Microsoft used subsidiaries in offshore tax havens to dodge billions of dollars in American taxes over the last three years, according to a memo from the Senate Permanent Committee on Investigations.

The committee’s top members, Sens. Carl Levin (D-MI) and Tom Coburn (R-OK), released the memo ahead of an afternoon hearing today. The memo outlines Microsoft’s use of subsidiary companies in foreign countries that allowed it to avoid $6.5 billion in American taxes, Bloomberg reports:

The report, released in advance of a 2 p.m. hearing in Washington today, said Microsoft used transactions with subsidiaries in Puerto Rico, Ireland, Singapore and Bermuda to save at least $6.5 billion in taxes. In 2008, Hewlett-Packard Co. (HP) created a series of short-term internal loans that allowed the company to tap its offshore cash for domestic operations without paying taxes, according to the report.

Use of such tax havens is prevalent among America’s biggest companies, including those in the tech sector. Apple, one of Microsoft’s chief competitors, used its own schemes to avoid more than $2.4 billion in American taxes last year. “The high-tech industry is probably the number-one user of these offshore entities to transfer intellectual property,” Levin said.

Like Apple, Microsoft was a member of the WinAmerica coalition that pushed Congress for a temporary holiday from the tax corporations pay when they bring overseas profits back to the U.S. The coalition ultimately disbanded after its lobbying efforts failed.

Those schemes come at a cost to other businesses and taxpayers. In 2009, offshore tax havens cost the average individual taxpayer $434, according to the California Public Interest Research Group. Citizens for Tax Justice, meanwhile, found that making up the lost revenue would have required an extra $2,116 from each American small business.

In the U.S., economic mobility — the ability of a person to move to a higher income bracket than her parents —
lags behind other industrialized nations. According to one study, “65 percent of Americans born in the bottom fifth stay in the bottom two-fifths as adults, while 62 percent of those born in the top fifth of incomes stay in the top two-fifths.”

But according to a Center for American Progress Action Fund analysis of data from the Pew Center on the States, there is something that can help: unionization. As CAPAF’s David Madland and Nick Bunker found, “states with high union membership rates are more likely to have high levels of economic mobility, even after controlling for other factors such as education, income levels, inequality, and unemployment”:

Our analysis finds that education is the most important source of mobility—but unionization rates matter quite a bit as well. Increasing the unionization rate in the average state by 10 percentage points—roughly to the level they were in 1980—would be associated with an increase of just under 4 percentage points in the share of the population that is upwardly mobile. This is about two-fifths of the impact of boosting the share of the workforce with a college degree by 10 percentage points.

Unionization also boosts wages, helping mitigate the effects of income inequality. Research has shown that income inequality can also dampen economic mobility.

The collective wealth of the 400 richest Americans totaled $1.7 trillion in 2011, a 13 percent jump from a year ago, as the stock market reached its highest mark in a decade and real estate rebounded, Forbes announced Wednesday. Microsoft founder Bill Gates led the list of America’s wealthiest with a net worth of $66 billion, followed by Berkshire Hathaway’s Warren Buffett ($46 billion) and Oracle’s Larry Ellison ($41 billion). Charles and David Koch, co-founders of Koch Industries and conservative mega-donors, rounded out the top five at $31 billion each.

The amount needed to join the list rose in 2011 as the average net worth of the richest 400 Americans jumped to its highest level in more than a decade, CNN Money reports:

The average net worth of a member of the Forbes 400 hit $4.2 billion. That’s the highest level it’s been in at least a decade, according to the magazine, and up from $3.8 billion last year. The net worth cut off to make the list this year was $1.1 billion, up from $1.05 billion in 2011.

At the same time that their collective wealth hits new heights, the tax rate for the Forbes 400 has remained low, thanks to the high-income Bush tax cuts, which slashed the rate on investments and capital gains. The average rate paid by the Forbes 400 in 2009, the last year for which tax data is available, was 19.9 percent. The estimated rate for last year’s list fell to 18 percent, according to economist Steven Rattner (the IRS releases official data on a two-year delay). From 1995 to 2007, tax rates for the Forbes 400 were halved even as their incomes quadrupled.

President Obama has vowed to let the high-income Bush tax cuts expire at the end of 2012, and both he and Senate Democrats have proposed hikes in the capital gains rate, though neither would tax investments at the 35 percent top income rate, as capital gains were taxed until the 1990s.

Republicans, however, have promised not just to extend the Bush tax cuts but to lower the overall rate on wealthy Americans. After taking the government to the brink of shutdown and default in 2011, the House GOP voted to give the rich and corporations more than $3 trillion in tax breaks in its budget this year.

After Mitt Romney’s comments about the “47 percent” brought the notion of a dependent class of non-taxpaying Americans to the fore of American political discourse, it was almost inevitable that someone would propose a minimum federal income tax. Former Governor and Senate candidate Tim Kaine (D-VA) did it today, saying, “I would be open to a proposal that would have some minimum tax level for everyone” in a televised debate.

But this idea, also raised by Rep. Michelle Bachmann (R-MN) as a solution to the “problem” of 47 percent of Americans not paying federal income tax, would work against the design of several bipartisan anti-poverty tax initiatives. Almost all of the 47 percent that don’t pay federal income tax are either elderly, federal payroll taxpayers, or adults with incomes under $20,000, and most of them pay plenty of other taxes at the federal and state level.

The reason these groups don’t pay income taxes is straightforward: it helps keep them out of poverty and capable of providing for themselves and their families. The centerpiece of the tax reform that brought about this state of affairs is the Earned Income Tax Credit (EITC), which provides tax relief for families that make under $36,000 and individuals that make under half that.

This bipartisan tax credit, hailed by President Reagan as “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress,” is the central mechanism allowing working families to buy necessities and stay out of poverty. The effect has been an estimated 3 million less impoverished children per year. The benefits of the EITC have been magnified in recent years by the greater need generated by the Great Recession:

Moreover, the tax breaks that benefit the 47 percent in no way foster a culture of “dependency” on the federal government. The EITC has been “more important than welfare reforms” in moving low-income Americans into the workforce and improving poor students’ performance in school. The Center on Budget and Policy Priorities’ summary of research on the EITC found evidence suggesting “[m]ost EITC recipients claim the credit only temporarily when a job disruption or other significant event reduces their income.” The majority of EITC recipients use it for only one or two years and “EITC recipients as a whole pay far more in federal income taxes than they receive in EITC benefits.”

According to new Cenus Bureau data released last week, the United States remains stuck with a high poverty rates. As of 2011, 46.2 million Americans — 15 percent of the national population — were living at or below the federal poverty line, which is set at $23,000 a year for a family of four.

The poverty rate amongst children is even higher, reaching almost 22 percent. In New York City alone, the number of children living in homeless shelters is at its highest peak since the Great Depression.

Despite these numbers, a recent report by Fairness and Accuracy in Reporting found that during this campaign season the issue of poverty has been remarkably absent from the media’s spotlight. Between January and June of this year, only 0.2 percent of campaign stories from major media outlets addressed poverty in a substantive way. A new video from the Half In Ten campaign points out this failure wasn’t due to a lack of time. During the recent debates, the media found plenty of opportunities to ask candidates whether they prefer Leno or Conan, how they stand on prostitution, and if they’re “a flake.” Watch it:

Half In Ten is a partnership of the Center for American Progress Action Fund, the Coalition on Human Needs and the Leadership Conference on Civil and Human Rights.

Republican Vice Presidential nominee Paul Ryan is returning to Washington on Thursday to cast what will likely be his last vote before the November election. House Republicans are holding a vote to block the much-maligned welfare waivers that the Obama administration granted states that wanted to experiment with their welfare-to-work programs.

Ryan will likely support the legislation. “The waiver I don’t think meets the letter of the law. The law was not intended to allow states to waive the work requirements,” Ryan said last week. “If states waive work requirements, people will not go from welfare to work. They will stay on welfare. That’s not good for anybody.”

For starters, the waivers do not waive the work requirements. And as the Milwaukee Journal Sentinel noted, in 2002 Ryan inserted a provision into a reauthorization of the welfare law that gave his home state “a significant break in meeting new federal work rules“:

Those measures — patterned after a Bush administration plan — require states to have 70% of their welfare recipients working by 2007. That’s compared with an average of about one-third now.

But under the change sought by Ryan, a Janesville Republican, the states with the biggest drop in their welfare caseloads since 1995 would have a lower threshold to meet.

Wisconsin had the third-biggest caseload drop between 1995 and 2001 — 76%. Under Ryan’s change, that would mean the state would need to have 54% of its welfare recipients working by 2007, instead of 70%. Sixteen other states would get relief under the change, but only two states would benefit more than Wisconsin.

As ThinkProgress reported, Ryan argued that this provision would “give the state more flexibility in meeting the tough new federal work requirements expected to be enacted this year — including more use of education and training to help move people into better-paying jobs.”

Now, of course, Ryan is singing a different tune, claiming that flexibility “is not the American idea. That’s a welfare state.” On Wednesday, Sen. Orrin Hatch (R-UT) attempted to move a measure blocking the administration’s waivers through the Senate by unanimous consent, but was blocked by Sen. Ben Cardin (D-MD).

A central premise of Mitt Romney’s now infamous speech to a room full of wealthy donors is that nearly half of the country relies heavily on the government for assistance with housing, food, and health care. Despite widespread criticism, Romney has stood by his claim that 47 percent of the country are “victims” who are “dependent upon the government.”

But while Romney decries the direct government programs that benefit lower and middle class Americans, he is silent about the plethora of government tax breaks that richer Americans enjoy. As an independent study by the Tax Policy Center found, the other 53 percent receive their own form government assistance: they disproportionately benefit from the federal government’s $1.08 trillion annual allocation for tax breaks:

The top 1 percent of income earners, those who take home in excess of $400,000 a year, account for almost a quarter all tax breaks, saving more than $250 billion a year in taxes. Meanwhile, the bottom 60 percent of wage earners — a group of people that encompasses 99 percent of the “victims” that Mitt Romney describes — are given just over 20 percent of annual tax breaks, or approximately $217 billion in breaks each year.

Former Minnesota Governor Tim Pawlenty announced Thursday morning that he would step down as co-chair of Mitt Romney’s campaign to become the head of the Financial Services Roundtable, a trade organization that represents the 100 largest financial services companies in the country.

Pawlenty tenure will begin as the group continues to lobby against the 2010 Dodd-Frank financial reforms that are starting to take effect. Among his new causes will be defeating the law’s price controls on debit card fees and the Volcker Rule, which is intended to keep banks from engaging in the risky behavior that led to the industry’s collapse in 2008. FSR has also taken aim at the Consumer Financial Protection Bureau and the bill’s provisions for whistleblowers.

In their new partnership, FSR and the former governor seem to be ignoring Pawlenty’s inflammatory anti-bank rhetoric during his failed presidential run. In 2011, Pawlenty wholeheartedly condemned Wall Street on the campaign trail, declaring, “Get your snout out of the trough just like everybody else.” A Pawlenty presidency, he said, would not tolerate cozy relationships between banks and politicians:

We will get rid of all the deductions, credits, or exemptions, and you will compete not based on your connections to a congressman, but connections whether you can convince consumers if you have a good product. If you cannot do that, you should not be in business. Do not look for government to bail you out. You either compete and succeed in the market or you do not.

In spite of this rhetoric, Pawlenty opposed Dodd-Frank in 2010, often pushing the GOP’s false talking point that the law promoted bank bailouts. “The notion that we’re going to have privately held entities in this country that can’t go out of business, to me, is troublesome and philosophically concerning,” he said in 2010.

Romney released a statement shortly after the announcement praising Pawlenty, saying, “His new position advancing the integrity of our financial system is vital to the future of our country.”