![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/quotes_7a.gif)
Oil And Gas • Arctic Oil Exploration Gains Momentum
Arctic Oil Exploration Gains Momentum
Tuesday May 29, 2012, 4:00am PDT
By Adam Currie
http://oilandgasinvestingnews.com/4438- … dium=email
——————————————————————————–
Despite oil prices recording steep declines over the past month, explorers and producers are continuing to search for economically viable plays in ever more challenging settings.
With conventional land plays still making up the majority of major discoveries, more and more companies are now choosing to venture beyond the beaten path in the hope that rewards will be plentiful with higher-risk ventures.
Untapped potential?
The land sections currently up for grabs in the northeastern stretches of the Beaufort Sea are a prime example of this type of high-risk venture. Recently Ottawa placed 905,000 hectares of Canada’s northern offshore up for bids, effectively clearing the way for energy companies to snap up exploration rights for an area half the size of Lake Ontario. Since the region has never been drilled by an oil and gas company, some speculators are labeling the area a high-potential play and a possible game changer. The US Geological Survey estimates Arctic waters hold 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas.
There is no guarantee that the current round will produce large numbers, as recent years have seen smaller bids from companies that some consider to be speculators with a questionable ability to mount effective drilling programs. With that said, there have been instances of large purchases in the past, and coupled with Arctic shipping lanes opening up, extraction from areas such as the Beaufort Sea is now a very real possibility.
The auction, which runs until September, puts in play a 30 percent expansion of the area already under lease in the Beaufort and Mackenzie Delta.
“World-class play”
Houston-based ION Geophysical Corp. (NYSE:IO) is a firm believer in the area’s potential and has admitted that while the economic and technical hurdles to producing oil from the Arctic remain high, recent data is altering the energy industry’s view of the potential up north. It has even gone so far as to describe the area as a “world-class play.”
The company has built up a highly sought after database that is beginning to alter perceptions within the industry. In 2006 it launched a multi-year program aimed at mapping the subsurface below the Beaufort Sea using seismic and gravity equipment to identify structures that might contain oil and gas.
The logistics of such a program do not come cheap, with hurdles including a region that is difficult to access, treacherous terrain, and continuous environmental group opposition. In a recent interview, Joe Gagliardi, director of Arctic Solutions and Technology for ION, confirmed that over $150 million has been spent on the program so far, before adding that a large portion of that money has already been recouped as the company’s data continues to gain “global” interest.
“The Beaufort-Mackenzie is a world-class play. It has the possibility to change the game when it comes to the world balance of oil and gas reserves,” said Gagliardi, before adding, “[t]he low-hanging fruit for large oilfields are drying up outside of the Arctic.”
“The new data that ION shot was revolutionary,” said John Hogg, vice president of exploration and operations for MGM Energy Corp. (TSX:MGX). “There’s much more sand [sedimentary rock] that goes out farther than what we would have thought.”
A frozen frontier
The excitement has not been limited to the Beaufort Sea. Many experts view the Alaskan Arctic as the last great US domestic oil prospect, with many feeling it might hold the potential to cut the country’s dependence on foreign oil. This sentiment is underlined by the fact that Royal Dutch Shell plc (NYSE:RDS.A) has spent over $4 billion on Arctic oil exploration since 2005, while BP (NYSE:BP) committed $1.2 billion in 2008 to drilling in the Beaufort. When crude prices spiked in the early 2000s, Shell joined the scramble accelerate exploration, bidding $44 million to lease Beaufort Sea prospects.
This momentum continues to grow, with executives forecasting that a high number of oil companies will line up to join in Arctic exploration. Some have forecast that the region could eventually yield up to a million barrels a day of crude – more than ten percent of current US domestic output.
Let the bidding begin
While there might be some concern in relation to companies not tabling serious offers for Beaufort Sea prospects, there has been increasing market activity over recent years. In 2007, Imperial Oil Ltd. (TSX:IMO) and ExxonMobil Corp. (NYSE:XOM) jointly bid $585 million for a large Beaufort Sea parcel, while in 2010 Chevron Corp. (NYSE:CVX) made a separate bid of $103 million.
It is likely that with the added benefits of up-to-date seismic data, a strong oil price, and new, effective methods of crude extraction, bidding will be highly competitive this time around. “If these guys are spending time up there, it’s not to chase little pools,” said Mike Dunn, an analyst with FirstEnergy Capital Corp.
Pius Rolheiser, a spokesman for Imperial, has commented that the company “continues to view the Beaufort Sea and our deepwater acreage there as a high potential area of opportunity,” while Chevron confirmed that it will be conducting its own data gathering in the Beaufort this summer. Chevron spokesman Leif Sollid stated, “[w]e view the Beaufort as an important future oil and gas region.”
Challenges remain
However, not all is rosy up north. Seismic data is only the first step in tapping this potential “game changer.” The technical and economic challenges are large and the Arctic remains an extraordinarily challenging terrain. In addition, existing estimates from companies and governments suggest that Canada’s Arctic holds a much smaller resource than other northern regions.
The Arctic, as the final energy frontier in Canada, continues to hold promise. Beneath the ice-covered waters of the Beaufort, explorers are confident that they might still discover the kind of mega-play that makes billion-dollar drilling programs worthwhile.
Securities Disclosure: I, Adam Currie, hold no direct investment interest in any company mentioned in this article.
Statistics: Posted by DIGGER DAN — Thu May 31, 2012 1:41 pm
View full post on opinions.caduceusx.com
International News • Euro break-up ‘could wipe 50pc off London house prices’
Property prices in the capital’s most sought-after postcodes have been driven up by investors moving funds out of assets held in euros to buy into what is seen as a “safe haven” alternative.
Foreign money seeking a refuge from the wider economic turmoil accounted for 60pc of acquisitions of prime central London property between 2007 and 2011, according to a report by Fathom Consulting for Development Securities.
If the shared currency broke up completely, London property would initially be boosted by the continued flight towards a safe haven, the report predicts.
But, once the break-up had taken place, demand for these assets as an insurance against this event would start to ebb.
“Although fears about a messy end to the euro debt crisis may account for much of the gain in prime central London (PCL) prices that has taken place over the past two years, we find that a break-up of the single currency area is also the single greatest threat to PCL,” said researchers.
“In our judgment, a collapse of the single currency area could ultimately produce a 50pc fall in the value of PCL property.”
http://www.telegraph.co.uk/finance/news … rices.html
Statistics: Posted by yoda — Thu May 31, 2012 12:08 pm
View full post on opinions.caduceusx.com
Canadian • Alberta Premier Alison Redford To Attend Bilderberg Conf.
On a mission to shore up Alberta’s position on the domestic and international scene, Premier Alison Redford took heat Wednesday for her decision to waive a meeting with national NDP Leader Thomas Mulcair, flying instead to an exclusive economic think-tank.
Deputy premier Thomas Lukaszuk was set to meet with the oilsands’ noisiest opponent during Thursday’s visit as Redford heads to the Bilderberg Conference — an invite-only annual meeting of movers and shakers in international economics.
No media coverage is allowed of the elite event in Chantilly, Va., which Redford and a staffer will attend on the taxpayers’ dime at a cost of $19,000.
"I think most people who have a sophisticated approach to world affairs understand that there’s lots of meetings that happen all over the world," Redford said, adding that she expects to be able to talk about the people she met and what was discussed when she returns.
She says her presence will bring business to Alberta.
"My job as a premier is to travel the country and to travel the world talking about our issues and (it’s) an opportunity to do that," she said.
Official Opposition leader Danielle Smith said Redford will miss a golden opportunity to stand up for the oilsands against Mulcair, the self-appointed "bully on the block."
"What is Alberta getting out of this?" Smith asked, adding that Redford’s "networking" benefits her own future and should be paid out of her own pocket.
In rebuttal, Redford quoted Smith in 2009 as saying the premier should deal with U.S. decision-makers, and said Smith could either make political hay of the event or accept that the premier’s job is to represent Alberta around the world.
The annual Bildenberg Conference, formed in 1954 to foster economic links and understanding between North America and Western Europe, comes at a time when Alberta’s oilsands are being blamed by Liberal Ontario Premier Dalton McGuinty and Mulcair for a robust Canadian buck and so-called "Dutch Disease," an economic syndrome that links manufacturing woes to energy sector booms.
Additionally, Alberta’s oilsands product has been summarily downgraded by the European Union, a move that irritated federal Energy Minister Joe Oliver on a recent Alberta visit.
Opposition scorn is heaped atop criticism for Redford’s move to open an Alberta office in Ottawa, expected to cost the province $850,000 a year.
In the latest gesture of garnering national resources, Redford appointed Lee Richardson her principal secretary.
The Calgary-Centre MP since 1988 has also held posts in the Diefenbaker and Mulroney governments, and recently served as Prime Minister Stephen Harper’s chair of the standing committee on international trade.
Alberta New Democrat Leader Brian Mason distanced himself a bit from Mulcair, saying the pair agree on lax provincial and federal environmental stewardship but differ on perspective — and on "Dutch Disease."
"You don’t help one part of the country by limiting the opportunities of another part of the country," he said, adding that he’s hoping fiery arrows between Mulcair and western defenders gets "more civil, more rational, less emotional."
"I think the role of our oilsands is very, very important in this country," Mason said, adding that he sees a closer relationship between the Redford government and the increasingly popular Mulcair as possible.
"Harper and the Conservatives worked very hard to defeat Alison Redford and the Progressive Conservatives in this last election," he said.
"Harper and the federal Conservatives worked very hard to elect the Wildrose last election — they sent people, they worked hard to defeat the PCs … they worked on campaigns for the Wildrose.
"This place was flooded with Ottawa staffers… They worked hard and so did a number of MPs in Alberta work very hard. Why do you think (Redford’s) opening an office in Ottawa?" Mason asked.
http://www.edmontonsun.com/2012/05/30/r … ir-visit-6
Statistics: Posted by yoda — Thu May 31, 2012 6:01 am
View full post on opinions.caduceusx.com
American • Obama Will Not Win Re-election
Obama Will Not Win Re-election
By Monty Pelerin
It is time to call the 2012 election. President Obama cannot win. He will likely lose big, in a very lopsided election. Pundits will claim to be surprised when the outcome becomes apparent. They should not be, as the signs of such a result are everywhere, despite the mainstream media’s attempts to suppress them.
There are numerous reasons why Obama will lose. Incompetence, likeability, and duplicity are a few. Obama has alienated too many in the electorate, including large numbers who supported him the first time. In 2012, many will vote against him or (even better) just stay home.
How Did Obama Get Elected the First Time?
Barack Hussein Obama is a self-created myth, polished further by David Axelrod and a compliant media. He is a chameleon who takes on whatever shape and form best suit his purposes and goals. There is little substance behind the façade other than an Elmer Gantry style of politics. He is completely malleable into whatever form and shape best serve his personal interests.
A few examples of this "flexibility" are the following:
He changed his name when he believed it served him to do so.
He is not a religious man, but he joined a Black Liberation Church to sell his bona fides to the black community in his early days in Chicago.
He said that preacher Jeremiah Wright was like his father yet threw him under the bus when it became convenient (necessary).
He claimed to have been born in Kenya in order to enhance book sales as a younger man.
He likely lied on his applications to college to gain foreign student status. At the time, that category provided more favorable admission and funding treatment than afforded domestic blacks.
He claimed to be a constitutional professor when he was neither a professor nor particularly well-versed in the Constitution.
Little was known about Obama when he entered the primary campaign. He became little more than a complex Rorschach blot with a sanitized past carefully scrubbed and scripted. His campaign avoided specifics; his speeches contained no substance. The imagination of observers defined him.
His greatest asset was his "unknownness." As a blank slate, voters imagined whatever they wanted in the next president. They were aided by a clever marketing campaign which emphasized his uniqueness:
As a political "newbie" and the first serious African-American candidate, he played well. He was an outsider who would clean up Washington. For many, he was the great healer who would bring unity to Republicans and Democrats, blacks and whites and America and its enemies. His Kumbayah campaign was hailed by the media, and a large, naive segment of the electorate believed it.
Why Obama Will Lose the Election
Why Obama will lose this next election is less difficult to understand than how he won the first time. Barack Obama was a fluke, an unlikely candidate with no demonstrated experience in anything other than reading a teleprompter and sounding good.
He was pushed to his party’s nomination as a result of the media. His election was a quirk, rather than something earned. Any Democrat who gained the nomination was likely ensured the presidency. Bush fatigue and the hapless John McCain made that almost certain.
Obama will lose the next election because his greatest asset, his unknownness, exists no longer. Voter imagination can no longer be manipulated in the presence of facts. Quite simply, Obama will not be re-elected because too many people now know him. His biggest attribute has been taken away.
What people got was nothing like what they were promised or imagined. What was a blank slate upon which to imagine an Obama presidency now is a full-blown portrait filled with failure, warts, and scars.
Obama’s track record is abysmal. Floyd and Mary Beth Brown discussed four of Obama’s failures:
Obama’s 825 billion dollar stimulus failed to keep unemployment below 8 percent as promised. Since President Obama’s stimulus passed, America has lost 1.1 million jobs. If you count people who have become discouraged and are no longer seeking jobs, some economists believe that real unemployment rate is above twenty percent.
Obama called his health care package one of his major accomplishments. He told CBS’ Steve Kroft he was "putting in place a system in which we’re going to start lowering health care costs." Yet it has failed to make health insurance more affordable. According to the fact watchdog website FactCheck.org, ObamaCare is actually making health care "less affordable." Workers paid an average of $132 more for family coverage just this year.
Obama predicted his investments in green energy would create 5 million jobs, but the Wall Street Journal reports: "The green jobs subsidy story gets more embarrassing by the day. Three years ago President Obama promised that by the end of the decade, America would have five million green jobs, but so far, some $90 billion in government spending has delivered very few."
Obama pledged to cut the deficit in half, saying: "And that’s why today I’m pledging to cut the deficit we inherited by half by the end of my first term in office." Even if every part of Obama’s deficit reduction proposal was enacted, the deficit at the end of his first term would still be $1.33 trillion, more than twice what he promised.
In addition:
His Obamacare legislation, despite all the state propaganda supporting it, remains unpopular and is viewed by more than half the country as unconstitutional. Recent hearings in front of the Supreme Court were embarrassing to the administration. The legislation is wildly over-budget and threatens to accelerate the bankruptcy of the nation. Further, the more people begin to deal with its implementation, the more unworkable it is considered and the more it is considered a mistake. Obama’s trophy piece of legislation is increasingly viewed as an unworkable, unmitigated disaster.
Relations between Republicans and Democrats and blacks and whites are worse than at any time in my lifetime. The former is on evidence every day. The latter has been emphasized with the circus surrounding the tragic death of Trayvon Martin.
The country’s foreign policy is a growing embarrassment. America has alienated many of its allies. America and its enemies are not doing so well, either. We don’t have a Cold War, although we don’t need one with what is happening. Russia is not our ally. China is exerting its newly developed muscle. Iran openly mocks the president as it proceeds to nuclear weaponry. North Korea plays Lucy with the football, and Charlie Brown falls for the trick every time. The Mid-East is in shambles, with the Arab Spring being nothing more than the replacement of tyrants who were friendly to the U.S. with tyrants who are not. Israel looks like it will have to act alone against its existential threat.
The economy has not improved despite record stimulus. Economic statistics are routinely "massaged" to make outcomes look better. Suffocating regulations, increasing debt levels and regime uncertainty prevent recovery. Capital and talent increasingly flee the U.S.
Obama has mortgaged the country’s future with his spending. By the time of the election, he will have added almost $6 trillion in new debt. There is no interest in cutting spending despite the doomsday warnings from multiple sources. Markets will eventually choose how and when the spending will cease. It will be at the convenience of markets when matters cease. Likely this timing will not be favorable to the country’s preferences.
Gasoline prices are soaring. The so-called "green energy" initiative has been exposed as corrupt political payoffs that will not produce economic energy for decades, if ever. Coal is under attack, exploration for oil is unnecessarily restricted, pipelines are stymied, and power plants are closing. Politically correct politics moves us away from modernity toward the Stone Age.
Obama is no longer seen as The One — just, instead, as another scheming Chicago politician. He is increasingly viewed as arrogant, dishonest, and incompetent. These are not messianic attributes. He is just another politician, although more flawed than most.
A great mistake was made in 2008. That mistake is now blatantly apparent to most voters and most political analysts around the world. Nothing Obama promised has been accomplished. Furthermore, much of what he did added to the country’s problems.
Even the fawning media and the Democrat establishment recognize his failings, although neither is willing to publicly discuss them. Democrats should have replaced this defective candidate long ago. Now is too late. Democrat sympathizers can only hope that this election does not destroy what remains of the party. Based on the debacle that was the 2010 election, that fear is not unfounded. If anything, the mistake that was Obama is better-known now than it was two years ago.
James Taranto pointed out the despair among Democrats and their PR arm, the national press. In an editorial, he cited several examples of disillusionment. Howard Portnoy was quoted in the piece stating:
What I believe is happening is that the left is reading the handwriting on the wall and resigning itself to the harsh reality [that] the man they trusted to "fundamentally transform America" is on the verge of being unelected.
Mr. Taranto added his own thoughts to those of the generally liberal pundits:
Not only does Obama’s re-election look to be in serious jeopardy, but his presidency has been an almost unmitigated disaster for progressive liberalism, nearly every tenet of which has been revealed to be untenable either practically, politically or both.
This despair was expressed last October. Things have only worsened since then.
Obama Stumbles Out of the Gate
Several different recent weeks have been described by various pundits as "Obama’s worst week yet." The rate of his decline steepens as the campaign season heats up.
Now the Obama political campaign is seen as being in disarray. Politico described the early stages of the Obama re-election campaign as follows:
That’s the unmistakable reality for Democrats since Obama officially launched his reelection campaign three weeks ago. Obama, not Mitt Romney, is the one with the muddled message — and the one who often comes across as baldly political. Obama, not Romney, is the one facing blowback from his own party on the central issue of the campaign so far — Romney’shistory with Bain Capital. And most remarkably, Obama, not Romney, is the one falling behind in fundraising.
Obama’s campaign was run so smoothly four years ago that it likely created a false impression on political observers. The campaign cannot be run the same way again for obvious reasons. Nor can it run smoothly this time. There is nothing on which Obama can run on regarding achievements other than the overhyped bin Laden killing.
He looks silly trying to blame Bush for the last four years, although he must make voters believe that he had nothing to do with the failures. Perhaps he should blame even earlier presidents for his woes. After all, Madison and Jefferson provided the Constitution, which he considers a roadblock in his attempts to remake America.
A Bigger Democrat Problem
There is a bigger problem for Democrats than one election and a failed candidate. The strategy adopted long ago and responsible for most of their success over the last eighty years has played itself out, and they are left with nothing.
Franklin Roosevelt, during the Great Depression, saw the value of buying votes by spreading benefits around. It was successful and a strategy refined by other Democrats over the years. It was based on identity politics that focused on certain segments of the population and won them over with "gifts."
It was a strategy of winning elections rather than a strategy of governance, and it was therefore very successful in winning elections, but not so in governing. The Democrat coalition is a motley collection of interest groups with nothing in common other than "we want more." That makes it impossible to have a coherent governing strategy.
Some are amazed that Democrats have not developed a budget for almost three years. It really is impossible to do so without offending their coalition. In a time of monetary constraint, they cannot afford to show who will benefit at the expense of others. That is just an example of how governance becomes impossible with an election strategy based on Santa Claus.
Now the country is near its Thatcher point, where there is no more money to buy votes and goodies will eventually be taken away rather than increased. This condition has serious implications for both political parties, but especially for the Democrats. The Democratic Party now exists and survives for one simple reason — making dependency more attractive. It has become the party of plunder, taking from the productive and giving to the unproductive in an attempt to buy enough votes to remain relevant.
The party approaches this election as an ogre driving an ice cream truck with no ice cream in it. Democratas will lose this election and will lose many more unless they redefine themselves in terms of something other than Santa Claus. Sadly, for Democrats (and some Republicans), Santa is dead.
Qualification
My projection of Obama’s defeat is based on some semblance of sanity among the electorate. H.L. Mencken might consider that a dangerous assumption, but I am still hopeful. However, if Obama wins, get the hell out of Dodge! Even if the election is close and he loses, leave if you are less than fifty years old and have any ambition and ability. If the election is even close, the country is lost!
Read more: http://www.americanthinker.com/2012/05/ … z1wQQSDXoc
Statistics: Posted by yoda — Thu May 31, 2012 12:14 am
View full post on opinions.caduceusx.com
Business • Rockefellers and Rothschilds unite
http://www.ft.com/cms/s/0/efe93494-a9a3 … z1wPgwLgKZ
May 29, 2012 11:46 pm
Rockefellers and Rothschilds unite
By Daniel Schäfer in London
©BloombergTwo of the best-known business dynasties in Europe and the US will come together after Lord Jacob Rothschild’s listed investment trust and Rockefeller Financial Services agreed to form a strategic partnership.
RIT Capital Partners is to buy a 37 per cent stake in the Rockefeller’s wealth advisory and asset management group for an undisclosed sum, giving Lord Rothschild’s London-listed trust a much sought-after foothold in the US.
The transatlantic union brings together David Rockefeller, 96, and Lord Rothschild, 76 – two family patriarchs whose personal relationship spans five decades.
The Rockefeller group traces its roots back to 1882 when John D. Rockefeller established one of the world’s first family offices dedicated to investing his wealth. It has since developed into a provider of wealth and asset management services to other families, foundations and institutions. It is majority-owned by the 19th century oil magnate’s family and has $34bn of assets under administration.
The partnership with RIT will focus on setting up investment funds, eyeing joint acquisitions of wealth and asset managers and granting each other non-executive directorships.
RIT Capital Partners is minority-owned by Lord Rothschild and its net assets of £1.9bn are spread across global investments from public equities to government bonds and private equity.
The deal stemmed from a meeting two years ago when Mr Rockefeller introduced Lord Rothschild to the US group’s chief executive, Reuben Jeffery.
In a follow-up meeting one year later at Lord Rothschild’s office at Spencer House in London, the financier won Mr Jeffery’s blessing for opening talks to buy a stake in the Rockefeller group.
He then launched long negotiations with Société Générale Private Banking, which has owned the shareholding since 2008.
The French bank’s wealth management arm has had several suitors for the minority stake – estimated to be worth less than £100m – but Lord Rothschild was the only one supported by the Rockefellers.
Lord Rothschild concentrated on RIT Capital Partners three decades ago after he fell out with his cousin Sir Evelyn de Rothschild and disposed of his stake in NM Rothschild, the family’s UK branch.
Sir Evelyn at the time ran NM Rothschild, which rose to fame in 1815 when Nathan Meyer Rothschild made a fortune buying British government bonds in anticipation of Napoleon’s defeat at Waterloo.
Baron David de Rothschild, chairman of the Rothschild Group, is currently bringing the UK-based investment bank under a joint roof with the French family operations.
At the same time Lord Rothschild launched an investment partnership in March with the Franco-Swiss private bank Edmond de Rothschild Group, which is yet another separate branch of the sprawling banking dynasty.
Statistics: Posted by yoda — Wed May 30, 2012 9:11 pm
View full post on opinions.caduceusx.com
Other • How The Super Rich Avoid Taxes Even As They Demand That The
How The Super Rich Avoid Taxes Even As They Demand That The Rest Of Us Pay More
The way that we tax people in the United States is fundamentally broken and should be completely discarded. The U.S. tax code is absolutely riddled with loopholes that allow the super rich to legally avoid taxes while many of the rest of us are being taxed into oblivion. In our system of taxation, middle class families that work hard and try to play by the rules are deeply penalized while those that are willing to abuse the system make out like bandits. There is something fundamentally wrong with a system that enables wealthy politicians such as Barack Obama and Mitt Romney to pay a smaller percentage of their incomes in taxes than millions of middle class families. Mitt Romney has millions of dollars parked down in the Cayman Islands and in other tax havens. He does this to avoid taxes. Unfortunately, most Americans do not have the resources to funnel money through offshore tax havens. Most Americans just automatically have their paychecks shredded by taxes and then try to live on whatever is left over. Most Americans are just trying to survive financially from one month to the next. But the super rich have options. Thanks to technology, they can live almost anywhere they want and they can run their companies and manage their investments from anywhere in the world. The truth is that the wealthier you are the easier it is to avoid taxes. But even as the ultra-wealthy do their best to avoid taxes, many of them still feel free to demand that the rest of us be taxed more.
So what are some of the ways that the super rich avoid taxes?
Well, let’s start with those that are just "somewhat wealthy". Many millionaires still want or need to be U.S. citizens, so they are subject to the U.S. tax code. Fortunately for them, their tax lawyers know of thousands of loopholes that have been designed to help the rich avoid taxes.
The following is from a recent article by Jen Talley….
Some of the richest people in the country pay the least, relatively speaking, in taxes. How is this possible? Answer: Through the clever manipulation of the U.S. tax code’s loopholes. And it works: as income rises, effective tax rates rise as well, but only up to a point. IRS data shows that the effective income tax rate flattens out at just over 24 percent for those making over a million dollars. As income exceeds $1.5 million, the rate begins to decline; those with incomes above $10 million pay an average income tax rate of around 19 percent. So, how do they do it?
You could write an entire series of books on the technical details of how this gets done. Trust me, I studied tax law when I was in law school.
If you are interested in digging into some of the technical details of tax avoidance, a recent Businessweek article detailed 10 ways that the wealthy use our current tax code to avoid paying billions of dollars in taxes. It is an article worth reading if you have the time.
Sadly, tax avoidance by the wealthy is not just something that happens in the United States. The truth is that the exact same kind of thing happens in the UK as well.
There is not an easy fix to this problem. Our politicians have had decades to try to come up with a fair tax system and they have completely failed. The wealthy are always several steps ahead of them.
But federal taxes are not the only taxes that can be avoided. The vast difference in state tax rates creates another opportunity.
One advantage that wealthy Americans have is that they are far more mobile than most other Americans are. So if they don’t like the tax system in one state they can simply pick up and move to another state.
According to the Tax Foundation, 3.4 million Americans left New York state between 2000 and 2010.
So where did they go?
The following is from a recent CNS News article….
Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.
There is no state income tax in Florida. So moving from New York to Florida can end up saving you a bundle.
The same kind of migration is happening out west as well. According to that same CNS article, hundreds of thousands of people have been moving from California (a high tax state) to Texas (no state income tax)….
Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income. Texas has no state income tax or estate tax.
A total of 48,877 people moved to Texas from California between 2009 and 2010 alone, totaling $1.2 billion in income. Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of $699.1 million and $707.8 million in income respectively.
Not that anyone really needs much of an excuse to move away from California. It is rapidly decaying right in front of our eyes.
But a lot of families do not have the same options that wealthy people do. Unfortunately, most average Americans are tied to their jobs and it would be much more difficult for them to pick up and move across the country. In this economy it can be economic suicide to give up a good job.
The reality is that most of us simply do not have the resources to play the same kinds of games that the wealthy play.
Sadly, even our most prominent politicians avoid taxes.
Just look at Massachusetts Senator John Kerry. He has avoided approximately $500,000 in taxes by docking his yacht in Rhode Island rather than in Massachusetts.
Yet Kerry sure does love to call for more taxes on the rest of us, doesn’t he?
Now let’s talk about the "super rich" and the "ultra-wealthy". For many people that are worth billions of dollars, tax avoidance has become an art from.
Facebook co-founder Eduardo Saverin made national headlines recently when he gave up his U.S. citizenship, but the truth is that his case is small potatoes compared to the global elite and the shadow banking system that supports them.
According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks.
That amount is more than the GDP of the entire planet for an entire year.
So what do I mean by "offshore banks"? I defined the term in a previous article….
Well, the term originally developed because the banks on the Channel Islands were "offshore" from the United Kingdom. Most "offshore banks" are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other "offshore banking centers" such as Monaco are actually not "offshore" at all, but the term applies to them anyway.
Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.
It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping 1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.
An article that appeared in the Guardian estimated that a third of all the wealth on the entire planet is being kept in offshore banks. One of the primary reasons for this is tax avoidance.
A lot of wealthy individuals never even visit these tax havens and yet reap the benefits anyway. The truth is that tax avoidance has become way too easy. The following example is from a recent Politico article….
A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.
Are you disgusted yet?
You should be.
But even though they avoid taxes like the plague, many of these elitists have the gall to call for higher taxes on all the rest of us.
For example, let’s review what the managing director of the IMF, Christine Lagarde, said in a recent interview….
"Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax."
Even more than she thinks about all those now struggling to survive without jobs or public services? "I think of them equally. And I think they should also help themselves collectively." How? "By all paying their tax. Yeah."
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.
"That’s right." She nods calmly. "Yeah."
And what about their children, who can’t conceivably be held responsible? "Well, hey, parents are responsible, right? So parents have to pay their tax."
Well, it turns out that she doesn’t pay any income taxes at all on her own income….
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills.
The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without "justification" – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.
Her "diplomatic status" allows her to escape all income taxes.
So perhaps she should pay her "fair share" before pointing the finger at anyone else.
But she is not the only one being hypocritical.
The super rich claim that they should pay lower taxes on investment income for the good of our "capitalist system", but when their banks are about to go under they are more than happy to have those losses be socialized.
As I wrote about yesterday, the stage is already set for another massive round of bailouts when the next great financial crisis strikes. Once again our taxes will pay for the mistakes of the ultra-wealthy.
The truth is that our system is fundamentally broken.
We need to abolish the income tax and shut down the IRS.
Those two steps alone would do wonders for our economic system.
We also need to shut down the Federal Reserve and break up the too big to fail banks.
Unfortunately, the vast majority of our politicians are not even willing to consider any of those solutions.
So our fundamentally broken system will continue to chug along.
It really is sad.
http://theeconomiccollapseblog.com/arch … s-pay-more
Statistics: Posted by yoda — Wed May 30, 2012 7:27 pm
View full post on opinions.caduceusx.com
An Introduction to Rent Seeking
Many consider rent seeking a vital contribution of public choice economics. This brief essay will explain rent seeking and its importance to economics and politics.
Most of us are familiar with the term “rent” as in “I paid the rent on my apartment.” Here the rent in question is the return on a productive resource (housing). Economists refer to an economic rent as a return to the owner of a resource in excess of what might be expected under normal competition. Market competition tends to reduce such rents; high profits attract new entrants who offer lower prices or better value for the same goods and services.
Government can create an economic rent by limiting market competition. New York City, for example, limits the number of taxis to 13,000 or about half as many as during the 1930s when the city’s population was smaller than it is now. The cap on taxis prevents new entrants, thereby protecting the profits of incumbents. The value of such protection should not be underestimated. A license to operate a taxi in New York recently sold for over $1 million.
Who is harmed by government providing economic rents? Consumers are harmed. Given the limits on competition, riders must pay more for taxi rides in New York than they would under open competition. People who might have driven a cab absent the licensing also lose out. The economic rents provided to taxis by government also cannot be spent on other goods or services. The people who would have offered those goods and services are worse off than they would have been absent the licensing. The limit on cabs thereby distorts the economy and harms many people, many of whom are not obvious.
Some people do benefit from economic rents and therein lies the problem of reform. The owners of a license gain the right to abnormally high profits. The public officials who grant the freedom from competition receive votes, electioneering efforts, and campaign contributions from the taxi industry. Everyone in the industry has a clear material interest in continuing the licensing whatever its effects on everyone else.
Some people say that removing the power to offer rents would avoid rent seeking. If government did less, officials would have fewer economic rents to offer leading in turn to less rent seeking and less damage to society. True enough. But existing laws and regulations cannot be wished away. We need a political solution to rents.
Imagine that by chance or design a New York mayor decided to eliminate taxi licensing. The industry would lose all the benefits noted above; in particular, owners would lose the value of their license, which depended on the protection from competition. They would have one million reasons to resist reform and would quickly organize resistance to the mayor’s proposal. Protests would fill the evening news. Poor service would be predicted. The sad plight of the cabbie would be discussed.
But, you say, what about the winners? Wouldn’t they rally to the side of reform? After all riders would pay less to get across town. Other people suffer in various ways from the licensing.
Probably not. In New York, many taxi riders would be from out of town. The businesses who would benefit from diverting dollars away from overpriced cab rides do not exist and thus cannot lobby the city government. Even those riders who live in New York would gain at most a few hundred dollars if the licensing disappeared.
Government responds to organized interests. Taxi owners have a lot to lose and thus sufficient motivation to pay the costs of organizing and influencing public decisions about taxi licensing. Taxi riders are different. The costs of organizing for them are likely higher than the gains from less expensive rides. Taxi licensing persists despite imposing aggregate costs on many New Yorkers.
Rent seeking involves other costs to society. The economic rents provided by the government are not economically productive. The resources spent seeking to persuade officials to grant an exemption from competition to an organized interest are wasted. This waste includes not only money but also the diversion of talent and time into rent seeking. Smart lobbyists might have done something more productive with their brains and their time.
Those who see government officials as benevolent seekers after the general welfare have a hard time accounting for rent seeking. It is not enough to say that bad people in office should be replaced by a better sort. The incentives created by awarding rents to organized groups would remain when the better sort arrive.
The idea of rent seeking tells us to be skeptical of government, pessimistic about reform, and morally outraged about the status quo.
Further Reading
Eamon Butler. Public Choice – A Primer. London: Institute of Economic Affairs, 2012.
Mancur Olsen. The Logic of Collective Action: Public Goods and the Theory of Groups (Revised ed.). Cambridge: Harvard University Press, 1965.
Gordon Tullock, “The Welfare Costs of Tariffs, Monopolies, and Theft ,” Western Economic Journal, 5(June 1967)224.
View full post on Libertarianism.org
How The Super Rich Avoid Taxes Even As They Demand That The Rest Of Us Pay More
The way that we tax people in the United States is fundamentally broken and should be completely discarded. The U.S. tax code is absolutely riddled with loopholes that allow the super rich to legally avoid taxes while many of the rest of us are being taxed into oblivion. In our system of taxation, middle class families that work hard and try to play by the rules are deeply penalized while those that are willing to abuse the system make out like bandits. There is something fundamentally wrong with a system that enables wealthy politicians such as Barack Obama and Mitt Romney to pay a smaller percentage of their incomes in taxes than millions of middle class families. Mitt Romney has millions of dollars parked down in the Cayman Islands and in other tax havens. He does this to avoid taxes. Unfortunately, most Americans do not have the resources to funnel money through offshore tax havens. Most Americans just automatically have their paychecks shredded by taxes and then try to live on whatever is left over. Most Americans are just trying to survive financially from one month to the next. But the super rich have options. Thanks to technology, they can live almost anywhere they want and they can run their companies and manage their investments from anywhere in the world. The truth is that the wealthier you are the easier it is to avoid taxes. But even as the ultra-wealthy do their best to avoid taxes, many of them still feel free to demand that the rest of us be taxed more.
So what are some of the ways that the super rich avoid taxes?
Well, let’s start with those that are just “somewhat wealthy”. Many millionaires still want or need to be U.S. citizens, so they are subject to the U.S. tax code. Fortunately for them, their tax lawyers know of thousands of loopholes that have been designed to help the rich avoid taxes.
The following is from a recent article by Jen Talley….
Some of the richest people in the country pay the least, relatively speaking, in taxes. How is this possible? Answer: Through the clever manipulation of the U.S. tax code’s loopholes. And it works: as income rises, effective tax rates rise as well, but only up to a point. IRS data shows that the effective income tax rate flattens out at just over 24 percent for those making over a million dollars. As income exceeds $1.5 million, the rate begins to decline; those with incomes above $10 million pay an average income tax rate of around 19 percent. So, how do they do it?
You could write an entire series of books on the technical details of how this gets done. Trust me, I studied tax law when I was in law school.
If you are interested in digging into some of the technical details of tax avoidance, a recent Businessweek article detailed 10 ways that the wealthy use our current tax code to avoid paying billions of dollars in taxes. It is an article worth reading if you have the time.
Sadly, tax avoidance by the wealthy is not just something that happens in the United States. The truth is that the exact same kind of thing happens in the UK as well.
There is not an easy fix to this problem. Our politicians have had decades to try to come up with a fair tax system and they have completely failed. The wealthy are always several steps ahead of them.
But federal taxes are not the only taxes that can be avoided. The vast difference in state tax rates creates another opportunity.
One advantage that wealthy Americans have is that they are far more mobile than most other Americans are. So if they don’t like the tax system in one state they can simply pick up and move to another state.
According to the Tax Foundation, 3.4 million Americans left New York state between 2000 and 2010.
So where did they go?
The following is from a recent CNS News article….
Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.
There is no state income tax in Florida. So moving from New York to Florida can end up saving you a bundle.
The same kind of migration is happening out west as well. According to that same CNS article, hundreds of thousands of people have been moving from California (a high tax state) to Texas (no state income tax)….
Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income. Texas has no state income tax or estate tax.
A total of 48,877 people moved to Texas from California between 2009 and 2010 alone, totaling $1.2 billion in income. Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of $699.1 million and $707.8 million in income respectively.
Not that anyone really needs much of an excuse to move away from California. It is rapidly decaying right in front of our eyes.
But a lot of families do not have the same options that wealthy people do. Unfortunately, most average Americans are tied to their jobs and it would be much more difficult for them to pick up and move across the country. In this economy it can be economic suicide to give up a good job.
The reality is that most of us simply do not have the resources to play the same kinds of games that the wealthy play.
Sadly, even our most prominent politicians avoid taxes.
Just look at Massachusetts Senator John Kerry. He has avoided approximately $500,000 in taxes by docking his yacht in Rhode Island rather than in Massachusetts.
Yet Kerry sure does love to call for more taxes on the rest of us, doesn’t he?
Now let’s talk about the “super rich” and the “ultra-wealthy”. For many people that are worth billions of dollars, tax avoidance has become an art from.
Facebook co-founder Eduardo Saverin made national headlines recently when he gave up his U.S. citizenship, but the truth is that his case is small potatoes compared to the global elite and the shadow banking system that supports them.
According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks.
That amount is more than the GDP of the entire planet for an entire year.
So what do I mean by “offshore banks”? I defined the term in a previous article….
Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.
Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.
It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping 1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.
An article that appeared in the Guardian estimated that a third of all the wealth on the entire planet is being kept in offshore banks. One of the primary reasons for this is tax avoidance.
A lot of wealthy individuals never even visit these tax havens and yet reap the benefits anyway. The truth is that tax avoidance has become way too easy. The following example is from a recent Politico article….
A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.
Are you disgusted yet?
You should be.
But even though they avoid taxes like the plague, many of these elitists have the gall to call for higher taxes on all the rest of us.
For example, let’s review what the managing director of the IMF, Christine Lagarde, said in a recent interview….
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”
Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.” How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.
“That’s right.” She nods calmly. “Yeah.”
And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”
Well, it turns out that she doesn’t pay any income taxes at all on her own income….
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills.
The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without “justification” – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.
Her “diplomatic status” allows her to escape all income taxes.
So perhaps she should pay her “fair share” before pointing the finger at anyone else.
But she is not the only one being hypocritical.
The super rich claim that they should pay lower taxes on investment income for the good of our “capitalist system”, but when their banks are about to go under they are more than happy to have those losses be socialized.
As I wrote about yesterday, the stage is already set for another massive round of bailouts when the next great financial crisis strikes. Once again our taxes will pay for the mistakes of the ultra-wealthy.
The truth is that our system is fundamentally broken.
We need to abolish the income tax and shut down the IRS.
Those two steps alone would do wonders for our economic system.
We also need to shut down the Federal Reserve and break up the too big to fail banks.
Unfortunately, the vast majority of our politicians are not even willing to consider any of those solutions.
So our fundamentally broken system will continue to chug along.
It really is sad.
View full post on The Economic Collapse
Political Correctness • Pastor Sentenced To 2 Years In Prison For Teaching That Par
Pastor Sentenced To 2 Years In Prison For Teaching That Parents Should Spank Their Children
Do you believe that parents should be able to spank their children? Do you ever express that opinion to others? If so, then you could be sent to prison. Sadly, that is exactly what happened to one pastor up in Wisconsin recently. A minister named Philip Caminiti was sentenced to 2 years in prison for simply teaching that parents should spank their children when they misbehave. Please note that Caminiti was not accused of spanking anyone or of physically hurting anyone. He was put in prison simply for his speech. He was put in prison simply for what he was teaching others to do. Whether you agree with spanking or not, this should be incredibly sobering for all of us. Increasingly, speech is being penalized in the United States. Much of the time, the focus of the attacks by the forces of political correctness is on religious speech. If this trend continues, many of you that are reading this article might be put in jail for the things that you say in the coming years.
When many of us were growing up, once in a while our parents would take out a belt or a wooden paddle and give us a paddling on the behind when we did something wrong.
Was there anything wrong with that?
Of course not.
Yes, there is real child abuse that goes on out there, but in the vast majority of instances spanking does not do any lasting physical harm. Rather, it benefits the child because it helps them learn what is right and what is wrong.
I know that when I got a licking on the behind as a child that helped me to remember not to do the same thing again.
But Dane County Circuit Judge Maryann Sumi was absolutely horrified that some parents would actually use a wooden spoon to spank their little children when they misbehaved.
Perhaps that judge should actually try to spank someone with a wooden spoon some time. You simply cannot do much damage with a wooden spoon.
Instead of going after the parents who were doing the spanking, prosecutors chose to go after the pastor instead. They claimed that Caminiti was "the spoke in the wheel of this conspiracy".
Even after Caminiti leaves prison, he will be forbidden from having any contact with his old church….
Caminiti will be on extended supervision for six years after his release from prison. Despite objections on constitutional grounds by Caminiti’s lawyers, Sumi ordered that he not have any contact with the Aleitheia Bible Church and have no leadership role in any church.
What in the world is happening to this country?
Criminal predators are literally eating the faces off of people, and yet authorities want to go after pastors that are encouraging their congregations to follow the teachings of the Bible?
Have we stepped into a really bizarre episode of The Twilight Zone?
Sadly, this is not the only example of how our free speech is under attack these days.
Up in New York, a new bill was recently introduced that would outlaw all "mean-spirited and baseless political attacks".
I think that would cover a whole lot of people that leave comments on my blog.
The following is how a recent article by Kurt Nimmo described what this new law would require….
New York state government is attempting to pass the measure in both the Senate and the Assembly. The legislation has been referred to the Codes Committee in the Senate, and the Government Operations Committee in the Assembly.
Both proposals are identical and would effect messages posted on message boards, blogs, social networks, and “any other discussion site where people can hold conversations in the form of posted messages.” The law would require websites to post email addresses for “removal requests, clearly visible in any sections where comments are posted.” Those demanding the removal of content they find objectionable, however, would have their anonymity protected.
“Had the internet been around in the late 1700s, perhaps the anonymously written Federalist Papers would have to be taken down unless Alexander Hamilton, James Madison and John Jay revealed themselves,” notes David Kravets, writing for Wired.
Will we soon see laws such as this nationwide?
Will all blogs and websites soon be at the mercy of the politically correct police?
Up in Buffalo, New York it is apparently now against the law to hand out Christian tracts on a public sidewalk. At least that is what one man was told recently when he attempted to hand out tracts outside of an Italian heritage festival. The following is from a recent WorldNetDaily article….
While handing out tracts to willing recipients on a public street during a public festival, Owen was approached by a police officer who declined to identify himself but told him that the Buffalo Police Department is “the law” and he should stop handing out tracts.
According to the lawsuit: “Subsequently, another police officer, Officer Slomka, arrived on the scene. She quickly informed Owen that they could not hand out tracts in the festival and explained that the prohibition was ‘by our orders.’ Owen asked for her name, and she replied: ‘Slomka, write it down.’ Owen advised that he believed the tracts to be free speech; nonplussed, Officer Slomka reiterated that they couldn’t hand out tracts there and had to go outside of the festival area to continue with their expressive activity.”
Then, “Owen inquired as to whether they would be arrested if they continued to hand out tracts in the festival area, to which, Officer Slomka replied: ‘Yes.’”
That almost makes me angry enough to take a trip over to Buffalo and hand out tracts right outside the police station.
Even if you do not ever distribute literature, you should be alarmed at how our freedom of speech is being eroded.
The truth is that whenever anyone has their freedom of speech attacked it is an attack on all of us.
If we are not careful, we are going to end up just like Canada.
At one high school up in Canada recently, a student was suspended from school for a week for wearing a shirt with the following message….
"Life is wasted without Jesus"
The student was told that the shirt was "hate talk" and that he would be suspended for the rest of the year if he tried to wear it to school again.
They are coming for our free speech ladies and gentlemen.
They are not going to be satisfied until they have either shut all of us up or put all of us in prison.
It is imperative that we all stand up for free speech while we still can. Once our freedom of speech is gone, the loss of the rest of our freedoms will only be a matter of time.
http://endoftheamericandream.com/archiv … r-children
Statistics: Posted by yoda — Wed May 30, 2012 1:07 pm
View full post on opinions.caduceusx.com