` Fifty Million Americans live in Poverty even though they receive Benefits’ the Year 2013′

#AceFinanceNews says that `Fifty Million Americans’ are living in poverty, even with benefits, it’s even higher – NOW! Mr Obama!

Published time: November 07, 2013 22:51
Edited :March 01 2014 20:50

Families search through shoes donated by Crocs at a distribution site for Feed The Children (AFP Photo / Scott Olson)

Families search through shoes donated by Crocs at a distribution site for Feed The Children (AFP Photo / Scott Olson)

Almost 50 million Americans are suffering financial hardship, and the situation is not improving, the US Census Bureau has found, using a sophisticated measurement of poverty that takes into account benefits, necessary spending and geographical location.

Unlike the official poverty threshold, which counts anyone who earns less than three times the cost of the minimum food diet – or $23,050 for a family of four in 2012 – as poor, the supplemental poverty index is more sensitive and accurate.

A family of four living in rural Kentucky without a mortgage, for example, would actually need to earn less than $18,000 to be poor, while the same family living in San Francisco in mortgaged house would need more than $35,500 to get by.

Image from census.gov

Image from census.gov

According to the supplemental poverty measure 49.7 million Americans can be classified as poor. The results show that even more Americans are in distress than the raw official figures show. The official survey, also published by the US Census Bureau in September, reported that 47 million Americans are below the poverty line.

The percentage of those suffering poverty remains virtually unchanged from 2011 and 2010, and is worse than that in 2009.

The worst affected are Blacks, Hispanics and those born outside the US (which may overlap the other two categories) – of these minorities just above a quarter are living in poverty. Worst off are non-citizens, who do not have the rights or the know-how to receive support from federal programs.

When factoring in expenses, the states with the least poverty are Iowa, Wyoming and Minnesota, and those with the highest proportion are DC and California, where nearly 24 percent of all people are below the threshold.

The survey also demonstrates who is most dependent on government aid, and would be confined to financial hardship without it.

Those 65 and over have a supplemental poverty rate of 14.8 percent. But without Social Security more than half of them would be destitute. Official statistics show that less than 10 percent of this group is poor – but taking into account heavy out-of-pocket healthcare spending, which the survey does, means this group is under more financial pressure than it appears .

The situation is reversed on the other side of the age spectrum. Official statistics show that more that more than 22 percent of under-18s are suffering from poverty, but the more sophisticated statistics that include tax credits, show that the number is around 18 percent. 

Image from census.govImage from census.gov
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` Super Rich Taxation could Boost the Economic Growth according to IMF ‘

#AceFinanceNews says that the `IMF says `Taxing Super Rich’can boost Economic Growth in the long run’

Published time: : March 01, 2014 20:28
 
Reuters / Kim Kyung-Hoon Reuters / Kim Kyung-Hoon
A new International Monetary Fund study has found that taxing the super wealthy does not stunt the economic growth of a country, and that redistribution can actually spur gross domestic product.

The paper argues inequality is harmful to a country’s growth, and that redistributing wealth using taxes can reduce inequality and boost growth and the length of growth cycles.

“There is surprisingly little evidence that increases in tax rates impede medium-to-long-run economic growth,” the IMF paper says.

Redistribution is a win-win situation and overall has a “pro-growth effect”, and is not a job killer, as many other economists argue.

Growth inequality is more common in countries that redistribute less, and more equal societies have “faster and more durable growth”. The paper addresses extremes in the formula that sometimes suggest huge redistribution has a negative effect on growth.

America’s tax authority, the International Revenue Service, released a report in November 2013 that shows that the US’s richest 1 percent now owns 31 percent of its wealth, while the rest of the population experienced an income rise of only 1 percent.

A recent Oxfam study shows that up to 146 million Europeans are at risk of falling into poverty by 2025, and 50 million Americans are currently suffering from severe financial hardship.

“We find that higher inequality seems to lead to lower growth. Redistribution, in contrast, has a tiny and statistically insignificant (slightly negative) effect,” the IMF paper states.

However, the report admits that labor supply could be adversely affected by a top heavy tax scheme.

“Redistribution that takes from the rich and gives to the poor is likely to reduce the labor supply of both the rich (who are taxed more) and the poor (insofar as they receive means-tested benefits that reduce incentives to work),” the report said.

The IMF study, compiled by researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides and published by Oliver Blancard, the institution’s chief economist and released on Wednesday, is meant to serve as a ‘discussion note’ and not an official stance of the Washington-based institution.

“Redistribution, Inequality, and Growth” stops short of declaring the paper economic gospel, as the authors admit the data, and discipline of economic theory, is complex and many different variables are at play.

‘Tax the rich’ has become the main mantra of Warren Buffet, America’s second richest man, who has urged Congress to raise taxes on millionaires to 30-35 percent.

Download the PDF #AFN2014

 

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` Richest `Twenty Six Corporations` have `Avoided Paying’ their share of `Federal Income Tax’ by exploiting Loophole’s’

#AceFinanceNews says that latest report states that `Twenty Six of the most powerful corporations, paid no `Federal Income Tax‘ from 2008 – 2012’

Federal Income Tax AvoidanceTwenty-six of the most powerful American corporations – such as Boeing, General Electric, and Verizon – paid no federal income tax from 2008 to 2012, according to a new report detailing how Fortune 500 companies exploit tax breaks and loopholes.

The report, conducted by public advocacy group Citizens for Tax Justice (CTJ), focuses on the 288 companies in the Fortune 500 that registered consistent profit every year from 2008 to 2012. Those 288 profitable corporations paid an“effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate,” CTJ states.

One-third, or 93, of the analyzed companies paid an effective tax rate below 10 percent in that time span, CTJ found.

Defenders of low corporate taxes call the US federal statutory rate of 35 percent one of the highest companies face in any nation. But the report signals how the most formidable corporate entities in the US take advantage of tax breaks, loopholes, and accounting schemes to keep their effective rates down.

“Tax subsidies for the 288 companies over the five years totaled a staggering $364 billion, including $56 billion in 2008, $70 billion in 2009, $80 billion in 2010, $87 billion in 2011, and $70 billion in 2012,” CTJ states. “These amounts are the difference between what the companies would have paid if their tax bills equaled 35 percent of their profits and what they actually paid.”

Just 25 of the 288 companies kept tax breaks of $174 billion out of the $364 billion total. Wells Fargo received the largest amount of tax subsidies – $21.6 billion – in the five-year period. The banking giant was joined in the top ten on that list by the likes of AT&T, Exxon Mobil, J.P Morgan Chase, and Wal-Mart.

#AFN2014

 

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`Investor’s Eye up the next `International Currency ‘ of the Chinese Yuan’

#AceFinanceNews says that `Chinese Yuan can become dominant world reserve currency according to the latest survey

Published time: March 01, 2014 12:15
Reuters / Kacper PempelReuters / Kacper Pempel
The Chinese yuan can overtake the dollar as the leading international reserve currency, a new poll of institutional investors indicates.

The authors of the survey, conducted by the Economist Intelligence Unit and commissioned by State Street financial services, polled 200 senior executives at institutional investors with knowledge of their exposure to yuan assets. Half of the respondents were from the firms headquartered in mainland China (including Hong Kong and Taiwan) and the other half were based elsewhere.

The report accompanying the survey points out that by the end of 2013, the yuan has risen to become the second-most-used trade financing currency and ninth-most-used currency for payments globally.

Image from statestreet.comImage from statestreet.com

A majority – 53 percent of respondents said that they believe the yuan will one day surpass the dollar as the top currency in international holdings of foreign-exchange reserves. In China 62 percent expressed this opinion, compared to 43 percent of respondents outside the country.

Last May International Monetary Fund analysis showed that the dollar had slumped to a 15-year low, heightening concerns that it may lose that status as global reserve.

Chinese officials are diligently working on sustaining their national currency, promoting it beyond the frontier.

In October 2013, the government of China agreed a pilot program to create a UK-based yuan hub that allows London investors to buy up to $13.1 billion (80 billion yuan) of stocks, bonds and money market instruments directly, avoiding Hong Kong transactions.

The move gave the yuan a firmer footprint in Europe and helped to overcome the euro in December, becoming the second most widely used currency in global trade.

Only 11 percent of respondents have said that they do not expect the yuan to become a major reserve currency, a split between 16 outside China and six onshore, according to the poll. Among the former, the most often cited reasons are that the yuan will never enjoy enough liquidity across all asset classes to offer a viable option as a reserve currency, and that people will not trust the yuan as a store of value, the survey says.

The very few pessimists from China-head-quartered institutions, meanwhile, say that people would be “concerned about future policies of the Chinese government and opposition from other economic powers, such as the US, the EU and Japan.”

But the consensus is that one day it will be a yuan world, according to the survey.

“As China’s economic influence grows, the global importance of the renminbi (yuan) will become magnified. Indeed, while for decades it has been a ‘green-back world’, dominated by the US dollar as the world’s primary reserve currency, many think a ‘red back world’, in which the renminbi enjoys premier status, is increasingly a possibility,” the survey’s authors concluded.

A report on RT back in December 2013 stated:

The yuan has replaced the euro to become the second most widely used currency in global trade in 2013, according to the SWIFT network responsible for international financial transactions.

The share of the yuan in global trade finance has jumped from 1.89 percent in January 2012 to 8.66 percent in the form of letters of credit and collections in October 2013, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) data shows.

The share of trade settlements in the euro fell from 7.87 percent to 6.64 percent in the same period. The US dollar still leads with 81.08 percent of foreign trade payments using the American currency in October.

The most active yuan users are Chinese and Hong Kong companies which account for about 80 percent of the total foreign trade operations in the yuan. The remaining 20 percent is spread among Singapore (12%), Germany (2%), Australia (2%) and other countries (4%).

“The renminbi is clearly a top currency for trade finance globally and even more so in Asia,” Franck de Praetere, SWIFT’s Singapore-based head of payments and trade markets for Asia-Pacific, commented in a statement.

#AFN2014 

RT 

 

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