Pres. Obama vs Tax Loopholes

[Professor S]

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9jSNVDYXQoE&refer=home

This is not at face value a bad thing, but only at face value. Currently many companies use these legal loopholes to avoid the US's relatively high corporate tax rates. Closing these loopholes only seems right in that it uphols the rule of law, but it will be hard to avoid the observation that this will also be viewed as a huge tax increase. This would not bother me so much if the administration coupled this with a corporate tax decrease, but I highly doubt this will ever happen.

The danger is that companies may leave America. It is a flattening world, and with modern communications corporations can easily move shop if they view remaining in the US is cost prohibitive. The infrastructure is in place globally that in the future I believe nations are going to have to compete for businesses, just like businesses compete for consumers. Ireland would LOVE to have more busineses.

But the tax implications aren't what bother me the most.

The most dangerous part of this mess is the following:

Obama also would shift the burden of proof to individuals when the IRS alleges assets are being hidden in certain offshore bank accounts, the White House said in a statement.

So now we will be guilty until we prove ourselves innocent? Another hole is punched through our rights, and the IRS becomes even more gestapo-like. Remember when we all thought Bush was the fascist?

[KillerGremlin]

This country has operated on a guilty till proven innocent basis for a while now.

Anyway, I agree, with globalization it is not impossible to see countries move their business elsewhere. Obama should be trying to work with big business instead of pissing them off. At least go for some sort of compromise.

[Professor S]

This country has operated on a guilty till proven innocent basis for a while now.

Perhaps thats your take on it from a social/media justice perspective, but the rule of law right now still runs on innocent until proven guilty beyond a shadow of a doubt. If this new action is taken, we will have rewritten the way out legal system works regarding the accused.

[Vampyr]

Perhaps thats your take on it from a social/media justice perspective, but the rule of law right now still runs on innocent until proven guilty beyond a shadow of a doubt. If this new action is taken, we will have rewritten the way out legal system works regarding the accused.

Unless I'm mistaken, you only have to be proved guilty 'beyond a shadow of a doubt' (unanimous jury) in murder and aggravated murder cases.

But I'm a little confused as to how this makes people guilty until proven innocent. What exactly does it mean for the 'burden of proof to be shifted to individuals'? It sounds like something that is a common practice in more areas than just the IRS - auditing. Where you take a sample from a group and ask them to provide proof that what they said was true. It's used to prevent people from cheating the government. It isn't fair for the people that it happens to, especially when it happens multiple years in a row - but I can't think of a better way to prevent people from gaming an already gamed system. This happens when applying for college financial aid too.

I agree that countries are going to have to start competing for businesses. Unemployment rate in the US is probably going to be hitting double digits in the next year or so.

I'm not a fan of upholding rules or laws for the sake of upholding them - I actually hate that. An unjust law is not a law at all. But I think the bigger picture of closing these loopholes is because currently it provides incentives for companies to move their jobs and profits somewhere that is not here - in order to avoid the higher taxes.

It would be nice if everything wasn't about making a dime, and people would shut up and pay their taxes. But companies have a responsibility to their investors to make the biggest profits possible.

But I believe that America may actually be on the track to producing more jobs that simply can't be outsourced. Our economy and businesses are based in the service industry. Saying 'service' implies things like restaurants and hotels, but it is actually encompassing more and more jobs that require a college degree. Teachers, social workers, software developers, engineers, etc, etc. You may be thinking 'wait, engineers or software developers can be outsourced - all they really do is make things', but that would be incorrect. Despite new communication technologies, companies who previously tried to outsource these jobs and now in sourcing them back. Quality is a huge factor in these industries, and you get more of that in America.

What is happening here is that the middle generation is getting screwed. The people who were told college was an option instead of a requirement when they were in high school 15+ years ago, and the only people who went were those who felt it was 'right for them,' which was totally legitimate at the time. But the world moved very quickly - the jobs you can have without a college degree are being outsourced. In the future these jobs will all be replaced by emerging industries that require degrees and where quality of the product or service is most important. These days not only is a 4 year degree a requirement, but soon an additional masters degree will be considered mandatory.

This is why I think such a huge focus needs to be put into education. Not only government aid in the form of dollars for students, but I think the price of college has become a scam. It's something we pay for because unless we are blessed with the talent to avoid college, we have to go. Government regulation to control the outrageous fluctuation of the price of going to a public university would be nice.

[Professor S]

1) Moving the burden of proof to the individual literally means that the individula must prove they are innocent. Meaning, the IRS can make an accusation, even randomly, and then the company/individual must prove their innocence. Also, I believe the "shadow of a doubt" rule and jury of peers applies to all state and federal cases beyond a misdemeanor, but is not applied to civil cases. I'm not positive on that though.

Currently I believe the IRS must have evidence/just cause (descrepancies, etc.) for an audit in most cases. But I'm not positive about that either. What I do know is that it is a huge change from current law/standard practice.

2) I don't like the idea that companies are avoiding taxes either, but we need to acknowledge why they are doing so: The US has the second highest corporate taxes in the world. What we should do is eliminate the loopholes, and couple that with with a tax reduction. This would encourage more companies to not use loopholes, and also benefit companies in that they won't need to invest time and effort in finding these types of shelters.

I agree that we are a service based economy, but we need some real production as well. Too much of a service economy is based on expendable income. As we've seen, when the economy hits hard times, the service industries are many times the first to go (restaurants, etc.)

[Jason1]

the rule of law right now still runs on innocent until proven guilty beyond a shadow of a doubt.

Tell that to this guy...

http://msnbcmedia.msn.com/j/msnbc/Components/Photos/060503/060503_predator_hmed_4p%20.hmedium.jpg

"I was just going to talk to her, I promise!"

"Well yea I have condoms in my car, but I always carry condoms in my car!"

[Professor S]

Tell that to this guy...

http://msnbcmedia.msn.com/j/msnbc/Components/Photos/060503/060503_predator_hmed_4p%20.hmedium.jpg

"I was just going to talk to her, I promise!"

"Well yea I have condoms in my car, but I always carry condoms in my car!"

LOL! While this was a joke (and a humorous one), Dateline NBC is not a part of the US judicial system. Unfortunately in today's intense media culture, people are tried in the public square and then in the court room.

[Jason1]

LOL! While this was a joke (and a humorous one), Dateline NBC is not a part of the US judicial system. Unfortunately in today's intense media culture, people are tried in the public square and then in the court room.

Dateline might not be part of the Judicial system, but the Cops who arrest them when they try to leave are...

I'm not saying what they are (99% likely) trying to do is right, but technically they haven't done anything illegal yet...

[KillerGremlin]

People have complained that Dateline uses entrapment methods which are unethical and are not valid proof that someone is committing a crime. But it's not just dateline, the feds do pedo-stings all the the time from what I can gather.

As far as my original comment, our government seems to be more gestapo like every year with the passing of things like the Patriot Act. I would hate to be on the shit end of the stick in this country, because the way certain systems are set up you really are guilty until proven innocent. And you better have some good evidence at your immediate disposal and some hard cash to afford to pay for our ridiculous legal system.

On a lighter note, government agencies like the RIAA also bully people with cease and desist fines and things like that. You can find examples all over. =/

I'm just saying, if they say you are a terrorist, you're a terrorist.

[Professor S]

Soliciting a minor for sex is against the law. You don't have to have sex with one. And since there is no coersion involved, simply the raising of an opportunity, the case for entrapment is not very good either.

To date I don't believe any Dateline subject has been acquitted on these grounds. And lets be honest, they're guilty as hell.

I can think of O.J. being a good case that someone is innocent until proven guilty. Still, whether or not you think the reality of the law is different that the wording, changing the wording and making it official is a HUGE step in the wrong direction.

[Bond]

This is why I think such a huge focus needs to be put into education. Not only government aid in the form of dollars for students, but I think the price of college has become a scam. It's something we pay for because unless we are blessed with the talent to avoid college, we have to go. Government regulation to control the outrageous fluctuation of the price of going to a public university would be nice.
Hhmm... how much is Kentucky per year (that is where you attend, right?).

Wisconsin is pretty affordable... especially considering that we have a top ten (or around) undergraduate business school. Top thirty med, law, and mba schools as well.

[KillerGremlin]

I think the bigger entrapment complaints come from prostitution stings. Even the televised prostitution stings are incredibly iffy in my opinion. The undercover cop prostitutes really pressure people into inviting them into their vehicle and offering pay for sex….
Or booking some poor guy for letting a prostitute come up into his hotel room, I’ve seen them make arrests before any transaction of money or sex took place =/.
I think the argument is that if the undercover cops are doing something that could be considering illegal (like offering to have sex for money), then it is entrapment.

It’s like the RIAA putting up fake torrents to catch people. How can they charge you for theft when they are breaking the law in the process?

BTW, I’m Chris Hansen. Why don’t you have a seat over there.
http://images.usatoday.com/Wires2Web/20070401/2770997084_TV_CHRIS_HANSENx.jpg

[Professor S]

Lets be clear on what entrapment is:

Entrapment is coercing or forcing someone to perform an illegal act. It's gun to your head type of stuff. "Do this or something bad will happen to you."

Presenting an illegal opportunity, repeatedly and convincingly, is not entrapment. You are simply presenting it to someone who in most cases has already shown interest. EX. the John wouldn't be in the situation if he wasn't scouting hookers to begin with. Now that he is there, he is presented with the opportunity to pay for sex, even multiple times, and accepts.

Now whether or not money changes hands is up for the courts to decide. This argument is not about whether or not cops always do tyhe right thing. It's about the letter of the law. And the letter of the law is that everyone is innocent until proven guilty, regardless of whether or not they've been accused. Accused and convicted are very different things.


Vampyer and Bond - As for the cost of education, my opinion is that government intervention has caused it to begin with, so how will more government intervention fix it? We've seen higher education costs for PUBLIC universities increase at over double the rate of inflation, and they are usually backed by tax dollars.

http://www.nytimes.com/2007/10/23/education/23tuition.html

Personally, when I started at Ursinus college in 1996, my tuition was $26,000 a year. Now the same college is over $40,000 a year. The only explanation of this is that market forces have not been allowed to reign in the costs. Every time tuition is raised, it seems one politician or another wants to quickly make up for the increase with added public funds, scholarships, grants and guaranteed low interest loans. Why would colleges and universities stop increasing the cost of education? THEY KEEP GETTING PAID REGARDLESS.

This is the perfect example of the danger of entitlements. We know money is getting wasted and we're all getting hosed in the end, but to stop the bleeding we would literally lose a generation of students because rates would not fall fast enough to account for the loss of public funds and we can't afford to do that. What we can do, however, is let these institutions know that they've reached the limit of what they will get and hopefully that will stagnate the rate of cost.

[KillerGremlin]

My apologies for adding the bit about the cop breaking the law, which really has little or nothing to do with entrapment. I wouldn't go as far as to use a "gun to the head" analogy though.

Here's one case, Sherman vs. United States
http://en.wikipedia.org/wiki/Sherman_v._United_States

In late August 1951, Kalchinian, a recovering drug addict, met Sherman at a doctor's office where they were both getting treatment for their addiction. They talked about drugs, and Kalchinian eventually asked Sherman if he could get him some as his own methadone program wasn't working. Sherman resisted, citing his own efforts to get clean.

On later chance encounters, Kalchinian continued to entreat Sherman, encountering similar resistance. Finally, in November, he gave in. Kalchinian informed agents of the Federal Bureau of Narcotics (a predecessor to today's Drug Enforcement Administration) whom he had been working with in hopes of lightening his sentence on a pending drug charge, that he had another seller for them. After three drug deals, Sherman was arrested.

Prostitution is even worse, because desperate guys are desperate guys, and guys think with their penis, not with the rational of the law.

I disagree with you though when you say presenting illegal opportunities many times is not entrapment. Like in the case of the Sherman vs. United States, even strong-willed people who want to focus on rehabilitation will give in eventually if pressured enough. If a prostitute goes up to someone's car and offers sex, and they say no repeated times and then they finally say yes, I think it could be argued on psychological grounds that they were pressured and thus it is sort of entrapment.

Now I'm of the opinion that 9 out of 10 times people who get arrested for prostitution charges are LOOKING to have sex with a prostitute, but I bet you get the occasional jackass, wrong place, wrong time, pressured by the undercover cop situation.

Anyway, I agree 100% with the letter of the law, which is innocent until proven guilty.