New Yorkers Funded Third of "Wolf of Wall Street"s" $100M Budget

“The Wolf of Wall Street” has been nominated for Best Picture, but it has already won one award – for Best Tax Break.

New York gives a 30 percent tax credit to film companies for movies filmed in the Empire State, which means that New Yorkers helped fund a third of “The Wolf of Wall Street’s” $ 100 million budget, according to a study from the Manhattan Institute.

All nine Best Picture nominees benefited from tax breaks offered to film companies across the country, which states created as an incentive for movie companies to do businesses there.

The best incentives are in Louisiana, where filmmakers are given a 30 percent credit on production costs and a five percent payroll credit. While “12 Years a Slave” and “Dallas Buyers Club” were both filmed in the Bayou State, they had much smaller budgets and didn’t have the savings of “Wolf.”

While the argument for such tax breaks by their supporters is that they will help create jobs and increase tax revenue, this has not turned out to be the case.

“Data from several states find movie production incentives generate less than 30 cents for every lost dollar in tax revenue,” the Manhattan Institute found.

The conservative think tank notes that this is a common problem with targeted tax breaks — they “routinely fail to deliver on the economic promises made by their proponents.”

It is also an example of government choosing winners and losers, the group says, and any industry would be attracted to a state if it promised to pay for a third of its costs. And if states did offer such incentives to other industries, it wouldn’t be sustainable.

But film is an especially bad industry to subsidize as the jobs it creates are temporary, and the workers are very specialized.

Connecticut, one of 37 states with tax incentives for the film industry, suspended its program in 2013 for two years after it became clear that it was hurting the state to spend the $ 140 million to attract filmmakers more than it was helping.

Related Stories:

• Oscars Snub ‘The Butler’ in All Categories


• Poll: Most Americans Have Not Seen Any Best-Picture Oscar Nominees

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Newsmax – America

New Yorkers Funded Third of "Wolf of Wall Street"s" $100M Budget

Americans for Responsible Leadership Wholly Funded by Koch-Linked Group

Americans for Responsible Leadership — one of the political nonprofits involved in a scheme last year that California authorities called political “money laundering” — spent more than $ 25.2 million last year, roughly a 13-fold increase over the $ 1.8 million it spent in the non-election year 2011.

And ARL received almost all its revenues — 97.6 percent — from a single organization linked to billionaire conservatives Charles and David Koch, the Center to Protect Patient Rights, making it practically a wholly-owned subsidiary of the latter group. In that sense it’s similar to another 501(c)4 nonprofit, American Future Fund, which obtained 92 percent of its 2012 funds from CPPR and one other Koch-linked group. 

ARL spent nearly $ 9.8 million in the 2012 elections, including $ 3.2 million against President Obama’s re-election bid, according to reports it filed with the Federal Election Commission. The rest was spent supporting Obama’s rival, GOP nominee Mitt Romney, and 20 other Republican candidates, most of whom were running for Senate seats.

That’s close to what the group told the IRS it spent on political activity in its annual tax filing covering 2012, which was obtained by OpenSecrets Blog: almost $ 9.9 million. ARL also gave $ 11 million to a group working on a California ballot measure and nearly $ 1.4 million to organizations fighting two Arizona ballot initiatives.

Groups organized under section 501(c)(4) of the tax code are supposed to be devoted to social welfare, and political activity (local, state or federal) can’t make up a majority of their spending. But, as ARL spokesman Barrett Marson noted, “IRS rules treat ballot initiative activity as lobbying and not political activity.”

Under federal law, these nonprofits also don’t have to disclose their donors, which is why they’re often referred to as “dark money” groups. But ARL last year was at the center of a case brought by the state of California, which demanded to know, under state law, who donated the $ 11 million that ARL sent to the Small Business Action Committee, a group that was fighting a tax-hike initiative and supporting a measure to cut the influence of labor unions. Under order from a state judge ARL eventually revealed that it received the funds from CPPR; CPPR in turn got the money from Americans for Job Security, another dark money group.

California wound up fining ARL and CPPR a total of $ 1 million and requiring the Small Business Action Committee to disgorge the $ 11 million to the state.

Somewhat ironically, ARL describes its mission as being to “further the common good and general welfare of the citizens of the United States by educating the public about concepts that advance government accountability, transparency, ethics and related public policy issues.”

Who’s getting paid?

The group’s top contractors included Direct Response LLC, which received $ 6.7 million for “consulting phone programs;” Direct Response was also a contractor for American Future Fund. Grassroots Outreach LLC — a company run by Nathan Sproul, who was at the center of allegations of Republican voter fraud last year — was paid nearly $ 1.4 million by ARL.

Despite the fact that efforts of ARL and other conservative dark money groups were largely for naught in that 2012 wasn’t a good year for Republican election victories, one individual in the Koch network seemed to make out very well: Sean Noble, the founder and president of the Center to Protect Patient Rights. ARL paid Angler LLC, one of several consulting firms he owns, $ 536,964, while American Future Fund paid Angler $ 5.3 million. And Angler plus two other consulting companies owned by Noble made $ 8.1 million from the Center to Protect Patient Rights.

In addition, the campaign against one of the Arizona ballot initiatives that ARL opposed was run by one of Noble’s firms. And ARL’s president, Kirk Adams — a former speaker of the Arizona House of Representatives — hired Noble to make ads for his ultimately unsuccessful bid last year for a seat in Congress, paying his firm DC London about $ 55,000.

Follow Viveca at @vjn.

Image of Kirk Adams via Flickr user Gage Skidmore.

OpenSecrets Blog

Americans for Responsible Leadership Wholly Funded by Koch-Linked Group

Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What"s the Solution?

Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What"s the Solution?
http://currenteconomictrendsandnews.com/wp-content/uploads/2013/10/21120__TRS1.png

In spite of a 12.8% annual return, with an 8% return assumption, the Illinois Teachers Retirement System (TRS) fell another $ 3.5 billion in the hole. TRS pension underfunding grew to $ 55.73 billion as of June 30, 2013.

Via email, the Illinois Policy Institute explains the growing liability.

First, TRS only has $ 0.40 in the bank for every dollar it should have today to make necessary pension payouts in the future. That means the high investment returns in 2013 were earned on less than half of the assets that TRS should have

TRS acknowledged this in a recent press release:

“Despite these strong returns, TRS cannot invest its way out of the funding hole we are in,” Ingram added. “This increase in the System’s unfunded liability, even with good investment results, is another wake-up call to state officials and our members that TRS long-term finances continue to head in the wrong direction.”

“Without changes to the pension code to ensure sustained and adequate funding, TRS faces the very real possibility that in a few decades the System will not have enough money to pay benefits to retirees. We cannot guarantee that TRS will have enough money to pay the pensions promised to every member in the System.”

Second, the inherent flaws of the state’s defined benefit pension system have driven up the shortfall significantly. According to the Commission on Government Forecasting and Accountability, the state’s pension shortfall grew by $ 41 billion from 1996 to 2012.

Of that amount, nearly $ 23 billion came from some form of missed “assumption” that continually plagues defined benefit pension plans:

• The investment returns for the state’s five pension funds were lower than their assumed 8% expectation. Cost to taxpayers: $ 9.5 billion.


• Unplanned benefit increases for employees. Cost to taxpayers: $ 1.1 billion.


• Changes in actuarial assumptions. Cost to taxpayers: $ 4.9 billion.


• “Other” actuarial factors. Cost to taxpayers: $ 7.2 billion.

TRS fails to acknowledge the failures of the defined benefits plan and instead chooses to blame taxpayers for not contributing enough to the system.

Who is to Blame for Shortfalls?

Please consider the Illinois Policy Center report State pension contributions: Taxpayers bear the brunt of increasing pension costs

A common refrain sounded by public sector unions is that government workers have consistently “paid their share” into Illinois’ pension systems and the state has not. However, the facts tell a different story.

While government worker contributions to Illinois’ five pension systems have increased by 75 percent since 1998, taxpayer contributions have increased by 427 percent over the same period. In 2012 alone, Illinois taxpayers contributed $ 3.5 billion more to the pension systems than state workers did.

Government workers’ share, as a percentage of total contributions, has continued to decline when compared to taxpayers’ contributions. In 1998, government workers paid for 47 percent of the state’s total pension contribution; today, they only pay 21 percent. By 2045, government workers will be expected to pay only 17 percent of total pension contributions.

Illinois’ Five Pension Systems

Illinois has five state pension systems, and all of them are seriously underfunded:

1. The Teachers’ Retirement System, or TRS, manages pensions for teachers across Illinois (excluding Chicago).With more than 130,000 active members and nearly 95,000 retirees, TRS is the largest pension system in the state. Unfortunately, TRS also has the highest unfunded liability of the state’s pension systems. In 2012, TRS was only 40.6 percent funded and officially had more than $ 53.51 billion in unfunded liabilities. TRS members contribute 9.4 percent of their salary to the pension system.


2. The State Employees’ Retirement System, or SERS, manages pensions for state-level employees across Illinois. It has 62,000 active members and 50,000 retirees. In 2012, SERS was only 33.1 percent funded and had officially $ 22.13 billion in unfunded liabilities. Under its regular pension formula, SERS members covered by Social Security contribute 4 percent of their salary, and those not covered by Social Security contribute 8 percent of their salary to the pension system.


3. The State Universities Retirement System, or SURS, manages pensions for employees working at state universities. It has 71,000 active members and more than 45,500 retirees. In 2012, SURS was only 41.3 percent funded and had officially $ 19.46 billion in unfunded liabilities. SURS members contribute 8 percent of their salary to the pension system.


4. The Judges’ Retirement System, or JRS, manages pensions for judges throughout the state. It is one of the two smaller pension systems, with only 968 active members and 725 retirees. Despite its small size, in 2012 JRS was only 28.6 percent funded and officially had $ 1.44 billion in unfunded liabilities. JRS members contribute 11 percent of their salary to the pension system.


5. The General Assembly Retirement System, or GARS, manages pensions for members of the Illinois General Assembly. Despite having only 176 active members and 294 retirees, GARS has the dubious honor of being the worst-funded pension system in the state. In 2012, GARS was only 17.4 percent funded and officially had $ 251 million in unfunded liabilities. GARS members contribute 11.5 percent of their salary to the pension system.

All Five Systems Bankrupt

TRS, SERS,SURS, JRS, and GARS are all insolvent. None of them can possibly meet their pension obligations. With 10-year treasuries yielding a scant 2.5%, plan assumptions of 8% are preposterously high on a sustained basis.

Yet, TRS went another $ 3.5 billion in the hole in spite of a 12.8% annual return.

What the hell is TRS going to do in the face of a stock market plunge, a bond market plunge, or both?

GARS, the General Assembly Retirement System is only 17.4% funded. Is it any wonder that state legislators are pressing for more tax hikes?

Beware Tax Hikes!

On October 18, I reported Illinoisans Beware: “Progressives” Seek Massive Tax Hike Again; Fight the Hike!

Pension shortfalls are the reason for the proposed hikes.

A few people commented the “progressive” tax was not as much as they pay. Here is Rep Naomi Jakobsson’s proposed scheme.

Property Taxes

What I failed to point out previously is that I pay $ 14,000 annually in property taxes on a home I can sell for $ 400K or so.

Sales Taxes

My sales tax rate is  7.75%. But hey, that could be worse. Cicero tops the state with a 9.5% tax. In Chicago, the sales tax is 9.25%.

In spite of all these massive taxes, the entire state is bankrupt!

The Solution

Raising taxes for the benefit of legislators and seriously undeserving public unions is certainly not the answer. The solution is twofold:

1. Immediately kill all Illinois public defined-benefit pension plans


2. Drastically lower existing pension plan expectations, via default if necessary

Nothing else can possibly work, and the numbers prove it.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

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Selective Shutdown: NSA Spying Funded, FOIA Requests Denied

The government might be shut down, but both parties have agreed that the National Security Agency’s dragnet surveillance programs will not be impacted by the stoppage.

However, fulfilling the requests of citizens or journalists trying to obtain information about the government’s activities has been deemed not “an essential service.”

As journalist Glenn Greewald tweeted Wednesday morning:

The link is to a NSA/CSS press statement which reads:

Due to the government shutdown, FOIA/PA requests or inquiries submitted to the FOIA/PA Office will not be addressed until the office reopens.

The contradiction has been hit on by other commenters who say the selectivity of the shut down reveals much about the government’s priorities.

Writing at Common Dreams on Tuesday, author and activist Norman Solomon argued not only should the NSA not be funded throughout the so-called “shutdown,” but that it should be permanently shuttered:

At the top of the federal government, even a brief shutdown of “core NSA operations” is unthinkable. But at the grassroots, a permanent shutdown of the NSA should be more than thinkable; we should strive to make it achievable.

NSA documents, revealed by intrepid whistleblower Edward Snowden, make clear what’s at stake. In a word: democracy.

Wielded under the authority of the president, the NSA is the main surveillance tool of the U.S. government. For a dozen years, it has functioned to wreck our civil liberties. It’s a tool that should not exist.

And Rabbi Michael Lerner, writing at Common Dreams on Wednesday, pointed the finger at Democrats, arguing they’ve made it all too easy for the shutdown to hurt everyday workers, but have preserved funding for the sacred cows of war and military spending. Lerner writes:

If [Democrats] had a backbone, they would have insisted that if the government is going to be shut down, then all of the government will be shut. Instead, they’ve taken the standpoint of the Republicans in dividing “essential services” from “non-essential,” and saying only non-essential services are to be shut down. So when it comes to taking care of the poor and the powerless, those services get shut.

What they should have been saying, and could still say, is this: the government finances and the ability to pay the national debt impact everything, and if the Republicans want to shut down the government, then everything will be shut. So, no pay for anyone who receives government pay, including the Congress (which right now continues to get paid), the entire military (after all, we are not in a war, and if we are still fighting in Afghanistan, we shouldn’t be), the entire homeland security, NSA, FBI, etc. including the people searching us when we get on airplanes (and if the airports have to shut down, that’s another consequence of the Republican’s move), the border guards and the entire Immigration and Naturalization service.

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Copyright: Common Dreams

WHAT REALLY HAPPENED

Selective Shutdown: NSA Spying Funded, FOIA Requests Denied