Janet Yellen’s (Johnny) Cash problem

• March 23, 2023

Johnny Cash has a lesson for Secretary Janet Yellen’s Treasury Department. In his classic rendition of Wayne Kemp’s “One Piece at a Time,” Cash describes how a worker on a Detroit assembly line put together a rather novel automobile by taking car parts from the factory over many years. If Secretary Yellen isn’t careful, a similar thing could happen to the U.S. tax base.

The administration’s budget, released just last week, proposes nearly $5 trillion in tax increases, including more than half a trillion specifically for multinational companies.

One of these tax hikes is a new global minimum tax, agreed to by OECD countries in 2021. Even though economists have warned of the anti-competitive consequences of this global minimum tax agreement, and Congress rejected such an approach last year,  Yellen doubled down on her support of the tax in her testimony to the House Ways and Means Committee, saying that, in part, it will help fund the president’s budget.

Revenue ambitions aside,   Yellen seems determined to downplay what will happen to U.S. tax revenues when foreign countries begin to adopt the global minimum tax. She told the tax-writing committee that the U.S. is not ceding taxing rights. I strongly disagree. Through this tax, the administration is giving away the U.S. tax base in two ways.

First, the new global minimum tax rules take priority over the U.S.’s current rules for taxing the foreign profits of U.S. companies. One such rule, the tax on global intangible low-taxed income (GILTI), was put in place during the 2017 tax reform to ensure U.S. foreign profits were sufficiently taxed even if firms paid low taxes abroad. The international tax agreement would supersede rules like this, and a slice of the current U.S. tax base would fall into the hands of foreign governments.

Second, the secretary has given foreign governments the ability to tax parts of the U.S. tax base that Congress has explicitly chosen not to tax. It’s no secret the corporate income tax system allows numerous credits and deductions that reduce tax revenue (often in an effort to spur investment and create jobs). Pundits call these “loopholes,” but we should really just call them “the law.” Regardless of one’s opinion of these provisions, they were put in place by elected members of Congress and signed into law by various presidents.

Now, large companies that take advantage of Congress’s incentives could get punished with higher taxes abroad. For example, say a U.S. company with a subsidiary in France claims a U.S. credit for research and development that puts them below the global minimum tax threshold. The French government would collect the difference. In other words, the global minimum tax would dull the U.S. government’s tax incentives — to the benefit of foreign countries. (The administration proposes ways to address this problem, but it’s a problem of their own design.)

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At a virtual event in March, Thomas Barthold, the chief of staff for Congress’ nonpartisan Joint Committee on Taxation, confirmed these views. As the global minimum tax collects more money, U.S. provisions (like GILTI and the Inflation Reduction Act’s book income minimum tax) collect less — meaning less revenue for the U.S. The global minimum tax isn’t just diminishing taxes put in place by Trump, it’s undercutting those put into law by Biden too.

Dr. Barthold also pointed to other potential effects this global tax will have on the U.S. tax base. The carve-outs for investment and payroll costs in the global minimum tax will play a role in the decisions that multinationals make regarding where to invest or hire employees, potentially hurting investment in the U.S. and decreasing employment.

Unless the administration and Congress get on the same page about U.S. competitiveness and who holds authority over the U.S. tax base (hint: it’s Congress), then any new round of tax competition could favor foreign jurisdictions. American policymakers should focus on ensuring the U.S. remains an attractive destination for investment and employment by large companies.

If other countries increase taxes on the foreign income of U.S. companies and claw back U.S. credits for research and development, then soon those countries will have reassembled the U.S. tax base into a tax base of their own.

They’ll get it one piece at a time, and it won’t cost them a dime.

Daniel Bunn is president and CEO of the Tax Foundation, a think tank in Washington, D.C.

​ Orange County Register 

Lakers top Suns with a free-throw bonanza

• March 23, 2023

LOS ANGELES — On Wednesday night, the Lakers heard no sweeter sound than a whistle.

The sharp, staccato bursts from the officials were a soundtrack to another needed win.

In the next few weeks, the Lakers (36-37) might just be built best to play ugly: Against the Phoenix Suns (38-34), they pushed it to an entirely new level with a season-high 46 free-throw attempts in a 122-111 victory, their second straight.

Anthony Davis paced the evening with a team-best 27 points, going 10 for 18 from the field including a few tough floaters against a Suns team with an undermanned frontcourt. But the biggest mark was his 7-for-10 contribution to the Lakers’ 36-for-46 performance from the foul line, which punished the Suns early, to the point that they were bubbling over on the sideline in frustration.

Overall, the Lakers attempted 26 more free throws than the visitors and made 21 more of them. There’s a well-known rivalry between Suns point guard Chris Paul and chief official Scott Foster that was sure to be stoked anew after the game – Paul has complained before that Foster shows bias against his teams – but the Lakers weren’t complaining.

In fact, the Lakers moved back into play-in position after the Utah Jazz lost to Portland, another standings shuffle in a tight race that has half the teams in the Western Conference biting their fingernails – including, perhaps, Phoenix, which will have to endure injuries for the final few weeks of the season. With the win, the Lakers broke a nine-game losing streak against the Suns that dated to their 2021 first-round playoff series.

Fresh off of 46 points in his previous game, All-Star Devin Booker scorched the Lakers in the second half with 25 of his 33 points, finding a rhythm in his jumper after primary defender Jarred Vanderbilt struck foul trouble. The Suns needed Booker to be hot, with Paul facing foul issues of his own, and the team down Kevin Durant and Deandre Ayton to injury (neither traveled to Los Angeles).

The Lakers – who improved to 7-5 during LeBron James’ latest injury absence – were able to counter with a high-scoring night from their own backcourt, including Austin Reaves who cracked the starting lineup after a career night against Orlando. For a guard with a penchant to get to the line, it was the perfect night to stand out: Reaves enjoyed his third straight game with double-digit free-throw attempts, making 12 of 13.  He also made his mark making plays, drawing up a career-best 11 assists.

D’Angelo Russell had one of his better nights as a shooter, going 9 for 13 from the floor, including three 3-pointers. The guard had 18 of his points in the second half, bringing a shot of energy into an often plodding game.

The whistles were a factor early: By halftime, the Lakers had 27 attempts from the line, and it helped them gain ground after a largely back-and-forth start.

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The third quarter was starting to look like the one when everything clicked for the Lakers, especially Davis. The big man finally got a head of steam going against Phoenix’s short-handed frontcourt after getting looks at the free-throw line. In the span of a few minutes, he spun baseline against an overmatched Joc Landale for a dunk, then grabbed his own miss for a slam on the head of T.J. Warren. Back-to-back jumpers toward the end of the third were an indicator of his rhythm: Davis wound up scoring 14 points in the quarter.

But the Lakers have had a nasty habit of finishing quarters poorly, a trend that continued in the third on a six-point swing. After Cam Payne knocked down a 3-pointer, Wenyen Gabriel put the ball down on the court to waste clock – without realizing Landry Shamet was positioned for a snatch. The Suns guard finished with an and-one layup, and the Lakers were just a slightly off-target Booker 3-point attempt away from going into the fourth quarter in a tie.

The Lakers have another key game on Friday against the Oklahoma City Thunder, a team they can earn a tiebreaker against, and one they might need down the stretch.

More to come on this story.

​ Orange County Register 

Authorities seek help identifying armed arsonist in Santa Ana

• March 23, 2023

Authorities sought the public’s help Wednesday to find an arsonist who sparked a business fire in Santa Ana.

The crime occurred at about 3:30 a.m. Monday in the 1000 block of East 6th Street, the Orange County Fire Authority reported.

The suspect, who was armed, entered the business and used “accelerants to start and spread a fire,” an OCFA statement said.

“OCFA investigators, with the assistance of Santa Ana police detectives, are seeking to identify the armed male arsonist,” the statement said.

OCFA Investigators Seek Help Identifying Armed Arsonist | At approximately 3:30 a.m. on Monday, March 20, an armed suspect entered a business in the 1000 block of East 6th Street in the City of Santa Ana, using accelerants to start and spread a fire. pic.twitter.com/iltwKyyUSX

— OCFA PIO (@OCFireAuthority) March 22, 2023

Investigators released a security video and urged anyone with information on the crime to call 949-560-0665.

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​ Orange County Register 

Dodgers manage just two hits in 5-1 loss to Mariners

• March 23, 2023

THE GAME: The Dodgers managed just two singles in a 5-1 loss to the Seattle Mariners on Wednesday night at Peoria Sports Complex in Peoria, Ariz.

PITCHING REPORT: Right-hander Ryan Pepiot pitched into the fifth inning, allowing three runs on five hits and two walks while striking out six. Two of the three runs scored after he left the game.

HITTING REPORT: The Dodgers didn’t have a hit until Bradley Zimmer beat out an infield single in the sixth inning. They scored their only run in the seventh inning on two walks, a double steal and a run-scoring forceout. Kody Hoese had a bloop single in the ninth inning for the Dodgers’ other hit.

DEFENSE REPORT: The Dodgers threw out two runners on the bases. In the first inning, right fielder James Outman charged a ground ball single by Ty France and threw Kolten Wong out trying to go first to third on the hit. In the third, Julio Rodriguez doubled over Outman’s head and tried to stretch it into a triple. He was out at third base on a relay from Outman to Miguel Vargas to Max Muncy.

UP NEXT: Dodgers (RHP Michael Grove) vs. Diamondbacks (TBA) at Salt River Fields, Thursday, 1:10 p.m., SportsNet LA, 570 AM

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​ Orange County Register 

Lakers move Austin Reaves into starting lineup

• March 23, 2023

LOS ANGELES — Darvin Ham gave a glint of a smile when asked about his starting lineup’s recent slow starts.

“We got a little something up our sleeve tonight,” the Lakers coach said.

Ham’s penchant for lineup secrecy offered a little suspense leading up to Wednesday night’s home tip-off against Phoenix, but not for long. Fresh off a career-best 35 points against the Orlando Magic, Austin Reaves was moved into the starting five.

While the second-year guard has had his cracks with the starting group – this was his 13th start of the season – Reaves hadn’t started a game since Jan. 4, before he sat out for a month with an injury. He’s largely been a bench sniper and, since Russell Westbrook was traded, a second ball handler off the bench next to Dennis Schröder.

But with LeBron James out of the lineup in recent weeks, Reaves has stepped up. The 24-year-old averaged 17.7 points and 5.3 assists in the 11 games without James while shooting 56.4% from the floor and nearly 40% from 3-point range. The Orlando game just happened to be one when he put it all together for a career night.

“I just think he’s maturing before our eyes as a high-level NBA player,” Ham said of Reaves. “We always saw the talent. We always saw the glimpses. Big moments where he played really, really huge for us. Now it’s just more on a consistent basis. He’s comfortable.”

Critically, Reaves has also been effective in lineups with Anthony Davis. Their season-long net rating is plus-9.5, according to stat site Cleaning the Glass. Reaves started Wednesday’s game 4 for 5 in the first quarter with 10 points, and ran pick-and-roll actions with Davis as his screener.

Reaves is also one of the best whistle-inducers in the league: According to CTG, he draws fouls on 20.1% of his shot attempts, one of the best marks for a guard. In crunchtime situations, Reaves has been one of the team’s consistently dependable players, especially when it comes to generating offense.

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“He knows what spots he wants to get to,” Ham said. “He understands when things are kinda off-balance for us offensively. He knows how to get to the line. He knows how to make big plays, passes. Scraps in there, draws charges. He just does a little bit of everything.”

The lineup change displaced Malik Beasley, who moved to the bench. Since being acquired from the Utah Jazz, Beasley has been cold (aside from a rip-roaring shooting night in New Orleans). In the last 11 games without James, he’s shot 32.5% from behind the arc.

Ham said he wanted Beasley to maintain his confidence even in his new role.

“Shoot, shoot, shoot, shoot, shoot. Stay aggressive. Do what you do,” Ham said of his advice to Beasley. “Keep competing on the defensive end. But don’t get discouraged, man. … Just encouarging him to be aggressive – constantly be aggressive. Let him know that I’m all for him. I have his back.”

​ Orange County Register 

A mid-century modern(esque) home in Sierra Madre seeks $4 million

• March 23, 2023

A Sierra Madre home designed by noted architect John Gougeon in a minimal mid-century modern style has come on the market for $3.9 million.

The 4,030-square-foot glass-and-wood residence went up on a half-acre-plus lot with garden and mountain views in 2007. It has four bedrooms, four bathrooms and a generous-sized kitchen that overlooks the lap pool and jacuzzi.

According to the listing, the home’s pared-down design inspires “health, nature, flow and function” in its occupants.

The airy interior features tall ceilings and large clerestories.

Partial walls separate the dining room from the kitchen and the kitchen from the living room with a fireplace embedded in the glass wall.

The primary suite has a walk-in closet and bathroom with a steam shower and a dry sauna.

Every room flows to the xeriscaped yard where two dry creek beds run along opposite sides of the gazebo.

There’s also a paver patio.

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“Entertaining and living in a home that connects seamlessly with the outdoors is a priority for the new luxury home buyer,” said the listing agent Melea Johnston-Avrach of Compass. “They strive for sustainability, beauty and the healing power of nature.”

Regarding sustainability, the long list includes solar power and an electric vehicle charging station.

The sellers purchased the property for $480,000 in 1999. According to Johnston-Avrach, the lot initially held a smaller ranch-style fixer. Construction on the new house began in 2003 and took four years.

Its designer, Gougeon, is known for the Pasadena Presbyterian Church sanctuary and its multi-tiered bell tower. The back of the building, completed in 1976, features a tall stained-glass window and half arch.

​ Orange County Register 

Gonzaga has familiar faces, but UCLA’s new ones could make the difference

• March 23, 2023

LAS VEGAS — Gonzaga basketball coach Mark Few had a good way of summing up the Bulldogs’ third matchup with UCLA in as many seasons.

“A lot of the same characters,” said Few, alluding to the 2021 Final Four game and last year’s early-season matchup in Las Vegas. “So, it’s the third act within kind of a small timeframe.”

The third act pits the second-seeded Bruins (31-5) against the third-seeded Bulldogs (30-5) in an NCAA tournament West Region semifinal on Thursday at 6:45 p.m. at T-Mobile Arena.

It will mark UCLA’s third straight Sweet 16 appearance and sixth in the past 10 seasons. It will also be the second consecutive time they’ve met in this arena – Gonzaga defeated UCLA, 83-63, on Nov. 23, 2021.

“We’ve got a lot of new guys. It’s a completely new team,” UCLA’s Jaime Jaquez said. “So, I think (last year’s) game has little effect on what we’re doing here in this game coming up.”

UCLA’s Tyger Campbell, David Singleton, Jaylen Clark and Jaquez played in the previous two matchups. Drew Timme and Anton Watson are the wily veterans for Gonzaga. But it might be the new faces that make the difference Thursday night.

Freshman Amari Bailey is averaging 17 points over the past five games, second-best on the team.

“Just trying to stay sane and trust in my work, trust in what we’ve built together collectively as a group,” Bailey said of his inspired play as of late. “Not really getting beside myself, knowing that we’re going to have to come in and compete for 40 minutes.”

Adem Bona is showing toughness, playing through a shoulder injury. Abramo Canka is ready to play at a moment’s notice, and Will McClendon – a Las Vegas native – is a champion in his role, according to Cronin.

“I know Will was a big shot-maker at (Bishop) Gorman,” Cronin said. “I know he still has that in him. We work with him every day on it, just trying to keep his confidence up. He’s just a winner. And I believe in winners. Right now in his career he’s helping us win with intangibles and toughness and defense. But I know the day is coming, he’s going to help us win with shots, too.”

Other than Bailey, fellow freshman Dylan Andrews has been blossoming since taking on more responsibility. Andrews is averaging more minutes, points and shots over the last five games. He also helped the Bruins pull away in their narrow win over Northwestern last weekend with a late second-half 3-pointer and two free throws in the final minute.

“It might sound crazy, but I expect that from (him),” Campbell said of Andrews. “Not just me, but the team expects that from him. Ever since he’s got here he’s been a dog and he’s been willing to learn.”

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Since Clark has been out hurt, Bailey’s efforts on defense have been apparent, but Andrews has been just as impactful off the bench.

“He’s young. He’s playing on a team with some great talent,” Cronin said. “And he’s embraced his role, which is the reason why (we) have a bunch of wins. It’s not the four letters. It’s not the coaching. The guys buying into what they need to be a 31-win team. And he’s a great example of it.”

Andrews is averaging 14 minutes, 4.5 points and is 8 for 21 from the field, making three 3-pointers in his last five games. Those numbers are well above his season averages for minutes and scoring.

“You could look at his numbers and say, ‘Well, he hasn’t had a great freshman year,’” Cronin added. “And I couldn’t disagree with you more. In what we’ve needed him to be this year, he’s done a great job.”

​ Orange County Register 

Tax preparer from Placentia pleads guilty to tax fraud

• March 23, 2023

LOS ANGELES — An Orange County tax preparer pleaded guilty Wednesday to submitting nearly 400 phony income tax returns that inflated his clients’ refunds without their knowledge, and then pocketing the difference between the true refunds and the inflated ones.

Raudel Sandoval, 48, of Placentia, pleaded guilty in Los Angeles to two federal counts of aiding and assisting in the preparation of false and fraudulent tax returns, according to the U.S. Attorney’s Office.

Sandoval, a licensed tax preparer, owns RSE Sandoval España Inc., a Downey-based tax preparation company. Sandoval admitted preparing hundreds of false federal and state returns for clients for the tax years 2015 through 2018. On these returns, he claimed false or inflated amounts of the child tax credit, business losses, short-term capital losses and other items to which the taxpayer clients were not entitled.

Sandoval falsified the tax returns with deductions and credits that his clients did not incur or had not informed him about. He also inflated the amounts of deductions and credits that his clients were entitled to claim, according to papers filed in Los Angeles federal court.

When he finished preparing a tax return, Sandoval gave his clients copies of their returns that were true and correct, but falsely told them he would file their true-and-correct copies with the Internal Revenue Service on their behalf, he admitted.

Sandoval then inflated his clients’ returns with false and fraudulent deductions and credits and filed the false returns with the IRS. The false returns showed a larger refund than on the true-and-correct copies Sandoval had given to his clients.

Sandoval then directed the inflated refunds to himself, causing more than $750,000 in losses to the IRS.

U.S. District Judge Sherilyn Garnett scheduled a Sept. 6 sentencing hearing, at which time Sandoval will face up to three years in federal prison for each count, prosecutors noted.

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​ Orange County Register