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“A man can not be too careful in the choice of his enemies.”

— Oscar Wilde

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John Steinbeck

Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.

 

John Steinbeck

Pentagon Plans for Climate Wars

Now that the Pentagon wants to address climate change, progress may be possible.

After all we only implemented food assistance when the head of the Selective Service in WWII warned Congress that too many draftees were being rejected due to malnutrition, the interstate highway system is actually the  Dwight D. Eisenhower National System of Interstate and Defense Highways, and the internet and numerous other technologies were funded by DARPA (Defense Advanced Research Projects Agency).

No fear, no funds.

Pentagon says we could soon be fighting climate wars | Grist.

Leaving Homeless Person On The Streets: $31,065. Giving Them Housing: $10,051. | ThinkProgress

There is a far cheaper option though: giving homeless people housing and supportive services. The study found that it would cost taxpayers just $10,051 per homeless person to give them a permanent place to live and services like job training and health care. That figure is 68 percent less than the public currently spends by allowing homeless people to remain on the streets. If central Florida took the permanent supportive housing approach, it could save $350 million over the next decade.

via Leaving Homeless Person On The Streets: $31,065. Giving Them Housing: $10,051. | ThinkProgress.

The Great Mortgaging | VoxEu.org

Interesting study that real estate debt has become the center of the financial industry, increasing fragility, and worsening recessions while diverting resources from industry.

In other words, banking today consists primarily of the intermediation of savings to the household sector for the purchase of real estate. The core business model of banks in advanced economies today resembles that of real estate funds: banks are borrowing (short) from the public and capital markets to invest (long) in assets linked to real estate.

By contrast, nonmortgage bank lending to companies for investment purposes and nonsecured lending to households have remained stable over the 20th century in relation to GDP. Nearly all of the increase in the size of the financial sectors in Western economies since 1913 stems from a boom in mortgage lending to households and has little to do with the financing of the business sector.

The great mortgaging | vox.

How Asset Building Tax Subsidies Miss Their Targets

How Asset Building Tax Subsidies Miss Their Targets

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

– See more at: http://taxvox.taxpolicycenter.org/2014/10/07/asset-building-tax-subsidies-miss-targets/#sthash.MFAItClc.dpuf

How Asset Building Tax Subsidies Miss Their Targets

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

– See more at: http://taxvox.taxpolicycenter.org/2014/10/07/asset-building-tax-subsidies-miss-targets/#sthash.MFAItClc.dpuf

| Posted on October 7, 2014, 4:40 pm

Nearly one-third of all federal tax expenditures–$384 billion in 2013 alone– is aimed at various forms of asset building, such as retirement savings, higher education, and home ownership. Yet, according to research by several of my Tax Policy Center and Urban Institute colleagues, these tax breaks do little to help low- and middle-income households build wealth.

Incentives for homeownership represent a bit more than half of these subsidies, special tax treatment for retirement savings nearly 40 percent, and higher education subsidies about 8 percent. Together, they are so big that they’ll inevitably be part of any broad-based tax reform effort. Because they are such a high percentage of tax expenditures, it is effectively impossible to achieve significant tax rate reduction without scaling them back. That’s why they were such an important element in House Ways & Means Committee Chairman Dave Camp’s tax reform plan.

In both a long paper and in a newly issued fact sheet, Gene Steuerle, Ben Harris, Signe-Mary McKernan, Caleb Quackenbush, and Caroline Ratcliffe conclude that these asset building subsidies are ripe for reform, whether through a broad tax code rewrite or on their own.

Because high income households receive the lion’s share of the benefits of these subsidies, they raise important distributional issues. But, more importantly, they fail to achieve a key goal: To help households boost their assets. They simply don’t work very well.

See more at TaxVox.TaxPolicy.org : Tax subsides for asset building fall short.

Mark Twain

God created war so that Americans would learn Geography.

Mark Twain

Bertand Russell

There are some activities in which the motive for private profit leads, on the whole, to the promotion of the general interest and others in which this is not so. Finance is now definitely in the latter class.

Bertrand Russell

Modern Midas – 1933

Abolish the Corporate Tax?

An interesting paper by Eric Toder of the Urban-Brookings Tax Policy Center and Alan D. Viard of the American Enterprise Institute on replacement of the corporate tax with a shareholder oriented accrual tax program. (Via Martin A. Sullivan at The Tax Analysts Blog.)

The second option, which could be adopted unilaterally by the United States, would replace the corporate income tax with increased taxation of shareholders. American shareholders of publicly traded companies would be taxed on both dividends and capital gains at ordinary income tax rates and capital gains would be taxed upon accrual. The option would ensure that American shareholders in both U.S. and foreign based   multinational corporations pay tax on their worldwide income, while improving incentives for both domestic and foreign corporations to invest in the United States and increasing the competitiveness of U.S.- resident MNCs. It would also curtail a host of closed-economy distortions, including the current system’s biases against corporate equity‐financed investment, dividend payments, the sale of appreciated assets, and specific industries and types of capital. But it would face a number of design challenges and would reduce federal revenue. It would also confront severe political obstacles because it would be perceived as a giveaway to corporations, it would tax accrued gains that many shareholders do not consider to be income, and it would require other tax increases or spending cuts.

Major Surgery Needed: A Call for Structural Reform of the U.S. Corporate Income Tax

 

Hire Robots Not People

Increasing supply while decreasing demand:

A survey by Harvard Business School reports that its alumni would rather buy robots, out-source, or use part-time workers than hire (and train) full-time, long-term employees. Part of the reason the economy will grow but with wealth concentrated among the haves, a declining middle class, and a growing class of have-nots.

Corporate boards lavish them with massive pay packages and politicians venerate them as “job creators.” But it turns out that America’s business chieftains would rather not create full-time jobs to do what needs doing if they can possibly avoid it, according to the latest annual survey from the Harvard Business School (HBS).

America’s Business Elites Admit They’d Rather Hire Robots Than People

JMc Picture Casual

James McCarthy has 30+ years in finance and private equity, corporate structuring and work-outs, and raising debt and equity as an investor, lender, investment manager, portfolio manager, financial advisor, corporate consultant, work-out consultant, and city planner. Clients have included domestic and offshore institutional investors, investment funds, hedge funds, high net worth investors, and private companies. I hold an MBA from Columbia University and a Master of City & Regional Planning from Rutgers University.

Special interests include green and sustainable design, resilience, passive energy design, waterfront, walkability, transit-oriented design, affordable housing, high-quality and innovative architecture and construction technology, mixed-use development, and the inclusion of public spaces and landscape architecture.

JMc & Jameson Capital