Eduardo Saverin, a co-founder of Facebook and a billionare at age 30, has publicly renounced his U.S. citizenship to move to Singapore. He was born in Brazil and became an American citizen as a teenager. Saverin denies that he is giving up his citizenship because of Singapore being a more favorable tax haven, and while we can’t get into his head, there is plenty of evidence to believe that the different tax laws probably drove his decision.
Now that we know a little bit of Saverin’s background, I wonder what he has ever given back to the country that allowed him to succeed, that gave him every opportunity to use the talents bestowed upon him at birth. Countless millions of people all around the world would give anything to become American citizens. Countless millions would also give up a lot to attend a good American university. I’m sure motivating factors don’t include our tax structure. Some who so badly desired to become Americans joined the armed forces to gain citizenship but died serving their adopted country before achieving it. Saverin also received other blessings of liberty like being able to live in a stable democracy, and federal, state and local governments that have low levels of corruption compared to most other countries. I’m sure Saverin knew that calling 911 almost anywhere in the United States would get an immediate police, fire or emergency services response. He knew that he could have one of his contracts enforced or defended in an American court. And he could sleep well at night knowing that the best military the world has ever known protected him and his interests. These, among so many things we often take for granted as Americans, are things that Saverin considers less important than how much he will ultimately pay in taxes despite already being wealthy beyond imagination. And again I ask, other than to pay his taxes (and surely taking advantage of every lawful loophole), what did Saverin ever give back to the country that gave him so much?
I think back to the invasion of Singapore and the other Asian countries that the Japanese invaded and occupied during World War II. And I wonder how much it would have been worth to be an American citizen when U.S. Navy warships were rescuing fleeing Americans. I wonder how much money it would have been worth to Saverin to be one of the rescued. Good bye and good luck, Mr. Saverin. May the United States fill your void with other industrious people who want the opportunities you had, people who will give back because they know the meaning of gratitude and want to make America better in return for what they were provided to succeed.
In just one week another example of free market hypocrisy has surfaced. In the May 13th edition of the AJC, there is a full page story about big developers seeking a debt bailout. Last week it was a story about the owners of the Atlanta Falcons seeking public monies to pay for a new stadium. With the Republicans occupying both houses in the General Assembly and the governor’s office, it would seem to be a no-brainer to summarily dismiss these two requests. Developers thrived during the good times, and they deserved to reap the rewards of their risk taking and hard work. The banks also deserved to prosper in turn for lending the money. Presumably the developers did their homework and studied the demographics, among other things, before deciding where to build and how much to invest in a project. The banks should also be presumed to have done their due diligence that the projects were credit worthy and would return a healthy profit to the shareholders. Capitalism at its best.
Then came the housing bubble and the collapse of the financial markets. Real estate development projects suddenly became worthless. Borrowers couldn’t repay the loans. Unfortunately for developers, the banks often require them to sign a personal guarantee that a loan will be paid back in full. I have to believe that anyone signing such a guarantee understands completely the risks of signing this promise. Two prominent Georgia public officials also signed such guarantees: Congressman Tom Graves, and Senate Majority Leader, Chip Rogers. Graves’ and Rogers’ project, in the end, failed. And then they sought to get off the guarantee provision. The last we heard is that they reached a sealed agreement with the trustee of the now defunct bank. Now the developers want to be taken off their promissory notes too. Somehow it seems wrong to them that if a bank sells their loans to a third party at a substantial discount, the third party should not be permitted to collect the full balance. What a strange notion for those of us who believe in free markets, keeping promises, standing by your financial commitments. I wonder if the same developers, if they held the mortgage of a homeowner who defaulted, would be as sympathetic to the pleas of the borrower about hard times, losing their job, uncompensated medical bills, or whatever.
The AJC article pointed out that both the bankers and developers had hired lobbyists to fight for their respective positions. Perhaps that’s why no action has been taken. This is another example of the need for campaign finance reform. What should be a screamingly obvious decision by our Republican lawmakers has been clouded by the one commodity that reigns when it rains: cash.
In the May 6th edition, the AJC published three opinion pieces about the merits of building a new stadium for the Falcons. It looks like it is heading toward a done deal since the Republican general assembly and Republican governor already set aside the money to purchase the land on which the stadium would be built. They also approved an extension of the hotel/motel/car rental tax until 2050 to cover some of the costs. All that’s left is the PR campaign to convince the public of the good deal they are going to get, how it will bring in the Super bowl, possibly attract a professional soccer team, host the World Cup, and many more things. And of course, I almost left out, it will be the stadium for the Falcons to play eight or nine days a year.
As it stands right now, if the stadium is built, it will be a public-private venture. The good news, so we are being told repeatedly, is that it won’t really cost the taxpayers a dime. Nope. The tax money that will be raised will be paid for by the out-of-town visitors. They get to pay for our dome. Aren’t we lucky. But not so fast, or at least as fast as the PR machine and supporters want to get this past you. First, many business people who live and work in Atlanta host conventions and conferences at local hotels. Also, consider that this has become the equivalent of a nuclear arms race where every major city has implemented similar taxes to attract or keep a professional team. So if you don’t pay the tax in Atlanta, you will pay it in Tampa, where their fortunate citizens have been sold the same bill of goods---that any new stadium won’t cost them a dime because out-of-towners from Atlanta will pay for it.
Since the Republicans are the ones that are in power in Georgia today, it seems fair to ask what ever happened to the Republican philosophy, the Republican mantra, “No new taxes!” What about the other side of the same Republican coin that says let the markets work, no government regulation, no government involvement. I keep hearing Ronald Reagan’s name invoked about the need for less government, yet it was Reagan who said that, “Government does not solve problems; it subsidizes them.” Does anyone really believe that if tax money is used on land paid for by the taxpayers that there won’t be a lot of new regulations governing the use and operation of the dome? And won’t it be the detestable bureaucrats the Republicans loathe that will implement those regulations?
Those who hate President Obama call him a socialist and even a Marxist, never mind the lack of real evidence for it. Yet despite all the touting of capitalism and free markets by the Republicans, they want it both ways. How is it that if a new stadium at a billion dollars is such a good deal there aren’t flocks of business people lining up to invest in it? I thought that if there was money to be made, especially the whopping sums the stadium is supposed to bring in, you wouldn’t need any taxpayer support. With upwards of $3 trillion sitting in the bank of American businesses today, surely some of these successful entrepreneurs would want to shake loose some of it to reap the substantial rewards. But it hasn’t happened and almost certainly won’t. What do these captains of industry know that our politicians don’t know? For one, they know that they aren’t going to waste their money on a pipedream while our elected officials prove once again that if it’s not their money, who cares. This is not the Republican Party of Eisenhower.
This past Thursday two gentlemen from the Shepherd Center in Atlanta put on a presentation to the Marietta Kiwanis about SHARE (Shaping Hope and Recovery Excellence). The privately funded program began in 2008, and provides individual treatment to wounded combatants with spinal cord and traumatic brain injury. To date SHARE has treated approximately 200 warriors. The cost is $100,000 per month, or $1.2 million per year. The majority of our wounded from the two wars of this century have been from blast injuries that have resulted in spine and brain trauma.
The presenters at Kiwanis had a PowerPoint that showed a very impressive number of rehabilitation facilities and a temporary residence for families at the Shepherd Center. I was convinced, as I think were all of my fellow Kiwanians, that this is a very worthwhile program that produces qualitative results. That’s the good news. The bad news is that SHARE has to beg for money---and a lot of it. This is not only disgraceeful, distasteful, and unconscionable, it is immoral. If our government is going to send Americans to war it is not enough to just outfit them with the best equipment and technology. The other half of the equation is to appropriately care for those who will probably never lead the normal lives of those who stayed home. The taxpayers owe these fighting men and women the best care that money can buy. There doesn’t seem to be any opposition by our congressional delegation and two U.S. senators to purchasing as many F-22 Stealth Fighters at $140 million each, but for some reason there is always a “budget” problem when it comes to treating our veterans. I wonder how many SHARE facilities could be opened around the country for the price of just one F-22.
I am astonished that there isn’t more anger out there against our elected officials who will tout the wonders of SHARE, who will tour the facilities and proclaim what a great program it is, who will say all the right things about trying to get government money for it, have their pictures taken for some campaign photo ops, and after they leave---silence. I can recall more statements than can be counted from the same delegation about the need to buy more Lockheed planes, but compare all their efforts for Lockheed with what they are doing for the veterans. Congressman Phil Gingrey avoided military service during the Vietnam War by deferments to attend college and medical school. Considering that he is a well known conservative who gives rousing speeches at veterans lunches and gatherings, I have often wondered why he didn’t give back to this country by volunteering his medical skills to the armed forces. Perhaps now he can show true leadership and not only sponsor a war tax that would pay the true costs for our veterans, but get out front and shame others in congress to support such a bill. That would be the right thing to do even if it goes against his and his Party’s mantra of no new taxes.
Every American should have skin in the game when we go to war. A war tax is a very small price to pay.
Recently, President Obama was overheard telling the Russian president, Dmitry Medvedev, that once the November election is behind him, he would be better positioned to negotiate a strategic arms treaty. The outcry from the right/reactionaries was expected and they did not disappoint as they found another fake issue to demagogue. We can expect to hear this come up repeatedly during the presidential campaign and in the debates. What a colossal waste of time and diversion from the real issues that need to be debated. It’s like a game of Three-Card Monte, which is designed to divert the focus of the sucker about to lose his money as he bets where the designated or money card is.
Let’s go back in time. President Eisenhower, who in my opinion represented the now extinct Republican Party, proposed to the Soviets an open sky policy. If the Soviets had agreed to it, both sides would have been permitted flyovers of military bases and to photograph missile silos and whatever else of intelligence value. Imagine if a President Obama had done the same thing. Nixon, we all know, did what Obama could never have done, and reached out to China, a country with which we had fought in the Korean War. Ronald Reagan not only offered to sharply reduce the number of our intermediate range missiles, he did something that would probably get Obama tried for treason: he told the Soviets that he would give them our technology, when developed, for the anti-missile/star wars defense. Subsequent presidents have also reduced our nuclear weapons presence in Europe and on U.S. Navy warships.
But back to Obama’s comment to Medvedev. Does anyone really think that he would have said what he said without having had extensive discussions about disarmament with the Pentagon and joint chiefs? If so, I have to ask why during the passing weeks we have heard nothing from one of the retired talking head generals? We all know that these generals are fed information from their former associates in which to publicize policies that they either promote or disagree with. This was confirmed during the Iraq War when it was reported that the White House and Pentagon used retired generals to propagate whatever policy considerations that they wanted the public to believe. Another point to consider before being too quick to judge Obama is what information Obama has about our defenses that is unavailable to the public. During the 1980 presidential election President Reagan blasted President Carter for killing the B-1 Bomber. What no one knew at the time was that Lockheed was developing the Stealth Bomber that would have made the B-1 obsolete. How many knew back in the 1960s and later that a lot of defense concessions we could make to the Soviets was because of our incredibly advanced submarine detection system, which included tapping into underwater Soviet communication lines.
I’m not worried about most, if not all, of the fake accusations against Obama, including that he is selling out our country. I suspect that the accusers are hoping that just one of the attacks will grow legs and influence the election. By now I think former Secretary of Defense Robert Gates would have been heard from, along with a slew of flag rank officers, if they honestly believed that our president was selling us short. Their silence is deafening as it is revealing.
The Republicans, and especially their reactionary media outlets, have been pounding their mantra of class warfare. It seems to be working, especially among those who don’t make the effort to understand exactly what their definition of class warfare is. Using this inflammatory term has become as common as the Republican solutions to every social ill and economic problem that the U.S. faces: cut taxes and regulations. If only it was that simple; if only there was a proven track record that doing one or the other, or both, would solve all our problems.
Since roughly 1978, the disparity in income between the very top earners and middle class has been widening. The very wealthy have a grossly disproportionate size of the assets and income that has grown substantially. It wasn’t always this way, and it is not a good thing for our society. A strong middleclass is the backbone of our nation’s stability. There was actually a time in American history, in my lifetime in fact, where a corporate executive did not get bonuses and stock options for failure. Also in my lifetime the C-level folks actually planned long term for their companies and were patient in reaping the rewards. That all changed over the past 30 years or so. Boosting stock prices for the next quarter has become more important, never mind that this might run the business into the ground a few years down the road. But if the short term gain could get the big boys big bonuses, and if they could take the income as some form of investment, they could also save a ton of taxes legally by paying the lower investment tax rates. Mitt Romney excelled at this at Harvard Business School.
While the top people were making millions -- and even billions -- creating paper products that substantially contributed to the housing crisis and Great Recession, the middle and lower economic classes lost jobs, lost their health insurance, lost their retirements, lost the equity in their homes, went bankrupt, and so much more. So President Obama dared to try and implement Warren Buffet’s proposal of taxing those who make more than $1 million/year at thirty percent. Now keep in mind that our taxes are currently lower than at any time in sixty years. And the echo chamber roared, “Class Warfare!” Those who prospered during the past three decades and through the recession, those who have taken advantage of the tax breaks that only they qualify for, now object during the hard times to paying what they should have been paying all along. I wonder how many of those who have benefited supported the preemptive war in Iraq but didn’t want to pay for that either. I wonder if these same people would support a tax to pay our combat troops what they are really worth.
Florida has no state income tax and a low corporate tax. It should be a mystery to the class warfare defenders why Florida has one of the highest unemployment rates in the country. Why haven’t so many corporations left the high tax states to relocate to sunny Florida’s tax haven? Massachusetts and New York as an aside, two high tax states, also have two of the best public education systems in the country. I also wonder why the Republicans are so quick to support expensive and exotic defense weapons at taxpayer expense, but they won’t support job training programs that could help the middle and lower classes develop skills to find jobs that in turn would make taxpayers out of them. Instead we continue to hear the false argument that tax cuts will create jobs. They haven’t to date. We have the lowest interest rates in memory, which is the equivalent of a tax cut, but they haven’t done anything to move the housing market or cause businesses to spend and hire more employees. Could it be because consumer demand is what we need? Inflation is a fact of life and has been with us since the founding of our country. Yet the Republican doomsayers’ predictions that we would have out-of-control inflation right after Obama’s Stimulus never materialized. It’s not even on the horizon yet.
This class warfare mantra is a hoax. If anything, it is a war against those who have suffered the most because of the profligate ways of those who want to take us for another ride.
Incredulously, President Obama has been criticized, demonized, and accused of trying to destroy the separation of powers that are the heart and soul of our federal government. And those are the nicer pejoratives. This followed Obama’s comments last week that he believed the U.S. Supreme Court would uphold the Patient Protection and Affordable Care Act (better known as ObamaCare). Obama opined that the law was constitutional, and while some of his further statements about the Supreme Court overturning legislation dealing with the Commerce Clause were factually incorrect, they didn’t change the thrust of Obama’s honest opinion. It should be noted that regardless of whether the High Court upholds or overturns the law, there is widespread disagreement among the most reputable legal scholars on this issue. If the law was so “obviously” unconstitutional, as many believe, we wouldn’t need nine justices on the Supreme Court to review it. One justice could interpret the Constitution every time and always be right if it was so obvious and easy.
Conservative/reactionary radio and conservative columnists for the most part have taken Obama’s remarks and turned them into some of the wildest and craziest conclusions. I have to believe their demagoguery is primarily for the purpose of scaring the average American into believing that Obama is out to destroy our government. I personally heard Rush Limbaugh call Obama a thug for trying to threaten, intimidate and influence the justices on the Supreme Court to vote to uphold ObamaCare. Limbaugh went even further and said that he would not be surprised if Obama paid a personal visit to the Supreme Court before they render their opinion. Talking heads are saying that Obama is undermining the separation of powers with his remarks. Not one of these commentators that I heard and read pointed out that federal judges have lifetime appointments and can only be removed through a labyrinthine impeachment process. In fact the Founding Fathers provided for lifetime appointments to prevent the very situation the opinionators claim Obama is trying to do.
To show how political and biased the commentators are, let’s go back just a few months to when Newt Gingrich was being taken seriously as a presidential contender. A federal district court judge in Texas had recently blocked a public school from having organized prayer at commencement. (I’m not offering an opinion on the judge’s ruling, only stating what occurred.) In addition to death threats, Judge Fred Biery came under verbal attack by any number of commentators, including Newt. Newt basically said that as president he will have removed those federal judges who do not properly interpret the Constitution. (I assume he means how he interprets it.) He went on to say that he would haul a deviating federal judge before the congress to explain where they came off dictating their views to the American people. Consider that this man, Newt Gingrich, could have been elected president. Can anyone argue that this would be an outrageous, egregious abuse of power? If Gingrich and likeminded thinkers were to carry out their threat, that would be a real, not imagined, assault on the separation of powers. But strangely enough there was no pushback by the conservative/reactionary media. The voice of silence was all you heard. Does it not become clear that the conservative/reactionary media are just setting up a straw man in going after Obama for voicing his First Amendment protected opinion? I’m sure that those who have an irrational hatred of Obama won’t see it that way.
The MDJ editorialized on Sunday, April 01, 2012, that it hoped the Affordable Care Act, better known as ObamaCare, would be overturned. The unsigned opinion stated that liberals typically favor large government and would probably seem fine with the enhancement of federal power if the law was upheld. I wonder where the voice of the MDJ has been up to now on the activist opinion by conservative Justice Antonin Scalia in Gonzales vs. Raich (2005). Angel Raich had a medically documented need for using marijuana and acted within California law that permitted homegrown use for medicinal purposes. When law enforcement agents seized her plants, she sued for injunctive relief arguing, among other things, that the federal government had exceeded its authority under the Commerce Clause. Justice Scalia did not seem to think so and found that Congress could regulate an exclusively intrastate activity if its failure to do so (in this instance) would undercut the federal Controlled Substance Act.
It was President Ronald Reagan who was successful in getting legislation mandating that hospitals getting federal funds treat anyone at the emergency room. This caused the insurance rates to go up among those who are fortunate enough to have it. Then Governor Mitt Romney decided to do something about it when he successfully pushed through an insurance mandate in Massachusetts. His argument was that it was time for the free-riders to pay, the people who chose not to carry health insurance because they felt they had no need for it. Republicans going back to Nixon, to include Newt Gingrich, were okay with the mandate. Today Romney and Newt, among the supporters, condemn it using the most disingenuous arguments. I guess it makes a difference which party is in power at any given time to determine one's position.
Those opposed to the mandate scream about the "obvious" violation of the Commerce Clause. It took a real stretch for Scalia to uphold a federal law that was in direct conflict with a state statute that dealt with strictly intrastate activity. I wonder what the effect on interstate commerce is on those who don't change jobs because they need to keep their health insurance and would lose it if they moved, or would be unable to afford a policy if a family member had a preexisting condition. How much money that those with insurance pay to subsidize those without gets diverted from potential interstate commerce spending of goods and services? How many very productive people have "insurance handcuffs" that keep them from changing jobs or starting their own business?
It would be interesting for the MDJ to opine on a solution to the American healthcare system. The ObamaCare law that we got was very different than the one he originally proposed, and no Republican put any serious plan forward that could have been debated. It was all about defeating the president. Perhaps their strategy will work, and the Supreme Court will toss the whole law. Health insurance costs have been spiraling northward for more than 25 years. Without the mandate, portability, and elimination of the preexisting conditions exclusion, we should see rates increase even more.
For those so opposed to ObamaCare for one reason or another, I am reminded of the curse of the Greek Gods: Be careful of what you wish for; it might come true.
The Georgia State Senate has introduced SB 448, which is titled, "Small Business Borrower Protection Act." Reduced to its basics it provides that if a community bank sells a note at a discount to a third party, the borrower that personally guaranteed the full amount would not be responsible for paying any more than what the note was sold for. In other words this bill, authored by free market Republicans, would interfere with the contract relationship between the borrower and a lender (in this case the community bank), and by law rescind the promise to pay that the borrower signed. Banks and other businesses often sell their notes for one reason or another based on what they hope is their best business judgment. If the debt is one they want off the books, and if the bank can find someone to buy it at a discount and thus pass the risk to the purchaser, that is a good thing for all concerned. Why should the new holder of the note not be allowed to seek full payment on it? Why should the borrower/promisor be allowed off the hook just because there is a new holder of that note?
How many of us have had our mortgages sold at a discount? Has anyone received a letter advising that the amount due has been reduced to the price of the sale of that note? This bill is bad for commerce and restricts the ability of a bank to make a business decision in its own interest. That is what free markets and capitalism are about. The borrowers who signed the personal guarantees took the risk that they would have to dig deep if their investment did not pan out. If the development had succeeded beyond expectations, would they have rewarded a third party holder of the note with a nice bonus? SB 448 seems to have Majority Speaker Chip Rogers' fingerprints all over it. Recall that he and Congressman Tom Graves signed personal guarantees to a bank on a motel project that went south. And these two staunch Republicans who tout less regulation, a philosophy of letting the markets work, risk and reward in capitalism, personal responsibility, etc., were successful in arguing before a judge that they should not be held liable for their written personal guarantees for about $2 million, and the judge bought it.
Must be nice to have that kind of influence.