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Expert: Congress Shouldn't Listen to Apple's Tax Plan

| Fri May. 24, 2013 7:54 AM PDT
rotten apple

The revelation that Apple used a web of baroque tax strategies to legally pay little to no taxes on tens of billions of dollars it earned overseas has re-ignited the debate over reforming the US tax code. But the non-partisan Center on Budget and Policy Priorities (CBPP) warned this week against proposals pushed by Apple and other large multinational corporations that would reduce taxes on offshore profits in order to encourage companies to bring that money back home.

Offshore profits are currently taxed at the same rate as onshore profits: 35 percent. Big US corporations have lobbied aggressively for the United States to shift to what is called a territorial tax system, in which foreign profits would be subject to low or no US taxes. The idea was a cornerstone of former Republican presidential candidate Mitt Romney’s economic platform last year. Now, Apple CEO Tim Cook is calling for a single-digit tax rate on overseas profits, as well as a reduction of the overall US corporate tax rate to the mid-20s.

Chuck Marr, the director of federal tax policy at the CBPP, explains that such a system would only make overseas profit-making more attractive—and that would weaken the US economy:

Multinational companies like Apple currently have a strong incentive to defer US corporate taxes by shifting and keeping profits overseas… [A] territorial system would create greater incentives for those companies to invest and book profits overseas rather than at home—and that, in turn, risks reducing wages at home by encouraging investment to flow overseas, increasing budget deficits by draining revenues from the corporate income tax, or raising taxes on smaller companies and domestic businesses to offset the revenue loss.

Democrats and trade unions agree, arguing that the United States should move in the other direction and tax foreign profits in the years they are made. They contend this would stem the corporate practice of deferring tax payments until the cash is brought back to the United States.

"We are dismantling vital government services because we don’t have revenue to support them," Damon Silvers, the policy director of the AFL-CIO told the Financial Times earlier this week. "And we have one of the most profitable corporations in the world [Apple] stashing $100 billion in [low-tax] jurisdictions."

Other high-tech companies are increasingly shifting profit-making overseas. The revelations about Apple's shenanigans—which apparently are legal—have drawn attention to similar behavior by many high-tech firms, including Google, HP, and Microsoft. "These [tax] incentives are creating unfair advantages for multinationals and draining much-needed tax revenue," says Marr. "The president and Congress should resist the lobbying campaign and instead focus on reducing the incentive to shift profits and operations overseas."

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Elizabeth Warren Attacks House GOP on Student Loan Bill

| Fri May. 24, 2013 7:52 AM PDT

On Thursday, Sen. Elizabeth Warren (D-Mass.) slammed a Republican student loan bill the House just approved that would allow interest rates on student debt to skyrocket.

"The student loan bill passed by House Republicans takes a bad situation and makes it worse," she said in a statement.

On July 1, rates for federal student loans called Stafford loans are set to double from the current rate of 3.4 percent to 6.8 percent. The GOP bill, which passed the House on a mostly party-line vote of 221 to 198, would allow interest rates on those loans to rise or fall from year to year with the government's cost of borrowing, ending the system in which rates are fixed by law. Because market rates are low right now, the initial rate for those loans would be about 4.4 percent, but in coming years it could increase up to a cap of 8.5 percent.

Warren, who has proposed her own student loan plan which would cut student loan rates to near zero, accused Republican lawmakers of making students into cash cows:

Our students should not be a profit center for the government, and the July 1 deadline should not be turned into an opportunity to make more money at the expense of young Americans who are working hard to get an education. This is about our values. We should be investing in higher education to strengthen our economy and grow the middle class.

The student loan bill proposed by Warren, a version of which was introduced in the House by Rep. John Tierney (D-Mass.), is called the Bank on Students Loan Fairness Act. Under Warren and Tierney's plan, student loan interest would be cut to the low .75 percent interest rate that banks pay to the Federal Reserve for short-term loans. After a year, a longer-term student loan solution would be drawn up.

"If we can invest in big banks by giving them low interest rates on government loans," Warren said in the statement, "we certainly can do the same to help students get an education."

The Republican bill faces opposition in the Democratic-controlled Senate, and President Obama has threatened to veto it.

Progressive Dems Spar Over Who Will Succeed Markey

| Fri May. 24, 2013 6:42 AM PDT
Raul Grijalva and Peter DeFazio

If Rep. Ed Markey wins the special election to become Massachusetts' junior US senator next month, it'll have at least one unintended consequence: A potentially ugly fight between two progressive Democrats for Markey's seat as the top Democrat on the House Natural Resources Committee. After Oregon Rep. Peter DeFazio launched his candidacy by getting 20 prominent congressmen—including Georgia Rep. John Lewis and two former chairs of the committee—to sign onto a letter on his behalf, Rep. Raul Grijalva (D-Ariz.) is pushing back, winning the endorsement, on Thursday, of the Congressional Hispanic Caucus.

The battle-lines are familiar, if not not entirely related to the actual responsibilities of the Natural Resources Committee: immigration reform and the Keystone XL pipeline. "DeFazio actually has a very anti-Democratic record on immigration," argues Grijalva spokesman Adam Sarvana. As proof, his office is sending around a fact-sheet highlighting a vote DeFazio cast in 2012 that would have authorized the Keystone XL pipeline as part of a larger transportation package—in contrast to DeFazio's otherwise outspoken criticism of the project. Sarvana is also touting support DeFazio received from the anti-reform outfit Numbers USA. (The group does not endorse candidates but has praised DeFazio's backing of universal electronic citizenship checks as a condition of employment.)

In a statement provided to Mother Jones, DeFazio, who is still considered the front-runner for the job, dismissed the Keystone vote as a procedural oddity: "I just helped lead the fight in two committees and on the floor against the Keystone Pipeline. In 2012, I voted for a transportation bill designed to bypass Tea Party obstructionist and get a much needed transportation bill to conference. As a conferee, I had assurances from Senator Barbara Boxer the Keystone provision would be stripped out of the final bill."

Markey's job isn't open just yet—the special election isn't until June and recent polls have shown a tight race. But the Democrat has never trailed, and his possible successors aren't waiting around for clarity.

Here's the CHC letter backing Grijalva:

 

Eliminating Hunger, One 3-D-Printed Meal at a Time

| Fri May. 24, 2013 3:00 AM PDT
And you thought frozen pizza tasted like cardboard…

Hunger remains a massive problem here on planet Earth. Globally, nearly 870 million people—1 in 8 of us—live with "chronic undernourishment." Meanwhile, obesity stalks us, too—about 1.4 billion people worldwide count as overweight, 500 million of whom are full-on obese.

The scourge of lingering hunger amid rising obesity is notoriously complex and difficult to solve. It raises knotty questions about our shockingly unequal global economic system, about European and US farm policy, about the rise of global agrichemical/GMO firms, about global commodity markets and land grabs.

But what if we could just ignore all of that unpleasantness and hack our way to answers with novel technologies?

For example, what if we could deliver food to the globe's hungry millions through 3-D printing? Here's Chris Mims, writing about an engineer whose company "just got a six month, $125,000 grant from NASA to create a prototype of his universal food synthesizer":

He sees a day when every kitchen has a 3D printer, and the earth's 12 billion people feed themselves customized, nutritionally-appropriate meals synthesized one layer at a time, from cartridges of powder and oils they buy at the corner grocery store.

While global population is expected to top off at 9 billion, not 12 billion, I guess the idea here is to reduce humanity's dizzying variety of foodstuffs to a set of "powder and oils," to be combined at home by a gadget. By stripping raw ingredients of their uniqueness—"a powder is a powder," as Mims puts it—food can be really, really cheap, and within reach of even the poorest people. This is an intensified version of the the promise of today's industrial agriculture—produce lots and lots of a few commodities like corn and soy, which can then be processed into a variety of cheap products, from burgers to breakfast cereal. This "universal food synthesizer" represents the apotheosis of the industrial food dream. 

And what about obesity? An enterprising engineer is hard at work on that, too—this time Dean Kamen, inventor of the Segway. From PopSci:

A valve gets surgically implanted in the user's stomach, and the gadget sends a tube through it into their belly. About 20 minutes after eating, the gadget sucks out some food, and when the user squeezes a bag filled with water, the liquid gets sent back into the stomach instead. Rinse and repeat until up to 30 percent of your meal is gone.

Wait, what? PopSci digs into the Kamen's website for details on how it works:

The aspiration process is performed about 20 minutes after the entire meal is consumed and takes 5 to 10 minutes to complete. The process is performed in the privacy of the restroom, and the food is drained directly into the toilet. Because aspiration only removes a third of the food, the body still receives the calories it needs to function. For optimal weight loss, patients should aspirate after each major meal (about 3 times per day) initially. Over time, as patients learn to eat more healthfully, they can reduce the frequency of aspirations. [Emphasis mine.]

Got that? You eat as much as you want, and then deposit a third of it directly into the toilet, undigested.

Better yet, why not combine these two innovations—3-D-printing optimum amounts of those powders and oils directly into the stomach, using Kamen's contraption hacked to work in reverse? By the time we're dining on home-synthesized combos of industrial goo, it's hard to imagine overeating being a problem, anyway.

"Arrested Development" Was the Best TV Satire of the Bush Era

| Fri May. 24, 2013 3:00 AM PDT
Arrested Development"BEES?"

Arrested Development is finally (for real this time) coming back. On May 26 at exactly 12:01 a.m. PDT, the series' fourth season will debut exclusively on Netflix, the on-demand streaming service that on any given weeknight accounts for nearly a third of internet traffic in North America. It's a hotly anticipated premiere that fans are praying will not crash the website.

This TV series—about a spoiled family wading through a glut of personal, financial, and international scandal—occupies a place in popular culture that few other shows have managed to reach. Fans have even witnessed Arrested Development burrow itself into Western politics. In March 2011, before NATO forces launched an air war that would help topple Moammar Qaddafi's mass-murdering regime in Libya, The New Republic ran a fantastic slideshow comparing the notorious Qaddafi family to Arrested Development's Bluth clan. During a speech this month in the House of Commons of Canada, opposition leader Thomas Mulcair quoted a famous episode of Arrested Development while criticizing the prime minister for over $3 billion in unaccounted anti-terrorism funding. And as the series revival neared, Republicans started dropping Arrested Development references to ridicule the Affordable Care Act, Democratic leadership, and the Obama administration.

The series has also found its way into the syllabi of college courses, and onto the pages of academic essays. "The writers worked miracles addressing philosophical and social issues," says J. Jeremy Wisnewski, an associate professor of philosophy at Hartwick College who served as a volume editor on the book Arrested Development and Philosophy. "To see the way race, gender, sexual orientation, and class are handled in the show is to witness genius at work."

There's something else the show handled so well that's often taken for granted: During its original run on Fox from 2003 to 2006, the series delivered what was arguably the sharpest satire of the Bush era and the Iraq War that has been broadcast on television.

Obama Nominates Benghazi Scapegoat for Promotion

| Thu May. 23, 2013 5:58 PM PDT

Oh yeah, this is going to be fun:

The State Department spokeswoman who earlier this month found herself in the middle of the controversy surrounding key revisions to the Benghazi talking points appears to be in line for a promotion. The White House announced Thursday that President Barack Obama intends to nominate Victoria Nuland as assistant secretary for European and Eurasian affairs, a position that requires Senate confirmation.

On a substantive basis, I know nothing about Nuland and have no opinion about whether she's well qualified for this position. On a political basis, hoo boy. Obama is waving a red cape in front of a bull here. The only question is, on a scale of 1 to 10, just how loathsome and shameless can the attacks from the Fox News set get over this? I'm going to predict it'll be about an 8. Give Ted Cruz a few minutes to warm up and he'll be claiming that Nuland's suggested changes to the Benghazi talking points should be prosecuted as a war crime.

What's more, this comes on the heels of rumors that Obama plans to appoint Susan Rice as his National Security Advisor. Rice, of course, has already been attacked by Republicans about as viciously and shamelessly as any State Department lieutenant in recent memory. But it's worth keeping in mind that there is a difference between the two women. In the Benghazi affair, Rice did nothing wrong, but she also did nothing especially noteworthy. Nuland, as near as I can tell, actually did yeoman work. The first draft of the CIA talking points was sloppily drafted and full of information that needed to be kept classified. Nuland firmly pushed back on this stuff, and eventually got it removed—which is exactly what she should have done. No good deed goes unpunished, of course, as I think we're all about to find out.

On a gossipy note, this sure seems to suggest that Obama is tired of kowtowing to the know nothings in the GOP. And good for him. This is obviously a political risk, but apparently he doesn't care anymore. He thinks Nuland is the best person for the job, so he's nominating her. If the whackjobs start frothing at the mouth over it, let 'em froth.

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Corn on MSNBC: Obama Speech Grapples with Security and Civil Liberties Issues

Thu May. 23, 2013 4:22 PM PDT

Wednesday, US attorney general Eric Holder acknowledged that four Americans have been killed in drone strikes, though only one was targeted. Today, the president spoke on the future of counterterrorism in the US. DC bureau chief David Corn discusses the speech with John Podesta, president of Center for American Progress, and host Chris Matthews on MSNBC's Hardball:

Corn also analyzed the speech with The Grio's Joy Reid on MSNBC's Martin Bashir:

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.

Boy Scouts: You Can Be Gay Until You Turn 18

| Thu May. 23, 2013 3:49 PM PDT
Boy Scouts and their families deliver signatures protesting the ban. GLAAD

Today, on a muggy afternoon in Grapevine, Texas, members of the Boy Scouts of America's National Council voted 61-38 percent to stop discriminating against kids in the program on the basis of sexual orientation, overturning a national ban on gay Scouts that the organization has enforced for decades. The BSA will continue barring gay adults from serving as scoutmasters and volunteers, meaning that teenagers who come out during their time with the program could be booted after they turn 18. The decision is seen as a compromise between church groups that partner with the Scouts and those eager to see the program fully end its discrimination against gays.

"No youth may be denied membership in the Boy Scouts of America on the basis of sexual orientation or preference alone," states the new resolution, acknowledging that "[y]outh are still developing, learning about themselves and who they are, developing their sense of right and wrong, and understanding their duty to God to live a moral life."

"It's an incomplete step, but still a step in the right direction," Zach Wahls, an Eagle Scout raised by two lesbian mothers, and founder of Scouts for Equality, tells Mother Jones. His organization, along with Scouts, parents, and volunteers who support overturning the ban, have been rallying in Texas for days, across from the Gaylord Texan Resort & Convention Center, where more than 1,400 BSA voting members from across the United States cast their votes this afternoon. Scouts in uniform faced off against about two dozen protesters supporting than ban—and "a couple local guys driving by in trucks, saying anti-gay stuff," Wahls says.

Controversy over the ban picked up last fall, when major backers like the Intel Foundation and UPS stopped funding the program because of its discriminatory policy. In January, the BSA said it would vote on the issue. The following month, President Obama said he supported overturning the ban, and celebrities like Carly Rae Jespen and Dr. Phil followed suit. There have been over 1.8 million signatures submitted through Change.org in favor of overturning the ban, according to Rich Ferraro, vice president of communications at GLAAD, a gay right group, in contrast to 19,000 signatures in favor of it, delivered by the Alliance Defending Freedom, a Christian organization.

The Boy Scouts, which was founded in 1910 with an oath promising that Scouts would be "morally straight," have a long history of discriminating against gay members. In 1980, an Eagle Scout and aspiring Scout leader was kicked out for attending his prom with a male date. In June 2000, the US Supreme Court affirmed in a 5-4 decision that the Boy Scouts could continue barring gay Scout leaders. And as recently as April, 2012, an Ohio mom and den leader named Jennifer Tyrrell was forced out of the organization for being gay.

The new policy, which kicks in January 1, makes it so that member troops can no longer discriminate against gay youth. But anyone who is gay and over 18 years old still won't be allowed to be a Scout leader or volunteer. (The Boy Scouts' coed Venturing program, aimed at young adults, will allow gay members until they are 21.) This means that gay Scouts like 16-year-old Pascal Tessier can continue to participate in the program without fear of being kicked out, and will have the opportunity to earn the prestigious rank of Eagle Scout like his older brother has. But under the new policy, he would still be banned from the program when he turns 18.

When Mother Jones asked BSA whether or not it would eventually consider voting on the ban on gay adult members, a spokesperson said: "This is not about a step or progression…It is the option that did not, in some way, prevent kids who sincerely want to be a part of Scouting from experiencing this life-changing program and to remain true to the long-standing virtues of Scouting."

Tyrrell, the mom ousted for being gay and still unwelcome under the new policy, said in a press release, "I'm so proud of how far we've come, but until there's a place for everyone in Scouting, my work will continue."

Obama Kinda Sorta Narrows the Scope of the War on Terror

| Thu May. 23, 2013 2:22 PM PDT

A couple of hours ago I had a choice to make: spend the next hour writing a reaction to President Obama's big national security speech, or go to lunch. I went to lunch.

That was all for the best, since I had mixed reactions to the speech and wasn't quite sure what to say about it. It was long and thoughtful, and in a lot of places its tone was welcome: Al-Qaeda is on the run, Obama said, and the danger we now face is of a much smaller scale than it was 12 years ago. So it's time to rethink just how we want to prosecute our eternal war against terrorists:

America is at a crossroads. We must define the nature and scope of this struggle, or else it will define us, mindful of James Madison’s warning that “No nation could preserve its freedom in the midst of continual warfare.” Neither I, nor any President, can promise the total defeat of terror. We will never erase the evil that lies in the hearts of some human beings, nor stamp out every danger to our open society. What we can do — what we must do — is dismantle networks that pose a direct danger, and make it less likely for new groups to gain a foothold, all while maintaining the freedoms and ideals that we defend. To define that strategy, we must make decisions based not on fear, but hard-earned wisdom. And that begins with understanding the threat we face.

Afterward, administration officials told reporters that Obama had announced a new drone policy in his speech, though you could be excused for missing it: in the future, "strikes will be authorized only against militants who pose 'a continuing, imminent threat,' aides said, instead of 'a significant threat,' which had been the previous standard." That's a mighty thin difference, especially with no external oversight to ensure that it's followed. And aside from that there were damn few specifics. Generally speaking, Obama defended drone attacks, defended the targeting of U.S. citizens abroad, and defended his aggressive prosecution of leakers. And while he suggested he was open to both more executive oversight and to a change in tactics, I think Dave Weigel was shrewd to highlight Obama's insistence that he couldn't do this on his own. Ed Kilgore summarizes:

Obama four times shifted responsibility for current dilemmas at least partially to Congress: on drones (where he insisted the appropriate congressional committees have known about every single strike); on embassy security; on the 9/11-era legal regime that still governs anti-terrorist efforts; and on Gitmo (where Republicans have repeatedly thwarted effort to transfer detainees to U.S. prisons). [And a fifth: a media shield law to protect journalists who report classified information. –ed.]

Is this a reflection of reality or an example of buck passing? I'm not sure we know yet. As someone who has consistently highlighted the power of Congress over policy—even foreign policy—I'm inclined to say the former. But it all depends on exactly what Obama does going forward. If Congress takes him up on his offer to rein in executive power and provide more oversight, will he cooperate or fight? He didn't say enough today to make that clear. He just said he was ready for a conversation.

So let's have it. As Heather Hurlburt points out, Obama's speech was a beginning, not an end. David Corn has more here.

Conspiracy Theory Watch: Hillary Sold Stingers to Al Qaeda!

| Thu May. 23, 2013 1:32 PM PDT

Seriously. This is the latest fever dream from the right. They believe that the reason Ambassador Chris Stevens was in Benghazi on September 11 was to negotiate the return of Stinger missiles that Hillary Clinton had sold to Al Qaeda groups over the objections of the CIA.

I am not making this up.

Why couldn't the wingers be happy with their old complaint: that Obama had done too little after the Libya war to secure Muammar Qadafi's arsenal of shoulder-mounted antiaircraft missiles,1 thus allowing them to fall into the hands of assorted bad guys in the Middle East? That's at least based on a kernel of truth. Beats me. Because it didn't involve Hillary Clinton, I guess, and therefore wasn't a perfect conspiracy theory.

1For the record, old Russian SA-7s, not Stingers. More here.