A mere 7,450 of the wealthiest estates in the country could receive an average tax break of $1.1 million in 2013, while over 13 million low-income families could see their tax burden increase by $1,000 or more, if proposals by the GOP were to go into effect, according to the Center On Budget and Policy Priorities. The legislation, drawn up by Senate Republicans and already passed by House Republicans, would preserve through next year a cut to the estate tax that was enacted in the December 2010 tax deal. Meanwhile, it would allow expansions of the Earned Income Tax Credit and the Child Tax Credit passed in that same deal to expire.

As the CBPP noted today, the asymmetry in who would and would not benefit from these proposals, and by how much, is striking:

Relative to the 2009 estate-tax parameters, the estate-tax break enacted at the end of 2010 benefits only the heirs of estates that have assets in excess of $3.5 million for an individual and $7 million for a couple. 

For the estates that receive it, the estate-tax break enacted in 2010 is worth an average of $1.1 million per estate, relative to the 2009 parameters, according to the Tax Policy Center. […]

For many lower-income working families, the impact of losing the tax-credit improvements would be substantial. For instance, a married couple with three children that has earnings at the estimated poverty line for 2013 ($27,713 for a family of that size) will receive $1,934 less in combined CTC and EITC benefits next year if policymakers let the improvements expire.  Similarly, a single mother with two children working full time at the minimum wage — and earning about $14,000 — will receive a CTC of just $173 in 2013 instead of $1,725.

The cost of continuing the EITC and CTC through 2013 comes out to $3.4 billion and $7.6 billion respectively, for a total of $11 billion. The cost of the estate tax cut for its original two year period was $23 billion, suggesting an extension for another year would roughly equal the cost of extending the tax credits.

In short, the Republicans are proposing to recoup new revenue by raising taxes on 13 million American families, while losing roughly the same amount of revenue in order to give a minute, rarified group of the wealthiest Americans another year of enormous tax cuts.

Since World War Two, manufacturing jobs have grown under Democratic presidents and faced more challenges under Republicans, a new study reported on Monday.

Democratic presidents presided over estimated employment rise of 7 million in the manufacturing sector over the course of seven administrations; In nine administrations, Republicans saw a fall of manufacturing jobs by an estimated 9 million. The Keystone Research Center broke down those numbers by region:

Trends in four regions reflect long-term shifts of manufacturing away from the Northeast and the Midwest and towards the South and the West. Averaging results using the three estimation methods:

- In the Northeast, about 4 million manufacturing jobs were lost in Republican administrations and nearly 900,000 gained in Democratic.

- In the Midwest, about 3.2 million manufacturing jobs were lost in Republican administrations and about 2 million created in Democratic.

- In the South, about 925,000 manufacturing jobs were lost in Republican administrations and about 2.1 million manufacturing jobs created in Democratic.

- In the West, about 380,000 manufacturing jobs were lost in Republican administrations and about 1.55 million jobs created in Democratic.

“These are big differences” said Dr. Colin Gordon, a senior research consultant on the report. “If the manufacturing jobs score under Republicans had matched that under Democrats, the U.S. would have roughly twice as many manufacturing jobs as it does today—the U.S. manufacturing jobs share today would be similar to Germany’s.” The study also found that specific states tended to perform better based on which party was in power at any given time. Iowa and Wisconsin, for example, broke just about even on the number of jobs created under either party.

For his part, President Obama has helped to quell the loss in manufacturing jobs during his time in office. He’s created half a million manufacturing jobs, but hasn’t yet reached a net gain since manufacturing was hit hardest by the 2008 recession.

For a look at interactive maps of job gains and losses, click here.

Technology companies have mastered the use of schemes involving low-tax foreign countries in order to avoid billions of dollars in American taxes each year. Now, fast food chains like McDonalds, Burger King, and Subway are doing the same.

When the companies create a product, like Burger King’s Whopper hamburger, they can classify it as intellectual property. Franchises then pay a fee to the company to sell the product and use the company logo. But instead of collecting the fees in the United States, where the intellectual property filings were created, Burger King, McDonalds, and other chains often house the fees in other low-tax countries in order to save millions of dollars, as Reuters’ Tom Bergin reports:

In Burger King’s case, the IP was created in the United States, home of the Whopper. But the fee the European units pay to use it goes to Burger King’s main European office in Zug, Switzerland. There the effective tax rate could range from 2 percent to 12 percent, according to Thierry Boitelle, tax partner with law firm Bonnard Lawson in Geneva.

Zug-based Burger King Europe GmbH retains the payments, a Burger King spokesman said. Had the fee been remitted to the United States it would have faced a tax rate of 35 percent to 39 percent.

McDonalds and Burger King each have overseas headquarters in Switzerland. Subway sends most of its overseas profits to Curacao, a low-tax haven in the Caribbean. Coffee-chain Starbucks also utilizes the intellectual property loophole to help reduce its corporate tax rate — Reuters reported that it successfully avoided millions of pounds in British taxes last year. The companies’ tax rates differed: Starbucks paid 31 percent in the U.S. but just 13 percent overseas; Burger King also paid 13 percent on overseas income, while McDonalds paid 20 percent.

None of the maneuverings used by these companies is illegal, but they do come at a substantial cost to taxpayers. In the U.S., corporate tax avoidance cost the average individual taxpayer $434 in 2010, according to the California Public Interest Research Group.

David Stockman, who was director of the Office of Management and Budget under President Reagan and largely crafted Reagan’s fiscal policy, published a column in the Daily Beast excoriating Mitt Romney’s claim that being a private equity executive makes one a job creator and, thus, qualified to be president. Stockman wrote:

Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better. [...]

The larger point is that Romney’s personal experience in the nation’s financial casinos is no mark against his character or competence. I’ve made money and lost it and know what it is like to be judged. But that experience doesn’t translate into answers on the great public issues before the nation, either. The Romney campaign’s feckless narrative that private equity generates real economic efficiency and societal wealth is dead wrong.

Stockman, who also worked in private equity during his career, used much of the column to criticize the Federal Reserve, a constant target of his ire. But his overall point aligns with that made by billionaire investor Warren Buffett, who said that Romney “makes his money the same way I make my money. He makes money by moving around big bucks, not by straining his back and going to work cleaning the toilets or whatever it may be. He makes it shoving around money.”

Stockman has been a thorn in the side of the GOP over the last few years, criticizing its fealty to tax cuts above all else. “After 1985, the Republican Party adopted the idea that tax cuts can solve the whole problem, and that therefore in the future, deficits didn’t matter and tax cuts would be the solution of first, second, and third resort,” he said. He also said that the House Republican budget authored by Vice Presidential nominee Paul Ryan “boils down to a fetish for cutting the top marginal income-tax rate” and “is devoid of credible math or hard policy choices.”

Following their roles in the housing collapse and financial crisis, some of Wall Street’s biggest banks faced fines from federal regulators reaching into the hundreds of millions of dollars. Now, a loophole in corporate tax law is allowing them — and other corporations that get penalized by Uncle Sam — to write off those fines as losses, letting them off the hook for millions of dollars in tax payments.

Fir example, Bank of America settled claims that it discriminated against African American and Latino mortgage borrowers for $335 million. The company will save more than a third of that — $117 million — on its tax bill, and other companies that have faced fines stand to benefit in similar fashion, the Washington Post reports:

Corporations can write off any portion of a settlement that is not paid directly to the government as a penalty or fine for violation of the law. A majority of the settlements that federal regulators announced in the past year include some form of restitution that is eligible for a tax deduction.

That means Wells Fargo could claim its $175 million fair-lending settlement with the Department of Justice as a deductible corporate expense. Or Capital One could write off a portion of the $210 million agreement it reached in July with the Consumer Financial Protection Bureau. And American Express can save millions on the $112.5 million settlement it negotiated last week.

Lawmakers have proposed legislation to limit or eliminate this deduction, but the bills floundered in Congress. Some tax policy experts told the Post that the deduction should continue to exist because “punitive and compensatory damages are essentially business expenses,” an argument that unlawful foreclosure practices, mortgage discrimination, and other violations perpetrated against consumers are merely the cost of doing business.

Other experts argue that instead of eliminating the deduction, regulatory agencies and the Internal Revenue Service should coordinate to levy larger settlement penalties. Consumer advocacy groups like the U.S. Public Interest Research Group, meanwhile, have called on the Dept. of Justice and other agencies to use their authority to prohibit companies from using the deduction following settlements.