What is Obama doing? » tax

Day 61: Bailout executives panic – House passes 90% tax on bonuses

Niklas — Fri, 20 Mar 2009 17:14:53 +0000

As if jumping executives from the roofs of bank and wall street buildings wasn’t enough of a public sidewalk hazard, the House overwhelmingly passed a near total tax on bonuses paid to employees of AIG and other bailout biters. And to really nail the coffin – it’s retroactive.

The faces of Evil according to bank executives.

The House vote sent some employees into a panic about the prospect of, in effect, having to give up money they might already have spent. And it had regulators fearing it could undermine the Treasury’s efforts to stabilize the financial system if banks tried to flee the bailout program or if other firms refused to participate in coming rescue operations to protect their bonuses, some executives said.

Story on NYTimes

Ps! If you happen to be a sad executive, here’s a little tax free bonus from us on WIOD: the streamed Leno interview with Obama.

Day 35: Obama expected to remove hedge fund tax breaks

Paul -V- — Thu, 26 Feb 2009 14:06:41 +0000

Obama is expected to start the process of removing hedge fund tax breaks.

If there is one tax loophole that looks dead in the water, it’s the law that lets hedge fund and private equity managers pay a 15-percent capital-gains rate on the multimillion-dollar fees they collect — substantially less than the top income tax rates paid by their secretaries, chauffeurs, and the pilots of their private jets.

On the surface, the stars are aligned. There is a newly elected Democrat in the White House who is desperate to raise revenues. Killing this tax break would raise $31 billion over five years. In addition, there are Democratic House and Senate majorities – representing the party of working people – and what could more unfair than letting billionaires pay taxes at a fraction of the rate of the guy with the lunch pail ?

Story by The Huffington Post

Day 31: Obama Has Plan to Slash Deficit, Despite Stimulus Bill

Niklas — Sat, 21 Feb 2009 23:00:08 +0000

After a string of costly bailout and stimulus measures, President Obama will set a goal this week of cutting the annual deficit at least in half by the end of his term, administration officials said. The reduction would come in large part through Iraq troop withdrawals and higher taxes on the wealthy.

Story on NYTimes

Day 27: Swedish newspapers about Obama’s banking stance

Niklas — Tue, 17 Feb 2009 11:30:40 +0000

Swedish newspaper E24 ran a story yesterday with the headline “Made in Sweden is hot again”.

Not since prime minister Olof Palme compared the bombings of Hanoi with Treblinka has Sweden been so debated on the other side of the Atlantic. In the times of financial crisis and regressing export markets the panicked Americans doesn’t want Volvos, Saabs or even Absolut Vodka anymore. A completely different blue-yellow (the colors of the swedish flag) product is high in demand: Swedish crisis solving.

There seems to be only two schools of thought on how to solve the crisis right now. Either the japanese version where limited support plans led to a lost decade, and the swedish model of “do it over again, do it right” where the banks are bought, cleaned up and then resold.

They use some Obama quotes where he on board of Air Force One stated in response to a question regarding the swedish model, “All I can say is that I won’t allow the financial industry to crash and burn.”

The Swedish version of Metro had a full cover today regarding Obamas stance on the swedish model set during the last banking crisis in the early 90′s when the banks were largely nationalized. He is largely skeptical, and with good reason as Sweden at the time only had about 5 banks while the U.S has thousands. The headline reads “The swedish model is completely rejected by Obama!”.

Translated excerpts:

The swedish governments saving of the bank industry in the early 90′s is a hot topic in the United States right now. But Barack Obama gives it a thumbs down.

“Sweden has a different culture when it comes to their relations to the market economy” Obama said to ABC news.

That didn’t stop two top economists from New York University stating “Nationalize the banks – we’re all swedes now” in the Washington Post (read it here). Correctly implemented the system could work in the US as well they argued.

Noteworthy point that isn’t mentioned in the article is that while the purchases of the banks cost the goverment around $6 billion at the time, most everything of that investment was quickly regained by the tax payers after the crisis.

Sweden, which was once called the “cowardly nation up north” by Churchill, seems to have been lifted to international star status with balls of steel. All because they once had a banking system that didn’t work at all, and a number cruncher who set it all right again.

Forget the Abba museum. What the world seems to want now is the former head of the swedish financial department Stefan Ingves.

Story on E24 (swedish)
Story on Metro (swedish)

Day 9: Breaking! House passes Obama economic stimulus plan

Niklas — Thu, 29 Jan 2009 13:09:32 +0000

In a swift victory for President Barack Obama, the Democratic-controlled House approved a historically huge $819 billion stimulus bill Wednesday night with spending increases and tax cuts at the heart of the young administration’s plan to revive a badly ailing economy.

The White House-backed legislation includes an estimated $544 billion in federal spending and $275 billion in tax cuts for individuals and businesses.

The vote was 244-188, with Republicans unanimous in opposition despite Obama’s pleas for bipartisan support.

Story on MSNBC

Day 7: Citibank are told to stop insane spending

Niklas — Tue, 27 Jan 2009 18:54:45 +0000

The administration today placed a phone call to Citibank, who received $45 billion in goverment bailout, about their plans to buy a new $50 million corporate jet. They were told to “fix it”.

The New York Post’s Jennifer Keil and Chuck Bennett reported in Monday’s paper that Citigroup, which has received $45 billion in government bailout funds, is about to upgrade to a new $50 million, twelve-seat corporate jet.

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.

Story on ABC news
Story on Huffington Post

Day 3: Congress gets busy

Niklas — Fri, 23 Jan 2009 14:38:31 +0000

The House Ways and Means Committee has approved $275 billion in tax cuts
The House Energy and Commerce Committee late Thursday approved a $2.8 billion program that would expand broadband service into underserved areas.
It also approved various programs costing an estimated $27 billion to promote energy efficiency.
On a key vote Democrats preserved a tax break for this year and 2010 that would mean $500 for many workers and $1,000 for millions of couples, including those whose earnings are so low that they pay no federal income tax. They also voted down a Republican effort to eliminate a health insurance subsidy for laid-off workers.

We need to be dealing with people at the bottom of the income scale,” said Rep. Jim McDermott, D-Wash. He also noted that the legislation would provide a $25-per-week increase in unemployment benefits.

Report on MSNBC