Posted on 02/25/2020 4:31:55 PM PST by Reno89519
Seven Democratic candidates for president will meet on the debate stage in Charleston, South Carolina, in a debate hosted by CBS News. It's the last time the candidates will face off before Saturday's critical South Carolina primary — and the last one before voters in 16 states and territories go to the polls on Super Tuesday, March 3.
"CBS Evening News" anchor and managing editor Norah O'Donnell and "CBS This Morning" co-host Gayle King will moderate the debate, joined in questioning by "Face the Nation" moderator and senior foreign affairs correspondent Margaret Brennan, chief Washington correspondent Major Garrett and "60 Minutes" correspondent Bill Whitaker.
I've never seen such a large group of debaters and all of them are terrible debaters. Trump will make mincemeat of their eventual nominee. Bernie is an honest to goodness clown. mini-mike is perhaps the worst debater I've ever seen.
Black is also the color of the arts, sophistication and NYC.
And I saw him speak (with Wozniak) at a conference in Boston in, gulp, 1981.
So he’ll have a sweet tooth. Gummy worms. Lots and lots of gummy worms.
When I was a teen, I worked a summer pipeline construction job. Grunt labor.
Anyway there was this short, morbidly obese dude with a long red beard. They called him fuzzy. He drove a dilapidated chevy van.
Everyday his life story changed. One day it was leading Israeli commandos in the six day war. Another was meeting Golda Meir. Others were Vietnam War movie fodder.
Oh I was not aware of that. It’s amazing that anyone actually believes anything that comes out of Biden’s mouth...but then again the DNC is a cult with a lot of kool aid.
his azz must be jealous of the crap that comes out of his mouth
Good point. On some level Walter Mitty knows that his adventures are fantasy. I'm not sure that Biden and McBragg know the difference, at least not all the time. I think Biden has something in common with Mitty (always makes himself the hero of the stories). walter mitty 1947
Rewatching the debate. For starters, Klobuchar appears to be the only one standing on a box. Anyone else rewatching?
Either way Putin wins.
What gets me is the richest corporations in the country paying NO income taxes. Here is an idea to chew on allow corporations to deduct NO MORE THAN $1 million from their corporate taxes for each employee. Then the stockholders will have to decide if Mr. Drug Company, or Walmart CEO, or whatever should have a salary of $20million. I remember 2008 when the stockholders discovered that the top 3 Goldman Sachs execs each earned MORE THAN $65million. They rebelled and held a vote on the proposition that stockholders have an advisory on executive compensation. It didn’t quite win with 43%, but that was enough to scare the CEO into only paying himself $25million the next year. We need a lot more of that kind of rebellion!!
Did they all try to look as radical as Bernie while trying to differentiate themselves from Bernie?
Exactly, Joe is always the hero in his stories. And on some level I’m sure he knows he is making it up. Maybe not.
One way these multinational tech and biotech companies are structured is through numerous shells and subsidiaries. Just one simple example that the tech companies use is that there is a tax-exemption in Ireland on royalty payments. So they structured to move the ownership of their patents to an Irish subsidiary, license the patents to a Dutch company, which collects all the revenues for advertising sales etc, then pays a 99% royalty (I exaggerate that number for effect) to the Irish subsidiary. So only 1% of their profits are taxed as income. Then the Irish subsidiary sends the cash to the Dutch Antilles or Caymans (they call this the "Dutch Sandwich" and it is no longer legal to do, but they are grandfathered). They have other tax avoidance schemes too such as setting up other subsidiaries as finance arms, so they are taxed at a different rate and get to write off payments to themselves as an expense. This is basically and a simplistic way to explain why say GOOG or FB or AAPL can make $40 billion a year and only pay 4% of it in taxes.
As for executive pay, if I start a company and own all or a big chunk of the stock I think I should pay myself all or a big chunk of the profits. But these executives of Wall Street banks are not major owners, they are not founders. Their compensation should be tied to how much money they make for their shareholders - and often they get paid in the form of stock options. The problem there is that this leads to short term thinking. This incentivizes them to think about moving the stock price so they get bigger options bonuses each year, and a little less about long term interests of the shareholders or the company. It encourages trading of stock over building of equity and strategic thinking. And it's partly why so many went belly up in 2008 trading crap paper as AAA rated and needed $1 trillion bailout from the taxpayers just to keep from crashing the entire system.
To be fair there are exceptions. FB for example, while it does practice very aggressive tax avoidance schemes, is still something like 35% owned by the founder. Amazon too, though Amazon pays very little because they don't make a lot of profits they are constantly reinvesting in growth. Because they are run by their founders they have been very good at building value over the long term. But perhaps one of the best is Disney, which is no longer controlled by the Disney family (less than 10% I think) - but is a very well run company. They took a very long time to acquire or build a lot of assets and then, very recently, learned a new way to exploit these assets by launching their own streaming service to take advantage of the new distribution mediums. They had a huge catalog of films, and owned ESPN too, but decided to spend something like $100 billion or more to buy Fox, Lucusfilm, Marvel Comics and bought out the partners of Hulu. Amazon and Netflix owned the streaming space until last year, but now Disney is in the process of pulling all their deals with Amazon and Netflix to put their films/shows on their own service and has in just 1 year signed up close to 30 million subscribers. The leadership of Disney has acted very cleverly and deliberately to grow to adapt to the changing times, to counter-act competitors, and to maximize the profits they will earn from their catalog of entertainment. And FWIW, Disney pays an effective tax rate of between 17%-24% which is very high when compared to say Facebook, Apple and Google because their assets and subsidiaries are largely all based inside the USA.
Now, they let the markets take the risk of developing new drugs and they spend their money on sales, advertising and acquisitions. Smaller companies and startups that develop a promising compound go to Wall Street and raise money to investigate and develop the drugs from wall street investors. If and when one of these smaller companies hits on a new drug then one of the big biotech companies will just buy the company or the drug from the small company, often using their own stock to do it. So they take few risks and more or less only bet on sure things (though there have been a few high profile disasters, like CELG's last acquisition (which forced them to sell to another company themselves) and Bausch & Lomb (used to be VHC) which used debt to buy up a bunch of medium sized companies trying to make a very large biotech, a couple of hedge funds ran the stock way up... but it was a huge debt bomb and the company stock has crashed 90% from its peak.
Some of the major companies a few years ago came to some agreement to "trade divisions" with each other, I won't tell it exactly right right but for example say Proctor & Gamble decided it would focus on consumer goods, so they trade their drug division to Johnson and Johnson in return for obtaining JNJ's consumer products division. They decided to focus and monopolize rather than compete with each other.
Thank you for the detailed explanation of ways in which this works. However, I would really like your thoughts on what would happen if the IRS only allowed $1million to be deducted from the corporate taxes, meaning that the stockholders would be more conscious of the ridiculously high pay many in upper management are receiving. I own some GE stock, and when it was crashing from $50 to $5, and stayed low afterwards, I was outraged to see that the top 7 executives were still being paid between $11 and $22 million well after their pixx poor performance.
I chose the $1million figure because there is a lot of nostalgia for the late 50s and early 60s when top executives only earned about 40 times what the lowest level workers earned. In recent years it has ranged from 200 to 1,000 times the lowest pay levels. So I thought take the target political wage of $15/hr. Multiply it to a years pay and then times 40, and that was around $1million. If everybody things those were such great years, then let them live and pay on that scale.
You really want my opinion? First then I will state that I want a repeal of the 16th and 17th Amendments.
As for executive compensation, I think it is up to the shareholders. I understand your point. I think at least part of the breakdown is that the rise of money management - that is to say 401k funds, retirement funds, index funds etc. You owned GE stock and you get POd to lose 90% of your value while the executives take home $20 million. And I don’t blame you. They have no shame. But, it is a good old boys network. The executives of the funds, the executives at the big companies - I won’t say they active collude but they are all connected by 1 or 2 degrees of separation. Now take some state retirement fund (I live in CA so say CalPers which is the public employee retirement fund) they are invested all over the place in everything. If GE drops 90% they are not happy. But are they going to lead a revolt against management? Not on that basis alone because management is going to be talking them away from the ledge with all kinds of plans and ideas and promises. They don’t want to get internally involved in their investments because it would be fighting many quagmires. Their job is to just decide where to put their money and believe that the right people are in place to manage the companies they are invested in.
I’d say if you took 90% of my value I’d toss your ass out on the door. Someone else might say that person has every reason to work extra hard to get the value back, and is in the best position to know how because he or she knows how/why it happened. And still others might say, if you don’t pay him or her $20 million, s/he’s going to take a job at some other engineering firm (or whatever the hell GE does these days) that will want his experiences and connections. So it’s not all that simple.
In theory you could impose a cap on wages. If we can have a minimum wage we could have a maximum. Or as you said, a high rate on 7 figure incomes. Both, imo, would be very disruptive. If you have time, or over time, check out some of Milton Friedman videos on Youtube. He was a brilliant, insightful and very well spoken economist. The key takeaway though from all of it is that government intervention into the markets inevitable causes the markets great damage and possibly destruction. When it is not your money and you are not personally benefiting from how you spend it, you will spend it recklessly and carelessly because it doesn’t matter to you. This same principle would seem to apply, imo, to the rise of money management firms. They control the shareholder votes and for the most part have little to gain by being disruptive. They probably almost always vote for whatever management asks for, regardless of how poorly management has performed. It’s not their money and they won’t be held personally responsible for losing it.
To the specific question of putting a cap on deductions - it’s the wrong idea. First, the problem with the big multinationals is not the deductions but that they operate in a way to put their profits in the place that offers them the most tax avoidance... like the Ireland example. Write some code and put that code in an Irish corporation. License the code to a dutch company at 90% royalty rate. Thus, 90% of the income goes to the Irish company where there is zero tax on royalty income. They will constantly seek out the best way to structure operations to minimize their taxes.
Mainstream GOP politicians, while I still think they are wrong on many ideas, are at least on the right track. If you put a cap on deductions you are going to limit capital investment. I want to build a new factory. It will cost me $20 million. You tell me I can’t deduct the cost of that factory? Then my incentive to build a new one is much lower. That’s simply bad for economic growth. The GOP has moved to lower corporate taxes and to expand the amount of deductions on capital expenditures. They should get away with the ridiculous amortization schedules. The tax code is absurd. And frankly I think it is immoral to tax wages at all. We humans have to work - it is our nature to work. When we lived in caves we had to work hunting animals and picking berries to provide for our families. Now in the age of paper money we do other kinds of work to pay for our families. To tax that work is imo exactly contrary to human nature. And it leads to all kinds of corruption.
Which isn’t to say I oppose all taxes. Just taxes on wages earned from labor. Some guy who gets paid tens of millions as a bonus or investment capital, I may not consider that to be wages. But money earned working should simply not be taxed at all. Just my personal opinion but I consider it immoral. We should be charitable, that is our responsibility. We shouldn’t be cajoled or threatened into “transferring” our responsibility to be charitable to the government. That just gives us an excuse to not be charitable, less of an ability to be charitable, and almost no decision on what constitutes charity.
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