Slashdot Mirror
AT&T Wants $100 Million From California Taxpayers For Aging DSL (dslreports.com)
An anonymous reader quotes an article on DSLReports: AT&T is asking California taxpayers to give them $100 million so that it can provide several parts of the state with unreliable, slow and expensive DSL service. Under Assembly Bill 2130 (written by AT&T lobbyists), AT&T would receive $100 million from state taxpayers. In return, AT&T would only need to provide 10 Mbps download and 1 Mbps upload and would have little to no oversight over whether the $100 million is even being used for the DSL service.
In the old POTS system, there was a standard where calls in cities and business telephone services overcharged heavily in order to subsidize the much more expensive rural phone lines, so that everybody in the country had a MUCH better chance of being able to afford a phone line if they wanted to.
In theory that is probably the argument behind this--but in practice it is probably just that AT&T paid them a few million in donations and want a hundred million steered toward AT&T.
I checked AT&T's corporate site to see how dire their cash situation is. If this company is asking the taxpayers to foot the bill for upgrading their network then they must be in serious trouble.
According to AT&T's press release dated October 22, 2015, AT&T had $39.1 billion in consolidated revenue, up 19% from the previous period (primarily due to the DirecTV purchase).
They also had $10.8 billion in cash from operations and $5 billion in free cash flow.
Apparently making a few billion dollars in a single quarter equates to not being able to spend $100 million to upgrade their own equipment. Who would have thought?
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
The devil is in the details. Saying the capital gains tax in the United States is 0% to 15% is disingenuous. The details are more nuanced. Some useful definitions are at https://www.irs.gov/uac/Ten-Fa....
Short-term capital gains (investments held less than 1 year) are taxed at ordinary income tax rates, which are typically higher than the special treatment given to long-term capital gains but could be lower if the individual earning the gains is in a lower tax bracket because of their overall income being low.
For the folks with high incomes, long-term capital gains are 20%. For folks with somewhat smaller incomes, the long-term capital gains rate might be 15%, and for those with incomes that cause them to have a tax rate already below 15%, the capital gains rate could be as low as 0%. The fat cats with big incomes are not paying anything like the 0% tax on THEIR capital gains, but COULD be paying less than ordinary income tax rates if most of their income is from capital gains rather than ordinary income.
In the end, the Alternative Minimum Tax can and does swoop in and raise the overall tax rate paid to 26% to 28%, again depending on overall income and how well someone has done reducing their overall tax rate with deductions and other treatments. Anyone triggering AMT also has a number of deductions taken away from them, making the 26% to 28% tax due on a greater portion of their gross income as well. More on the AMT https://www.irs.gov/taxtopics/.... Oh, and, in addition to AMT, the Affordable Care Act also added an additional 3.8% net investment income tax onto both short-term and long-term capital gains for individuals making over $200,000/year, so they are likely to be paying a total of 23.8% on their long-term capital gains, not someplace between 0% and 15%.
The reason given for the lower tax rate on long-term capital gains is typically to encourage people and corporations to invest their money (put it to work) instead of just sitting on it, and to keep it invested (for at least a year) instead of being speculative and trading it in and out, disruptively.