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NEWS FLASH

Wage Theft Complaints Have Increased 400 Percent In The Last Decade | According to CNN Money, “More than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations under the Fair Labor Standards Act, an approximately 400% increase since 2000.” A 2009 report showed that more than two-thirds of low-income employees had experienced a wage law violation in the previous week alone, prompting Mother Jones’ Kevin Drum to ask, “How many reports of mistreatment do we have to get before we finally figure out that labor violations are rampant in this country?” As the Huffington Post’s Alexander Eichler noted, the weak economy has “reduced the amount of leverage employees have in their relationship with their managers — meaning it’s been especially easy in recent years for bosses to demand ever more of workers while paying them the same amount as before.” (HT: Mike Elk)

New Jersey Governor Is Latest To Divert Foreclosure Settlement Aid Away From Needy Homeowners

Several states across the country, from Vermont to Wisconsin to California, have been taking some of the money they received from the foreclosure fraud settlement signed with the nation’s biggest banks and diverting it away from its intended purpose of providing relief to desperate homeowners. According to ProPublica, the total amount of money taken from the hands of needy homeowners is close to $1 billion.

Now, housing advocates are alleging that New Jersey Gov. Chris Christie (R) is doing the same thing, diverting $75 million meant to help homeowners into the Garden State’s general fund:

Affordable housing advocacy groups today said Gov. Chris Christie is misusing $75 million from a foreclosure settlement, calling his budget plan “reckless” and “a shell game.”

Christie is putting that money into the budget general fund, advocates said at a Statehouse press conference this morning, instead of specifically earmarking it to fund help for people who have been foreclosed on.

Several governors, the first of whom was Wisconsin Gov. Scott Walker (R), have used the settlement money to simply bolster their general funds, patching over budget problems that they’ve created. Progressives in New Jersey have been concerned that Christie would follow suit, and those concerns now seem to be justified. Previously, New Jersey’s attorney general had declined to confirm whether or not the state would use the settlement funding for foreclosure aid.

But not all homeowners are quietly accepting losing out on the funding. In Arizona, a group of homeowners have sued the state, saying that the diversion of settlement funds is illegal.

IMF Director Pillories Tax Evaders While Paying No Taxes Herself

In an interview with the Guardian last week, International Monetary Fund Managing Director Christine Lagardge scolded Greeks for not paying their taxes, essentially arguing that they deserved the pain that is coming with the austerity package they are being forced to swallow:

Lagarde, predicting that the debt crisis has yet to run its course, adds: “Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.” She says she thinks “equally” about Greeks deprived of public services and Greek citizens not paying their tax.

“I think they should also help themselves collectively.” Asked how, she replies: “By all paying their tax.”

Asked if she is essentially saying to the Greeks and others in Europe that they have had a nice time and it is now payback time, she responds: “That’s right.”

But as it turns out, Lagarde was throwing stones from inside a glass house, since she doesn’t pay any taxes of her own due to working for the IMF, which is part of the United Nations system. Most UN employees pay no taxes on their income.

Of course, when it comes to Greece and revenue, Lagarde did have a bit of a point. Greece’s revenue is on the low end for a European nation, due in part to its large underground economy:

In 2009, Greece collected just 36.9 percent of GDP in total government revenues. That was far below the overall EU total of 43.9 percent. Greece’s anemic tax collections ranked them seventh from the bottom among EU countries…This has been a longstanding problem in Greece. From 2001 to 2007, Greece consistently collected far less in revenue than a typical EU country. [...]

The current crisis has cast a light on Greece’s shadow economy and massive illicit financial flows. There are varying estimates of the size and impact of the country’s underground economy. Some suggest that a quarter of Greece’s GDP comes from its underground economy and estimates are that Greece lost an estimated $160 billion in unrecorded transfers through its balance of payments over the last decade ending 2009.

Perhaps next time, though, Lagarde should find a messenger that doesn’t earn a tax-free income that is larger than that made by the President of the United States.

Health

GOP Opposes Expanding Small Business Tax Credits That They Supported In 2009

Obamacare includes a small business tax credit to help employers provide health insurance coverage. The issue, however, is that only 170,300 businesses out of a possible 4 million have applied for the credit because of the time-consuming application procedure. Now, the Obama administration is asking Congress to improve the process so that more small businesses apply for the credit.

Republicans are opposing the request, even though it would lower taxes for small businesses. They’re seeking to repeal Obamacare, not change it. “I don’t think expanding it is going to make any difference whatsoever,” said Rep. Sam Graves (R-MO), who chairs the House Small Business Committee.

But their runs against what GOP leaders proposed in 2009, during the debate over health care reform. Then-Minority Leader John Boehner (R-OH) had deputized Rep. Roy Blunt (R-MO) to lead the Health Care Solutions Group and shape the GOP alternative to the Democrats’ health care proposals. “Unlike the Democrats’ government takeover of health care, this common-sense plan keeps patients and doctors in charge of key medical decisions,” Boehner said of the plan. In it, Blunt’s group called for a small business tax credit to help employers offset the cost of providing health insurance:

To expand availability and accessibility of health care coverage, the Republican plan: [...]

Helps employers offer health care coverage to their workers by reducing their administrative costs through a new small business tax credit.

The Affordable Care Act’s tax credit was designed to help small businesses with fewer than 25 employees, which have the most difficult time offering insurance to their employees. These businesses make up almost 90 percent of all employers in the U.S., so improving the application process for tax credits would expand health insurance to thousands of workers.

NEWS FLASH

One In 189 High Income Americans Pays No Federal Income Taxes | Republicans love to rail against those Americans who don’t pay any federal income tax due to the fact that they make too little money to even qualify for the lowest tax bracket. However, according to the latest data from the Internal Revenue Service, many Americans at the top of the income scale are also avoiding having any federal income tax bill. In fact, one in 189 Americans with an annual income of more than $200,000 had no federal income tax liability in 2009, the most recent year for which data is available.

Romney Dodges Repeated Media Inquiries, Refuses To Say If He Supports Paycheck Fairness

Despite repeated media inquiries from a conservative-leaning newspaper, Mitt Romney remains stubbornly silent on the Paycheck Fairness Act, a bill that would bring up to date the 1970s-era Fair Pay Law.

Congressional Democrats are gearing up for another legislative effort to ensure that women and men receive equal pay for equal work and are renewing their push for the Paycheck Fairness Act. But as with many ongoing political fights, Romney is not taking a decisive position.

Romney was originally unclear about his position on another fair pay bill, the Lilly Ledbetter Fair Pay Act and he has not spoken about this specific legislation — despite repeated requests for comment from the Washington Times:

His campaign didn’t respond to five messages left over the past week seeking his stance on the Paycheck Fairness Act. In April, when he was fending off questions about his stance on women’s compensation, his campaign would only say he “supports pay equity” but would not say any more about the new legislation.

“Governor Romney only says that he wouldn’t change existing law, raising questions about why he feels the need to parse his words on issues that are so significant to the security of women and families,” said Ben LaBolt, President Obama’s campaign spokesman. “Would he sign a veto of Lilly Ledbetter? Why won’t he express support for the Paycheck Fairness Act?”

The Paycheck Fairness Act would close loopholes in existing pay equity law and give additional funding toward programs that help women close the gender pay gap. President Obama has come out strongly in favor of the legislation, as have several prominent Democrats, but many Republicans claim that it would be a hindrance to businesses.

Romney Economic Adviser Says Romney Plans To Undermine Consumer Protections In Wall Street Reform Law

Mitt Romney, who last night secured the Republican presidential nomination with his win in Texas’ primary, has already made clear his desire to repeal the Dodd-Frank financial reform law, enacted in response to the financial crisis of 2008. But according to Glenn Hubbard, one of Romney’s economic advisers, even if Romney can’t get rid of the law wholesale, he’d still like to dismantle important aspects of it:

For example, he said Mr. Romney would propose:

– replacing the new system for dismantling failing financial companies that was created as part of the 2010 Dodd-Frank financial overhaul law with a new system, which he declined to specify.

a new system of consumer financial regulation that either moves the new Consumer Financial Protection Bureau outside of the Federal Reserve or breaks up the new agency and places the powers within existing financial regulators.

That Romney would break up and disperse the Consumer Financial Protection Bureau’s duties amongst existing financial regulators shows just how little he cares to address the causes of the 2008 financial crisis.

After all, it was the fact that consumer protection responsibilities were dispersed throughout the regulatory system — and were no regulator’s primary responsibility — that allowed banks to get away with so much pernicious behavior. The creation of the CFPB was meant to address this problem, giving consumers at least one regulator explicitly tasked with looking out for their interests.

Romney, of course, has been raking in money from Wall Street interests who fought the creation of the Bureau tooth and nail. Back in January, Romney called the Bureau the “most powerful and unaccountable bureaucracy in the history of our nation” and falsely claimed that it is “headed by a powerful and unaccountable bureaucrat with unprecedented authority over the economy.”

Econ 101: May 30, 2012

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • According to a new poll, most Greeks want the terms of their country’s international financial rescue to be revised. [Bloomberg]
  • The National Bank of Greece warned that an exit from the euro could cause Greeks to lose half of their annual income. [Associated Press]
  • JP Morgan Chase is selling $25 billion in profitable securities in order to offset a huge trading loss it sustained earlier this year. [Reuters]
  • The percentage of Americans between the ages of 25 and 54 who have jobs is the lowest its been in nearly a quarter century. [Washington Post]
  • Eight more states received exemptions from parts of the No Child Left Behind education law, bringing the total number of states that have received waivers to 19. [Wall Street Journal]
  • A whistleblower who found that Bank of America was inflating appraisals of government backed loans will receive $14.5 million. [Reuters]
  • The odds are not good that the government will move forward with criminal prosecutions related to the 2008 financial crisis. [New York Times]

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