Showing posts with label Labor. Show all posts
Showing posts with label Labor. Show all posts

Sunday, September 02, 2012

Bain Capital Subpoenaed on Taxes

Bain Capital, the Venture Capital Firm that has become synonymous with Mitt Romney’s personal fortune, has been subpoenaed by NY Attorney General Eric Schneiderman for possible rampant tax evasion practices.

This blog has been critical over the years of the special tax treatment afforded to profits made from Capital Gains – profit made as an increase on investments - which is only taxed at rates of about 15%. Common wage labor is taxed at rates up to 38%. This creates a tax system that rewards stock and investment trading – which amasses wealth but creates no products or jobs - and punishes the actual creation of goods and services.

This is the legal tax code of course, but Bain is being investigating for making Management Fees charged to clients ‘appear’ to be investment income, rather than the fees they actually are.

Bain (and other firms) have a history of “waiving” the actual Management Fees they charge their clients; but in the place of these fees, they require the clients to place some of their investments in a fund for Bain, so that Bain receives the income from the investment; hence, the money Bain receives is taxed at 15% for capital gains rather than being taxed at 38% for the raw income from a fee.

I will remain a broken record on this issue, especially on Labor Day weekend: income from gambling with financial instruments must not be taxed less than the income earned by construction workers and firefighters and nurses and dressmakers who earn wages for providing the nation’s goods and services.

Whether Bain’s approach is legal or a tax-evading subterfuge will be settled in the court system.

Whether it is ethical and desirable as public policy, in light of how we tax honest labor, is much clearer.

Monday, July 09, 2012

Con Ed Holds Labor, NYC Residents Hostage During Heat Wave



Electric Utility Consolidated Edison, which supplies electricity in New York City and Westchester County, has continued to lock out  8,500 workers for the second week in a row, despite a series of  brownouts (carefully directed at low-income neighborhoods in the Bronx and Brooklyn), manhole explosions, injuries to managers, a loss of electric capacity, and unprecedented heat wave.

Another Con Ed transformer exploded on Saturday underneath E. 56th Street in busy midtown Manhattan, setting off an explosion in a parked vehicle and sending flames up the scaffolding around an adjacent 16-story building. This was the most recent in a series of accidents and injuries related to the lockout. Con Ed is attempting to maintain an overtaxed infrastructure with a force of 5,000 managers, who have been brought in to replace 8,500 locked-out workers. Two of these managers have already been hurt in accidents. Most recently, a Con Edison manager filling in for a locked out union worker was injured Wednesday in a manhole explosion on the Upper West Side.  His face was burned  when he was working underground in front of 145 W. 70th St. just after 1 p.m., according to the NY Fire Department said.  The Fire Dept expects that the explosions are directly related the current heat wave…exacerbated by the loss of a knowledgeable workforce in the field.

While brownouts continue in Brooklyn and the Bronx, Con Ed has removed locations of outages from its website and is providing little or no public information on the status of its systems.

"This is what we have been saying all along, that the company would run into these problems when the weather heats up. They needed to reduce voltage because they could not keep the system up," John Melia, a union spokesman, told Reuters.  "This is an extremely dangerous situation for the people of New York," Melia said, noting that replacement workers were getting hurt every day due to a lack of experience.

It should be noted that the workers did not go on strike; rather, they were locked out by Con Ed Management.

Con Ed, which made a billion dollars in profits last year, is demanding substantial concessions in health care and pensions from the union that negotiates for the workers, the Utility Workers Union of America (UWUA) Local 1-2. The company locked the workers out July 1 when the union did not agree to give advanced notice of possible strike action. Meanwhile, CEO Kevin Burke received at least 11 million dollars in compensation in 2011 in cash and stock options. In fact, all of Con Ed’s Officers make over three-quarters of a million dollars each.

Jose Torres, a locked-out union worker with five years service at Con Ed, said, “The issues in the lockout are wages, pensions and health care. They are trying to break our wages down to nothing. They want to give us a 1.5 percent wage increase over a four-year contract.”

One Con Ed customer service representative said, “I’m not very happy about this. I was here Saturday night when the contract expired. I thought it was going to be OK until 2 AM. There were about 150 of us here at about 10 PM. Union reps let us know what was happening. At midnight they kept talking, and it still sounded good. Then Con Ed locked us out.
The work here is not like Verizon where they can turn people off with a switch. We have to go to every location to turn a customer’s power back on and repair the wires. I don’t think management can handle a big power surge or a blackout. They don’t have enough people to handle this. I would say only 2,500 of their 5,000 could do field work.

 Con Ed has already threatened lives and caused widespread suffering by calling the lockout on Saturday. We always send teams to help out with power outages and disasters around the country. With last week’s storm along the East Coast, power was out in New Jersey and on Long Island and many other places for long periods of time. Con Ed locked us out so we couldn’t send out teams as we regularly do, and the people along the East Coast were forced to suffer with power outages and breakdowns longer than they should have because of Con Ed’s action…

 They should leave the pensions alone. We do a dangerous job. You have to go down in manholes where there are live wires. The firefighters and police don’t go down there. Sometimes there are explosions and fires. People call the fire department when this happens, but they don’t go down in the manholes. If it is 100 degrees up on the street, it is 130 down in the manholes. There is the same kind of danger dealing with transformers and wires up on the poles. We come out to fix them, not the Fire Department or police. They should leave our pension like it is.”

Another worker reporter,

“They have stopped our health benefits. I have heart trouble, and I was supposed to go for a stress test. Oh my god. I am disappointed that none of the politicians have come out to condemn this. I know a family whose daughter needs constant medical care. She needs a number of medications and care. This might stop because Con Ed stopped our health care, and the father is the only one in the family working…. We are aware that all the other unions are watching this. We know this is critical. Everyone is looking at us, and we can’t let them take this back. I look at this personally as a civil rights struggle. Enough is enough, and I’m not going to take it anymore. In an ideal world, all the other unions would come out with us, especially Verizon and transit. We are making a stand, and I am asking all other unions to come out and support us. I don’t think the union leadership will issue a call for others to come out because they are too close to the company. But we shall overcome. We have to. It is do or die.”

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[It should be noted that under the federal Taft-Hartley Act of 1947, “sympathy strikes,” where a union strikes in solidarity with another union’s treatment, are illegal.]