searle Freedom Trust is one of dozens of conservative foundations that have given tens of millions of dollars to Donors Trust from 2001 to 2011. Among the group’s donors is the Knowledge and Progress Fund, a Wichita, Kan.-based foundation run by Charles Koch.

The foundation gave almost $8 million to Donors Trust between 2005 and 2011.

Where those funds ended up is a mystery, though some Donors Trust recipients, including the Mercatus Center and the Institute for Humane Studies based at George Mason University in Virginia, have also received major funding from foundations set up by Charles Koch and brother David.

Nearly half of the revenue for David Koch’s Americans for Prosperity Foundation came from Donors Trust in 2010, in the form of $7.6 million in grants.

Representatives for the Koch foundations did not return calls for comment.

Before Donors Trust, Ball was the director of development for the libertarian Cato Institute, which Charles Koch was instrumental in founding.

“We think they’re great guys,” she says of the Kochs, “but if they weren’t around, we’d still be successful.”

At a private Koch fundraising meeting in the summer of 2010, Donors Trust hosted cocktails and dessert for what Ball called a “target-rich environment” of wealthy donors.

Several wealthy conservatives who have attended Koch fundraising parties have Donors Trust accounts, including Amway co-founder and longtime booster of conservative causes Richard DeVos; hedge fund billionaire Paul Singer; and Philip Anschutz, owner of the conservative Examiner newspapers.

Dozens of other major conservative philanthropies have Donors Trust accounts, including the Lynde and Harry Bradley Foundation, the John M. Olin Foundation and the Coors family’s Castle Rock Foundation, according to IRS records.

One Donors Trust grant to Mackinac Center was earmarked for “statehouse reporting” efforts. Mackinac put the money toward a media machine of blogs and research studies making the case for the state’s new “right-to-work” law.

 

Money in the states

For a decade, Donors Trust has bolstered the efforts of D.C.-based conservative think tanks, including Cato, the Heritage Foundation and the American Enterprise Institute — whose president, Arthur C. Brooks, is on the Donors Trust board.

In recent years, it has taken a strong interest in the states, funding state-level think tanks and three national umbrella organizations that coordinate their activities: the American Legislative Exchange Council, the State Policy Network (SPN), and the Franklin Center.

“Gridlock” at the federal level of government means donors see “a better opportunity to make a difference in the states,” says Ball, who sits on the board of the State Policy Network.
SPN has become a major recipient of Donors Trust money — receiving $10 million in the past five years.

In 2011, the nearly $2 million in grants from Donors Trust made up about 40 percent of SPN’s revenue for the year, according to tax records obtained by the Center.

In the past five years, Donors Trust money has gone to at least 51 state-level think tanks affiliated with SPN, located in nearly every state. Last year, SPN used the money to incubate think tanks in Arkansas, Rhode Island and Florida, where it hosted its yearly gathering in November.

Donors Trust grants, 2002-2011

Grants (in millions)

Donors Trust grants have risen sharply since 2002.
Source: Internal Revenue Service
 

One workshop touted privatization of state and local government services. Another featured anti-tax crusader Grover Norquist. A third focused on how “property rights and markets provide the best way to protect the environment.”

SPN also sponsors the American Legislative Exchange Council, another D.C.-based clearinghouse for state-level policymaking that gets support directly from Donors Trust.

A laboratory for corporate-friendly laws in the states, ALEC hosts closed-door meetings where corporate lobbyists and state legislators meet to hammer out free-market legislation.

Ten state-level think tanks got a total of $200,000 from Donors Trust to attend ALEC meetings in 2011 including the Michigan-based Mackinac Center and the Arizona-based Goldwater Institute, which introduced a raft of anti-union model bills at ALEC’s spring 2012 conference.

The Mackinac Center has gotten $2.4 million from Donors Trust since 2008, according to the Bridge Project, a liberal think tank.

One Donors Trust grant to Mackinac Center was earmarked for “statehouse reporting” efforts. Mackinac put the money toward a media machine of blogs and research studies making the case for the state’s new “right-to-work” law.

The Mackinac Center works closely with other Donors Trust recipients, including the Franklin Center, which counts Mackinac’s “media” outlets in Michigan as affiliates.

The Franklin Center, Mackinac and another major recipient of Donors Trust cash, Americans for Prosperity, co-hosted a day-long training for “citizen watchdogs” featuring speakers on “school choice” and “union reform” from the Mackinac Center and Republican state Rep. Tom McMillin, who is also an ALEC member.
 

Against the tide

The California-based Tides Foundation, which Ball calls the “ideological opposite” of Donors Trust, also operates donor-advised funds.

In 2011, Tides raised $91 million and made $96 million in grants, including $26 million to overseas recipients.
Tides gives grants to the Ameri
can Civil Liberties Union Foundation and liberal groups like the Center for American Progress and the National Resources Defense Council.

Since 2010, the foundation has received $10 million from George Soros’ Foundation to Promote an Open Society, which has assets of $2.2 billion. Tides has assets of $142 million, and the Donors Trust funds have combined assets of $62 million.

The Center for Public Integrity has received funding from Soros’ Open Society Foundations and the Tides Foundation.

Soros’ foundation listed the specific recipient of its grants to Tides, including its largest gift, a $1 million grant for school nutrition programs. The largest foundations contributing to Donors Trust do not identify the ultimate recipient of their funds, records show.

Though its donors remain anonymous, the Franklin Center touts “transparency, accountability, and fiscal responsibility as its watchwords.”

Donor-advised funds offer private foundations created by wealthy individuals several tax advantages and a degree of anonymity, but there are also advantages for recipients.

The Franklin Center, for example, maintains a tax-exemption as a “publicly supported” entity.
If the organization were perennially accepting 95 percent of its funding from a handful of wealthy donors “it would not count as public support” and could jeopardize its tax status, Owens said.
Though its donors remain anonymous, the Franklin Center touts “transparency, accountability, and fiscal responsibility as its watchwords.”

Franklin has numerous ties to the Koch-connected Americans for Prosperity like board member Rudie Martinson, a former assistant state director for AFP’s North Dakota’s chapter, and Franklin’s vice president of strategic initiatives, Erik Telford, who was director of membership and online strategy at AFP for four years.

One of Franklin’s state-based blogs, New Jersey Watchdog, also received $50,000 from AFP in 2011, according to IRS records.

In 2011 alone, Donors Trust helped the Franklin Center expand by funding state-based reporting projects in Illinois, Iowa, Missouri, Nebraska, Nevada, Ohio and Virginia.

Recurring themes on the Franklin Center blogs include “union bosses,” “Marxian” senators and the perils of renewable energy.

Franklin has noted that its journalists’ work had landed on major networks from Fox to MSNBC. The details of several stories offered by the Franklin-funded outlets have been called into question, however.

One report from a New Mexico affiliate housed at a free-market think tank also funded by Donors Trust garnered national attention when it reported that millions of dollars in federal stimulus money had been allocated to non-existent congressional districts.

The government database on stimulus spending had indeed listed non-existent districts as receiving funds, but the Associated Press reported that the problem was due to data errors and that “’phantom congressional districts’ are being used as a phantom issue to suggest that stimulus money has been misspent.”

When asked to comment on the criticism, Franklin Center spokesman Moroney said: “Franklin Center adheres to the highest degree of journalistic integrity and we stand by our Watchdog.org reporting 100 percent. In this case, the Associated Press had it wrong.”