While the rest of us are recovering from the holidays and mulling over the best ways to spend our gift cards, the GOP hopefuls are making their final pleas to the citizens in Iowa and New Hampshire.

Just in case they have run out of campaign material, the debt ceiling compromise of summer 2011 is a gift that keeps on giving. President Barack Obama is expected to formally request to raise the debt ceiling again today. While this move should be no surprise, given the terms our dysfunctional Congress agreed to last summer, it will be greeted with political theatrics nonetheless.

While the obstinate Republican freshmen would love to vote against another debt ceiling increase, the timing of Obama’s request should deny them that pleasure. Congress will be allowed 15 days to vote on a resolution of disapproval, which could in turn be vetoed by the president. However, because neither the House nor the Senate are in session until Jan. 17, a resolution will not be introduced. Read 

From Washington, D.C., and Brasilia to Moscow and Madrid, the taxman is on a mission to squeeze more revenue from people, many of whom are struggling to make ends meet amid the worst economic slowdown since the Great Depression. He has his work cut out for him. That’s because tax evasion in all its many forms is so pervasive around the world.

How big a problem is tax evasion? Take a look at the table below from Tax Justice Network, a London-based watchdog that fights against tax havens. When combined with information from other academic, governmental and media sources, the full scope of tax evasion’s impact starts to become clear. And the results are surprising in a few ways. Top 10 Countries Losing to Tax Evasion Country GDP
($ MILLIONS) Size of
Shadow
Economy (%) Tax burden
Overall (%) Tax lost as
a result of
shadow economy
($ Millions) U.S. 14,582,400 8.6% 26.9% 337,349 Brazil 2,087,890 39% 34.4% 280,111 Italy 2,051,412 27% 43.1% 238,723 Russia 1,479,819 43.8% 34.1% 221,023 Germany 3,309,669 16% 40.6% 214,996 France 2,650,002 15% 44.6% 171,264 Japan 5,497,813 11% 28.3% 171,147 China 5,878,629 12.7% 18% 134,385 U.K. 2,246,079 12.5% 38.9% 109,216 Spain 1,407,405 22.5% 33.9% 107,350 Source: Tax Justice Network

First, though politicians may disagree, the relationship between high tax rates and tax evasion isn’t so clear-cut. As David Cay Johnston of Reuters recently noted, “The United States has lower tax rates than eight of the nine other top 10 tax evasion countries [on Tax Justice Network’s list]. Rampant evasion in America raises doubts about the notion that high tax rates fuel evasion.” Indeed, countries with some of the lowest tax rates are among the most economically troubled, such as Ireland. Read 

Happy Holidays from Congress’s failed supercommittee! The political pain we find ourselves in just days before Christmas was supposed to be alleviated by the bipartisan group appointed last summer to work out a large compromise on a variety of important fiscal policies: among them, the soon-to-expire payroll tax cut, extended unemployment benefits and the periodic Medicare “doc-fix.” When the supercommitte failed miserably right before Thanksgiving, they assured us of this current impasse.

The House of Representatives refuses to even vote on the bipartisan bill the Senate passed last week aimed at tackling those left-undone issues. The effects of this latest deadlock include slimmer paychecks for American workers in January, a cut-off in assistance for long-term unemployed and a 27% pay cut to Medicare providers.

But although the short-term pain will be immense, this could be a substantive turning point for the do-nothing Congress and Obama’s presidency. Read 

Capital markets are plagued with a disease called greed. Its symptoms are many, including overleverage, rogue traders and out-and-out fraud. But the end result is the same: Greed leads to a scandal, and folks lose their hard-earned money. That scandal erodes investor confidence. When confidence declines, people feel uncertain and afraid, prompting them to park their money on the sidelines. And that hurts everyone.

Greed has a cure, but the pain that accompanies this treatment is usually enough to scare off even the most intrepid caregivers.

In this column and the next few, I’m going to address the hazards of greed, and then give you some tips on how to protect yourself from the Wall Street shenanigans that greed creates. Read 

This past Friday, The Wall Street Journal’s Kimberley Strassel wrote that “Ron Paul is, in many ways, the ideal candidate for a conservative electorate hungry for a principled GOP nominee.” She continued by saying despite this, “there is only one bar to a Ron Paul victory: Mr. Paul.”

Ron Paul is favored by many for proposing to slash $1 trillion from the budget and eliminating five federal cabinet agencies, proposing to cut the corporate tax rate (I would cut it to zero) and cutting the tax on capital gains and dividends — absolute musts in my book. He also is held in high regard by many for his plans to dump Obamacare (most Americans want this) as well as Sarbanes-Oxley — both absolute musts, too. Despite this, Strassel still writes that Ron Paul is neither timid nor inconsistent, and these characteristics “ought to” make him a star. This is false, because Paul is not merely an “ought to” candidate. He clearly is a star with any American who believes in the Constitution as written.

So where is the real rub for Strassel? It is in Paul’s “noninterventionist” approach. Read 

On Wednesday, Fitch Ratings downgraded its credit ratings on five of Europe’s biggest banks, and while that decision made headlines, it’s not the most important story to come out of Europe this week.

The real story, which the mainstream media is neglecting, is about signs of an underground run on Europe’s banks. Almost nobody’s talking about it, but there are indications money is already moving out of the EU faster than rats abandoning a sinking ship.

Not through the front door, mind you. There are no lines, no distraught customers and no teller windows being boarded up — not yet, anyway. Read