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* I told subscribers about this last week…
Ty Fahner, the head of the Civic Committee of the Commercial Club, over the holidays quietly put together a big-bucks political action committee that raised $142,750 in its first week of operation and likely will raise a ton more in this election year. […]
In its statement of purpose, We Mean Business PAC — catchy name, no? — says it’s function is to “reform public pensions in the state of Illinois through non-federal political activity.”
Translation: It’s going to bankroll candidates who are willing to cross labor unions and vote to reduce pension benefits and/or require workers to pay more for them.
Insiders say the goal is to emulate what school reform forces did in the last election — putting hundreds of thousands of dollars behind legislative candidates who promised to be independent of the teachers union. That strategy worked when the unions came to the table and agreed to things such as a longer school day and year.
You can read through the list of We Mean Business PAC’s donors here. The Crown family contributed most of the PAC’s startup money. But, as I told you already, this is just one of many new pro-business PACs that will be flooding campaign coffers this year.
* Speaking of the wealthy and powerful, there is quite a bit of overlap between Ty Fahner’s pro-reform Civic Committee board of directors and Aon’s board. Aon, of course, recently decided to move its corporate headquarters from Chicago to London for tax purposes, but the company also more than just implied that London was a better center of commerce than Chicago.
Eden Martin, the Civic Committee’s former president, sits on Aon’s board. Aon’s President and CEO Gregory Case sits on the Civic Committee’s board. Lester Knight, the founding partner of RoundTable Healthcare Partners, sits on both boards. Andrew McKenna, the McDonald’s Chairman, sits on both. Ariel Investments CEO John Rogers, JRr. also sits on both boards.
That’s a fine example they’re setting for the rest of us.
* Related…
* Aon employees face tax hit in HQ move to London
* Illinois Issues: Pension reform across the country
* Illinois Issues: Part 2: A look at pension reform across the country: Maryland Gov. Martin O’Malley pitched a proposal this month that follows in the lines of Quinn’s statements. Under O’Malley’s plan, local governments would pick up half of the cost of teachers’ retirement benefits, including Social Security contributions. Currently, districts pay about one third of the cost. If O’Malley’s plan were approved, local governments would pay almost $240 million more, but they would get some funding — from the proposed elimination of a tax break for top earners — to help with the transition.
* Illinois Issues: Part 3: A look at pension reform across the country: “I think what happened in Vermont is that the governor and others sat down with labor and said, ‘We’ve got this problem. There’s only so much money to go around, and something’s got to give,’” Brainard said. The state is facing a deficit, a pension funding shortfall and, according to Vermont Public Radio, 25 percent of Vermont state workers will be eligible to retire by 2015. Other key factors in the negotiations may be the fact that Vermont is a small state and has a tradition of public civic engagement.
* Municipal pensions eat more, but they’re still hungry
* Kadner: No state plan to treat mentally ill
* Dozens protest CME Group incentives - Activists chant slogans decrying CME Group Inc.’s ‘corporate welfare’ as they deliver a golden toilet to its headquarters
posted by Rich Miller
Thursday, Jan 26, 12 @ 11:51 am
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To thumbnail summarize the Illinois Issues articles, courts have gone both ways in States without a constitutional clause protecting both the pensions and COLAs. In Vermont, the defined benefit plan was preserved and the final benefits actually increased in exchange for a higher payment by the employee and a bit later retirement date. In other states that mostly reformed things, they negotiated with the labor groups to change the contracts. Very few of the changes were unilaterally imposed … but those got all the media attention and push back. In terms of both the size of the problem and the amount of protection, Illinois is unique and stands alone.
As far as the business groups, it sounds like they are worried someone will notice they have a pile of money that could be taxed. If you accept the position that you have to change the Illinois Constitution to change pensions, it would be just as easy to change the Constitution to have a progressive income tax … which would hit those same wealthy groups trying to reduce / eliminate state pensions. Those groups have apparently decided they want to distract the public from the issue of a progressive income tax and instead use class warfare / envy against the public employee.
I still think nothing will happen this year … but it sounds like business groups are trying to set the stage for a railroad job next year …
Comment by Retired Non-Union Guy Thursday, Jan 26, 12 @ 12:32 pm
I’m no international tax expert, but I don’t see how London is some low tax haven. According to their annual report, Aon pays exponentially more in incomes taxes overseas than it does in the United States.
11. Income Taxes
Aon and its principal domestic subsidiaries are included in a consolidated federal income tax
return. Aon’s international subsidiaries file various income tax returns in their jurisdictions.
Income from continuing operations before income tax and the provision for income tax consist of
the following (in millions):
Years ended December 31 2010 2009 2008
Income from continuing operations before income taxes:
U.S. $ 21 $215 $129
International 1,038 734 750
Total $1,059 $949 $879
Income taxes:
Current:
U.S. federal $ 16 $ 32 $ 44
U.S. state and local 10 23 21
International 202 150 210
Total current 228 205 275
Deferred (credit):
U.S. federal 47 49 (15)
U.S. state and local 13 5 (2)
International 12 9 (16)
Total deferred 72 63 (33)
$ 300 $268 $242
Comment by wordslinger Thursday, Jan 26, 12 @ 12:33 pm
London is a center for International banking. And oh, what a great time it is to get into THAT field, AON… I hear Mikkonos is lovely this time of year:-)
Comment by Newsclown Thursday, Jan 26, 12 @ 12:46 pm
==I’m no international tax expert, but I don’t see how London is some low tax haven. According to their annual report, Aon pays exponentially more in incomes taxes overseas than it does in the United States.==
Of course they pay a larger sum outside the US; that’s where the vast majority of their income is.
Let’s look at it another way, using your figures. I’m going to use the 2008 figures, because the 2010 figures seem strange (taxes are higher than income in the US).
They earn 15% of their income in the U.S. Yet, 25% of the taxes they pay are US taxes.
The effective tax rates for them are 37% in the US and 26% outside the US.
They could have an international tax rate of 6.5% and STILL pay “more” taxes outside the US and within. The TOTAL of tax expenditures isn’t what matters. The tax rate is what matters.
Comment by Lizard People Thursday, Jan 26, 12 @ 12:58 pm
The rules for AON have the potential to be substantially different when they relocate to “The City”.
For example, if they are doing a substantial amount of work for subsidiaries of US corporations where the expenditures and revenues are billed to the non-US components/operations of the firms (say, operations in Ireland or Scotland), well then if you are domiciled in the UK, you could easily have a vast tax savings by just relocating headquarters operations to the UK.
Remember, many multinationals over the years have built up extremely large amounts of retained earnings in non-US regions, and they want to work those large piles of cash down. So they want to spend down the overseas cash horde before the host governments get too greedy.
So companies like AON move HQ operations to the UK to take financial advantage of a situation.
Certainly makes sense from a numbers standpoint.
Comment by Judgment Day Thursday, Jan 26, 12 @ 1:05 pm
“That’s a fine example they’re setting for the rest of us.”
Rich, how so? I think Aon is voting with its feet by leaving.
Comment by Anonymous Thursday, Jan 26, 12 @ 1:33 pm
captFax
$142K barely covers the parking fees for the Rolls between now and the primary. Thought Ty was claiming he had a $1 million?
Would have loved to been to the TeaParty when the Crowns and Mr. D’s dopey son were ringing their hands about public worker pensions.
Focus on that image …. and try not to puke.
Guess that put a freezoramabama until the primary
Capt: have you sold em some blog ads yet?
Comment by They'reMeanBusiness Thursday, Jan 26, 12 @ 2:09 pm
===have you sold em some blog ads yet? ===
Not yet. Good idea, though.
Comment by Rich Miller Thursday, Jan 26, 12 @ 2:26 pm
Fools and their money are soon parted or money given to a fool will soon be gone.
Comment by Obamas Puppy Thursday, Jan 26, 12 @ 8:41 pm