ataxingmatter

Obama's tax ideas, per McCain, checked by Factcheck

FactCheck.org has produced an analysis of a frequent claim of the McCain campaign that Obama has voted many times to raise taxes.  In the process, they also did a fact check on the Obama campaign.  Here's what they have to say in their summary of the report, called "Tax Tally Trickery" (July 3, 2008).

• Republican claim that Obama "voted 94 times for higher taxes" is "inflated and misleading" and "padded"
• FactCheck's review of the 94 votes showed:
  • 53 of the 94 votes were on budget bills, not tax bills, and thus not tax increase measures;
  • 4 of the 94 were on nonbinding resolutions related to conference negotiations;
  • 23 of the 94 were for measures that would produce no tax increase at all (they were simply against additional proposed tax cuts);
  • 7 of the 94 were for measures to reduce taxes for most, offset by raising taxes on relatively few corporations or wealthy individuals;
  • 11 of the 94 votes were to increase taxes on those making more than $1 million annually in order to fund programs such as Head Start, veterans' health care
  • many of the items listed were double-counting (or even quadruple counting) of votes on same measure

The summary concludes that Obama has "voted consistently to restore higher tax rates on upper-income taxpayers but not on middle-or low-income workers.  That's consistent with what he's said he'd do as president, which is to raise taxes only on those making more than $250,000 a year."

These "fact checks" are useful, because the campaign season can easily be filled with hype that repeats ad nauseum misleading statements, and leaves voters with unreliable information on which to base a decision.  thanks to FactCheck.org for paying attention to tax as an issue of importance in this campaign.

UBS (and some of its wealthy US clients) in the soup

UBS, one of the banks that took a huge hit from the subprime mortgage crisis, is in the news again, this time for what appears to be assistance to wealthy US clients in evading US taxes by creating offshore entities to hold the UBS accounts and then failing to provide required information on those accounts to the US government.  The Justice Department has now asked a court to serve an IRS summons on the bank for names of those wealthy US clients, who may now be subject to everything from civil to criminal fraud for tax evasion, and a judge has cleared the request.  See this NY Times story by Browning and Werdigier this morning, and this Justice Department release indicating that former employees have estimated that at least $20 billion in assets may have been hidden from the U.S. Treasury Department in undeclared accounts.   Penalties for failure to report foreign-held assets are quite large--up to 50% of the assets held, after changes made to those requirements in recent years.

The US, of course, has an ace in the hole in this investigation, the UBS banker Bradley Birkenfeld who pled guilty to conspiring to defraud the IRS and has turned state's witness on the bank's secretive practices.

IRS Commissioner Doug Shulman got it right--these US citizens who are hiding their assets to evade their tax liabilities are "short-changing the nation" as a whole.  See Shulman statement in BNA.  Shulman added:

A few wealthy individuals eagerly embrace the benefits of a global marketplace, but yet they do not take the basic steps of paying what they owe back to the nation. People should be ashamed of hiding money in offshore accounts, while tens of millions of people of more modest means honestly and accurately pay their taxes each year.  Id.

These wealthy individuals shouldn't be able to get away with hiding their assets, and the bank that aided them in doing it should lose the respect of its law-abiding customers.

Center for Economic Progress "summit"

The Center for Economic Progress, through the National Community Tax Coalition and with Frontera Assets, is hosting a "summit" on financial independence for working families in Arizona, California, Colorado, Hawaii, New Mexico, Nevado, Texas and Utah.  It will be held in Scottsdale Arizona, with "pre-event" sessions July 23 and "event sessions" July 24 and 25m with a charge of $150 for affiliated organizations and $200 for others.  You can register at www.tax-coalition.org.  and apply for scholarships at this link: click here.

The Center is a coalition of organizations that focuses on helping working families. You can read about its various programs at this link:  http://www.economicprogress.org/index.php/c/About_Us

Here's what the organization has to say about the event:

From food to housing to child care, working families face rising costs at every turn, while their wages stagnate or even decline.  The National Community Tax Coalition, a leader in the movement to connect working families to tax credits and economic opportunities, wants to help you combat this crisis for working and immigrant families.  Join us as we share tools and strategies to create change on a larger scale.  During this summit, we will talk about the state of low-income workers nationwide, in the South, and along the Southwest border.  By focusing on skill building and action planning, and providing opportunities to network with other programs, experts, and elected officials, we will help you to take your organization from a practitioner in the field to a leader in the movement.

****

General Sessions:

30,000 Feet: State of Low-Income Workers, A National View

Drilling Down: State of Low-Income Workers, A Regional Perspective

What to Expect: Let's Go Deeper?

Panel Discussion: IRS News Flash

Concurrent Sessions:

Where the Rubber Meets the Road: Using Datat to Improve Your Program

The Flip Side of Free Tax Prep: Being a Strong Voice for Low-Income Workers in Your Community

Hitting Rock Bottom: Helping Low-Income Workers Navigate the Marketplace

McCain's Tax Plans

Yesterday I received a fundraising mailing from John McCain's presidential campaign.  I found it quite interesting, as much for what it didn't say as for what it did say.  It presumed that McCain supporters would care about a very select subset of issues:  1) making the Bush tax cuts permanent, 2) making sure health care stays in the control of the insurance companies and 3) making a commitment to keeping troops in Iraq for the indefinite future (til "victory").

If you put the three issues together, you come up with some interesting analyses.  A near-permanent commitment to Iraq is not costless.  In fact, our long-term spending commitments--for disabled soldiers, equipment replacement, recruitment, and the daily costs of war at the inflated prices paid by the Pentagon for private mercenary forces--are staggeringly high.  (Recall the Stiglitz-Bilmes estimate of $3 trillion and counting as of about 6 months ago, with a $6 trillion figure not unrealistic.)   At the same time, making the Bush tax cuts permanent, and thus benefiting primarily those who have considerable capital income and are otherwise in the very tip top of the income distribution making multiple millions annually, is enormously costly.  Remember that the cost of the original package of 2001 tax cuts was around $1.6 trillion.  Project that out permanently (i.e., without the sunset gimmick used to make it come within budget estimates) and we are talking about billions of cuts annually that amount to trillions of lost revenues for each decade.  Put trillions of costs for an endless war together with trillions of lost revenues for welfare for multinational corporations and the elite owners of capital in this country, and you have put this country on a train ride to fiscal disaster.

Couple that with the personal tragedies now facing so many ordinary working Americans--foreclosures on their homes, loss of their jobs, inability to maintain high-cost (and high-deductible) health insurance so that a medical emergency can leave them with nowhere to turn.  What's McCain's preferred solution? Letting the private markets handle the health care crisis.  Folks, we've been there and done that.  In fact, we are there right now and it isn't working.  Even with all the tax code provisions that encourage provision of health insurance through work, we have more than 40 million Americans, many of them children, without adequate health care.   The private market can't do what needs to be done, because the insurers' goal is, by definition, to avoid spending by preventing people from getting benefit coverage so that their profits will be bigger.  That's why the people who need the most care are the least likely to be insured.   Only the people working together--through a single payer, single provider system-- have a chance of reaching everyone. 

Now add in the high price of oil.  Having reached or neared peak oil, the price isn't going down, not even if we drilled offshore and in every natural habitat McCain could think about opening.  Global demand will eat up whatever oil resources there are, and the price will continue to rise.  Americans need to develop technologies to switch away from oil pronto--bikes in cities, solar water heating in homes and factories, wind power, etc.   And our tax policy should be pushing us in that direction, not continuing to give Big Oil the kinds of tax breaks that have made in the business that makes men wealthy since the turn of the last century.

I can't say that I saw anything in the campaign letter that made me think the campaign has come up with a viable strategy for dealing with these long-term fiscal problems.  And this recent study from the Center for American Progress Action Fund provides an even more worrisome look at the McCain tax plans for huge tax breaks to the biggest multinational corporations.  The largest 200 corporations would get breaks of about $45 billion a year.  These are not corporations that need largesse from the federal government in order to be competitive (which they often allude to, even while claiming that they are for private market processes):  this is Wal-Mart and Exxon and other huge companies that are enormously profitable.  These huge multinationals have already captured a significant share of the power that should belong to the people and they seldom create jobs that in any way compensate for the tax breaks they get.   The country would be much better off using the revenues that would be lost in tax giveaways for corporations to create education and job training program and other infrastructure that really helps people--or even just give it away to people in poverty whose spending would be an enormous stimulus to the economy, instead of to corporations.

Treasury, capital gains, and tax policy

Phillip Swagel, assistant treasury secretary for economic policy, spoke yesterday to the National Association of Publicly Traded Partnerships and, according to BNA RealTime, repeated two of the mantras of the tax-cuts-for-capital club.

first, Swagel urged the party line on low taxes on capital gains to encourage savings and "to remove a bias away from capital income".  The usual argument for there existing a "bias" is that the US system has a corporate tax, so that a tax on capital invested in corporations is a "double tax" on the holders of the corporate interests.  Fact is, of course, that many corporations pay no tax at all on their income, as a result of a combination of agressive tax planning and legislated corporate welfare, including the "paper" deductions created by the many Bush accelerated write-offs for investments.  Furthermore, there is not much support for the notion that shareholders bear the corporate tax- studies show a minimal effective tax difference for investments held through corporations and other investments.   So with the very low preferential tax rate for capital gains, the very low tax on dividends paid to shareholders, and the very low effective tax rate for corporations, talk about a bias against capital in our system is mostly hot air.  In fact, with the significant preference for capital gains and the regressive nature of the payroll taxes, among other features, our overall system is really biased in favor of taxpayers who have mostly capital income and against taxpayers who have mostly wage income.  Since the latter group of ordinary salaried workers make up the majority of taxpayers, the system is biased in favor of the elite at the top of the income distribution who aren't paying their real share of the tax burden.   

Second, Swagel repeated the fearmongering on Social Security that is becoming so common that it reminds me of the talk about weapons of mass destruction before Bush undertook his preemptive attack on Iraq.   Swagel warned that "entitlement spending must be dealt with", again according to the BNA report.  Now, interestingly, this is a statement that leaves out one entire side of the equation by suggesting that it is the "entitlements" that are the problem.  Remember that we created Social Security as a safety net to ensure that elderly and disabled Americans would not be thrust on meager private charity for their subsistence.   The vast majority of Americans are still very much in favor of maintaining the kind of social net that Social Security and Medicare provides.  And the projected shortfalls of both systems, though large, may not even materialize, if the trustees' conservative projections prove too conservative.    A small shift in the economy can make enormous differences in predictions about funds available in 20 or 30 years.  Furthermore, we can (and should, in my opinion) take reasonable and fair steps now to ensure that there will not be a problem in addressing these needs in the future--by removing the cap on payroll taxation, and changing it from payroll to an income basis (and so including capital gains).

One can expect this kind of rhetoric to continue, however, at least through the election.  Americans are not very well educated about taxes, and it is terribly easy to distort a tax statistic or present information selectively to support the conclusion desired.  Sometimes it happens by mistake, but frequently it is associated with an attempt to push a particular policy perspective.  We need straight talk about taxes and our social net, not fearmongering, but we are not likely to get it.

Research & Development tax credit: an extension that should be cut off

As most everybody probably is aware, the fate of "extender" legislation--legislation to extend the term of various corporate tax breaks enacted as part of the huge Bush corporate tax break package--is at this point uncertain.  The House passed HR 6049 some time ago, with the various corporate extenders as well as several energy tax breaks.  These "popular" extenders (that is, popular with the lobbyists, like the National Association of Manufacturers, that think pork for corporations is just dandy) include almost $9 billion for one year's extension of the R&D credit (for research that companies have to do anyway if they want to compete, now more than ever in a globalized environment), and more for the active financing exception (a boon to financial institutions that operate overseas), and another boon to corporations operating overseas in the look-through provisions under Subpart F.  Consider NAM's chief John Engler's statement about why the R&D credit is needed in spite of the fact that research is just an ordinary expense of business like any other deductible expense:

If the theory of having the R&D tax credit, which I believe is to encourage additional research and development investment, then you need to have the tax credit be permanent so people can make longer term strategic commitments because you aren't are going to invest in building a lab and a staff of researchers based on a commitment," he said. "What I see out in the world is pretty good competition for these jobs."  Heather Rothman, NAM Chief Urges Congress to Move on R&D Tax Cut, BNA Daily Tax Report, June 24, 2008.

Come on.  Common sense says that corporations that need to invest in a lab in order to stay competitive (like, say, pharmaceutical companies) will do it whether or not they get the gift of an accompanying tax credit.  It also says that companies don't make long-term commitments based solely on whether or not there's a credit (instead of a deduction) in the tax code, because history shows that the tax code can be (and is) revised on an annual basis.  In fact, you can certainly interpret the legislative history to say that the GOPers that now want these extensions so badly (but not bad enough to pay for them) enacted them all as temporary provisions under the argument first that they were giving back the surplus (of course, that evaporated very quickly) and then that the cuts would provide a needed short-term stimulus to the economy and were simply too expensive for enacting as permanent provisions.   Lots of the purportedly temporary provisions are aimed at letting companies expense their investments rather than taking them into account over time as deductions--the R&D credit is just one more corporate welfare element like those accelerated depreciation provisions.

Although I think most of these extender tax breaks for corporations are unsound and shouldn't be extended (many were on the decades long wish list that most tax practitioners had thought had a snowball's chance in you-know-where to be enacted prior to Bush taking office), at least the House purported to pay for the corporate breaks with revenue raisers (eliminating deferral treatment of offshore compensation for hedge fund managers and extending out even further the delay in implementation of a tax break enacted to benefit multinational corporations (the worldwide interest allocation scheme, that let's corporations use the fungibility of money to decrease their US taxes). 

The Senate has stalled on action, based on Dems' refusal to let go of pay-as-you-go (about time they applied it, since they've been honoring it in the breach mostly) and the GOPers' refusalto accept paying for their largesse to corporations by removing some of the other pork they've put in the corporate pie.  My wishful thinking says that maybe for once the partisan fighting will yield a good result--letting these corporate extenders hit the dust bin for once and for all.   I hope that at least the Senate Dems will have the spine not to cave on paying for these extensions with revenue offsets, if they do enact them.

Tax Snitches--a big one revealed

This is a double gotcha moment.  As Tax Prof reported this afternoon, Bloomberg.com reveals that UPS Lobbyist Secretly Spurred Ohio to Demand Taxes from FedEx.  Kenneth Kies, the former chief of staff of the Joint Committee on Taxation, left Congress to become a lobbyist.  One of his clients was UPS. And Ohio has just revealed that Kies was the author of a detailed report delivered to Ohio officials back in December 2006 about FedEx's employment practices--a tricky little matter of several hundred thousand in taxes possibly due on drivers that FedEx classifies as independent contractors (here's its website about independent contractor recruiting), but that may instead be employees. 

FedEx had already been found to have inappropriately classified certain drivers as independent contractors in California, in a Dec 2005 decision.  See this link.  Massachusetts reached a similar decision about FedEx drivers, and there've been other lawsuits by drivers across the country, see this link, as well as the FedEx Watch site that has links on litigation around the country.   Information is also available on the class action lawsuit's website.   Here's a site, Braun Consulting, that contrasts independent contractor status with employee status, comparing FedEx and UPS.

Why would UPS care?  Because UPS treats its drivers as employees, so it is at a competitive disadvantage when FedEx does not, for essentially the same work.  They both apparently wear uniforms, drive trucks with the company's logo on them, deliver packages according to the company's mandates, with routes set by the company.....hard to see how one set could really be employees and the other set drivers, though there may be a number of factual differences that aren't obvious on the surface.  At any rate, Ohio launched its own investigation and concluded that the FedEx drivers are indeed employees.

So there's a "gotcha" for FedEx (assuming that the classification of drivers as employees holds). And if they are employees for state tax purposes, it is quite possible that they should have been treated as employees for federal tax purposes as well.  The IRS has already tentatively determined that they owe several hundred million in back taxes just for 2002 due to the classification of some drivers, and is investigating the company's classification of about 13,000 drivers in 2004-2006.  See this Trading Markets.com story.  So double "gotcha."

But there's also a "gotcha" for Kies.  In the letter turning the report over to Ohio, Kies asked for confidentiality.  Guess he didn't want to get a reputation as being willing to snitch to tax authorities.  But Ohio released the letter.   So Kies has been outed.

When I was practicing, I heard at various ABA conferences and elsewhere that brown envelope revelations were not an uncommon thing for the IRS.  Companies who were offered a tax shelter by a promoter, for example, may have refrained from buying in, yet recognized that they would be at a competitive disadvantage to companies that aggressively pursued the deal.  Snitching evens the playing field, and lets the IRS find out about the newest tax "inventions" long before it otherwise would have.  I never asked, but I always assumed that the snitching was done anonymously--materials from a promoter sent in a brown envelope with no trace or obvious identification of the sender.  I guess Kies was trying to be more up front, and hoping that his candor would encourage Ohio officials to honor his confidentiality request. 

We tend not to like snitches, of any kind, and thus the "gotcha" sense about Kies' outing.  But we really do want people to help ensure that everyone complies with the tax laws and be willing to report gross miscompliance rather than be cowed by fear of being known as snitchers.  I suspect states and the fed should err on the side of protecting the identity of snitches, and be grateful for the evidence that helps end noncompliance.

Addressing Poverty, Protecting the Environment: PEW religious survey and its implications for tax policies

PEW has released the second part of its major survey of religion in America in the twenty-first century (this part on religious beliefs and practices, social and political views), described in Neela Banerjee, Survey Shows U.S. Religious Tolerance, NY Times, June 24, 2008.  It seems that one major conclusion of the survey is that Americans, though accurately described as a religious people, are also a tolerant people.  The survey report notes an "openness to a range of religious viewpoints [that] is in line with the great diversity of religious affiliation, belief and practice that exists in the United States."  Survey, linked above. 

Along with that tolerance go a few other attitudes that, I believe, are important to a sustainable democracy.   While Americans continue to differ strongly on issues that the right has for decades attempted to define as boundary "religious values" issues such as abortion and gay marriage, they are pretty consistently in favor of social and environmental justice, as evidenced by two views reported in the survey.  First is a view that we have an obligation through government to help the poor (more than two-thirds of those surveyed thought the government should aid the poor, even if it means more debt).  Second is a view that we have an obligation to protect the environment as a natural resource for people across generations (almost two-thirds agree that environmental protection and regulation is an important government obligation).

These findings are particularly interesting at this time, when an economic crisis means more ordinary Americans are finding it difficult to make ends meet while life remains an easy street for those few extraordinarily wealthy people at the top of the income distribution. 

On the concern for Americans in the lower income distribution, most politicians remain agonizingly silent.  We have known that we have a health care crisis for millions of Americans, but we continue to foster a private insurance system that makes its most profit by denying care.  At the same time, the country declines to take action to ensure that even the most helpless among us are protected--as shown by the decision on SCHIP.  We know that the economic crisis is extraordinarily stressful on those with few resources, but understanding and action on unemployment compensation extensions, foreclosure assistance, and infrastructure needs are terribly slow.

On the environmental front, some politicians have determined to take advantage of the ordinary person's pain from the increased price of gas to urge action --offshore drilling and opening of the Alaskan wildlife refuge--that does nothing in the short or long run to help those struggling with transportation costs but actually harms the environment and leaves us with an even more precarious energy dependency on oil.  We don't have the refining capacity to refine more oil if we got a tad more from the dangerous drilling; globalization of the energy industry means that a tad more oil here would do next to nothing to lower prices here (it's a global market, and the prices are set by global demand, including the rising powers of China and India); drilling offshore and in wildlife refuges has huge detrimental costs to wildlife and natural resources that swamp the piddling gains in energy availability; and it is time (in fact, it was time forty years ago) to take much more drastic action to reduce our dependency on oil and move us to alternate energy sources and conservation measures, both of which will improve the environment, conserve resources, and help cut our outsized contribution to global warming.

Taking the citizenry's clear support for helping the poor and protecting the environment, the idiocy of responding to high gas prices by subsidizing Big Oil and ensuring that Big Oil gets no-bid contracts in Iraq, and the need for fiscal and tax policies that better reflect the concerns of ordinary Americans, what could we do in our tax policies to make things better?  How about some or all of the following:

1. change the payroll tax system to make it progressive rather than regressive:  reduce taxes on the lowest-income Americans and increase them on the highest-income Americans by removing the cap and taxing capital gains as well as wages
2. eliminate corporate tax breaks that make moving offshore easy and profitable, for tax purposes, for big companies (e.g., define domestic companies by state of incorporate OR place of management and control; stop deferral of income--starting with the end of the active financing exception to Subpart F income and then transitioning over time to a complete no-deferral regime; and by all means, even if we don't get rid of deferral, for goodness' sake don't enact another corporate welfare provision like the 2004 de minimis tax on repatriated income that let the "bad" companies that keep their income overseas get a tax break for bringing it back to do all kinds of things other than create jobs (many of the companies actually laid off workers!)--see Lynnley Browning's NY Times story today on the windfall for 843 corporations that saved $265 billion in taxes); 
3. increase the Earned Income Tax Credit,
4. index the AMT rate brackets and exemption amount, creating an exemption amount that ensures that the lower 50% of the income distribution is not subject to the AMT; while at the same time adding various current preferences back into income for AMT purposes, such as the capital gains preference and mortgage interest deduction (if those aren't eliminated by other reforms)
5. Bring the regular tax rates into the 21st century by recognizing the way annual incomes have grown for those at the very top (CEOs making more in half a day than their average workers make in a year is not uncommon) while wages have remained stagnant (at best) for most ordinary Americans:  that means keep rates low at the bottom income tax brackets, but let them go back to their 2000 levels for the highest bracket AND add a rate bracket to the regular tax for taxpayers with more than $2 million in annual income (the current highest rate is reached at considerably less than half a million)
6. transition to a phase out of the mortgage interest deduction at lower mortgage levels
7. retain the Estate Tax (with something close to the 2001 rates and exemption levels) and at the same time eliminate gimmicky ways (from four-letter entities like GRATs and GRUTs to "valuation discounts") that the wealthy use to avoid the Estate Tax, and
8. eliminate the preferential rate for capital gains that favors accumulations of passive investments over productive engagement in enterprise--starting with the way "carried interest" is taxed for fund managers.

There are, I'm sure, a number of other things that should be done in the tax code to reflect the priorities that Americans consistently demonstrate--caring for those who are less fortunate, protecting the environment, having a fair tax system that doesn't let people off the hook just because they are wealthy enough to hire expensive "guns" to help them.   But some of these would be a welcome start.  Congress, are you listening to what ordinary Americans are saying?

Tax Cuts and Loopholes

Womenstake, a blog network run by the National Women's Law Center, has an interesting post on recent Congressional votes on various bills.  It's called "One Tax Loophole Gets Closed: Can We Make It a Trend? (June 18, 2008, Joan Entmacher).

The post praises Congress for paying for some of its tax largesse by closing loopholes--in this case, the provision in the new law providing tax assistance for military families that prevents Defense contractors from setting up shell companies offshore to avoid paying payroll taxes in respect of their employees. The post goes on to consider the House Ways and Means bill to "patch" the AMT, with offsets including taxing fund managers on their compensation the same way that bricklayers are taxed on their compensation (ie, at regular "ordinary income" rates rather than preferentially low capital gains rates) and the extender bill (with more child care credits and alternative energy incentives) that has been blocked in the Senate because of its resistance to paying for it by eliminating the fund managers' ability to defer income using offshore entities and other revenue raisers.

Here are the lines that count most in the posting:

1. Alas, as we’ve said before, there is no tax fairy to make up for lost revenues. Will we continue to cut the services women and families need to pay for tax cuts?

bank secrecy and tax evasion by wealthy US clients

The US District Court for the Southern District of Florida today released a "statement of facts" Download birkenfeld. statement of facts. 061908.pdf in connection with the guilty plea of Bradley Birkenfeld, a UBS banker, for his role in tax evasion schemes whereby the Swiss bank provided hidden offshore accounts for wealthy US taxpayers to hide their income from the US and avoid US taxes.  The statement of facts indicate that the bank earned about $200 million a year on assets of about $20 billion connected with these "undeclared accounts" of wealthy US clients, which were set up in tax havens such as Liechtenstein or Panama identified as belonging to sham offshore entities.  Birkenfeld's largest client was "a billionaire real estate developer" with initials "I.O."(identified by news media as Igor Olenicoff) who evaded more than $7 million in taxes from 2001 on the income from a nest egg of $200 million hidden offshore in this way.

UBS will likely be in for more pain from this, as will be various wealthy US residents and perhaps even some politicians.  According to an article on Bloomberg.com by Kolker and Voreacos, Birkenfeld's plea provides a description of the bank's systematic attempt to cater to wealthy US tax-avoiders and his attorney said he would "tell the government everything he knew about UBS."  According to an earlier New York Times article, UBS is considering divulging the names of some 20,000 private banking US clients. See Lynnley Browning, Wealthy Americans Under Scrutiny in UBS Case, June 6, 2008.  They may well be shaking in their boots about possible criminal tax convictions.  Let's hope so.

Phil Gramm, former US Senator from Texas, is vice chairman of UBS's investment banking arm, UBS Securities.  Mr. Gramm is also "McCain's econ brain" (that's presidential candidate John McCain, who has publicly stated that he isn't as well-informed about the US economy as he should be).  If the bank's assistance to wealthy US taxpayers' tax evasion was a pervasive as it appears to have been from the Olenicoff and Birkenfeld guilty pleas, one wonders how someone in as prominent a role as Mr. Gramm could possibly have been unaware of the shenanigans.  One suspects that either he was turning a blind eye (not a very good role model for providing the leading economic analysis to a presidential candidate) or he was in the know and not doing anything to stop the bank's engaging in such practices (not a very good role model for providing the leading economic analysis to a presidential candidate).

ASIDE: McCain is now described as a "budget-shrinking, flat-tax-embracing, healthcare-privatizing champion of free markets."  Id.   In other words, one might say, one who supports the kind of tax policy that embraces the tax aid to corporations and the wealthy along with unworkable "you only get what you can pay for" solutions for people at the bottom of the income scale that have put us into an  economy that works only for the wealthy, after 7 years of the Bush regime.