The state Department of Labor had petitioned the federal government for the ruling. The decision entitles the workers to additional federal support for retraining programs. Rose Lucenti is the department’s workforce development director. She said 115 IBM employees and contractors who worked at the company’s Williston facility now qualify for the retraining assistance. ...
Sen. Bernie Sanders has been working with the state to get the additional federal support. Sanders said he’s disappointed that the federal Department of Labor did not provide trade adjustment assistance for all the laid-off IBM workers.
Meanwhile, officials from the Vermont Department of Labor and the state’s independent U.S. Sen. Bernie Sanders are asking the federal labor department to amend the approval issued earlier this month to include workers from the IBM campus in Essex Junction.
Labor Commissioner Annie Noonan said in a Thursday release she didn’t know why the Essex Junction workers weren’t included in the Trade Adjustment Assistance ruling. So she said her department is looking for information from displaced workers to support the amended petition
Sanders said he was dismayed the Essex Junction workers weren’t included. ‘‘I strongly believe all of these workers deserve to receive Trade Adjustment Assistance and I will pursue this matter vigorously,’’ Sanders said.
Sanders issued a statement on Thursday in reaction to the partial approval: “I appreciate that the U.S. Department of Labor ruled on behalf of IBM’s Williston workers. I am dismayed, however, they have not yet ruled in favor of those Vermonters who worked on the Essex Junction campus. My office has contacted the Department of Labor to express our strong support for all of these employees who have lost their jobs at IBM. I strongly believe all of these workers deserve to receive this Trade Adjustment Assistance and I will pursue this matter vigorously.”
The training and income assistance, offered by the U.S. Department of Labor to workers whose jobs are lost “as a result of companies shipping U.S. jobs overseas,” Sen. Bernie Sanders, I-Vt., said in a statement, is known as the Trade Adjustment Assistance program.
The VDOL filed a petition on June 21 on behalf of all 419 IBM employees who lost their jobs this summer. On Dec. 4, federal officials approved the request for 115 IBM workers on the company’s Williston campus, but not for the 304 workers on the Essex Junction campus.
Fast forward three years, and the Pepsi Beverage expansion has taken a surprising workforce twist.
About 260 full-time employees – nearly one-fourth of the division’s 1,110 local workforce – were transferred Nov. 15 to IBM as part of PepsiCo outsourcing certain financial-services operations under a seven-year contract.
PepsiCo also may have become another example of the limited impact of economic incentives since the company never signed the local and state contracts it sought so intently. ...
PepsiCo said in a statement Thursday that “transitioning these shared services positions from PepsiCo to IBM was made with careful consideration. This transition will enable us to stay competitive and better meet the needs of our business. There has been no net impact on local employment.”
However, employees who declined the IBM work offer were let go, although they could apply for future PepsiCo job openings as external candidates. ...
Several new IBM employees expressed concern to the Journal that their jobs could be transferred again to offshore IBM facilities. They said they were told they would be taking a 10 percent pay cut, effective in January, and that any full-time staff that left employment would be replaced by contract employees.
The employees are not identified for fear their jobs might be compromised.
PepsiCo deferred comment on the IBM workforce to IBM.
IBM spokeswoman Trink Guarino said it is company policy not to discuss employee numbers “anytime, anywhere.”
“We are a global company with global sourcing options,” she said. “This agreement has just been reached and being sorted out.”
In the PepsiCo employee memo explain the outsourcing, it said “IBM determines workforce requirements based upon business needs. The company does not discuss layoffs prior to the time a final decision is made.” ...
Boyd said bringing jobs back to the U.S. “is not a dominant trend” within the call-center sector.
“This contrasts with the manufacturing arena, where falling U.S. energy costs, skyrocketing factory wages in China and costly and over-extended supply chains are all strong currents helping to wash manufacturing jobs back to U.S. shores.”
By contrast, Boyd defined the outsourced PepsiCo jogs as “mid-level customer service functions” that IBM, with its global reach, can quickly and easily outsource anywhere around the world
IBM lobbied Congress hard to pass a law letting it share personal data of customers in China and elsewhere with the U.S. National Security Agency in a bid to protect its intellectual property rights, according to a complaint filed in the U.S. District Court in Manhattan.
The plaintiff in the complaint, Louisiana Sheriffs' Pension & Relief Fund, said this threatened IBM hardware sales in China, particularly given a program known as Prism that let the NSA spy on that country through technology companies such as IBM. ...
The lawsuit names IBM, Chief Executive Virginia Rometty and Chief Financial Officer Mark Loughridge as defendants, and says they should be held liable for the company's failure to reveal sooner the risks of its lobbying and its NSA ties.
"These allegations are ludicrous and irresponsible and IBM will vigorously defend itself in court," IBM spokesman Doug Shelton said in an e-mail.
''We've upset quite a few of our online shoppers, and we really apologise for that. We expect to have it [the website] up in the next couple of hours, maybe earlier,'' Mr Brookes told Fairfax Media on Boxing Day. ...
Myer has pumped tens of millions of dollars into improving its website and online sales functions in previous years, as a growing number of customers opt to buy online. ...
''Both IBM internationally and in Australia, and most of our IT team, are working furiously to get it right,'' Mr Brookes said. ''There's 27 days of stocktake sale and there's $175 million worth of stock, so we don't expect our customers to miss out. Of course it doesn't excuse the fact that there's a software error.''
A successful culture ensures that all employees are treated with respect. Think this is pie in the sky, just words on a page? It ain’t necessarily so.
“I talked to David Rock, director of the NeuroLeadership Institute, about the impact of being treated with disrespect by colleagues,” said Bryant. “He explained that the experience fires up the same part of the brain as if you were sticking your hand on a hotplate. You tend to forget physical pain over time – but if you’ve ever been humiliated by a boss in front of other people, you remember it like it was yesterday. And every time you remember it, it’s as if you’re experiencing it again.
“If managers don’t treat their people with respect, those employees go to work in a defensive crouch in order to protect themselves,” said Bryant - hardly the way to get the best out of people.
Even more compelling in today’s tech reality: “Everybody’s fighting for the most talented engineers, the best coders. CEOs need to ask themselves, How do I create a great work environment where people want to stay? If you treat workers badly, they’ll turn to those ten job offers and grab one of them. Companies must be more thoughtful about their people. Besides – the generation coming up is not going to put up with anything less.”
Overtime opportunities. If you are skilled, you may get called at home and get overtime pay.
Well worth it if you don't have a job and can't find a better one elsewhere.
Cons: No room for promotions. Salary increases are rare. Negative atmosphere, with many co-workers highly unsatisfied with the company. "Promotions" mainly happen when someone retires or dies. Company is not growing. Promotions generally consist of going from hourly to salaried for a 15% raise, then you end up working a lot of unpaid overtime.
Company prefers to replace employees with contractors. Coming in as a contractor, IBM will not hire you directly until years after you've well-proven your skill and reliability. Going from contractor to IBMer is often a reduction in salary in exchange for better benefits. Skilled contractors get furlough (unpaid vacation) for a few weeks if BCRS doesn't meet their numbers. Unskilled contractors can get months of furlough.
Skilled and experienced administrators tend to leave after only a few months for better pay elsewhere.
BCRS is not growing; they are shrinking. They've laid off most people they could till it is mostly a skeleton crew, then hired a few to reduce disasters.
Advice to Senior Management: I recommend recruiting workers directly from local colleges and high schools. Emphasize the on-the-job training and welcome unexperienced workers who are willing to learn. Recommend hiring interns, since many people don't stay long anyway. If possible, offer more opportunities for advancement.
Cons: I have been with IBM since 2011. While it may be the workplace for some it is not fitting towards the environment that I wish to be in. Their learning resources are very limited due to the age gap of employees. Well seasoned employees retire before completing the training of new employees which leads to inadequate skill levels. The technology is very old and out dated, and as a developer you do not feel like you are contributing since the components are so separate from each other.
What matters to the execs (any with a moral backbone are long gone by now) is making their short-term bonus objectives, regardless the long-term impacts on IBM. In an ongoing game of "chartsmanship," where execs, fed by their ambitions and greed, take any actions short of illegal or immoral ones to "make the numbers."
We were once rewarded for providing outstanding customer service, thus we would "under promise" and "over deliver"; unlike today when the standard is to "over promise" and "under deliver." Short of an absolute miracle I see no chance of IBM becoming the great, customer-focused company it once was. -Laid-Off-in-2009-
"This could be the next shoe to drop, as people don't realize that if they're buying a bronze plan, they may have to pay $5,000 out of pocket before it contributes a penny," said Carl McDonald, senior analyst with Citi Investment Research, speaking at a Washington, D.C., conference last month. ...
Bronze and silver plans -- which have lower monthly costs but typically, higher deductibles -- are the most likely to require consumers to spend that amount themselves before the insurer pays any claims. There is no nationwide data on how many do that. But in seven major cities, half of bronze plans on average require policyholders meet the deductible before insurers help with the cost of a doctor visit, according to an analysis by eHealthinsurance.com, a private online marketplace, for Kaiser Health News. Patients in those plans who haven’t yet met their annual deductible would have to pay the full cost of the visit, unless it was for a preventive service mandated by the law. A typical office visit can run $65 to $85, while more complex visits can cost more. ...
Meeting the deductible before most coverage kicks in is common in the individual market, but differs sharply from job-based health insurance. More than three-fourths of the insurance plans offered to Americans with coverage through their jobs pay a substantial chunk of the cost of doctor visits without the worker having to meet the annual deductible first, according to the annual survey of employers by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.) ...
Plans that list a price for a doctor visit followed by the phrase "after the deductible is met" mean the consumer must pay the full deductible before getting doctor visits for a small copayment. Additional information can be found by clicking the "details" button and reading the summary of benefits. Consumers can also call insurers directly or look up the information under the policy name on an insurers’ website.
But each year the dreaded renewal letter arrived, and the premiums increased by leaps and bounds. In years when my age was divisible by 5, the increases were stunning in their scope. I could do the math. Before long, the premiums would be beyond my ability to pay.
I cheered when Obama was elected, and I cheered when Congress began to consider changes to our healthcare system. Then I watched in dismay as the debate wore on. Single payer was taken off the table, and the surviving proposals were watered down to suit the egos of various elected officials. The early provisions of the Affordable Care Act were of no help to me. Somehow, I needed to hold on until 2014. I didn’t make it that far.
In early 2011, I was paying $463 per month for a plan with a $2,600 deductible. In eight years’ time, my premiums had more than doubled, and so had my deductible. But the big shock was yet to come. When my renewal letter arrived, I was politely informed to begin remitting $756 instead of $463 – a staggering 63% increase. My health insurance was going to cost more than my house payment! That was my line in the sand. I had told myself that I would drop my insurance if it ever got that expensive.
Before letting go, I did two things. I went to my doctor for a thorough checkup, including a blood test. And I applied for a very-high-deductible plan that would keep my monthly payment in the $400 range. Given that I was still insured, the insurance folks got a copy of the blood test, which they proceeded to search line by line until they found something wrong with me. Out of two pages of data, there was a single thyroid reading was outside of “normal” range (side note: there’s nothing wrong with my thyroid; it was simply their excuse to make me pay that outrageous premium). They’d found their so-called preexisting condition, and denied me access to the new plan with the lower premium. With the help of my doctor, who wrote a letter on my behalf, I appealed.
I still remember where I was when I got the phone call. I had just driven across the country to do forestry work in the Pacific Northwest for three months. It was an utterly miserable July day on the Olympic Peninsula of Washington. Rain was coming down, and all the trees and underbrush were soaking wet. Water was making its way through and around my rain gear. I’m about ten miles from the nearest cell tower, and barely had a signal. My appeal had been denied, said the distant voice. My choice was to pay the $756 premium or do without insurance. I said, “Terminate the policy.” ...
With the plan chosen, I began the process of creating an account at healthcare.gov. As I progressed through the various steps, the system even located my paper application. Along the way, I was required to make several decisions. I was asked how much money I expect to earn in 2014. As an independent consultant, I can only guess. The earnings estimate is used to calculate your subsidy, but you are allowed to decrease the size of the subsidy you accept, in case your earnings turn out higher than expected. In my case, the subsidy was going to pay about two-thirds of my $570 monthly premium. I chose to err on the side of caution, selecting a $200 subsidy for a net cost of $370 per month. Once I made those decisions, I was set. In less than an hour, I had been approved for health insurance. ...
As I began walking towards Rep. Scott, a reporter stopped me. Would I mind saying a few words into the camera, he asked. I told him that I wanted to talk to the Congressman first. I managed to be second in line to speak. He recognized me from the previous time. I was courteous, and as succinct as I could manage. My message was that the website that he had just maligned in his speech was now functioning. I had obtained health insurance for half of the cost of the plan that I dropped two and a half years ago. Rep. Scott admitted that one of his relatives had recently obtained lower-cost coverage, too. But he still thought that Obamacare is a mess and needs to be replaced with something else; and he referred back to the point he’d made in his speech about the five million people whose plans were cancelled, or had become much more expensive.
I answered him thusly:
Okay, you say that there are 5 million who are hurt in some manner by the ACA. What about the 40 or 50 million uninsured citizens, many of whom live in your district, who stand to benefit from the ACA as it is currently written? I’m one of those 50 million. Let’s make the law better instead of repealing it.
Researchers found in this study, which relied on a sample of over 7,000 non-elderly adults both with and without insurance, that many struggled with these nine health insurance terms.
Not quite: As with all of those canceled policies, this “outrage” isn’t good evidence that the law is flawed, no matter what the president may have promised.
The issue is that some of the people who must switch health plans are transitioning into policies with narrow networks that don’t always include the doctors, hospitals and other providers they used before. Anecdotes have emerged of people parting with physicians they’ve trusted for years.
Yet, even for people who have never switched plans, this sort of thing happened well before the ACA; insurers constantly negotiate with providers over inclusion in coverage networks and payment rates. Doing so is one way insurers can keep costs down in the individual insurance market. In the past, other ways to control costs included skimping on benefits and turning away the sick and the old. Now, the ACA is about to stop the last two practices, a key, and popular, feature of the law. That leaves trimming provider networks as one of the last tools open to insurers to restrain premiums. ...
The ACA won’t leave everyone better off. There will be a few people who will end up having to pay more than they used to for access to networks of comparable size. There are also some places that don’t have enough competitors in the marketplace, which means some people won’t have every option.
Still, Republicans, many of whom claim to favor market approaches to expanding health-care coverage but oppose excluding patients with preexisting conditions, can’t credibly balk at the natural results of competition organized under those very principles. No one can expect low premiums and near-unlimited service, particularly in a system designed to spread costs around so that the sick and the old can finally obtain decent health coverage from private insurers. That’s not a mistake. It’s economics.
These plans are possible, says Peterson, who turned 50 this year and co-manages a financial services firm in Champaign, Ill., because of a piece of plastic the size of a credit card that arrived in the mail the other day: a health insurance card.
Peterson is among the millions of uninsured Americans who are benefiting from the Affordable Care Act, the 2010 law that launched far-reaching changes to the U.S. health-care system and is President Obama’s premier domestic achievement. ...
And as New Year’s Day approaches, and with it, health insurance, their frustration is trumped by gratitude. “I get these messages from acquaintances on Facebook saying, ‘Let me keep my doctor,’ ’’ Peterson said. “Well, what about those of us who didn’t have health insurance before? . . . I have been walking a tightrope and have had some twists and falls off of it. To not have to worry about this anymore is a tremendous relief.” ...
Getting Americans health insurance is at the heart of the health law, the most significant change in health-care policy since the 1965 creation of Medicare, the federal program for the elderly, and Medicaid, the federal-state program for the poor and disabled. Such a dramatic expansion in coverage had eluded presidents, including Republican Richard Nixon and Democrat Bill Clinton, for decades. ...
Amy Torregrossa is 27, lives in San Francisco and creates Web tools for political candidates. She has been without insurance only since July, when coverage through her boyfriend’s company ended because he changed jobs. In the months since then, Torregrossa has found that “it’s really scary to not be covered.” She has a congenital heart defect and a history of high blood pressure. She no longer runs, she said, because “if I twist my ankle or get hit by a car . . . any doctor visit is so expensive.”
When California’s insurance exchange opened Oct. 1, she was among the first to sign up, picking a $310 silver plan. She made sure her cardiologist was in the insurer’s network and plans to schedule a checkup for early next year. ...
For Adam Peterson, awaiting gallbladder surgery in Illinois, the dark tunnel without insurance began about six years ago, when he decided to forgo health coverage because he needed the cash to set up his financial services business. The cost of that decision hit home in March, when the emergency surgery to remove a gallstone cost him $27,000.
When he went to HealthCare.gov this fall, the online system at first balked at verifying his identity — an essential step. It took a few calls to a help line before anyone called back. But just before Thanksgiving, he managed to enroll in a top-tier plan with a monthly premium of $475.
For the typical American adult under 65 who does not have health insurance, the total of all health care bills would be $2,700. That’s according to calculations by Milliman, an actuarial firm.
The obvious problem is that you can’t know in advance if your costs for the year will be typical. If you are unfortunate enough to have a costly medical problem, you could end up with far higher bills. Milliman calculated that 5 percent of the population will incur bills, absent insurance, exceeding $47,300.
Massachusetts health officials said they will meet in early January to decide whether to suspend payments to the company, CGI Federal, which has also been criticized — and questioned during a congressional hearing — for its central role in building the problem-plagued federal health insurance exchange. The state may also seek a refund from the firm, which is an American subsidiary of the Canadian-based CGI Group.
Already, Vermont has refused to pay $5.1 million of its contract with the company and is trying to get hundreds of thousands of dollars refunded. The two states’ problems with CGI were reported by The Boston Globe.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
The alarming thing is not inequality per se, but immobility. It’s not just that we have too many poor people, but that they are stranded in poverty with long odds against getting out. The rich (and their children) stay rich, the poor (and their children) stay poor. President Obama’s speech on Dec. 4, widely characterized as his inequality speech, was actually billed by the White House as a speech on economic mobility. The equality he urged us to strive for was not equality of wealth but equality of opportunity.
A stratified society in which the bottom and top are mostly locked in place is not just morally offensive; it is unstable. Recessions are more frequent in such countries. A widely praised 2012 book, “Why Nations Fail,” argues that historically when the ruling elites have pulled up the ladder and kept newcomers from getting a foothold, their economies have suffocated and died. “The most pernicious fact of inequality is when it translates into political inequality,” said Daron Acemoglu, a co-author of the book and a Massachusetts Institute of Technology economist. “That means our democracy ceases to function because some people have so much money they command greater power.” The rich spend heavily on lobbyists and campaign donations to secure tax breaks and tariff advantages and bailouts that perpetuate their status. Not only does a dynamic economy stagnate, but the left-out citizenry becomes disillusioned and cynical. Sound familiar?
Why? Because they have so little bargaining power. Leave or lose your job, and the chances of getting another comparable job, or any job at all, are definitely not good. And workers know it: quit rates, the percentage of workers voluntarily leaving jobs, remain far below pre-crisis levels, and very very far below what they were in the true boom economy of the late 90s...
Now, you may believe that employment is a market relationship like any other — there’s a buyer and a seller, and it’s just a matter of mutual consent. You may also believe in Santa Claus. The truth is that employment is, in many though not all cases, a power relationship. In good economic times, or where workers’ position is protected by legal restraints and/or strong unions, that relationship may be relatively symmetric. In times like these, it’s hugely asymmetric: employers and employees alike know that workers are easy to replace, lost jobs very hard to replace.
And may I suggest that employers, although they’ll never say so in public, like this situation? That is, there’s a significant upside to them from the still-weak economy. I don’t think I’d go so far as to say that there’s a deliberate effort to keep the economy weak; but corporate America certainly isn’t feeling much pain, and the plight of workers is actually a plus from their point of view.
Over the coming year, the American Legislative Exchange Council (Alec) will promote legislation with goals ranging from penalising individual homeowners and weakening state clean energy regulations, to blocking the Environmental Protection Agency, which is Barack Obama's main channel for climate action. ...
Eick told the Guardian the group would be looking closely in the coming year at how individual homeowners with solar panels are compensated for feeding surplus electricity back into the grid.
"This is an issue we are going to be exploring," Eick said. He said Alec wanted to lower the rate electricity companies pay homeowners for direct power generation – and maybe even charge homeowners for feeding power into the grid.
"As it stands now, those direct generation customers are essentially freeriders on the system. They are not paying for the infrastructure they are using. In effect, all the other non direct generation customers are being penalised," he said.
Eick dismissed the suggestion that individuals who buy and install home-based solar panels had made such investments. "How are they going to get that electricity from their solar panel to somebody else's house?" he said. "They should be paying to distribute the surplus electricity."
In November, Arizona became the first state to charge customers for installing solar panels. The fee, which works out to about $5 a month for the average homeowner, was far lower than that sought by the main electricity company, which was seeking to add up to $100 a month to customers' bills.
You see, from a profits point of view it’s not a depressed economy at all. Look at profits versus compensation of employees (that’s wages and benefits combined) since the slump began at the end of 2007; both are expressed as indexes with 2007Q4=100...
Profits took a hit during the financial crisis, but have soared since then, and are now 60 percent above pre-crisis levels; meanwhile compensation has grown hardly at all, and indeed fallen in real per capita terms.
The point is that we have a depressed economy for workers, but not at all for corporations. How much of this is due to the bargaining-power issue is obviously something we don’t know, but the disconnect between the economy at large and profits is undeniable. A depressed economy may or may not actually be good for corporations, but it evidently doesn’t hurt them much.
Now, about the political economy: I don’t think we have to believe in a cabal of CEOs trying to keep the economy depressed. All that we need is for the big money to find the state of the economy OK from its point of view, so that politicians who listen to that money lose interest in the unemployed. You can round up a who’s who of CEOs for Fix the Debt; you can’t even get started on a power-list drive to Fix the Economy. And so it remains unfixed.
Lawyers drumming up business say they have found just the place: the Cook Islands. And, thanks to a recently released trove of documents, it’s become clear that hundreds of wealthy people have stashed their money there, including a felon who ran a $7 billion Ponzi scheme and the doctor who lost his license in the Octomom case. ...
The Cayman Islands, Switzerland and the British Virgin Islands capture headlines for laws and tax rates that allow multinational corporations and the rich to shelter income from the American government. The Cook Islands offer a different form of secrecy. The long arm of United States law does not reach there. The Cooks generally disregard foreign court orders, making it easier to keep assets from creditors, or anyone else. ...
A close study of the Cook Islands documents by The New York Times and the international consortium shows that these trusts are popular with the wealthy in Palm Beach, Fla., New York and Hollywood. The trust owners include people who have been convicted of Medicaid fraud, Ponzi schemes and bilking employee pension funds. Many others are simply rich.
The documents described a Cook trust held by Denise Rich, former wife of the disgraced trader Marc Rich, who was pardoned on the last day of the Clinton presidency. Her trust contained more than $100 million in assets, including her yacht, the 157-foot Lady Joy; a Learjet 60; and a Swiss bank account. In addition, more than $116 million in assets of the Cordish family of Baltimore, which owns one of the nation’s largest privately held real estate conglomerates, were held in Cook trusts. ...
There is also Dr. James Naples, a Texas podiatrist who pleaded guilty in 2004 to federal charges of obstructing justice in connection with treating cancer patients with a pesticide and then billing Medicare and insurance companies. Another Cook trust holder is Dr. Richard Edison, a Fort Lauderdale, Fla., plastic surgeon, called “Dr. Dread,” who was sued after five patients at his Florida plastic surgery clinic died and he left a medical sponge in a woman’s breast. After the 2004 death of a patient, the Florida health department restricted his medical license.
A gravel-voiced man whose accent recalls his blue-collar Boston roots, Adelson, 80, has just rung the bell at the New York Stock Exchange. Shares of his Las Vegas Sands Corp. are at a five-year high, making him one of the world’s richest men, worth more than $30 billion.
Federal law requires billionaires such as Adelson who want to leave fortunes to their children to pay estate or gift taxes of 40 percent on those assets. Adelson has blunted that bite by exploiting a loophole that Congress unintentionally created and that the Internal Revenue Service unsuccessfully challenged.
By shuffling his company stock in and out of more than 30 trusts, he has given his heirs at least $7.9 billion while legally avoiding about $2.8 billion in U.S. gift taxes since 2010, according to calculations based on data in Adelson’s filings with the Securities and Exchange Commission.
Hundreds of executives have used the technique, SEC filings show. These tax shelters may have cost the federal government more than $100 billion since 2000, says Richard Covey, the lawyer who pioneered the maneuver. That’s equivalent to about one-third of all estate and gift taxes the nation has collected since then.
The popularity of the shelter, known as the Walton grantor retained annuity trust, or GRAT, shows how easy it is for the wealthy to bypass estate and gift taxes. Even Covey says the practice, which involves rapidly churning assets into and out of trusts, makes a mockery of the tax code.
“You can certainly say we can’t let this keep going if we’re going to have a sound system,” he says with a shrug. ...
Goldman Sachs disclosed in a 2004 filing that 84 of the firm’s current and former partners used GRATs. Blankfein has transferred more than $50 million to family members with little or no gift tax due, according to calculations based on his SEC filings.
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