US politics: Just another Mueller Monday

[Altherion]

1 hour ago, Rippounet said:

Well, we'll see. This was posted in another thread:

I agree with @OldGimletEye on this one: they'll acknowledge the problem and perhaps discuss it, but they're not likely to do anything meaningful about it because the latter would be contrary to their own interests. Still, this is better than the previous situation wherein they weren't even talking about it.

1 hour ago, Rippounet said:

It seems they ignored European directives.
https://www.theguardian.com/commentisfree/2017/aug/24/austerity-lie-deep-cuts-economy-portugal-socialist
https://www.theguardian.com/world/2017/feb/21/portugal-shows-there-is-an-alternative-to-austerity

Interesting. I didn't realize they could do that, but it looks like they're getting away with it. It's worth watching where this ultimately goes.

24 minutes ago, Mlle. Zabzie said:

Some of the stuff being breathlessly reported isn't exactly that shocking.  (Yeah, people invest through Cayman and Bermuda vehicles.  It's often for tax reasons. Color me surprised).  The scope of the data breach here is really scary though.  Appleby is a real law firm - pretty reputable.  This would be on par with Cravath or S&C (or *gulp* my firm) getting hacked.  I mean, there is a whole bunch of privileged information that is now available for everyone.  Data privacy is a huge concern for law firms and this is exactly why.  And frankly, to the extent that any of this has to do with any privileged advice given in context of a white collar defense/investigation, it should be disturbing to everyone.

I think most people suspected that the rich use offshore investments to avoid taxes, but few understood the scale of this behavior (depending on where you work, you might be one of these few). This information is valuable because it reveals this scale and also because it gives quite a few specifics. A few years down the line, leaks such as this one may be useful in outlawing tax havens altogether or, if a more extreme set of politicians comes to power, the wealth may even be confiscated (based on this BBC article, the vast majority of this wealth is held by not even the 1%, but the 0.1%).

[Zorral]

1 hour ago, Sword of Doom said:

Another mass shooting in the US. 27 dead so far. Shot in a church in Sutherland Springs, near San Antonio. 

So of course Paul Ryan thinks they need prayers, completely ignoring how they were shot in a fucking church.

 

Interview with people on ground included this, which struck me very hard: 

"If it can happen here it can happen anywhere.  This is the last place in the world we thought something like could happen."

Interviewer then asks, "Why did you think it couldn't ever happen here?"

"Because this is a heavily armed community.  Everybody here owns guns."

[The guy from the Vale]

5 minutes ago, Zorral said:

Interview with people on ground included this, which struck me very hard: 

"If it can happen here it can happen anywhere.  This is the last place in the world we thought something like could happen."

Interviewer then asks, "Why did you think it couldn't ever happen here?"

"Because this is a heavily armed community.  Everybody here owns guns."

Guess what. If nobody had guns, it would actually be more surprising. But that somehow never gets through to them.

[Fragile Bird]

A helicopter carrying a Saudi prince, Mansour bin Muqrin, and 8 officials has crashed and killed everyone on board. The prince was a governor of a province, the crash happening in the southwest, apparently somewhat close to the Yemen border.

Between 11 Saudi princes being arrested, including a billionaire, for corruption and this plane crash, the world is bound to be wondering what is going on.

[Zorral]

38 minutes ago, theguyfromtheVale said:

Guess what. If nobody had guns, it would actually be more surprising. But that somehow never gets through to them.

The real lesson is that more guns don't make anyone, anyplace, more safe than fewer guns do.  But nobody seems willing to learn this, no matter what the actual boots on the ground experience is.

[The guy from the Vale]

Indeed.

[Mlle. Zabzie]

41 minutes ago, Altherion said:

I agree with @OldGimletEye on this one: they'll acknowledge the problem and perhaps discuss it, but they're not likely to do anything meaningful about it because the latter would be contrary to their own interests. Still, this is better than the previous situation wherein they weren't even talking about it.

Interesting. I didn't realize they could do that, but it looks like they're getting away with it. It's worth watching where this ultimately goes.

I think most people suspected that the rich use offshore investments to avoid taxes, but few understood the scale of this behavior (depending on where you work, you might be one of these few). This information is valuable because it reveals this scale and also because it gives quite a few specifics. A few years down the line, leaks such as this one may be useful in outlawing tax havens altogether or, if a more extreme set of politicians comes to power, the wealth may even be confiscated (based on this BBC article, the vast majority of this wealth is held by not even the 1%, but the 0.1%).

Except that there are lots of reasons to use a Cayman or Bermuda entity, and a lot of them have nothing at all to do with tax, and most of the tax reasons, at least for US purposes, are totally legit - that is you are perfectly allowed to arrange your affairs so that you minimize your taxes.  Cayman has modeled its corporate law after Delaware, and people get relatively comfortable using it as a holding jurisdiction because they know there is a real court available to sue there.  Cayman is also very well set up for capital pooling entities, not necessarily because assets are being hidden (really hard for a US person to hide anything in Cayman post-FATCA), but because it is a neutral jurisdiction with good pass-through law that is attractive to people from multiple jurisdictions.  There are some times that a foreign pooling vehicle can be beneficial for a US person, but I don't need Cayman or Bermuda for that.  So much of what goes on is because of the way our world wide tax system interacts with other jurisdictions' territorial system, which leads me to my next response. 

What is a tax haven?  Frankly, the US, given the secrecy permitted and the way our tax system currently works, is a giant tax haven and money laundry for foreign money.  I mean, I personally would be much more up in arms about Delaware than Cayman.  But what about the Netherlands?  Ireland?  The UK (which, incidentally has several quasi-autonomous haven-type jurisdictions - I'm looking at you Isle of Man and Guernsey).  Switzerland?  Does it depend on which Cantonment?  I've lived through KYC in Luxembourg - it's the real deal, and European countries usually require filing statutory accounts, which Delaware does not.  Anyhow, I could go on, but frankly, there are some things in the current US tax bill that would actually do a lot to tax currently profits beneficially owned by US people offshore (completely legitimately).  There's a lot to hate in the new tax bill, but a lot of the foreign stuff ain't too horrible.

[Tempra]

2 hours ago, Mlle. Zabzie said:

Some of the stuff being breathlessly reported isn't exactly that shocking.  (Yeah, people invest through Cayman and Bermuda vehicles.  It's often for tax reasons. Color me surprised).  The scope of the data breach here is really scary though.  Appleby is a real law firm - pretty reputable.  This would be on par with Cravath or S&C (or *gulp* my firm) getting hacked.  I mean, there is a whole bunch of privileged information that is now available for everyone.  Data privacy is a huge concern for law firms and this is exactly why.  And frankly, to the extent that any of this has to do with any privileged advice given in context of a white collar defense/investigation, it should be disturbing to everyone.   

As a lawyer, this is terrifying.

As a citizen, it is appalling (though unsurprising) to see the extent the rich and their enablers (lawyers, lobbyists, etc) have deprived the public fisc through (likely legal) tax evasion schemes via elaborate offshore shell games.

It is only a matter of time until most/all major multinational law firms are hacked.  Those firms house valuable information and, for now, are soft targets.  They better keep their insurance premiums paid with sufficient coverage for the inevitable lawsuits.   Although I suspect some of these firms fear something worse than a simple lawsuit...

[Martell Spy]

 

The Curse of Econ 101
When it comes to basic policy questions such as the minimum wage, introductory economics can be more misleading than it is helpful.

https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/

13155/

[Mlle. Zabzie]

13 minutes ago, Tempra said:

As a lawyer, this is terrifying.

As a citizen, it is appalling (though unsurprising) to see the extent the rich and their enablers (lawyers, lobbyists, etc) have deprived the public fisc through (likely legal) tax evasion schemes via elaborate offshore shell games.

It is only a matter of time until most/all major multinational law firms are hacked.  Those firms house valuable information and, for now, are soft targets.  They better keep their insurance premiums paid with sufficient coverage for the inevitable lawsuits.   Although I suspect some of these firms fear something worse than a simple lawsuit...

I think most major law firms are well aware that they are targets.  The problem as always is sophisticated spear phishing attacks (we frankly get training on this stuff every 6 months).  

And I always wonder what counts as an "evasion scheme" (in the US sense - scheme has a very different connotation in the UK).  That is, for me things that rely on a strict and rigid reading of the words of a statute, but ignore the legislative purpose of that statute/get you a result that is too good to be true - that's evasion.  But I know for others anything that reduces the taxes of someone you want to pay more taxes (whether it is legal or not) is an "evasion" scheme.  For instance, should people be able to conduct businesses through partnerships and/or S corporations and pay a lower overall rate of tax?  Well, rightly or wrongly, there was a policy decision in the statute to permit this, so if I can meet the requirements for the tax treatment, am I evading tax by organizing my affairs efficiently?  The biggest problem with our system is that it disfavors labor (omg, I'm starting to sound like OGE).  But seriously, our system explicitly taxes capital at a lower rate and is set up to pass capital inter-generationally on with minimal tax.  The Republican plan just makes this worse.  As an ordinary citizen, you are getting screwed by this daily.

[ThinkerX]

I found confirmation that this coup happened elsewhere.  The relevant part, as yet unsubstantiated, is the links to the Trump crew.  A 'Jared Kushner' is mentioned in the article.

https://theintercept.com/2017/11/05/what-happened-in-saudi-arabia-last-night-and-how-washington-corruption-enabled-it/?link_id=4&can_id=53a3e80570c15482bdf0c110d9e3dac9&source=email-what-happened-in-saudi-arabia-last-night-and-how-washington-corruption-en

The mass arrest of high-ranking Saudi businessmen, media figures and royal family members Saturday has shaken the global business community. Among 10 other princes and 38 others, the roundup netted Prince Alwaleed bin Talal, one of the world’s richest men, who owns significant shares in everything from Citibank to Twitter to the parent company of Fox News.

Prince Alwaleed has done business with President Donald Trump in the past, but during the campaign turned into a fiery critic, drawing Trump’s Twitter ire.

[Altherion]

2 hours ago, Mlle. Zabzie said:

Except that there are lots of reasons to use a Cayman or Bermuda entity, and a lot of them have nothing at all to do with tax, and most of the tax reasons, at least for US purposes, are totally legit - that is you are perfectly allowed to arrange your affairs so that you minimize your taxes.

I realize that leaving aside things such as non-disclosure by cabinet members, this is currently perfectly legitimate. What I meant was that minimization of this nature might not stay that way.

2 hours ago, Mlle. Zabzie said:

Cayman has modeled its corporate law after Delaware, and people get relatively comfortable using it as a holding jurisdiction because they know there is a real court available to sue there.  Cayman is also very well set up for capital pooling entities, not necessarily because assets are being hidden (really hard for a US person to hide anything in Cayman post-FATCA), but because it is a neutral jurisdiction with good pass-through law that is attractive to people from multiple jurisdictions.  There are some times that a foreign pooling vehicle can be beneficial for a US person, but I don't need Cayman or Bermuda for that.  So much of what goes on is because of the way our world wide tax system interacts with other jurisdictions' territorial system, which leads me to my next response.

This is interesting information, but off the top of my head, I don't see how it bodes well for anyone except the very rich.

2 hours ago, Mlle. Zabzie said:

What is a tax haven?  Frankly, the US, given the secrecy permitted and the way our tax system currently works, is a giant tax haven and money laundry for foreign money.  I mean, I personally would be much more up in arms about Delaware than Cayman.  But what about the Netherlands?  Ireland?  The UK (which, incidentally has several quasi-autonomous haven-type jurisdictions - I'm looking at you Isle of Man and Guernsey).  Switzerland?  Does it depend on which Cantonment?  I've lived through KYC in Luxembourg - it's the real deal, and European countries usually require filing statutory accounts, which Delaware does not.  Anyhow, I could go on, but frankly, there are some things in the current US tax bill that would actually do a lot to tax currently profits beneficially owned by US people offshore (completely legitimately).  There's a lot to hate in the new tax bill, but a lot of the foreign stuff ain't too horrible.

The US cracked down on Switzerland pretty hard a while back (UBS wouldn't give American citizens a bank account there without considerable hoop jumping even if they were based in Switzerland and needed one), but I didn't realize there were so many of these havens or that the US itself behaved this way. Oh well, looks like there is a lot more work for whoever is ultimately going to deal with this mess...

[Mlle. Zabzie]

8 minutes ago, Altherion said:

 

The US cracked down on Switzerland pretty hard a while back (UBS wouldn't give American citizens a bank account there without considerable hoop jumping even if they were based in Switzerland and needed one), but I didn't realize there were so many of these havens or that the US itself behaved this way. Oh well, looks like there is a lot more work for whoever is ultimately going to deal with this mess...

I think you are referring to FATCA, which is a regime that requires any "foreign financial institution" (which is really broadly defined) to disclose all of its US account holders to the US or be subject to withholding taxes (can actually extend to US holders of debt and equity interests in foreign entities, which is a pain).  We have bilateral agreements with a lot of countries to enforce FATCA, and other jurisdictions are starting to think it's not such a bad idea.  However, Switzerland is still a pretty good place to do business.  It's non-EU, so it's not subject to all the state aid stuff, and in certain of the Cantonments you can negotiate pretty low corporate tax rates with the authorities.  So you still see folks organizing their affairs to run as much profit (different than revenue) through Switzerland as possible.  Because of FATCA, it's really difficult for a US person to hide assets offshore.  That doesn't mean that the US person can't strip its tax base out of the US and into a lower tax jurisdiction, but it does mean that it can't just park it in a Swiss bank account that the IRS can't ever find.  I find it so hypocritical that the KYC needed to form a Delaware corporation is laughable and that it is super easy for anyone to set up an elaborate holding chain ending up with a trust organized in Jersey for the benefit of Lord only knows whom.  

I think we could fix a lot of nonsense with the super wealthy US individuals by having a real and robust estate tax that everyone needs to pay and getting rid of the capital gains preference.  However, the proposal is to double down on the preferential treatment of income from capital and to do away with the estate tax.  At least the foreign stuff will bring back income into the US and tax it faster, ending the quasi-permanent deferral that our system previously allowed; at least with respect to active businesses.

 

[Dr. Pepper]

5 hours ago, Zorral said:

Interview with people on ground included this, which struck me very hard: 

"If it can happen here it can happen anywhere.  This is the last place in the world we thought something like could happen."

Interviewer then asks, "Why did you think it couldn't ever happen here?"

"Because this is a heavily armed community.  Everybody here owns guns."

I saw peeps on the social medias saying "it was a gun that stopped the gunman."

The practically malfunctioned when it was pointed out that this only happened after dozens were murdered.  

[ThinkerX]

Regarding the mass shooting in Texas.  This is in the process of taking an extremely ugly political turn.

I have been coming across commentary on political articles, as yet unverified, that the shooter shouted 'this is the communist revolution!' prior to opening fire, and draped an 'antifa' flag over a pew before leaving.  The (unsubstantiated) claim is the shooters Facebook had antifa symbols.  Predictably, the conservative crowd is going absolutely insane with rage. 

Even if debunked by the authorities and mainstream press, this will persist as a call to action for violent conservative/alt-right groups. 

[Dr. Pepper]

Well, it's the day after the so-called antifa supersoldiers were supposed to take over, so I guess close enough. 

[Manhole Eunuchsbane]

 I haven't seen anything in legit media regarding an Antifa angle. Apparently this guy was ex-Air Force, who was court-martialed on the back of an assault  charge that he committed against his wife and child back in 2012. 

 

[Darth Richard II]

Don't be silly, every mass shooter ever hasn't had a history of violence against women.

Shit, I didn't even think about the antifa bullshtit angle. Great.

[Bonnot OG]

1 hour ago, ThinkerX said:

Regarding the mass shooting in Texas.  This is in the process of taking an extremely ugly political turn.

I have been coming across commentary on political articles, as yet unverified, that the shooter shouted 'this is the communist revolution!' prior to opening fire, and draped an 'antifa' flag over a pew before leaving.  The (unsubstantiated) claim is the shooters Facebook had antifa symbols.  Predictably, the conservative crowd is going absolutely insane with rage. 

Even if debunked by the authorities and mainstream press, this will persist as a call to action for violent conservative/alt-right groups. 

The only shit I saw of this was coming from well known alt right liars who photoshop images to demonize the left.

 

[Manhole Eunuchsbane]

 It's looking quite possible that this was an attempt by the shooter to kill his wife or his wife's mother, or possibly both. The wife of the shooter grew up in Sutherland Springs, and her mother apparently attended the church regularly.

 https://heavy.com/news/2017/11/devin-kelley-p-sutherland-springs-church-shooter-patrick-kelly/

 

/The Antifa bullshit seems to be just that. A Facebook construct spun from whole cloth.