Between 2008 and 2011, 26 major corporations were able to pay no federal corporate income tax, despite making a combined $205 billion in profits. According to a new report from Citizens for Tax Justice, Facebook joined that illustrious club last year, receiving $429 million in tax rebates despite making more than $1 billion in profits:

Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.

Instead, Facebook says it will receive net tax refunds totaling $429 million.

Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million

Facebook will be able to carry further tax rebates forward, according to CTJ, for a total of $3 billion in tax deductions.

“When profitable corporations can use the stock option tax deduction to pay zero corporate income taxes for years on end, average taxpayers are forced to pick up the tax burden,” said Sen. Carl Levin (D-MI) when this issue arose as Facebook was preparing its initial public offering last year. This tax preference for corporations costs the U.S. about $2 billion in revenue per year.

Massachusetts Sen. Elizabeth Warren (D) used her debut on the Senate Banking Committee to question financial regulators about the lack of accountability for Wall Street banks’ role in the financial crisis, challenging them to name the last time a Wall Street bank was taken to trial over allegations of fraud and other crimes instead of being allowed to settle out of court.

“What I’d like to know is, tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to a trial,” Warren asked the regulators. But none provided a specific answer. That led Warren to wonder if Wall Street banks had become “too big for trial”:

WARREN: I just want to note on this: there are district attorneys and U.S. Attorneys who are out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it. I’m really concerned that “too big to fail” has become “too big for trial.”

Watch it (at 3:50):

Prosecution of financial fraud hit a 20-year low in 2011, even amid broad findings of fraud that took place at the biggest banks. The government has instead reached settlements over mortgage and foreclosure fraud, and other alleged crimes with a multitude of banks, and while those settlements are significant, they have also been plagued with problems. And as Warren noted, settling out of court has also prevented the public from “days of testimony” from banking officials that would result from trials.

Though Warren came to the Senate with a reputation for being tough on banks, she is hardly alone in her criticism of the lack of legal action that has been taken against them. Iowa Sen. Chuck Grassley (R-IA) blasted the “get-out-of-jail-free card” the banks seem to hold, and he and Sen. Sherrod Brown (D-OH) petitioned the Justice Department last month over concerns that big banks had become “too big to jail.”

Requiring that businesses provide employees decent amounts of sick leave doesn’t cost jobs, according to research by the consumer advocate group Public Citizen. The researchers studied three examples of sick leave policies — the San Francisco paid sick leave ordinance (which requires general paid sick leave), the wider California Paid Family and Medical Leave (which requires paid time to take care of children or sick family members), and federal Family and Medical Leave Act (FMLA, which mandated job-protected, but unpaid sick leave).

In each case, Republicans and industry advocates like the Chamber of Commerce warned that sick leave would kill jobs. In each case, the evidence after the fact proved them wrong.

Take the San Francisco law, both the most progressive of the three laws (in that it mandated paid sick leave for a wide set of reasons) and the clearest case of success. Here’s what Public Citizen found:

[A]fter implementation of the paid sick-leave law, San Francisco experienced an increase in employment. A study by the Drum Major Institute found that employment in San Francisco increased 3.5 percent between the start of 2006 and the start of 2010. In San Francisco’s five closest neighboring counties, employment fell 3.4 percent during the same period. The same study found that despite predictions to the contrary, the number of businesses in San Francisco grew by 1.64 percent between 2006 and 2008 while falling by 0.61 percent in neighboring counties. San Francisco also experienced growth within both large and small businesses, and within the retail and food service industry during this period. (These industries expected to be affected most by the ordinance.)

The impact on businesses themselves was minor. A majority reported that understanding and implementing the ordinance was either “not difficult” or “not too difficult.” Additionally, while only 14 percent of businesses reported a negative impact on profits, more than 70 percent reported that the law had either no impact or a positive impact on their profitability…After its implementation, many small business owners discovered that many of the dire consequences predicted prior to the ordinance’s passage, virtually none of them came to fruition. In 2010, three years after the ordinance was enacted, the San Francisco Chamber of Commerce realized there was very little impact on business, noting that “it has not been a huge issue that we have heard from our members about.”

The reason for the gap between industry predictions and reality, as Public Citizen notes, is clear: “Productivity, and thus profitability, suffers when workers are forced to come to work when they are sick. One study on the impact of illness on productivity estimates that businesses lose twice as much money to workers who show up at work while sick then when workers stay home due to an illness.”

Currently, the FMLA does not, as San Francisco does, mandate paid sick leave. For this and other reasons, Congress should consider expanding the FMLA’s protections.

Public Citizen also studied the effect of three other unrelated regulations which business interests decried as job killing, coming to similar conclusions about their actual impact. Their conclusion squares with a wide body of evidence suggesting that overregulation is not the problem holding back American growth and, moreover, that smart regulation can effectively create jobs under certain circumstances.

There were fewer foreclosure filings in January than there have been in any month since April 2007, as foreclosures dropped 28 percent from the same month a year ago, according to data from RealtyTrac. And while the drop was significant across the country, no state contributed more to the decline than California, where legislators last year passed a law that grants homeowners new rights in the foreclosure process.

The “Homeowners’ Bill of Rights,” signed by Gov. Jerry Brown (D) in July, took effect at the turn of the year. California has led the nation in foreclosures every month since 2007, but foreclosure filings dropped 62 percent in January, moving three states ahead of the Golden State. The decline is at least partially attributable to the homeowner protections contained in the new law, CNNMoney reports:

Regulations that took effect in California contributed to the dramatic decline. The state had long been recording the highest number of foreclosure filings of any state. But on January 1, a Homeowner Bill of Rights became law, offering more protections for California borrowers in default. As a result, new foreclosure filings in California fell 62% in January.

Under the new rules, mortgage servicers must halt all foreclosure proceedings once a borrower applies for a mortgage modification. Servicers will also face fines of up to $7,500 per loan if they record and file multiple unverified documents in foreclosure proceedings.

The Homeowner Bill of Rights makes foreclosure harder for banks by banning practices like dual-tracking, in which banks foreclose on homeowners even as they are seeking a loan modification, and robo-signing, the fraudulent approval of foreclosure documents widely utilized by banks immediately after the housing crash. The law also makes it easier for homeowners to deal with their banks and gives them legal recourse against lenders.

The new regulations, and fears that it would make foreclosing harder and more stringent for banks, led to a “bum rush” of foreclosures before the deadline, CNNMoney reported. But after it went went into affect, foreclosures dropped precipitously.

Other states, however, are trying to take the opposite approach, speeding up the foreclosure process instead of slowing it down and protecting homeowners. Lawmakers in Florida, which now leads the nation in foreclosures, introduced a bill to reduce the amount of time banks had to process foreclosure documents, a plan consumer advocates fear will make it more likely that banks will resort to the shoddy and sometimes fraudulent practices California banned.

President Obama’s State of the Union proposal to raise the minimum wage to $9 an hour and index it to inflation so that it keeps up with growth in the economy was quickly rebuked by top Republicans like Speaker John Boehner (R-OH) and Rep. Paul Ryan (R-WI), who claim the minimum wage will kill jobs and hurt small businesses.

Tennessee Rep. Marsha Blackburn (R) chose a different reason to oppose the proposal today. A stronger minimum wage, Blackburn said, would negatively affect the ability of young workers to enter the workforce as teenagers, and would prevent them from learning responsibility like she did when she was a teenage retail employee making a seemingly-measly $2.15 an hour in Mississippi:

BLACKBURN: What we’re hearing from moms and from school teachers is that there needs to be a lower entry level, so that you can get 16-, 17-, 18-year-olds into the process. Chuck, I remember my first job, when I was working in a retail store, down there, growing up in Laurel, Mississippi. I was making like $2.15 an hour. And I was taught how to responsibly handle those customer interactions. And I appreciated that opportunity.

Watch it:

Making $2.15 an hour certainly does sound worse than today’s minimum wage, which federal law mandates must be at least $7.25 an hour. But what Blackburn didn’t realize is that she accidentally undermined her own argument, since the value of the dollar has changed immensely since her teenage years. Blackburn was born in 1952, so she likely took that retail job at some point between 1968 and 1970. And according to the Bureau of Labor Statistics’ inflation calculator, the $2.15 an hour Blackburn made then is worth somewhere between $12.72 and $14.18 an hour in today’s dollars, depending on which year she started.

At that time, the minimum wage was $1.60, equivalent to $10.56 in today’s terms. Today’s minimum wage is equivalent to just $1.10 an hour in 1968 dollars, meaning the teenage Blackburn managed to enter the workforce making almost double the wage she now says is keeping teenagers out of the workforce.

Republicans are responding to President Obama’s proposal raise the federal minimum wage by arguing that requiring businesses to pay their workers at least $9 an hour would lead employers to shed jobs or increase prices and pass the costs onto consumers.

“When you raise the price of employment, guess what happens? You get less of it,” House Speaker John Boehner (R-OH) said at a House Republican press conference on Wednesday. Sen. Marco Rubio (R-FL) agreed, explaining that “the impact of minimum wage usually is that businesses hire less people.” It’s a fairly logical and simple argument: increasing the cost of labor causes competitive employers to cut employment or hours to make up for the additional cost, hurting the very low-skilled workers that the policy was designed to benefit in the first place.

The problem? What sounds perfectly reasonable in theory doesn’t actually hold up in the real world and the overwhelming empirical consensus shows little if any effect of the minimum wage on employment.

For instance, in 2009 researchers conducted a review of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages on teenage employment and when they graphed “every employment estimate contained in these studies (over 1,000 in total), weighting each estimate by its statistical precision, they found that the most precise estimates were heavily clustered at or near zero employment effects.” The following year, researchers published a study comparing restaurant employment differences across 1,381 U.S. counties with different levels of the minimum wage” in every quarter between 1990 and 2006. Their conclusion: “The large negative elasticities in the traditional specification are generated primarily by regional and local differences in employment trends that are unrelated to minimum wage policies.”

The findings raise an important question: if employers aren’t responding to minimum wage increases by the seemingly logical action of cutting employment — which is what Republicans predict — then, what are employers doing?

John Schmitt finds the answer in a paper out this month for the Center for Economic and Policy Research. After reviewing the available data, he concludes that employers react to minimum wage increases by adjusting their practices in a wide range of ways, some of which can strengthen their businesses and the economy as a whole:

Read more

After President Obama’s called to attain a “level of research and development not seen since the height of the Space Race” in the State of the Union, universities are renewing their cry for a deal to avoid the so-called “sequester” in order to preserve federal research and development (R&D) funds.

ScienceWorksForU.S., a project of the Association of American Universities, the Association of Public and Land-grant Universities, and The Science Coalition, is releasing videos from university leaders across the country about how the scheduled cuts will impact the U.S.’s long-term competitiveness, like this one from University of Kansas Chancellor Bernadette Gray-Little:

National investments in R&D as a percentage of discretionary public spending are down to around 9 percent today from a high of 17 percent in 1962, and the automatic cuts looming in the sequester threaten an 8.4 percent reduction to discretionary spending programs across the board. When you take into account non-discretionary and discretionary spending, total R&D cuts from sequestration over the nine year period will amount to $95 billion.

These cuts will hit universities especially hard because academic institutions perform a huge amount of the research that drives our economy, doing 53 percent of total basic research and 36 percent of all research funded by the U.S. government in 2009. But the $95 billion figure doesn’t reflect the true damage the cuts will have to the U.S. economy because of the exponential impact innovation has in driving our economic growth. A report released last September by the Information Technology and Innovation Foundation estimates the sequester’s R&D cuts will reduce GDP by between $203 billion and $860 billion over nine years, and result in 200,000 job losses in 2013 alone.

While the economic impacts could be devastating, looking beyond the numbers, it’s almost impossible to calculate the value add of innovations fueled by federal R&D funding in the U.S. and how many of them — such as medical treatments, the internet, or cell phones — have fundamentally improved or saved the lives of millions.

The European Union is working on rolling out a financial transactions tax, a tiny tax on stock trades. The benefits of such a tax are substantial: it can raise significant amounts of revenue without bothering most investors and it can slow down the high-frequency trading that has brought huge amounts of volatility into markets.

Some Democratic lawmakers have been making a push to implement a transactions tax here. But in an email to the Wall Street Journal, the Treasury Department had nothing but harsh words for Europe’s effort:

The U.S. Treasury said it opposes plans by 11 European Union countries to impose a small tax on trades in shares, bonds and derivatives. [...]

The potentially broad impact has triggered opposition in the U.S. “We do not support the proposed European financial transaction tax, because it would harm U.S. investors in the U.S. and elsewhere who have purchased affected securities,” a Treasury spokeswoman said in an email. “Treasury has raised these concerns with European counterparts.”

Treasury has never had much love for a transactions tax, but this outright denunciation is a missed opportunity. Instead of dumping on the tax, Treasury could have seized the chance to say that, if the developed world gets together on a transactions tax, many of the concerns about it undermining an individual nation’s competitiveness will disappear.

As Reuters’ Felix Salmon noted, “financial transactions taxes work pretty well: even the UK, which is implacably opposed to the European tax and which won’t ever join such a scheme, levies a surprisingly large 0.5% tax whenever anybody — anywhere in the world — trades a UK stock. And yet, somehow, London remains the first choice for international companies looking for a place to list their shares.”

There is little reason to expect that the U.S. experience would be substantially different, as New York would still have all the attraction for the financial industry that it does today, even with a transactions tax. And most investors would barely notice the miniscule tax, as they don’t engage in enough trading to rack up a substantial bill. In the meantime, the U.S. would raise revenue from a sector that can afford it, with little economic effect.

The economic news in Europe continued to get worse on Thursday, as the Eurozone fell even deeper into recession, contracting by 0.6 percent in the fourth quarter. This is the first time since 1995 that the Eurozone has produced no quarters of growth over a full year:

It marked the currency bloc’s first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, gross domestic product (GDP) fell by 0.5 percent.

Economic output in the 17-country region fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said on Thursday, following a 0.1 percent output drop in the third.

The quarter-on-quarter drop was the steepest since the first quarter of 2009 and more severe than the average forecast of a 0.4 percent drop in a Reuters poll of 61 economists.

Even supposedly mighty Germany saw its economy contract by 0.6 percent. Across the whole of the Eurozone, only Estonia and Slovakia experienced economic growth.

This is more evidence showing that European austerity has been an utter failure. Instead of ushering in prosperity, attempts to slash deficits and debt have actually caused more debt by depressing economic growth. As this chart from Paul Krugman shows, austerity goes hand in hand with unemployment:

But lawmakers in the U.S. still want to follow Europe’s lead, slashing spending while unemployment remains stubbornly high. The so-called “sequester” set to take place on March 1 will cost the country one million jobs, according to the Bipartisan Policy Center.