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Monthly Archives: July 2004
AP reports that the legal sparring over the merits of the Guantanamo detentions is heating up:
A federal judge ordered the Bush administration on Thursday to explain its detention of a Libyan at a U.S. military prison in Cuba by next week, the first such demand since the Supreme Court ruled in June that foreign detainees can use American courts to challenge their confinement.
U.S. District Judge Reggie B. Walton set a deadline of next Tuesday for the government to lay out why he should not order the release of Salim Gherebi, who is among nearly 600 men from about 40 countries who have been held with little or no contact with the outside for two years or more.
A case filed on Gherebi's behalf was already pending at the Supreme Court when the justices decided 6-3 to allow U.S. judges to hear detainee lawsuits.
The high court sent the case back to California, where it was filed, and the San Francisco-based 9th U.S. Circuit Court of Appeals transferred it to Walton's court earlier this month.
In a brief order, Walton said that if government lawyers cannot meet the Tuesday night deadline or are concerned about “revealing classified information that might jeopardize national security,” they can request more time. The judge said he must be told by Friday if the government will seek to have the case dismissed.
Walton said military officers should not try to persuade Gherebi, who was captured in Afghanistan, to waive his legal rights in the meantime.
… Walton was named to the bench by President Bush.
A case to watch!
The most original insight I've encountered on Kerry's speech was something I heard in the car this morning, one of the commentators on the Diane Rehm show, who said that Kerry's speech was set up to portray him as a sort of national daddy, the steady calm presence presiding over a bunch of smaller, noisier figures. This plays to his strengths, and even harnesses his physical size, as he towered over John Edwards.
It's an interesting thought. Alas, I have no idea who was speaking, whether it was James Fallows, Stephen Hayes, or Frank Sesno. I doubt it was Hayes, though.
Matthew Yglesias raps Kerry's speech because it doesn't describe an Iraq strategy. This has to be the most unfair critique I ever heard of.
1. Bush has not mapped an exit strategy.
2. Events are very fluid. Any statement now is likely to be overtaken by events, resulting in charges of shifting position if the postion needs to shift.
3. Kerry's strategy is known to be the 'pottery barn' view of once you are in you are sort of stuck, but he'd like to internationalize the foreign presence. At this point there is little he could reasonably add. If you need more, read Juan Cole.
Your posts make it clear that I should say more about how a multinational can have “extra” value. But, tomorrow. Today, as promised, formulary apportionment.
“Formulary apportionment” is the most talked about alternative to the arm's-length method discussed yesterday. Most US states use formulary apportionment to attribute a multistate business' income to the taxing state. As the name suggests, a formula is used to figure out how much income a business earns in a taxing jurisdiction. The classic formula allocates on the basis of three factors: the business' property, payroll, and sales. Each year, the business figures out what percentage of its property, payroll, and sales are located in the taxing state. These percentages are averaged. This average percentage is applied to the business' income to figure out the portion of the income to be taxed.
As noted yesterday, the US does not tax foreign income of foreign corporations, even when the foreign corporation is a wholly-owned subsidiary of a US corporation. Under this regime, a US parent corporation with a subsidiary in a low-tax (tax haven) jurisdiction has an incentive to park income in the tax haven by (i) paying the subsidiary too much for goods and services and (ii) charging the subsidiary too little for goods and services. The US polices this with two mechanisms: First, some very mobile income, like royalties, of a controlled foreign corporation is taxed to US shareholders as earned by the foreign corporation. Second, there are rules that attempt to insure that parent/subsidiary transactions are priced at “arm's length.” The arm's-length rules don't work, which calls the entire regime into question.