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"A penny for your thoughts"

Friday, January 16, 2009

America raising A Trillion Dollars for Recovery Operations Without Raising Taxes

Joe Rothstein ( said it is possible for the new president to raise for the needs of at least a trillion dollars to clean up the wreckage left by the old president. And Obama needs to get that money without raising taxes which is not a problem.

1)Getting back money the wealthy have been hiding from the tax collectors.
In the January 9 New York Times the Swiss bank UBS is closing the hidden offshore accounts of its well-heeled American clients, potentially allowing their secrets to spill into the open, under pressure from federal authorities. UBS will shut about 19,000 accounts that prosecutors suspect have gone undeclared to the Internal Revenue Service. It all stems from a Florida judge's order dating back to the summer of 2008 and the confession of a former UBS banker that he helped clients defraud the government of tax money. He did this on behalf of Igor Olenicoff, who Forbes magazine once ranked as the 286th richest person in the U.S. Olenicoff has since paid over $50 million in back taxes. A Senate committee reported last year that the U.S. treasury loses $100 billion a year to secretive offshore tax havens. And that's just one slice of the money stashed away around the world from tax evasion and illegal activities. Conservative estimates put the number of shell companies who bank in these no-tax places at over 300,000. Given the general world economic meltdown, governments are much more willing to cooperate on ways to dislodge sheltered money. A few years ago the Organization for Economic Cooperation estimated that $3 trillion was hidden from the group's 21 member countries. At the time of the report that amounted to nearly 10% of the world's GDP.

2) Amend legal tax preferences the U.S. generously provides to companies that move their operations and jobs overseas.
A blatant loophole that lets U.S. companies defer taxes on their profits until they transfer them back to the U.S. The U.S. lose the jobs and economic activity that go with those companies and also lose the taxes on the outsized profits those companies make by moving into cheaper labor markets. Most estimates peg this lost revenue at about $100 billion.

3) The health sector is another big target for money.
Obama estimates that there's a $200 billion savings to get back subsidies that the U.S. gives to health insurance companies to help them compete with Medicare. Another $25 billion or so can be saved by letting Medicare negotiate with the drug companies for lower prescription drug prices. In one of the more bizarre things the Republicans did while they held the majority in Congress, they banned Medicare from negotiating for lower prices. Making medical records computer based will bring savings that are estimated to be enormous, $200 to $300 billion a year which Obama pledged to make it happens within five years.

4) Big oil and the combination of tax breaks and other unneeded incentives taxpayers give to an industry that consistently makes enormous profits need to be looked into.

5)Tax breaks for everyone making more than $250,000 a year.
Obama has promised to repeal this.

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