Tuesday, July 26, 2011

Anders Behring Beck drek

It's still July! Hope you haven't missed this:

Beck: Norway camp smacks of 'Hitler Youth'
Beck said the camp "sounds a little like, you know, the Hitler Youth or whatever. Who does a camp for kids that's all about politics? Disturbing."

But while condemning the attacks, Beck said he predicted last fall that Europe "is going to go into problems with radical Islam" and cited Dutch far-right politician Geert Wilders as saying "Political correctness and multiculturalism is killing Europe, and he's right."

However, politically-oriented camps are being organized in several U.S. states by chapters of the "9/12 Project" -- an organization founded by Beck himself in 2009.

The Colorado 9/12 Project hosted a "Patriot Camp" for kids in grades 1-5 earlier this month, featuring programs on "our Constitution, the Founding Fathers, and the values and principles that are the cornerstones of our nation."

Tuesday, July 19, 2011

I did but see her passing over

Driving to work today in the PT drop top, a route that takes Guambat across the end of the runway (well, not directly across, but just beyond, and downhill) of the GUM airport, looking at the plane gliding in over the southern ranges, slowly, gliding, how does it stay in the air, somewhat like Guambat would image a Shuttle landing (but with enormous engines underwing), still ponderous but quickly now and at last overhead...

Yes! There it is, painted in blue, "ANA". Wasn't a dream. Was a Dreamliner.

15th December 2009 13:46 GMT Today's the day - finally Boeing 787 Dreamliner set for first flight

Boeing's 787 Dreamliner will later today take to the skies for the first time, almost two-and-a-half years after it was originally supposed to get airborne.

Although the "eco-friendly"* Dreamliner has attracted 840 orders, customers' patience has been sorely tried by continuously-reshuffled delivery estimates. The 787 maiden flight is therefore critical for Boeing, as Richard Aboulafia, aerospace analyst at research firm Teal Group, explained to Reuters: "It will provide a badly needed perception that the program is on some kind of schedule again. But it's still a long way from the ultimate result."

Indeed, even if all goes according to plan today, there are still a minimum of nine months of "around the clock" flight testing of six aircraft to follow before All-Nippon Airways gets its hands on the first example by the end of 2010.
ANA 787 In GUM For Etops Testing

Per Boeing Boeing:
In addition to bringing big-jet ranges to mid-size airplanes, the 787 will provide airlines with unmatched fuel efficiency, resulting in exceptional environmental performance. The airplane will use 20 percent less fuel for comparable missions than today's similarly sized airplane. It will also travel at speeds similar to today's fastest wide bodies, Mach 0.85. Airlines will enjoy more cargo revenue capacity.
United Continental just raised its baggage fees, in apparent contemplation of that last metric.

Don't get the impression Guambat is a plane spotter, but he did grow up on and around air bases, and still remembers, years ago, going out with future Mrs. Guambat to SFO to get a look at the new 747.

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Friday, July 15, 2011

I did but see him passing by

Guambat is here talking about the inscrutable Mr. Murdoch, but with full apoplectics to poor old Sir Robert Menzies, the die hard of monarchism in Australia. Be sure to click the link in that story to hear this.

Murdoch is no Sisyphus. When that bastard chooses to climb a mountain, stone and all, he does; and he stays. Stone and all.

Or so it once was, and so it may forevermore no longer be if the story is told the way some minstrels would sing it.

Mr. Murdoch is one of those Genghis Khan types whose unbent rises to power consumes himself. For him, every slight along the way, every refusal to step aside, is not only remembered, it is crucified in both glory and gore.

When he was only 30 he had to step back and tug forelock from the ascending Kennedy star, in a move that left him with but no choice but to give up his birthright of citizenship to take on the entirety of the American political might, with control of the Wall Street Journal and Fox "News" and countless other rags for riches.

But before he consummated screwing over the sheepish American "news" followers, he first had to settle his score with the Mother Land, and the Mother of all mothers in that land.

Murdoch got his moleskins dirty following other Aussie country gentry, such as John McEwen, leader of the Australian Country Party. McEwen was governing in coalition with the larger Menzies-Holt Liberal Party. (Wikisource) "From the very first issue of The Australian Murdoch began taking McEwen's side in every issue that divided the long-serving coalition partners."

Murdoch, probably akin to McEwen, and certainly unlike Menzies, chafed at the old English establishment running Australia. So he would have been less than pleased with Menzies' sycophantic rendition of "we did but see her passing by". ("Despite Menzies continuing electoral success, Australians increasingly felt that his British and royalist sentiments were out of step with the majority attitude. This was brought to the fore in Menzies' much-lampooned 1963 speech to the Queen in which he quoted the verse "I did but see her passing by and yet I love her till I die". (Click to hear an excerpt from the speech." (From this).)

And so, before exiling himself back to Merry Old England, Murdoch, like a cat in a cat pan, scratched over Menzies' place in history by backing his nemesis, Gough Whitlam. As Wikipedia recounts, "Rupert Murdoch's flirtation with Whitlam turned out to be brief." Murdoch was, even at that early point in his empire building, more pragmatic than dogmatic, but even so, you could only push an old dog so far.

Having buried Menzies and abandoned Whitlam, Murdoch set about settling scores with Merry Old. As Wikepedia puts it: "In Britain in the 1980s Murdoch formed a close alliance with Margaret Thatcher, and The Sun credited itself with helping John Major to win an unexpected election victory in the 1992 general election.[38] However, in the general elections of 1997, 2001 and 2005, Murdoch's papers were either neutral or supported Labour under Tony Blair. This has led some critics to argue that Murdoch simply supports the incumbent parties (or those who seem most likely to win an upcoming election).

As we've seen in his framing of Fox News, Murdoch is very keen on selling media by, simply, telling folks what they want to hear, and then claiming it was his idea all along. Fair and balanced? Get real. Never give a sucker an even chance. Make him laugh, make him dance, make him pay.

And so, by wheeling an wiling, Murdoch has stitched up the world, from Adelaide to Arlington, from Sydney to Surrey, from Baltimore to Beijing. It's been a feat you just have to admire, no matter how much it makes you sick to your stomach at the same time.

But like Alexander the Great, Napoleon, Genghis and the rest, the impetuous dash for power, glory and most likely just getting even with all the rest because one slob sometime somewhere kicked sand in their faces, they burn out. Some of them go down in a flame of glory, others just go down, burned out.

Mr Murdoch is past his high corona days, but not one to be shorted unhedged.

As this item from not too long ago reported, It was Murdoch wot won it – or so he'd like us to believe.

Murdoch the Magician. Can he unwrap himself, again, from this Houdini trap?

Murdoch Defiant as FBI Acts
In an interview with The Wall Street Journal [WHICH HE OWNS] late Thursday, he said he wanted to address "some of the things that have been said in Parliament, some of which are total lies. We think it's important to absolutely establish our integrity in the eyes of the public. ...I felt that it's best just to be as transparent as possible."

Guambat has indeed but seem him, figuratively, passing by. But love him 'til he dies? Not a chance.

A good Israeli friend once told Guambat, you have to admire the Israelis, even if it is impossible to love them. Funny, Murdoch doesn't loooook Jewish.

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Saturday, July 09, 2011

The JP Morgan shell game

J.P. Morgan continues to shell out money to keep from going to jail, or at least to avoid the prospect.

J.P. Morgan charged with rigging municipal bond deals
J.P. Morgan Securities rigged bids in at least 93 municipal bond deals in 31 states for eight years beginning in 1997, the Securities and Exchange Commission charged Thursday.

The government said the firm agreed to pay $228.2 million to settle charges

recent enforcement actions have portrayed this seemingly staid corner of the banking world as having been a feasting ground for corrupt financiers.

Thursday’s settlement was another mark against J.P. Morgan Chase, parent of the securities firm.

Last month, J.P. Morgan Securities agreed to pay $153.6 million for allegedly selling investors a complex investment that was secretly designed to help a hedge fund profit at their expense.

In 2006, the SEC charged J.P. Morgan Securities with abuses in the market for another type of investment known as auction-rate securities. In that case, the firm agreed to pay a $1.5 million fine.

J.P. Morgan Securities won the bidding in some transactions because it obtained information from the agents about competing bids, the SEC charged. In other instances, the bidding was rigged in J.P. Morgan’s favor, and in still other deals, J.P. Morgan helped other parties win by deliberately submitting losing bids, the agency said.

“Municipal issuers and investors didn’t stand a chance against the fraudulent strategies [J.P. Morgan Securities] and others used to guarantee profits,” Robert Khuzami, the SEC’s enforcement director, said in a statement.

The firm neither admitted nor denied wrongdoing in its settlement with the SEC. But in its settlement with the Justice Department, it admitted to illegal anti-competitive conduct by former employees. Under its agreement with Justice, the firm avoided prosecution.

“The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm,” J.P. Morgan Chase said in a statement. “These employees concealed their conduct from management.”

Management doesn't commit illegal action. Small desks do. But there's no constitutional right to pack a small desk.

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Wednesday, July 06, 2011

Of banks and bailing wire

File this under financial wizardry, of the sovereign kind, with a European flair.

Is the European Union bailing out Greece?

Euro zone approves 12bn euros bailout for Greece
Euro zone finance ministers have approved a 12 billion euro installment of Greece’s bailout, but signaled that the nation must expect significant losses of sovereignty and jobs.

Ministers in the Euro-group gave the go-ahead for the fifth tranche of Greece’s 110-billion-euro financial rescue agreed last year, and said details of a second aid package for Athens would be finalized by mid-September.

But within hours of Saturday’s decision, Eurogroup chairman, Jean-Claude Juncker, warned Greeks that help from the EU and Inter-national Monetary Fund (IMF) would have unpleasant consequences.

Sounds a bit like it, but it depends, to some significant extent, on how you define "bail-out". And definition is everything in A Europe of judges.

EU: No-bailout rule III
In the Treaty establishing a Constitution for Europe the provisions on economic policy were located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 1 ‘Economic policy’.

The ‘no-bailout’ clause is found in Article III-183, OJ 16.12.2004 C 310/78:

Article III-183 Constitution

1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.
'No Bailout' Clause? The EU's Greek Rescue Problems
European Policy Centre CEO Hans Martens is referring to the 'No Bailout' clause in the European treaty. Article 103 says that: the Union shall not be liable for or assume the commitments of central governments.

This article was specially written to leave ensure no EU country would be saved by the EU if it doesn't respect the Union's economic rules. And that's precisely the case in Greece.

On the other hand, if the European leaders are really willing to aid Greece, they can simply ignore the first clause and go with article 122, which states: when a member-state 'is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council [of national governments], on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the member-state concerned.

ECB's Stark rejects EU guarantees for Greek debt
A senior European Central Bank policymaker rejected the idea of a Greek debt solution involving EU guarantees on Wednesday, and said Greece would face economic collapse if it restructured its debt.

Asked about a scenario under which banks exchanged their Greek bonds for new paper backed by guarantees from EU states - an approach that would be similar to that used in Latin America in the 1980s - Juergen Stark said: "This instrument is disqualified."

"It would break the ban on support - the no bail-out clause in article 125 of the EU Treaty," Stark, a member of the ECB's Executive Board, told German newspaper Die Zeit in an interview.

The U.S.A. and Europe Are Reaching the End of the Line
Because of the sins of the € Commission, the European Central Bank (ECB), and the governments, which have repeatedly violated the no-bailout clause of the European Union's Maastricht Treaty with their so-called rescue packages, plus the ECB's acquisition of toxic government bonds, a situation has now arisen in which the ECB could become technically bankrupt overnight.

UPDATE 1-Finland demands bailout guarantees, bank participation
Finland's new finance minister said on Tuesday that the Nordic country will demand guarantees if it participates in any new euro area bailouts and that it wants private investors to bear more of the burden.

"We want to limit Finland's responsibilities. The new government has taken a tougher stance than the previous government regarding crisis countries' aid packages," Jutta Urpilainen said in a television interview with public broadcaster YLE.

She said the guarantees could be in the form of shares in a company managing the debt-laden state's property.

UPDATE 1-S&P warning adds default threat to Greece's bailout woes
Greece would likely be in default if it follows a debt rollover plan pushed by French banks, S&P warned on Monday, deepening the pain of a bailout that one European official said will cost Athens sovereignty and jobs.

Derivatives industry body ISDA said before the French proposal was released in late June that a voluntary agreement to roll over Greek debt would "typically" not trigger payments on credit default swaps.

European politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor's said it would involve losses to debt holders, most likely earning Greece a "selective default" rating. S&P cut Greece's sovereign rating to "CCC" last month, from "B", on a view that any restructuring of the country's massive debt load would count as an effective default.

Greece crisis: German lenders 'join rollover plan'
German lenders and insurers have agreed to participate in a plan to continue lending to Greece, according to German finance minister Wolfgang Schaeuble.

He was speaking after a private meeting of the country's main banks.

Mr Schaeuble said German institutions would contribute 3.2bn euros ($4.6bn, £2.9bn) to the plan, details of which have yet to be finalised.

It comes after French banks agreed to relend about half of Greek debts they own coming due by 2014.

Deutsche, Germany's biggest lender, was expected to contribute less than 1bn euros to the plan, according to reports in Germany.

Commerzbank , Germany's second-biggest lender, is likely to contribute far less than 1bn euros, the reports said.

The French plan is designed to make Greece's debtload more manageable in a way that would not be deemed a formal default.

If the deal is classified as a default by ratings agencies or credit derivatives traders, it could force European banks to recognise billions of euros in losses in Greek debts that they currently hold, putting their own solvency at risk.

A couple of years ago, ECB warns Germany against EU bail-out
The European Central Bank gave a thinly veiled warning to the German government on Friday not to violate the European Union’s “no bail-out” clause, which prevents members of the eurozone from supporting other members that are facing rising public debt.

Jürgen Stark, ECB executive board member, told Spiegel magazine in an interview released on Friday that the clause was an “important basis for the functioning of the monetary union”.

The warning follows reports that Germany was considering ways to help members of the eurozone that are facing fast-rising refinancing costs as investor fears rise about deteriorating public finances.

The “no bail-out” clause of the EU treaties prohibits countries from becoming “liable for” or assuming “the commitments” of other governments and is regarded by the ECB as an important weapon for ensuring fiscal discipline.

Asked about the issue on Friday, Frank-Walter Steinmeier, foreign minister, said; “A process is now starting to consider to what extent support via the eurozone and the economically strong countries of the eurozone can happen.”

Fast forward back to the present, German court considers challenge to EU bail-outs
Germany's Constitutional Court is hearing a challenge to the country's participation in bail-outs of Greece, the Republic of Ireland and Portugal.

A Berlin professor argues that the process violates constitutional provisions and should be blocked.

Germany's finance minister rejected the claim, saying all rescue packages had been made on solid legal ground. Experts say the court is unlikely to block Germany's participation in the eurozone bail-outs altogether.

German court hears case against bail-outs
The signs are still that the case is unlikely to cause serious problems for Berlin – the court last year declined to issue an injunction to prevent financial transfers to Greece. Judges signalled they were sceptical that an infringement of EU law would fall under their competence. However, as one government official remarked: “The court is always good for surprises.”

A decision is expected in September or October.

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Friday, July 01, 2011

How do you tax the Nowhere Man?

When sales taxes, gross receipts taxes and the like get much above 1%, and when don't they, retailers who don't have to pay that tax have a significant advantage over those who do.

So, catalog order companies like Amazon (in Guambat's day, Sears, Montgomery Ward and the like, and in Mrs. Guambat's days, Lands End and Williams-Sonoma and a myriad of others) get more than a virtual leg up over the bricks and mortar mortal because, under pre-web days, the US laws required some physical presence "nexus" before you could tax those mail-order sales.

But at the break-nexus speed of email-order sales, it is arguably time to have a rethink of the level playing field of tax policy (or, fantasy).

Amazon does not have a price advantage over other book (etc.) stores, it has simply externalized pre-tax overhead expenses and post-tax profits. And you can expect plenty of argy-bargy and spin as the coddled e-industries try to hide their profits from the taxman, and continue their externally taxpayer underwritten e-infrastructure, and their competitive advantage over the local showrooms and sales forces.

Nudging toward a new direction, but with caution born of identifying some kind of tangible nexus, California has joined a growing list of states trying to capture some of the tax base that the online world represents and virtually avoids.

Amazon to shut down California affiliates over new sales tax law
Late Wednesday, California joined the growing list of states attempting to collect sales tax from online retailers like Amazon in an effort to help close the state's vast budget deficit. Amazon, in typical fashion, has aggressively pushed back, warning its California-based affiliates that they'll have their revenue streams cut off as of September 30 if the law ends up being enacted.

California's new law, signed by Governor Jerry Brown on Wednesday, requires online retailers to collect sales tax even if they have no physical presence in the state. How does that work when federal law states they have to have a brick-and-mortar store to qualify? Like the many other states before it, California counts Amazon affiliates who reside in California as a "physical presence." So, if Joe Blow runs a personal blog with affiliate links to Amazon products (you know, to make a few bucks on the side), he is effectively "selling" Amazon products and making money from them via his home in California.

Because of this "physical presence" technicality, the state wants Amazon to begin collecting sales tax from California residents, and subsequently pay it back to the state.

California's—and other states'—laws don't just affect Amazon either, despite the "Amazon Tax" moniker. Plenty of other sites offer similar affiliate programs (Overstock.com, Drugstore.com, FatWallet.com, to name a few) and will either have to rework the way they do things with California residents or cancel their affiliate programs as well. eBay also claims to we worried about how the tax affects small businesses and individuals who are not actually involved with these large corporations. "We believe that putting a tax burden on small businesses and treating them the same as giant retailers is unfair," eBay senior director of government relations told Internet Retailer. "eBay is advocating a threshold that accurately defines a small business, so that the sellers that are getting started aren't held back from growing in across the US."

Amazon’s bad argument By Ezra Klein
I just received this e-mail from the company, as back when I had a personal blog, I was a member of their affiliates program:

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants...

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action...
Let’s be clear: Amazon opposes this bill because it wipes out a price advantage they currently have against their competitors.

And, as the Center on Budget and Policy Priorities has explained at length, their other arguments simply don’t add up.

Now, Amazon is a business, and so you can’t fault it for playing hardball in an effort to retain a competitive advantage. But this is bad policy that they’re trying to protect — it’s starving states, killing brick-and-mortar stores and encouraging a race to the bottom among states who want to attract the offices of online retailers. Brown is right and Amazon is wrong.

Guambat is sure there's some kind of hedge play for this situation, but reckons he'll hedge by going to that little shed out back and retrieving that Sears and Roebuck catalog. And replace it with his iPad.


It's a WIN-when? situation

What is the corporate tax rate in the USA? Doesn't matter if there is nothing taxed, does it? It's a European holiday for free.

If companies are allowed, indeed encouraged by certain "transfer pricing" regimes or other structured loopholes mechanisms, to park profits overseas and then every few years simply bring them back "home" to "repair" balance sheets, "create jobs" or just about any other euphemism you can choose for "avoid tax payments", companies get away with tax avoidance scott-free regardless of the ersatz tax rate.

Indeed, such "repatriation" schemes, from the stance of global companies, is just one more "transfer pricing" get out of tax jail free card.

Yeah, the US corporate tax rate may or may not be competitive/fair/productive or whatever, but it really doesn't matter if it is never imposed, or if imposed, done so on only a very small portion of profits. So, yeah, they may be taxed at a higher rate, but when if not ever?

Back in 2004 many of these global companies, claiming a tax "home" in the USA, transferred billions of dollars from other tax havens back to the US tax haven is a scheme called "repatriation", but it was like repatriating draft dodgers, only here it was repatriating tax dodgers.

They did it under a cynical scheme, sold easily to the US Congress, called the "Homeland Investment Act of 2004".

Same guys, same scheme is being reheated in the Congressional kitchen under the new banner of the WIN America Campaign, as reported a few days ago by Jesse Drucker in Bloomberg.

Biggest Tax Avoiders Win Most Gaming $1 Trillion U.S. Tax Break
Cisco, Oracle Corp. (ORCL), Microsoft Corp. (MSFT) and others formed a coalition called WIN America Campaign that plans to spend several million dollars pushing the issue.

“We simply don’t think it’s a good idea to do nothing while a trillion dollars sits overseas,” said Doug Thornell, a vice president for the firm who is advising the campaign.

Companies including Google Inc. (GOOG), Apple Inc. (AAPL) and Pfizer Inc. (PFE) are also pushing the proposed tax holiday, which would allow profits to return to the U.S. at a discounted 5.25 percent rate. Under current law, American companies can defer federal income taxes on most overseas earnings indefinitely. When they do return to the U.S., they’re taxed at the corporate rate of 35 percent -- with credits for foreign income taxes paid. Thus, companies paying little overseas face higher U.S. tax bills upon repatriation, and would get more benefit from the discount.

One way multinationals avoid taxes is through “transfer pricing,” transactions among subsidiaries that allow for allocating expenses to high-tax countries and profits to tax havens.

Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.

Cisco transfers a portion of the patent rights to technology developed in the U.S. to a Dutch unit, which sells some of the resulting products back to its parent for eventual distribution in the U.S., according to annual reports filed by the Amsterdam subsidiary. That means Cisco credits about $5 billion in U.S. sales annually to the Netherlands.

At the same time, most of the income from sales in countries like Germany, France and Japan [and the US], where statutory income tax rates average more than 30 percent, is ultimately transferred to Switzerland, meaning the other nations lose potential tax revenue. The result: Cisco’s international earnings have been taxed at about 5 percent since 2008, records show.

All told, Cisco has accumulated $31.6 billion in overseas earnings on which it has paid no U.S. income taxes yet, records show -- part of more than $1 trillion in U.S. companies’ offshore profits, according to data compiled by Bloomberg. In total, almost 90 percent of Cisco’s cash sits overseas.

Cisco, the largest maker of networking equipment, wants to save even more -- by asking Congress to waive most federal taxes due when multinationals bring such offshore earnings home. Chief Executive Officer John T. Chambers has led the charge for the tax holiday, which would be the second since 2004. He says it would encourage companies to “repatriate” as much as $1 trillion held abroad, spur domestic investment and create jobs.
[In the Homeland Investment scheme, they used these "talking points":

* Increasing domestic investment in plant, equipment, R&D and job creation;
* Increasing investments in business ventures in emerging technologies,
* Increasing funding for pension plans depleted by declines in the stock market;
* Improving the long term financial strength of U.S.-based companies by reducing domestic debt loads, strengthening corporate balance sheets, and lowering corporate bond rates; increasing dividends to shareholders (which can be productively redeployed); and raising equity market valuations by increasing funds available for share repurchases.

Actually, that last point was rather right on the main purpose of the supporters, and perhaps too blatant.]

“I create jobs overseas,” Chambers told interviewer Lesley Stahl on the CBS News program “60 Minutes” in March. “I build plants overseas and I badly want to bring that money back.”

The company needs that cash to prop up its share price.

U.S. companies used $312 billion they repatriated under a 2004 tax holiday largely for stock repurchases, while doing little direct hiring or domestic investment, according to a paper in the current issue of the Journal of Finance by professors at the University of Illinois, Harvard University, and the Massachusetts Institute of Technology. It was the latest in a series of studies that reached similar conclusions.

“Cisco complies with all global tax laws,” said John Earnhardt, a spokesman for the San Jose, California-based company, which makes switches, routers and other products, in an e-mailed statement. “In the past three years alone, Cisco (which has over 35,000 U.S. employees) has paid approximately $4.4 billion in U.S. federal corporate income taxes.” The company reported an effective tax rate last year of 17.5 percent, half the U.S. statutory rate.

While Treasury Secretary Timothy F. Geithner has expressed skepticism about a new repatriation break, Representative Kevin Brady, a Texas Republican, introduced a bill on May 11 that, like the 2004 measure, would not require companies to use their cash for hiring.

Brady declined to address why his measure does not include a hiring requirement. “With millions of Americans seeking work it makes good economic sense to temporarily lower the tax gate and allow up to a trillion dollars of stranded American profits to flow back into our economy,” he said in a statement.

The idea gained momentum last week after Senator Charles Schumer, a New York Democrat, said his party’s caucus was discussing whether short-term revenue from the holiday could fund an “infrastructure bank” to create jobs. Senator John Kerry, a Massachusetts Democrat, has also signaled that he may reconsider his previous opposition.

“Why should we reward firms for successfully gaming the tax system when we in turn are called on to make up the missing tax revenues?” said Kleinbard, a former corporate tax attorney at Cleary Gottlieb Steen & Hamilton LLP. “Much of these earnings overseas are reaped from an enormous shell game: Firms move their taxable income from the U.S. and other major economies -- where their customers and key employees are in reality located -- to tax havens.”

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