Archives: In the News

• Bush Proposes Unlimited Tax-Free Savings Accounts
• Emerging Enron Scandal
• What's New at CTJ
• Documents on Bush "Stimulus" Proposals
• Tax Profs in the News
• Bush Replaces Treasury Secretary
• In the News (Current)

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Bush Proposes Unlimited Tax-Free Savings Accounts

• GOP Not Backing Savings Changes: Bush Plan Won't Pass, Leaders Say, Washington Post, February 7, 2003; Page A01, by Jim VandeHei
  "A key element of President Bush's ambitious tax-cutting agenda -- his proposal to create new tax-free savings accounts -- has virtually no chance of passing and should be replaced with a bipartisan proposal to expand existing retirement programs, House Republican leaders have told the White House.
  ' I just don't think we can realistically go as far as the president proposes,' Rep. Rob Portman (Ohio), chairman of the GOP leadership team and a close Bush ally, said yesterday."
• Editorial: Stealth Tax Reform, Washington Post, February 4, 2003. Page A24. IMAGINE THAT President Bush had a plan to dramatically reshape the federal tax system, eliminating taxes on investment income for most taxpayers, making the tax structure less progressive and providing a boon to the wealthiest Americans. You might think he would mention it during his State of the Union address. You might think he would call it by its name: radical tax reform.
  It turns out that Mr. Bush has such an audacious plan, but he has left it to his Treasury Department and to his 2004 budget proposal, which was released yesterday, to spell it all out. It's being wheeled into town inside a Trojan horse of private savings accounts.
• Bush's Plan Would Scrap Many Investor Taxes, New York Times, February 6, 2003, By EDMUND L. ANDREWS: "The new retirement plans would shield much more than income from stock dividends. They would also shelter interest from bank certificates of deposit and corporate bonds, and they would eliminate taxes on profits from all kinds of investments held in the new accounts."

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Emerging Enron Scandal

• Joint Committee on Taxation issued a three volume report on the Enron scandal on 2-13-03. Link here and here. For the Senate Finance Hearings, click here.
• For a web site with lots of neat Enron documents, click here.
• Alan Murray column, July 2, in Wall Street Journal, calling for publication of corporate tax returns.
• from SLATE, June 21, 2002: "The recent conviction of Enron's auditor, Arthur Andersen, for obstructing justice raises a disturbing question: Why isn't Enron's outside law firm, Vinson & Elkins, on trial for its conduct, too?" See Julie Hilden, Summery Judgment: Why Enron's sleazy lawyers walked while their accountants fried.
• Washington Post, Feb. 7, 2002: Accounting Firms Auditing their Own Tax Shelters
• Enron Report: (pfd file, 218 pages) REPORT OF INVESTIGATION BY THE SPECIAL INVESTIGATIVE COMMITTEE OF THE BOARD OF DIRECTORS OF ENRON CORP. by William C. Powers, Jr., Chair; Raymond S. Troubh; Herbert S. Winokur, Jr.
• Washington Post Dec. 2 Story on Fall of Enron
• Public Citizen exposure of the Gramms (Wendy & Phil) contribution to Enron fiasco. Click here for link to Public Citizen website,
• Citizens for Tax Justice shows that Enron paid no corporate income taxes from 1996-2000, although the company was profitable in each of those years. The analysis is available on the CTJ website and is available here in PDF format.
  

Enron, From Slate, January 11, 2001:

The papers are stuffed with Enron news. The Los Angeles Times's lead says the company's accounting firm, Arthur Andersen, announced yesterday that some of its employees have destroyed a "significant" number of financial documents relating to Enron. Anderson says it may have shredded papers even after the SEC subpoenaed some Enron-related files in November. Whoops. USA Today's lead focuses on President Bush's order to review regulations to make sure that employees' 401(k) accounts won't be gutted if their company runs into trouble. The New York Times and Washington Post lead with news that in October Enron's chairman, Kenneth Lay, phoned the Secretary of Treasury and the Secretary of Commerce to discuss his company's precarious situation. The Wall Street Journal's top business story is the document destruction. The first story in its world-wide newsbox is that the U.S. began transporting al-Qaida prisoners yesterday to the American base in Guantanamo, Cuba. The Pentagon has said it might sedate prisoners during the flight. Amnesty International complained that that would violate the Geneva Convention. Soon after the prisoner transport took off from Kandahar, Marines at the airport came under small arms fire. Nobody was hit, and nobody was caught.

The papers report that Commerce Secretary Donald Evans said that Lay asked him to put in a kind word for Enron with a credit-rating service (he declined). An Enron spokesperson denied that the request was made and said Lay was just being nice and letting the government know that Enron might go belly up and thus shock the financial markets.

The NYT is careful to avoid implying that Lay was asking for a bailout. The WP, though, states in its subhead, "CEO sought intervention before bankruptcy."

The White House's spokesman, Ari Fleischer, said the President was only made aware of Enron's calls yesterday morning.

Fleischer added that the calls were SOP, "It's not uncommon for people who are in the community, business community or in the labor community, to talk to a cabinet secretary to tell them about the financial status of their business."

The NYT reports, "several congressmen demanded again today that the White House release records of all its contacts with Enron executives." The Times then quotes one of the congressional critics at length. Presumably the administration has articulated a reason why it won't release the records, but the paper doesn't include it (or note the lack of a response, if that's the case).

The NYT asks a good question about the revelation that Enron's accounting firm recently destroyed some of company's documents: In order to avoid endless piles of paper, the company has a policy of destroying old and unneeded records. Were these shreddings simply part of that policy? Enron says it's not sure yet.

Attorney General Ashcroft recused himself from the Justice Department's investigation of Enron because he received $50,000 in campaign donations from the company during his last run for Senate. The entire U.S. Attorney's office in Houston also recused itself from the investigation.

According to the NYT, the Enron fiasco has "reawakened Washington's now-familiar scandal machinery." The White House is desperately trying to distance itself from Enron. It won't be easy. Enron execs have been among the president's largest donors for years. Bush is also a long-time friend of the company's chairman. Still, nobody has suggested that the President did anything improper.

Five congressional committees have sent out subpoenas related to Enron.

"This is the perfect storm," said one Democratic congressional staffer. "It's the biggest bankruptcy in American corporate history, a bankruptcy where a small number of executives enriched themselves while thousands of employees were left with worthless stock. And in 2001, Enron is the most influential company in Washington. When you piece it all together, there are many questions that need to be answered."

YEAR BY YEAR ANALYSIS OF BUSH TAX CUT SHOWS GROWING TILT TO THE VERY RICH

A June 12 analysis released by CTJ and the Children's Defense Fund reveals for the first time who stands to benefit from the 2001-enacted Bush tax cuts in each year from 2001 through 2010. The study shows that by 2010, when the Bush tax cuts are fully in place, 52 percent of the total tax cuts will go to the richest one percent of taxpayers --- whose average 2010 income will be $1.5 million.

The analysis is available on CTJ's website at http://www.ctj.org/html/gwb0602.htm.

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Documents on Bush "Stimulus" Proposals

Analysis by Citizens for Tax Justice

• CORPORATE TAX PAYMENTS NEAR RECORD LOW THIS YEAR

  A March 15, 2002, CTJ analysis finds that the big corporate tax cut bill just passed by Congress and signed by President Bush will slash corporate income tax payments this year to their lowest level as a share of the economy since the early Reagan administration. This will be the second lowest level in the past 60 years.

  The CTJ analysis is available on the CTJ website in HTML and PDF format at http://www.ctj.org/html/corp0302.htm .
  

• The so-called “stimulus” bill that the House overwhelming passed today offers the same $114 billion in corporate tax concessions over the next three years as the failed bill House Republicans put forward last December. Despite growing public pressure on House GOP leaders to pass a clean extension of unemployment benefits, almost all House Democrats cravenly joined in kowtowing to corporate special interests instead. Click here for CTJ website.
• Kennedy Tax-Cut Freeze Proposal Would Reduce Revenue Loss from Bush Tax Cuts While Affecting only the Very Top Income Earners. Click here for pdf copy of CTJ study.
• LATEST GOP CORPORATE TAX-GIVEAWAY COMPROMISE" LOOKS ALMOST IDENTICAL TO ORIGINAL BLOATED PLAN

  The latest so-called "compromise" package of corporate tax subsidies and upper-income tax reductions put forward today by House Republicans with President Bushs approval is almost identical to the tax cut bill passed by the House in October. A December 18 CTJ analysis looks at the major details of the bill.

  The analysis is available on the CTJ website in PDF format at
  http://www.ctj.org/html/stimdec.htm .

• BUY NOW, PAY LATER: HOW GENEROUS CORPORATE CAMPAIGN DONORS SAVE BILLIONS IN
  TAXES
• Profitable corporations that would receive a total of $7.4 billion in
  immediate Alternative Minimum Tax rebates under the economic *stimulus* bill recently passed by the House of Representatives are also major campaign contributors, according to a new report released today by Citizens for Tax Justice (CTJ), the Institute on Taxation and Economic Policy (ITEP), and Public Campaign. The report finds that these corporations have given $45.7 million to federal elections since 1991.
• The report is available on the CTJ website in HTML and PDF format at http://www.ctj.org/html/camptax.htm.
  
• SENATE REPUBLICAN "STIMULUS" BILL UPS THE ANTE ON HOUSE-PASSED MEASURE

  Senate Republicans have proposed even larger upper-income and corporate tax cuts than the bloated *stimulus* measure passed by the House last week on a party-line vote. An October 29 CTJ analysis looks at the cost and distribution of the Senate Republican proposal.

  The analysis is available on the CTJ website in HTML and PDF format at http://www.ctj.org/html/senstim.htm.
  

• HOUSE GOP "STIMULUS" BILL WOULD GIVE A DOZEN LARGE CORPORATIONS MORE THAN
  $100 MILLION IN TAX REBATES EACH

  An October 16 CTJ analysis looks at corporations benefiting from the "stimulus" tax cut bill just approved by the Ways and Means Committee. The analysis shows that a dozen profitable corporations would enjoy immediate tax rebates of over $100 million each under the bill. The analysis is available on the CTJ website in HTML and PDF format at http://www.ctj.org/html/amtdozen.htm.

• WAYS AND MEANS TAX BILL WOULD ALMOST DOUBLE BUSH TAX CUTS OVER NEXT THREE
  YEARS

  On October 12, the House Ways and Means Committee approved, on a party line vote, a bill that would almost double the size of the Bush tax cuts enacted last May. An October 15 CTJ analysis examines the distributional impact of the bill and takes a closer look at the bill's corporate and individual tax cut provisions.

  The analysis is available on the CTJ website in HTML and PDF format at http://www.ctj.org/html/stimulus.htm.
  

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Tax Profs in the News

• Marc Rich Defended by Profs. Wolfman and Ginsburg (Dec. 7, 1990 Memo)

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Bush Replaces Treasury Secretary

• From CTJ: "John W. Snow, President Bush’s choice to replace the fired Paul O’Neill as Secretary of the Treasury, is the CEO of a champion corporate tax dodger, CSX Corporation. CSX’s 2001 annual report states the following company motto: “CSX will pursue all available opportunities to pay the lowest federal, state and foreign taxes." As a result of those efforts, CSX reports that:

  In three of the past four years, CSX paid no federal income tax at all. In fact, instead of paying taxes, CSX supplemented its $934 million in pretax U.S. profits over the four years with a total of $164 million in tax rebate checks from the federal government. “If the President’s goal is to encourage even more corporate tax sheltering, then Mr. Snow looks like a fine choice to help him do so,” said Robert S. McIntyre, director of Citizens for Tax Justice. For CTJ figures on CSX taxes, click here (Dec. 9, 2002).

• From SLATE: Snow Job: President Bush appoints yet another phony businessman, this time as treasury secretary (Dec. 10, 2002).
• From Newsday: Bush Picks CSX Exec For Treasury Job (Dec. 10, 2002).