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Tax the Rich; New Tax Havens; Washington Insiders; Dialing for Dollars | 60 Minutes Full Episodes

60 Minutes・46 minutes read

Congress debates raising taxes on the wealthy post-elections, with President Obama advocating for maintaining Bush tax cuts for most but not the top 2% to reduce the deficit. David Stockman suggests eliminating all Bush tax cuts, criticizing both parties for misleading the public, while Washington State's proposed income tax on the wealthy aims to generate $3 billion for education, sparking debates on its impact.

Insights

  • President Obama advocates maintaining the Bush tax cuts for most but not the top 2% to reduce the deficit, while David Stockman suggests eliminating all cuts, criticizing the Republican party's anti-tax stance.
  • Companies exploit tax loopholes by shifting profits overseas, prompting scrutiny from lawmakers like Congressman Lloyd Doggett, who aims to change tax laws to ensure companies pay taxes based on where decisions are made.

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Recent questions

  • What is the purpose of Washington State's Initiative 1098?

    To impose an income tax on the wealthy.

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Summary

00:00

Debate over Wealthy Taxation and Budget Cuts

  • Congress will address the issue of raising taxes on the wealthy post-elections, with President Obama advocating for maintaining the Bush tax cuts except for the top 2% to reduce the deficit.
  • Eight states have already increased millionaire income taxes to avoid severe budget cuts in health and education, with Washington State potentially becoming the ninth.
  • David Stockman, President Reagan's budget director, suggests eliminating all Bush tax cuts, including those for the middle class, criticizing the Republican party's staunch anti-tax stance.
  • Stockman emphasizes that merely taxing the rich won't suffice to tackle the $1.3 trillion deficit, calling out both parties for misleading the public about government spending and taxation.
  • Washington State's Initiative 1098 proposes an income tax solely on the wealthy, aiming to generate $3 billion annually for education, with support from Bill Gates Sr. and opposition from major businesses like Boeing and Amazon.
  • The initiative would impose a 5% rate on income over $200,000 for individuals and $400,000 for couples, with a 9% rate for higher incomes, sparking a debate on its impact on high-tech innovation and business relocation.
  • Entrepreneurs like Brian Misterly and Adam Steitz argue that the tax would harm small businesses and startups, potentially leading to relocations to states with lower tax rates.
  • Governor Christine Gregoire defends the tax as essential for funding education amidst significant budget cuts, questioning high-tech CEOs' opposition despite advocating for improved education.
  • The initiative faced opposition ads highlighting concerns about its extension to the middle class, leading to a shift in public opinion and fairness debates, including Bill Gates' support for the tax.
  • Companies exploiting tax loopholes by shifting profits overseas to tax havens like Zug, Switzerland, to benefit from lower tax rates, prompting scrutiny from lawmakers like Congressman Lloyd Doggett on the legitimacy of such moves.

17:22

Tax loopholes exploited by companies and Congress

  • Weatherford International's headquarters location is unclear, leading to confusion for those seeking it.
  • Companies like Transocean and Weatherford are exploiting tax laws to lower their rates by moving management to places like Geneva.
  • Congressman Doggett aims to change tax laws to ensure companies pay taxes based on where decisions are made, not just where paperwork is filed.
  • Companies are moving management overseas to lower tax rates, leading to a drain of top management jobs from the U.S.
  • U.S. tax laws allow companies to exploit loopholes, moving chunks of their businesses to foreign subsidiaries to lower taxes.
  • Companies like Cisco are moving operations overseas to lower tax rates, with Ireland offering significant tax advantages.
  • Shifting patents, formulas, and assets to low-tax countries allows companies to lower their tax rates significantly.
  • Companies like Pfizer, Merck, and GE have used accounting tricks to lower their tax rates substantially.
  • U.S. companies have $1.2 trillion trapped overseas due to tax laws, with Cisco alone having $40 billion abroad.
  • Congress members have been engaging in insider trading, exploiting loopholes that exempt them from laws applying to corporate insiders.

33:48

Congressional Corruption: Insider Trading and Fundraising

  • Illinois Congressman Dennis Hastert became Speaker of the House in 1999, worth a few hundred thousand dollars, but left eight years later as a multi-millionaire.
  • Speaker Hastert secured a $207 million Federal earmark in 2005 to build the Prairie Parkway through cornfields near his home, benefiting his adjacent land purchase.
  • Former New Hampshire Senator Judd Gregg directed nearly $70 million in government funds towards an Air Force Base redevelopment, in which he and his brother had a commercial interest.
  • Members of Congress have access to lucrative initial public stock offerings, unlike regular citizens, allowing them legal financial gains.
  • Former House Speaker Nancy Pelosi and her husband participated in at least eight IPOs, including a Visa deal in 2008, coinciding with legislation that could impact credit card companies.
  • Former Congressman Brian Baird and Congresswoman Louise Slaughter introduced the Stock Act in 2004 to prevent insider trading by Congress members, but it failed to gain traction.
  • Political intelligence has emerged as a $100 million industry in Washington, where former congressmen and staffers sell non-public information to Wall Street traders.
  • Members of Congress spend significant time fundraising, with pressure escalating since the Citizens United decision, allowing unlimited spending in elections.
  • Florida Republican David Jolly learned he needed to raise $18,000 daily for his re-election campaign, highlighting the intense fundraising demands on Congress members.
  • Congressman Jolly introduced the Stop Act to ban federal elected officials from directly soliciting donations, aiming to reduce the focus on fundraising and enhance legislative work.

49:59

"Money in Politics: Impact on Democracy"

  • Congressman Rick Nolan, a Democrat from Minnesota, co-sponsors the Stop Act, expressing concern over the influence of money in politics and the impact on democracy.
  • Both Republican and Democratic parties advise newly elected members of Congress to spend 30 hours a week in call centers raising funds, discouraging potential candidates from running for office.
  • Democratic members were advised to spend four hours a day on fundraising calls, more time than on constituent work or congressional duties, highlighting the focus on money in politics.
  • Congressman Steve Israel, in charge of the Democratic Campaign Committee, spent over 4,000 hours soliciting donations, revealing the extensive time commitment required for fundraising in Congress.
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