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Brian Dunn, Best Buy CEO, Resigns Amid Internal Probe
By
By ANNE D'INNOCENZIO and MICHELLE CHAPMAN 04/10/12 09:06 PM ET 
NEW
YORK -- Best Buy CEO Brian Dunn abruptly resigned on Tuesday after the
embattled consumer electronics chain launched an internal investigation into
his "personal conduct."
Best
Buy released a statement late Tuesday saying that it is conducting the probe
after earlier only saying the departure was a "mutual decision." The
chain would not give any specifics on the circumstances surrounding the
investigation of Dunn, a 28-year Best Buy veteran who had been CEO since 2009.
"Certain
issues were brought to the board's attention regarding Dunn's personal conduct,
unrelated to the company's operations or financial controls, and an audit
committee investigation was initiated," according to a company statement
issued late Tuesday. "Prior to the completion of the investigation, Mr.
Dunn chose to resign."
Dunn,
who started his career at Best Buy as a sales clerk in the 1980s, could not be
reached for comment about the investigation. But earlier on Tuesday, the
50-year-old said in a statement that he was leaving Best Buy poised "for a
strong future."
Best
Buy Co. hasn't disclosed the terms of Dunn's severance package. But Dunn's
annual compensation for fiscal 2010, the latest figures available, was worth
about $5 million – half of what it was in the prior fiscal year.
The
resignation adds to Best Buy's mounting problems. Up until a few years ago, the
nation's largest consumer electronics retailer was the place Americans went to
grab TVs and cameras. But the chain has suffered in the economic downturn and
has been widely criticized for not being quick to respond to growing
competition and the changing shopping habits of Americans.
While
industry watchers had been calling for changes at Best Buy, news of the
investigation didn't sit well with Wall Street. On the news of the probe, Best
Buy's shares fell almost 6 percent, or $1.33, to close at $21.32, after
initially climbing higher on news of Dunn's departure. Best Buy's shares have
lost more than half of their value since April 2006, when they were trading at
$56.66 per share.
"It's
good news that he's gone," said Brian Sozzi, chief equities analyst at NBG
Productions, an independent research firm. "But this adds another layer of
uncertainty."
Best
Buy said Tuesday that board member Mike Mikan, 39, will serve as interim CEO
while the company searches for Dunn's permanent replacement. A new CEO will
face a big challenge trying to usher Best Buy into a new era.
Sales
of TVs, digital cameras and video game consoles – once the bread-and-butter of
Best Buy – have weakened, while sales of lower margin items like tablet
computers, smartphones and e-readers have increased. Adding to that, people
increasingly use the stores of big-box retailers like Best Buy as showrooms to
browse for products and then go online to Amazon.com and other sites to buy
items at lower prices.
Best
Buy, based in Minneapolis, was expected to benefit from the liquidation of the
company's main competitor Circuit City, which was overcome by growing
competition in 2009. But instead, the company has continued to struggle even in
the absence of its rival.
Best
Buy's revenue at stores opened at least a year – a key measure because it
excludes results from stores that open and close within the year – has declined
in three of the past four years. In the most recent fiscal year ended March 3,
the figure fell 1.7 percent. That's on top of a 1.8 percent decline in the
prior fiscal year.
The
chain also lost $1.23 billion, or $3.36 per share, in the most recent fiscal
year. That compares with a profit of $1.28 billion, or $3.08 per share, in the
prior year
"Best
Buy's operational strategy has been way off the mark and late to address the
fundamental industry upheaval," Sozzi, the analyst at NBG Productions,
said. "Big-box stores can't be fixed. They have to be re-invented."
Best
Buy, which has 1,400 U.S. stores, has been trying to revamp its business. In
the past few years, the company has cut its square footage by 15 percent in
about 43 stores. It did that by either subletting the space to other merchants
or giving it back to the landlords.
And
a couple weeks ago, the chain unveiled a massive restructuring plan that calls
for closing 50 of its U.S. big-box stores and opening 100 small-format stores
focusing on its burgeoning mobile business that focuses on cell phones. It's
also planning to cut $800 million in costs over the next five years.
But
analysts say there's more work to be done. Gary Balter, an analyst at Credit
Suisse, says the company should close even more stores and take better
advantage of its fast-growing mobile business. After all, Best Buy's mobile
business makes up nearly one-third of the retailer's profits, he says, but
accounts for less than 10 percent of the overall square footage.
"Best
Buy faces an uphill battle to find the right CEO," said Michael Pachter,
an analyst at research firm Wedbush Securities. "Mr. Dunn's replacement
must be prepared to manage the transition from big box to small box format. A
CEO with this experience will be difficult to find."
IBM, AT&T Unfairly Getting
Small-Business Contracts: Study
Some
of the world's biggest companies are benefiting from a program meant to help
America's small businesses, according to a new study.
Lockheed
Martin, IBM and AT&T all have snatched up federal government contracts
meant for small businesses, according to a study from the American Small Business
League.
Indeed,
almost three-fourths of the top 100 federal "small" business
contractors in fiscal year 2011, were actually large companies, says the report
highlighted by the Project on
Government Oversight. Some of the biggest beneficiaries include
Aegis, a 1,900-employee defense contractor, and Sierra Nevada, an
1,800-employee aircraft parts maker. Among the top recipients were Metro
Machine Corp. in Norfolk, Va., which received almost $240 million in contracts
even though it is a subsidiary of General Dynamics, a conglomerate with $2
billion in annual revenue.
The
ASBL, which has repeatedly complained about
instances in which large companies misrepresent their status to the
government in order to qualify for such contracts, said such diversion of
contracts deprives legitimate small businesses of more than $60 billion in
contracts each year. "Misrepresenting your firm as a small business is a
felony, but the SBA has NEVER prosecuted a single offender," it says on
the league's website. The Small Business Administration did not return a call
for comment.
The
industry group found that the government failed to reach its statutory goal of
providing 23 percent of all federal contracts to small businesses in fiscal
year 2010 and that there was an increase in the number of large businesses
winning such contracts, as reported by the Project on Government Oversight.
The
discrepancy could get worse. The SBA recently issued a rule that
broadens the definition of companies that qualify as small businesses, as noted
by POGO. Spokesmen for Lockheed Martin, IBM and AT&T did not return emails
seeking comment.
Chamber,
Business Groups Aim To Weaken Anti-Bribery Law
A law that bans American companies from
paying bribes to often-corrupt foreign leaders seems pretty obvious.
But
the Chamber of Commerce is spearheading an under-the-radar battle to weaken the
decades-old Foreign Corrupt Practices Act, which was passed in 1977 in the wake
of scandals like Banana gate, in which Chiquita admitted to bribing the
president of Honduras. In that year alone, more than 400 U.S. companies
admitted to making questionable payments of more than $300 million to foreign
government officials and politicians. Recent violators include Siemens AG,
which was forced to pay a $450 million
fine for distributing more than $800 million to governments
around the world, and former representative William "Dollar Bill"
Jefferson (D-La.), who was busted for bribing African governments to win
contracts for business colleagues.
American
companies have often chafed at the rule, complaining that it hurts their
ability to compete for business against non-U.S. firms that are not subject to
such anti-bribery laws. The Chamber, which corralled a number of other
prominent trade associations to send a letter this week to
the Justice Department seeking clarity on the law, has long lobbied against it.
The
Chamber's Institute for Legal Reform hired former Bush administration attorney
general Michael Mukasey last year and has spent millions to lobby on the FCPA
and other bills. This week is a particularly vulnerable time for DOJ with the
collapse of one of its biggest bribery cases against more than a dozen
defendants in a case involving military equipment contracts. Still in
officials' sights are Avon, over whether it paid bribes in China to win a
license there, and Wynn Resorts, which gave a $135 million donation to the
University of Macau while seeking gaming licenses there, as reported by Reuters.
Pentagon Lets
Down Whistleblowers, Says GAO
Members
of the military who fear retaliation for blowing the whistle on fraud and other
concerns may not get help from the Pentagon, according to a new Government Accountability Office report.
Military brass take too long to
investigate whistleblower complaints and have sometimes put the careers of
whistleblowers in jeopardy, according to the audit. But the process also can
transform the career of a grunt -- in one example cited by the GAO, a service member
eventually was given a Bronze Star that had been denied to him due to reprisal.
Quick Hits
*
The Securities and Exchange Commission is making government geeks happy with
a user friendly redesign of its database
of official speeches, statements and videos.
*
SEC Chairman Mary Schapiro expressed her support for the STOCK
Act, which seeks to limit congressional insider trading in the wake of a
"60 Minutes" investigation.
*
Yet more SEC news: Two former top officials, including ex-commissioner Kathleen
Casey and ex-general counsel Brian Cartwright just joined Patomak
Global Partners, a consulting group in D.C. already run by a former SEC
commissioner, Paul S. Atkins.
Obama Campaign To Wall Street:
We'll Go Easy On You Guys
President
Obama's campaign manager has a message for Wall Street: This time around, we'll
lay off.
Jim
Messina, Obama's campaign manager, told the hosts of a $38,500 per-plate
fundraiser geared towards investment bankers and hedge fund managers that the
president wouldn't make Wall Street look bad during his re-election campaign,
Bloomberg reports. The assurance follows Obama's call to raise taxes on the rich in his latest budget proposal.
The
current attempt at appeasement also comes as Obama attempts to win back the
donors that provided him with so much last election. Despite criticizing Wall
Street during a 2007 speech at the Nasdaq stock exchange, financial industry donations
to Obama outpaced Wall Street cash to his GOP rival John McCain two-to-one at certain points in that campaign, according
to the New York Daily News.
This
time, Wall Street donors are instead favoring Republican candidates, their dollars going to the GOP by a five to one margin. And
Mitt Romney, the Republican front runner and a former Wall Street man himself,
is netting most of that cash, according to campaign finance data.
In addition, an October fundraiser geared towards Wall Street donors and
headlined by billionaire investor Warren Buffett had a "disappointing" turn out,
according to the New York Post.
Wall
Street may be having a change of heart after Obama has repeatedly slammed the
industry during his first few years in office. The president criticized the
financial industry in a December 2009 CBS 60 Minutes interview for giving
themselves big bonuses -- calling them "fat cat bankers" -- after U.S.
taxpayers bailed them out. In April 2010, he chided a group of Wall Street
leaders for their “reckless practices,” according to The New York Times.
Another
Wall Street bugaboo may be Obama's push for more financial regulation -- some
Wall Streeters said Obama's support for the Dodd-Frank financial reform act
turned them off from the president. Obama's repeated calls to raise taxes on
the wealthy may also be ruffling the financial industry's feathers. The
president's budget proposal for 2013 included a provision -- dubbed the
"Buffett rule" -- that would require households making more than $1 million to pay at least 30 percent of
their income in taxes.
Calf In Backseat Of Honda Civic
Leads To Arrests In New Mexico
04/
2/12 11:02 AM ET 
Cops arrested three men after reportedly finding a calf in their
backseat. It probably looked a lot like this cute little guy.
CARLSBAD,
N.M. -- New Mexico authorities have arrested three men found with a 220-pound
calf in the backseat of their car.
The
Carlsbad Current Argus reports that the men are accused of cattle rustling.
They were jailed on charges of suspicion of larceny of livestock, conspiracy,
lack of a bill of sale and exporting livestock.
Luna
County sheriff's office says a deputy pulled over their Honda Civic on Friday
and saw the animal sharing the backseat with one of the alleged thieves.
The
three are being held at the Luna County Detention Center.
Jessica Rae Sacco Dismemberment:
Five Suspects Arrested In Horrific Ohio Slaying
By BARBARA RODRIGUEZ 04/ 2/12 05:38 PM ET
Christopher
Wright and Sharon Cook were arraigned on Monday -- two of five suspects in
connection with the killing of Jessica Sacco
COLUMBUS, Ohio — Authorities investigating the death of a
western Ohio woman who they say was stabbed, suffocated and dismembered in her
bathtub before some of her remains were dumped in Kentucky believe she may have
met two of her assailants through the Internet.
Urbana Police Chief Matt Lingrell said 21-year-old Jessica Rae
Sacco was living with her boyfriend and a Michigan couple they met on the
Internet. Sacco's dismembered body was found in her apartment Friday.
Twenty-five-year-old Matthew Puccio of Urbana is charged with
killing Sacco. Twenty-six-year-old Andrew Forney and 25-year-old Kandis Forney,
both of Fenton, Mich., face charges involving corpse abuse and evidence
tampering. They are among five people arrested in connection with Sacco's
death.
Police said they will not discuss a motive while the
investigation is ongoing.
The Huffington Post | By Andy
Campbell | Posted:
04/02/12 02:32 PM ET | Updated: 04/02/12 04:37 PM ET
Sarah Jones Case: Bengals
Cheerleader Pleads Not Guilty To Sex With Student
The
captain of the Cincinnati Bengals cheerleading squad -- the Ben-Gals -- pleaded
not guilty today to charges of having sex with a student while she was a high
school teacher.
Sarah
Jones, 26, is accused of having a sexual relationship with a senior at Dixie
Heights High School in Kentucky, where she taught until she resigned last
November, according to MSNBC.
The
details of the accusations are unclear, but Jones was indicted last week on
charges of first-degree sexual abuse and unlawful use of electronic devices.
Her mother, Cheryl Jones, was also indicted on accusations that she tampered
with physical evidence in her daughter's case.
Sarah
Jones abruptly quit her teaching job on Nov. 30, citing "personal
reasons," WLWT reported. Dixie Heights
Superintendent Terri Cox-Cruey said that the resignation came at the same time
as the first police probe.
"The
day the police openly investigated, that was the same day she submitted her
resignation," Cox-Cruey told the station, adding that she was surprised to
hear about the allegations.
"No
parents or students ever approached me in all the years she worked for the
district with any concern," she said.
Gannett reported that
the police investigation was, for the most part, kept secret from the school
district.
Sarah
and Cheryl Jones held hands as they pleaded not guilty in court today. The
victim's family was in court to support Jones and deny that the abuse happened,
according to MSNBC.
"The
student denies it. The parents of the student are upset that this has gone
where it has gone. They don't have anything bad to say about Sarah. Sarah
denies it," said attorney Eric Deters in December. "There's no
victim. There's nobody saying, 'Hey, this happened.'"
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Shaquan Duley Begins 35-Year Sentence After Killing
Her Two Sons, Staging Their Death
Shaquan
Duley, 30, sits with her lawyer at her sentencing hearing before she was
committed to a maximum security prison Friday.
COLUMBIA, S.C. -- A 30-year-old South Carolina mother has begun
a 35-year prison sentence for killing her two young sons.
Records show Shaquan Duley (shah-KWAHN' DOO'-lee) was admitted
Friday to a maximum-security women's prison in Columbia.
Divers pulled the bodies of 2-year-old Devean and 18-month-old
Ja'van from the North Edisto River in August 2010.
Last month, Duley pleaded guilty to murder in the boys' deaths,
admitting that she smothered them with her hands, then put their bodies in the
river, staging a watery crash scene.
Duley said she killed the boys after a fight with her mother
over her parenting skills.
Snow Plow Driver And Wife Charged
In Alleged Strangulation Murder: Allen And Patricia Prue In Custody
By LISA RATHKE 03/28/12 04:39 PM ET
ST.
JOHNSBURY, Vt. — A Vermont snowplow driver who wanted to "get a girl"
was accused Wednesday along with his wife of luring a popular prep school
teacher from her home by pretending their vehicle had broken down, beating and
strangling her, stripping her body naked and throwing it into the Connecticut
River.
Allen
Prue, 30, and Patricia Prue, 33, of Waterford, pleaded not guilty to
second-degree murder in the death of Melissa Jenkins, whose SUV was found
idling along a remote road near her St. Johnsbury home on Sunday with her
unharmed 2-year-old inside.
Police
said Allen Prue was riding around on Sunday with his wife when he got the idea
"to get a girl," the affidavit said. "They didn't plan to get
one forcefully," the police affidavit said.
Police
gave no further details on a possible motive in the death of the 33-year-old
teacher at the prestigious St. Johnsbury Academy. The Prues were ordered held
without bail, and police said more charges were possible.
"They
knew Miss Jenkins and had snow plowed her driveway a couple of years ago,"
Vermont State Police Maj. Ed Ledo said at a news conference announcing the
arrests. A friend told police that Allen Prue had asked Jenkins out a couple of
times and that she felt uncomfortable around him, according to the documents.
She stopped having him plow, and in autumn 2011 he showed up drunk at her home
asking if he could plow her driveway the following year.
After
the court appearance, Allen Prue's mother, Donna Prue, said that her son has
never been in trouble with the law before and that she has faith he didn't
commit the crime. "I do not believe he would ever do this, because he
didn't have it in him. I have nothing against her (Patricia); I don't have
nothing bad to say about either one," said Donna Prue, who lives with the
couple and her daughter. She said she did not know Jenkins.
Police
were called Sunday night after Jenkins' son was found alone in her vehicle.
Her
former boyfriend told police she called him saying that she had gotten a weird
call from a couple who used to plow her driveway and that she was going to help
them. She wanted someone to know what she was doing, the documents say.
When
he couldn't reach her two hours later, he went to check on her. He told police he
found her vehicle, with her son sleeping in it, and one of her shoes nearby. Allen
Prue later told police that Patricia Prue called Jenkins and told her they had
broken down near her home.
The
death of the well-loved science teacher at St. Johnsbury Academy, once attended
by President Calvin Coolidge, reverberated through the town of 6,200 in
northeastern Vermont about 40 miles south of the Canadian border.
Ledo
said he hoped the arrests would bring closure for Jenkins' family and friends.
"We
can now turn our full attention to healing from this tragic loss, celebrating
Melissa's life and mourning her death," said Joe Healy, a spokesman for
St. Johnsbury Academy.
The
court documents describe the encounter this way:
When
the 33-year-old Jenkins got out of her vehicle, Allen Prue grabbed her and
strangled her. He said his wife was outside helping him but didn't know what
she was doing. He then put the body in the backseat of their car, and they
drove to their home. At some point, Patricia Prue choked Jenkins in the car
"to ensure she wasn't breathing."
Back
at their home, he put Jenkins' body on a tarp, removed her clothes and poured
bleach on her body. The Prues also removed their clothes and put them on the
tarp. They then drove to a boat access at the Connecticut River, which
separates Vermont from New Hampshire, and put Jenkins' body in the water,
weighing it down with cinder blocks and concealing it with brush.
They
threw a prepaid cell phone that Patricia had used to call Jenkins into the
water near Moore Dam and took the tarp and the clothes to New Hampshire where
they burned it. Jenkins' body was found with her feet tied and severe bruising
indicating a severe beating before her death, the affidavit said.
Number Of Working Poor In America Hit Its Highest
Level In Last Two Decades: Report
In
this post-recession economy you may be able to get a job, but that doesn't
necessarily protect you from falling into poverty.
In
2010, the number of working poor Americans climbed to its highest level in the
last two decades, the Department of Labor reported last week.
About 10.5 million Americans, or 7.2 percent of the labor force in 2010,
weren't earning enough to stay out of poverty, according to a Department of Labor report released
last week. That's the highest rate since the Labor Department
started reporting the statistic in 1987 (h/t Think Progress).
To
provide broader picture of 2010, during that year, 46.2 million Americans or 15.1 percent of the
population were earning below the official poverty line -- an
annual income of $10,830 for a single person and
$22,050 for a family of four, according to the Census Bureau.
But
the new report isn't the only indication that the number of Americans making a
decent income has declined in recent years. The number of U.S. households
classified as living in "extreme poverty" -- earning a cash income of
less than $2 per person per day -- more than doubled from 1996 to 2011, the Center on Budget and Policy
Priorities reported.
In
addition, nearly one in every two Americans or 146.4 million is now classified
as either low-income or earning below the poverty line, an increase of 4
million from 2009, according to a December Census report.
What's
more, the number of Americans one emergency away from a financial crisis also
climbed to nearly 50 percent, a study from earlier this year
found.
And
while there may be indications that the job market is improving, the most
recent employment gains are reportedly taking place in low-paying industries like
retail and temporary work. In addition, median income has
decreased more during the recovery than the recession.
Big Companies Collecting State
Taxes From Workers And Keeping The Money
Posted:
04/12/2012 12:01 am Updated: 04/12/2012 11:22 am
By
David Cay Johnston
April
12 (Reuters) - Across the United States more than 2,700 companies are
collecting state income taxes from hundreds of thousands of workers - and are
keeping the money with the states' approval, says an eye-opening report
published on Thursday.
The
report from Good Jobs First, a nonprofit taxpayer watchdog organization funded
by Ford, Surdna and other major foundations, identifies 16 states that let
companies divert some or all of the state income taxes deducted from workers'
paychecks. None of the states requires notifying the workers, whose
withholdings are treated as taxes they paid.
General
Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors
and AMC Theatres enjoy deals to keep state taxes deducted from their workers'
paychecks, the report shows. Foreign companies also enjoy such arrangements,
including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and
European banks, Good Jobs First says.
Why
do state governments do this? Public records show that large companies often
pay little or no state income tax in states where they have large operations,
as this column has documented. Some companies get discounts on property, sales
and other taxes. So how to provide even more subsidies without writing a check?
Simple. Let corporations keep the state income taxes deducted from their
workers' paychecks for up to 25 years.
It
was not always this way. Letting companies keep their workers' state taxes
apparently began in Kentucky two decades ago as a way to retain jobs. Last July
when I wrote about six big companies that pocket Illinois state taxes () I knew
there was more to this. But I had no idea how pervasive these diversions were
until I read an advance copy of the 39-page report by Good Jobs First.
CORPORATE SOCIALISM Deals cut with the states over the past two decades
diverted $5.5 billion from public purposes to private gain, the report says.
Close to $700 million more was diverted last year, Good Jobs First estimates.
New
Jersey approved $73.2 million in new deals in 2011 on top of $178 million
diverted that year alone under previous deals. I calculate that at nearly $80
per household in corporate welfare based on New Jersey's 3.1 million
households.
These
deals typify corporate socialism, in which business gains are privatized and
costs socialized. They also mean government picks winners and losers,
interfering with competitive markets. Leaders in both parties embrace these
giveaways because they draw campaign donations from corporate interests and
votes from people who do not understand that they are subsidizing huge
companies. Michael Press, a Connecticut consultant on tax incentives, says such
deals, however troubling, are an inevitable result of the U.S. Constitution
setting up competition between the states. "In an ideal world we would not
provide any corporate subsidies," Press told me. "It looks like
corruption. But if you do it right, if you only target those companies whose
behavior you change to create jobs or keep jobs in your state then these
targeted temporary arrangements are cheaper - much cheaper - and can be more
effective than an overall reduction in tax rates."
The
mission of Good Jobs First (www.goodjobsfirst.org) is making economic
development subsidies accountable and effective. In years of working with their
data I have always found it sound. While Greg LeRoy, Good Jobs First's founder,
has rooted out all sorts of hidden subsidies over the years, he emphasizes that
he is not inherently hostile to them, only to secrecy, waste and what he calls
job piracy and job blackmail.
"Job
piracy" occurs when one state diverts taxes to lure an employer across
state lines. AMC Entertainment announced a deal last year to move its corporate
headquarters from Kansas City, Mo., to a nearby Kansas suburb. In return, Good
Jobs First said, Kansas will let the multiplex chain keep $47 million of state
income taxes withheld from its workers' paychecks, a drain on public finances
that did not create any jobs, but does enrich the Wall Street firms that own
AMC including arms of J. P. Morgan, Apollo Management, Bain Capital and the
Carlyle Group. AMC declined to answer my questions. "Job blackmail"
occurs when a company threatens to close a plant unless it gets tax money.
In Illinois, the law requires companies to threaten to leave before they can keep taxes withheld from paychecks. Motorola Mobility, now being acquired by Google; the truck maker Navistar; the German manufacturer Continental Tire, and three auto makers - Chrysler, Ford and Mitsubishi - get to keep $346.8 million in t axes over 10 years because they threatened to leave Illinois. Navistar can pocket $62.1 million even if it fires a quarter of its Illinois workforce, its contract shows. A recent deal gives Sears $150 million, Good Jobs First reported.
In Illinois, the law requires companies to threaten to leave before they can keep taxes withheld from paychecks. Motorola Mobility, now being acquired by Google; the truck maker Navistar; the German manufacturer Continental Tire, and three auto makers - Chrysler, Ford and Mitsubishi - get to keep $346.8 million in t axes over 10 years because they threatened to leave Illinois. Navistar can pocket $62.1 million even if it fires a quarter of its Illinois workforce, its contract shows. A recent deal gives Sears $150 million, Good Jobs First reported.
PROMISES
OF JOBS Promising to retain jobs can be lucrative. General Electric invested
$126 million updating part of its Ohio operations. In return, GE gets a tax
credit equal to $115.3 million of its worker taxes, recovering 92 percent of
its investment. A sweet deal for GE, but not its competitors. Gary Sheffer,
GE's top spokesman, said the company told its workers about the deal. In all,
he said, GE is investing around $300 million in Ohio and "the resulting
taxes the state will receive will far exceed the tax credits provided to
GE."
That
response, I think, misses the point - GE should pay its own bills without
taking welfare.
Many figures in the Good Jobs First report are from disclosure reports some states make. Others come from news accounts and company announcements. Total revenue losses are higher than the report states. First, some states hide the costs. Phil Mattera, the research director at Good Jobs First, said he lists the cost as zero for states that hide the numbers.
Many figures in the Good Jobs First report are from disclosure reports some states make. Others come from news accounts and company announcements. Total revenue losses are higher than the report states. First, some states hide the costs. Phil Mattera, the research director at Good Jobs First, said he lists the cost as zero for states that hide the numbers.
Good
Jobs First wants to end these diversions, but failing that recommends mandatory
disclosure to the workers as the first reform. I concur. It's the first step in
ending corporate welfare as we know it.
Allen West: I've 'Heard' 80 House
Democrats Are Communist Party Members (UPDATE)
Posted: 04/11/2012 9:16 am Updated:
04/11/2012 5:34 pm
WASHINGTON
-- As many as 80 House Democrats are communists, according to Rep. Allen West
(R-Fla.).
West
warned constituents at a Tuesday town hall event that he's "heard"
that dozens of his Democratic colleagues in the House are members of the
Communist Party, the Palm Beach Post reported. There are
currently 190 House Democrats.
West
spokeswoman Angela Melvin later defended West's comments -- and clarified to
whom West was referring.
"The
Congressman was referring to the 76 members of the Congressional Progressive
Caucus. The Communist Party has publicly referred to the Progressive Caucus as
its allies. The Progressive Caucus speaks for itself. These individuals
certainly aren't proponents of free markets or individual economic
freedom," Melvin said in a statement to The Huffington Post.
West's
campaign also sent over the transcript of the actual exchange that took place
during the town hall to show that West was asked directly about the role of
communists in the House.
Moderator:
What percentage of the American legislature do you think are card-carrying
Marxists or International Socialist?
West:
It's a good question. I believe there's about 78 to 81 members of the Democrat
Party who are members of the Communist Party. It's called the Congressional
Progressive Caucus.
Some
members of the Congressional Progressive Caucus confirmed that they are not, in
fact, members of the Communist Party.
"I
can confirm that Congresswoman Baldwin is not a communist," said Jerilyn
Goodman, spokeswoman for Rep. Tammy Baldwin (D-Wisc.), a vice chair of the
caucus.
"Chellie
is a Democrat, a farmer and a Lutheran but no, she is not a Communist,"
said Willy Ritch, spokesman for Rep. Chellie Pingree (D-Maine), also a vice
chair of the caucus.
During
the same event, which took place at Jensen Beach, the freshman Republican said
President Barack Obama wouldn't have a public debate with him over their policy
differences because he was "scared." The president was in Florida on
Tuesday giving remarks about the economy and holding campaign events.
"I
really wish that, standing here before you, was Allen West and President
Obama," West said, according to the Palm Beach Post. "We
could have a simple discussion. But that ain't ever gonna happen."
When
an audience member asked why, West said in "a mocking voice" that it
was because Obama "was too scared."
UPDATE: 5:30 p.m. -- Congressional Progressive
Caucus Co-Chairs Raul Grijalva (D-Ariz.) and Keith Ellison (D-Minn.) later
criticized West's "outrageous" claims.
"Calling
fellow Members of Congress 'communists' is reminiscent of the days when Joe
McCarthy divided Americans with name-calling and modern-day witch hunts that
don't advance policies to benefit people's lives," Grijalva and Ellison
said in a joint statement. "We hope the people of Florida's 22nd
Congressional District will note that he repeatedly polarizes the American
people instead of focusing on their interests."
CORRECTION: A
previous version of this post stated that West made the remarks at Florida
Atlantic University. He made the statement at Jensen Beach.
Director, Citizens for Tax Justice and
the Institute on Taxation and Economic Policy
The Facts About U.S. Corporate
Taxes
Posted: 04/11/2012 3:53 pm
You
might have heard how the U.S. has just become "number one" in
corporate taxation. The campaign to make this event news was led by the Business Roundtable,
an association of CEOs that advocates for a lower corporate rate and a more
"competitive" tax system. They cleverly used the day that Japan
lowered its corporate tax rate by a few percentage points as an opportunity to
complain, anew, about the U.S. corporate tax rate, which, as of Sunday, became
the highest in the developed world.
But
it's the highest on paper only. In practice, the true U.S. corporate tax rate
is barely half of the 35 percent nominal rate. A major study by Citizens for Tax
Justice last November found that the biggest and most
profitable Fortune 500 corporations paid only 18.5 per percent in federal
income taxes on their U.S. profits from 2008 through 2010. Many companies paid
little or nothing.
Let's
take some examples. The Business Roundtable's executive committee is chaired by
Boeing CEO, James McNerney. Over the last 10 years, Boeing has only paid
federal income taxes in two years (in 2002 and 2007) and has gotten tax refunds
from the U.S. Treasury all the others. Boeing's average federal tax rate in the
last decade? Negative 6.5 percent.
GE's
Jeffery Immelt is also on that executive committee. His corporation famously
paid no taxes last year and, in the last ten years, has averaged a federal
income tax rate of 2.3 percent on its $83 billion in U.S. profits.
It wasn't always this way. Back in the prosperous 1960s, corporate taxes averaged almost 4 percent of our gross domestic product. But over the past three fiscal years, federal corporate income taxes plummeted to only 1.2 percent of GDP. That's the lowest sustained share in seven decades.
It wasn't always this way. Back in the prosperous 1960s, corporate taxes averaged almost 4 percent of our gross domestic product. But over the past three fiscal years, federal corporate income taxes plummeted to only 1.2 percent of GDP. That's the lowest sustained share in seven decades.
Confronted
by this data, corporations often point to their worldwide tax bills, which
combine U.S. profits and taxes with foreign profits and taxes. But that's
mixing apples and oranges. In fact, if you look into the foreign taxes paid by
U.S. companies, you'll make an interesting discovery. Despite the common
corporate claims that U.S. taxes are higher than taxes in other developed
countries, it turns out that most U.S. multi-national corporations are actually
paying higher taxes to foreign governments on the profits they earn there than
they pay to the U.S. on the profits they earn here.
The
reason for the extraordinarily low U.S. corporate tax payments, of course, is
that our corporate tax code is riddled with loopholes and tax breaks, most of
them indefensible. These include rules that let companies shift their profits,
on paper, to low-tax foreign tax havens, and thereby avoid their U.S. tax
responsibilities. The price tag for these subsidies is slated to approach $2
trillion over the next 10 years.
Given their huge cost, you might think that eliminating corporate tax subsidies would be high on the list among the ways we could cut our nation's long-term budget deficits. And in fact, the American general public does think so. But such is the power of corporate money and corporate lobbying in our nation's capital that every Republican presidential candidate and virtually every GOP member of Congress thinks we need to reduce corporate tax payments even further. And some Democrats in Congress feel the same way. Another recent CTJ study found that 98 percent of sitting members of Congress have accepted campaign money from the thirty most notorious tax avoiding companies.
Given their huge cost, you might think that eliminating corporate tax subsidies would be high on the list among the ways we could cut our nation's long-term budget deficits. And in fact, the American general public does think so. But such is the power of corporate money and corporate lobbying in our nation's capital that every Republican presidential candidate and virtually every GOP member of Congress thinks we need to reduce corporate tax payments even further. And some Democrats in Congress feel the same way. Another recent CTJ study found that 98 percent of sitting members of Congress have accepted campaign money from the thirty most notorious tax avoiding companies.
There's
a price to pay for letting the corporate income tax dwindle. It inevitably
means higher taxes or reduced public services (or both) for the rest of us.
This simple arithmetic isn't just a theory. Japan may be shaving a few points
off its corporate tax rate, but it not only coupled that with curbs on
corporate loopholes, but also added a new surtax on personal income taxes.
Getting
rid of useless or harmful corporate tax breaks ought to appeal to anyone who
believes in free markets. As a bonus, it would make it much easier to fund the
investments we need to improve education and repair our crumbling roads and
bridges -- things that would actually help businesses and our economy grow.
Robert McIntyre is Director of Citizens
for Tax Justice and the Institute on Taxation and Economic
Policy. His research on corporate and individual taxation has been shaping
policy for 30 years.
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