Excerpts from recent editorials in the United States and abroad:
The Guardian on the Pandora papers — bringing tax havens to heel:
Five years after the Panama papers exposed the vast scale of offshore banking and business services via the activities of the wealth management specialist Mossack Fonseca, hundreds of billions of pounds are still being secreted away in tax havens. The leak of almost 12m documents, known as the Pandora papers, reveals that 35 current or former heads of state are among the customers of secrecy jurisdictions where huge sums of money are hidden in order to avoid tax and transparency. King Abdullah II of Jordan, Czech prime minister Andrej Babis and Azerbaijan’s ruling Aliyev family are among those with serious questions to answer, along with more than 100 billionaires and rich individuals from all over the world.
Beyond any specific acts of venality, as outrageous as these are, looms a system whose existence is a global disgrace. As a matter of course, and in spite of their immense personal advantages, the ultra-rich are ripping off everyone else. They do this by refusing to pay their share towards the services and resources (health, education, energy, water and governance) on which everyone depends. And they are facilitated and encouraged in this by an industry whose purpose is to shield their wealth and conceal what they are up to.
Underpinning this international tax avoidance infrastructure is the idea that rich people and companies should be allowed to do what they want; that governments’ claims on their money are in some sense unreasonable or unjust. How deeply antisocial this belief and its adherents are has never been better illustrated than now, in the middle of a pandemic and on the brink of climate disaster. Rarely, if ever, has the pooling of global resources to solve our collective problems been more necessary. And yet, the Tax Justice Network reported last year that governments are losing $245bn (£180bn) annually to corporate tax abuse, and $182bn (£134bn) to tax evasion by individuals.
The efforts of campaigners and media organisations have borne some fruit. This summer 130 countries signed up to a new global minimum corporate tax rate of 15%, along with measures to stop multinational corporations shifting profits around. The EU has a blacklist of jurisdictions lacking transparency, and pressure has increased since Brexit to add the British Virgin Islands, Guernsey and Jersey to it.
But while measures to prevent tax evasion and money laundering have been strengthened, the legal tax avoidance sector is thriving. The chancellor, Rishi Sunak, was wrong to say on Monday that the prominent role of the City of London in this system is not a “source of shame.” British crown dependencies and overseas territories were pioneers in the tax avoidance business, and are responsible for a third of the total losses borne by other countries. What makes this even worse is that the countries bearing the heaviest losses relative to their overall public spending are among the world’s poorest – and also those hit hardest by Covid-19 and global heating.
Successive Conservative governments have dragged their heels on this issue. But the current one appears to be heading in the wrong direction entirely with its network of freeports, or onshore tax havens. The Pandora papers have revealed how many world leaders and other public figures have a vested interest in the status quo. Elected politicians, including Boris Johnson, must now prove that they are not among them. The stashing of vast quantities of cash in tax havens must be stopped.
The Chicago Tribune on Democrats and infrastructure negotiations:
That canny Cajun James Carville had this to say in Vox in April: “the Democratic Party can’t be more liberal than Sen. Joe Manchin. That’s the fact. We don’t have the votes.”
And you know what? That’s still the fact.
It’s still true, however hard the Democratic left tries to demonize the West Virginia senator as an iconoclastic fool or a sycophantic toady to the interests of big business.
What Rep. Alexandria Ocasio-Cortez did or didn’t say about Manchin as she swirled around in her “tax the rich” couture at New York’s Metropolitan Museum of Art gala really doesn’t matter; what matters is that Manchin was duly elected by the good people of West Virginia to serve their interests as he sees fit. And he gives every indication of doing precisely that.
The Democratic strategist’s incontrovertible truth is tough medicine for the party’s aggressive progressive wing, a group of idealistic social engineers who are not content with the possibility of a big win for their party by passing a $1 trillion infrastructure bill that most reasonable people can agree the country needs as part of its COVID-19 recovery, even if the cost makes us gulp. Instead, this activist group wants to tie that bill to a separate, colossal $3.5 trillion bill that includes all manner of social programs paid for by a major tax increase.
Manchin, of course, has a fellow moderate holdout in Arizona Sen. Kyrsten Sinema. Over the weekend, all kinds of crude attempts were made to attack Sinema and paint her as a certified eccentric, if not someone who has entirely taken leave of her senses. With many of her left-wing opponents forgetting any and all obligation to avoid sexist stereotyping, we read of her eccentric wardrobe, her love of furs and stiletto heels and the seemingly limitless nature of her maverick personal ambition.
On Sunday, protesters even confronted her in a bathroom at Arizona State University, where she occasionally teaches. They demanded that she support the agenda of the party’s left wing.
In a bathroom. Not so classy.
Reportedly, Sinema remained silent throughout the encounter. It is unlikely that any of this will change her mind. Nor should it. She is entitled to her view. She answers to her own conscience and to the people responsible for her election.
The hubristic left of the party feels the wind of power at its back and yet also fears its changing direction. They worry that Republicans may make midterm gains that will torpedo their current plans. Thus they want to pass their agenda now, while they can. They also are compelled by a variety of socialist ideas and hope to legislate in sweeping fashion for the history books, as did Franklin D. Roosevelt, say, or Lyndon B. Johnson.
But Roosevelt enjoyed a Democratic supermajority built on his own coattails, never mind two electoral victories with 57% and then 60% of the vote. Johnson, who won 61% of the vote, enjoyed a similar buffer. Both presidents had an irrefutable claim on a mandate.
By contrast, President Joe Biden won by a total of less than 45,000 votes when you figure in the machinations of the Electoral College and note the vote counts in the states — Arizona, Georgia and Wisconsin — that put him over the top.
Despite all the failings of Donald Trump, the kind of inept, narcissistic, scorched-earth opponent who should have been toast, Democrats did not enjoy a sweeping rise to power in the last election. In fact, they barely squeaked by in the Senate, winning only because Georgia election rules mandated a runoff. They were not expected to gain both of those seats after the first go-round, and they probably only did so because the spurned Trump started to enact his signature mischief, casting evidence-free doubt on electoral fairness and basically telling his people to stay home rather than enable a corrupt system.
That made it possible for the unlikely win. But even then, the Democrats could only manage to gain power in the Senate based on the tie-breaking vote of the vice president.
In the minds of some on the anti-liberal left, the enacted voter preference for a roughly evenly divided government is a failing on the part of the voters. They’ve decried it as a consequence of racism, no matter that many voters of color beg to differ with at least some of the far-left agenda. These extremists see the ideological diversity of this nation not as a chance to bring America together, but as foolishness that must be overcome.
We disagree. The results of the last election show a preference for adult ideas, incremental change, a disavowal of ideological extremism on both sides and, especially as the country recovers from COVID-19, a preference for helpful, practical legislation passed with an eye on the cost.
The infrastructure bill, which enjoys wide support, mostly passes that test. It should not be held hostage to a broader agenda, and Biden is wrong to acquiesce to that demand.
No doubt compromises will ensue and we’ll stipulate that not everything in that second bill represents an absurd idea. But America can’t afford that cost and the tax burden is rising to egregious levels for many Americans, once you add everything up at federal, state and local levels.
There is no appetite for a socialist America with the state running a big percentage of the economy and big earners getting to keep little of the fruits of their labors, and thus laboring proportionately less.
If there was, the results of the last election would have been different and Democrats would not have chosen a candidate who at least positioned himself as a centrist and a moderate, even if some of those closest to him at the White House seem not always to remember their history.
America may need to send another memo.
The Houston Chronicle on the unraveling of Texas Gov. Greg Abbott’s border policies:
The first sign that Gov. Greg Abbott’s approach to the surge of migrants at the border was shortsighted and politically motivated was when he referred to it as a “game.”
“We’re gonna start by helping these 34 (border) counties respond by increasing arrests,” Abbott told Sean Hannity on Fox News on June 3. “We got a new game in town in the state of Texas that’s going to begin next week.”
The “game” deployed about 1,000 state troopers to the border to arrest migrants on trespassing charges which would have them spend “half a year in jail, if not a year in jail,” Abbott said proudly. Apparently, nobody told Abbott, a former Texas attorney general, that his approach was predicated on flagrant violations of state law.
Hundreds of migrants arrested for trespassing have now been jailed for weeks with no charges filed against them, and dozens more have been jailed for more than a month without being appointed a defense attorney, as required in cases involving indigent defendants and Class B misdemeanors or higher offenses. State law requires defendants to be released on cashless bonds or have their bail reduced “if the state is not ready for trial” before certain deadlines are met. For most trespassing cases, prosecutors must file charges within 15 days.
We shouldn’t be surprised that state District Judge Roland Andrade, a Republican, took a close look at this process and decided to grant the release of 240 migrants being jailed in Kinney and Val Verde counties on cashless personal bonds. There are thousands of others who have been arrested since June under Abbott’s executive order, with many likely facing the same backlogged courts that prompted Andrade to act in his cases.
Abbott essentially set up an ad hoc criminal justice system solely for the purpose of processing alleged migrant trespassers. Local officials have scrambled to not only find space to jail suspects — migrants were being held in state prisons outside of the counties they were arrested — but have also had to recruit judges, prosecutors and defense attorneys — all at a steep cost. Lewis Owens, Val Verde County judge, expects to submit an invoice to the state between $380,000 to $400,000 for the extra staff and overtime the county has had to pay.
“Is it sustainable? It can’t be,” Owens told the editorial board Wednesday. “Why would we want it to be? Why would we want to keep throwing this amount of money at (border security)?”
Owens said Abbott’s approach has helped reduce the crossings in his county, but at what he called an unsustainable cost. He also worries that migrants are simply crossing at other locations to stay ahead of the enforcement efforts.
What happens next to the migrants who’ve been released is anyone’s guess. Federal authorities may take them into custody or deport them or screen them for asylum. Some will be released into the United States while they await immigration proceedings. Nothing Abbott has done on the border has stemmed the overall tide of migrants willing to risk a dangerous border crossing into America, most of whom are fleeing poverty, violence or environmental disasters.
Abbott is right about this much: The influx of migrants across Texas’ border with Mexico demands stepped-up attention from the Biden administration. But ad hoc games on the part of attention-seeking governors won’t substitute for needed federal action, including comprehensive immigration reform, more judges and resources for backlogged immigration courts and increased diplomatic efforts on the ground in troubled home countries. Biden has work to do, but Abbott’s expensive, burdensome border security initiatives are nothing more than a lesson on what not to do.
The Winston-Salem (N.C.) Journal on N.C. Sen. Richard Burr’s new student-athlete tax:
North Carolina’s Sen. Richard Burr hasn’t always played it safe as a legislator.
He was one of the few Republicans in the Senate who had the courage to vote against former President Trump during his second impeachment trial earlier this year, though it certainly cost him good will with his colleagues. (And the N.C. GOP censured Burr for his vote.)
He’s currently taking another chance and inviting the ire of many — Democrats and Republicans — as well as both sports fan and those who couldn’t care less about sportsball — by introducing legislation last week that would require college student-athletes to pay taxes on their scholarships if they make more than $20,000 in outside endorsements — this, in response to the NCAA’s decision to allow student-athletes to earn money by licensing their name, image or likeness (NIL).
“The premise of this bill is simple,” Burr said. “If a student chooses to monetize their name, image and likeness based on their connection to their school — in some cases earning them $1 million or more a year — their scholarship should be subject to federal income taxation.”
Burr said that his bill is needed “to protect the integrity of amateur athletics at colleges and universities across the nation.”
We wonder why it is, though, that he thinks the scholarships should be subject to taxes when their actual NIL earnings already are taxed. The next questions are inevitable: Should other scholarships be subject to taxation? Should all?
We also struggle to see a natural connection between taxation and college athletic integrity, but perhaps it’s there. Burr, who played defensive back for Wake Forest football in the 1970s and lettered for the Demon Deacons in 1974 and 1975, definitely has more experience in the field.
But even for the few student athletes whose endorsements could lead to quite a haul — some have signed five- or six-figure contracts, and some fewer have reached as much as $1 million annually — taxing their scholarships strikes us as unnecessary and unfair for several reasons.
While student-athletes come from a variety of backgrounds, athletic scholarships are often the lifeline that allow lower-income students to acquire a higher education. These scholarships don’t turn them into moguls; money can still be tight and an NIL contract can make life more pleasant for them — and their families.
Taxing them for lifting themselves by their own Nikes doesn’t seem … sporting.
There also seem to be quite a few members of society who have been freed from the burden of taxation while regularly earning quite a bit more than the most photogenic college football star — some of whom are quite talented at hiding their earnings, as we’re beginning to learn through the release of the Pandora Papers.
Perhaps Burr should join his Democratic colleagues in asking them to pay their fair share.
There’s also something about the way Burr phrases this — “If a student chooses to monetize their name, image and likeness based on their connection to their school” — that sounds almost punitive, as if he thinks they should be content to play their sport and go to class.
Before the changes in NIL compensation, student-athletes were doubtlessly shortchanged, and most still are. Yes, their scholarships are valuable, and successful college athletic careers can be parlayed into professional careers.
But college athletics generates billions in revenue. Even with compensation for NILs, the lion’s share of the financial benefits will go to their schools.
Winning the right to be compensated for their NIL, if not their work, was an accomplishment — but is still somewhat chintzy. Most of their deals aren’t likely to be that lucrative. Do they really need to be taxed?
“Given the political makeup in both his chamber and the U.S. House, it’s unlikely this measure will go anywhere without substantial support from Democrats across the aisle,” Todd McFall, a sports economist at Wake Forest University, told the Journal. But Burr’s isn’t the only proposal for dealing with NILs. Other proposals will attempt to codify and limit student-athletes’ earnings even more.
If this is the closing act of Burr’s congressional career — he’s not running for reelection — he could do better.
(Columbia, S.C.) The State on Sen. Lindsey Graham and Trump’s legacy:
How could Sen. Lindsey Graham even suggest that the Jan. 6 riot at the U.S. Capitol might someday become a historical footnote?
Speaking to The State reporter Caitlin Byrd, Graham said Monday that somehow the breach of the seat of our beloved, fragile democracy, and former President Donald Trump’s role in spreading the Big Lie that prompted it, would be somewhat forgotten or minimized if Republicans regain control of the House and Senate in 2022.
“That won’t be his legacy,” Graham said of Trump in the interview. “That won’t be his legacy if we win in 2022. If we lose in 2022, then Jan. 6 becomes his legacy.”
Whatever happens in 2022, we will not forget the day the world watched in horror as Americans tried to stop the certification of our election and ultimately the peaceful transfer of power that has distinguished this nation for hundreds of years.
We will not forget watching from our living rooms and offices that Wednesday as people literally scaled the Capitol walls, broke windows, assaulted police officers, chanted “hang Mike Pence,” and desecrated a place that has long been a symbol of what a democracy can be.
If you want a reminder of how terrible the day truly was, visit the FBI website, which has a separate section labeled U.S. Capitol Violence.
It features video after video of graphic violence as crowds forced their way into the building. You can see the names of each of those charged and the string of criminal charges they face.
The website notes, “In the eight months since Jan. 6, more than 600 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including at least 185 individuals charged with assaulting or impeding law enforcement.”
Graham seems to have forgotten that he and his fellow senators fled for safety that day. None of them stuck around to greet the so-called “tourists” whose entry into the building delayed certification of the election of President Joe Biden.
One of those tourists, Jason Dolan of Florida, recently pleaded guilty to “conspiring with intent to deliberately obstruct election certification.”
A press release on his guilty plea recounts the day’s events.
“Dolan stood at the top of the steps on the east side of the Capitol and joined some co-conspirators who had walked up in a ‘stack’ formation, with each person keeping a hand on the shoulder of the person in front. Around 2:40 p.m., Dolan was present on the plaza outside the east Rotunda doors where some co-conspirators and other individuals pushed against the USCP officers defending the building, eventually forcing the doors open. The doors were significantly damaged, and Dolan unlawfully entered the building.”
It continues, “According to his plea, at the time Dolan entered the building, he believed that he and the co-conspirators were trying to obstruct, influence and impede an official proceeding by stopping or delaying the certification of the electoral college vote.”
Hours after the breach, when Congress reconvened, Graham spoke passionately about the importance of certifying the election and rejected the idea that Pence or anyone had the Constitutional authority to stop the democratic process.
“If you’re a conservative, this is the most offensive concept in the world that a single person could disenfranchise 155 million people,” Graham said of the suggestion that Vice President Mike Pence could reject certification of the vote totals.
When Byrd asked Graham why he wants to support a figure who has openly sought to undermine our democratic process, Graham said Trump was a good president whose policies “will stand the test of time.”
But Graham said he would encourage Trump to look forward.
We, as a nation, however, can only look forward if we remember the events of Jan. 6 and hold those responsible accountable.
The Wall Street Journal on Facebook, parental control and political speech:
Facebook has become the latest company that everyone loves to hate, and internal documents stolen by an employee have become an opening to blame the social-media giant for America’s ills. The company has made mistakes, but it’s worth sorting the genuine issues from the opportunism of politicians looking to censor opponents.
Both were on display Tuesday as Frances Haugen, the former employee who leaked the documents, testified on Capitol Hill. One of her legitimate concerns is Facebook’s negative influence on the mental health of teenagers. It’s no surprise to parents that teens are emotionally fragile and especially vulnerable to peer and celebrity influences.
Ms. Haugen’s documents show that Facebook understands its impact on teens but has done little about it. According to its internal research, 82% of teens experienced emotional issues in the last month, including poor body image, anxiety and depression. More than half who experience anxiety, family stress and loneliness said they use Instagram to distract from their feelings. One in five U.S. teens said Instagram made them feel worse while 42% said it made them feel better.
“Teens not satisfied with their lives are more likely to say (Instagram) makes them feel worse than those who are satisfied,” a Facebook slide-deck notes, and “being in a low or vulnerable state of mind means teens are more vulnerable to the content they see online.” Many teens don’t have close friends or mentors they feel they can turn to for support.
This is a problem that can’t be solved by government, though some politicians want to try. They’ve proposed eliminating Section 230 liability protection for algorithms or requiring Facebook to submit its algorithms to regulators for review. Just what we need–a Bureau of Algorithms.
A better idea is to give users more control over their news feeds and parents more control over what their kids are exposed to online. Tech companies overall have resisted giving parents more control over what their children see online, and social-media apps are especially unhelpful. Here’s where Congressional pressure could do some good.
Too bad the main concern of many politicians is prodding Facebook to censor “misinformation.” Ms. Haugen seems to agree, and it’s notable that her appearance seems to have been midwifed by Bill Burton, a prominent Democratic communications executive. Facebook is “facing a Big Tobacco moment, a moment of reckoning,” said Connecticut Sen. Richard Blumenthal.
Democrats have seen that bludgeoning CEO Mark Zuckerberg and threatening the company with regulation has been working. Mr. Zuckerberg resisted censorship for some time, but in recent years Facebook has begun to add opinionated “fact-checks” or has censored stories that disagree with progressive orthodoxy on climate, Covid or other issues. Our op-eds have been targeted more than once.
Facebook makes money by targeting ads, so it naturally has an incentive to feed users content that keeps them hooked. But the company has also become a political scapegoat for the deeper-seated cultural problems that its platform can amplify. Congress ought to be examining ways to empower social-media users and parents, rather than bullying Facebook to exercise more control over user speech.
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