September 3, 2014



WSJ: Tax Collectors in the Cafeteria

Having harassed the Tea Party for years, the Internal Revenue Service is now targeting Silicon Valley. The tax collectors are offended by the practice, common in the technology industry, of providing meals to employees without counting the food as taxable compensation.

Courts have traditionally found that when meals are offered for the “convenience of the employer” they do not need to be considered a taxable benefit. And certainly it benefits firms like Google and Facebook to have employees grab a quick bite before returning to their desks rather than spending time to dine off-campus.

But last week the Treasury published the annual list of IRS priorities and ominously included a plan for new guidance “regarding employer-provided meals.” As a large bureaucracy, the IRS has no fewer than 317 such projects on its priority list. In this case they seem to mean it. The Journal reports that IRS auditors are now flagging the issue and demanding back taxes from companies amounting to 30% of the meals’ fair-market value, according to lawyers for the firms.

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Barron’s: Work’s for Squares

The job market has made a comeback over the past year, but the American labor force hasn’t, and the prospects don’t look good. Work seems to be on the wane in the U.S., with worrisome consequences for economic growth.

While the unemployment rate slipped to 6.1% in June — its lowest level in six years — the percentage of adult American workers who are actually in the workforce is at its lowest level in 36 years, with no rebound in sight.

No one in government is facing up to the severity of the problem. In her recent talk at the Jackson Hole Economic Policy Symposium, Federal Reserve Chair Janet Yellen posed the question of whether weak labor-force participation is due to cyclical factors that will pass with a stronger expansion or to structural factors likely to endure. She offered no sure answer.

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Chicago Tribune: Not guilty pleas in red light camera bribery scheme

A former Chicago transportation manager and his longtime friend both pleaded not guilty today to bribery charges in an alleged $2 million scheme to rig the contract for the city’s red light camera program.

John Bills is accused of conspiring with top officials at Redflex Traffic Systems Inc. to help them win the contract and grow the camera system into the largest in North America. His friend, Martin O’Malley, is accused of  funneling bribe money from Redflex to Bills.

The Tribune has reported that O’Malley is cooperatingwith the ongoing federal investigation and will eventually enter a guilty plea. That cooperation did not come up in court today.

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USA Today: Attorney: ‘Detroit won’t recover’ without grand bargain

The grand bargain to help resolve Detroit’s bankruptcy offers a fair and lucrative resolution of the city-owned Detroit Institute of Arts, the city’s top bankruptcy lawyer argued Tuesday.

Jones Day bankruptcy lawyer Bruce Bennett — offering opening statements in Detroit’s historic bankruptcy trial — said the lowest “range of reasonableness” for prospective sale of the DIA is “zero or a number close to zero” because it’s not clear the art can be sold.

“The purpose is no less than to save the city of Detroit,” Bennett said. “Detroit won’t recover or survive if this isn’t done.”

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The Guardian: Car sharing service Uber banned in Germany

The online car-sharing service Uber has vowed to continue operating across Germany after its mobile app was banned by a Frankfurt regional court.

The ruling that the app violates the country’s Passenger Transportation Act applies nationwide, according to legal experts. The temporary ban remains in place until a full hearing takes place, and Uber could face a €250,000 (£198,000) fine per ride.

But Uber vowed to keep the app online regardless. “You cannot put the brakes on progress,” the company said. “Uber will continue its operations and will offer Uberpop ride-sharing services via its app throughout Germany.” It promised to appeal against the decision and would, if necessary, “exhaust all the legal possibilities”.

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The Wall Street Journal: A College Degree Pays Off Far Faster Than It Used To

College graduates may be taking on historically high debt burdens to finance their educations. But it will take them far less time to get a return on that “investment” than it took their parents’ generation.

That’s the conclusion of new research from the Federal Reserve Bank of New York. Researchers there estimate someone earning a bachelor’s degree in 2013 will need 10 years to recoup the entire cost of that degree. Those who earned a bachelor’s in 1983 needed 23 years to do so.

That’s the good news. The bad news is that the shift has a lot to do with the plight of those who never went to school, rather than simply the higher wages of college graduates.

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The Examiner: Right-to-work push goes local

Conservatives are starting to push the idea that city and county governments can pass union-restricting right-to-work laws, even though it may not be legal and has been tried only a handful of times in the last 70 years.

Right-to-work laws prohibit union contracts that require all employees to join the union, or at least pay union fees. Twenty-four states currently have versions of the law, which generally weaken unions by making it harder to sign up and retain members.

The common understanding is that federal law allows only states to enact the measures. But at a *Heritage Foundation forum Thursday, conservative labor policy experts said nothing explicitly prevents cities and counties from passing right-to-work ordinances too.

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ICM PR: Public Records – Now Online?

Been issued a speeding ticket? Failed to stop at a stop sign? What about your family members? And friends? If you are like most of us, the answer to at least one of those questions is “yes”—the vast majority of us have slipped up at least once or twice.

An innovative new websiteInstant Checkmate is now revealing the full “scoop” on millions of Americans.

Instant Checkmate aggregates hundreds of millions of publicly available criminal, traffic, and arrest records and posts them online so they can easily be searched by anyone. Members of the site can literally begin searching within seconds, and are able to check as many records as they like (think: friends, family, doctors, teachers, neighbors, etc. etc.).

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Red Eye Chicago: Divvy faces growing pains in Chicago

One recent Tuesday morning, Jennifer Burgess left her Lakeview home and walked to the nearest Divvy station, at Racine and Diversey avenues.

Since it was 10 a.m. and raining, Burgess figured not many people would be taking advantage of Chicago’s bike-sharing program. She was irked to find the station nearest her home empty, despite the fact that it can house 15 bicycles.

Then it happened again. And again.

“Just about every time I go to get a bike there, there’s hardly any bikes there,” Burgess, 41, said about the Racine and Diversey dock. “It definitely fouls me up when I go to get a bike and there’s not one there.”

Burgess, a Divvy member since spring, is not alone in her frustration.
Call it the Divvy blues. With one year—and two summers—under its belt, Divvy has seen an explosion in membership growth and usage—and to a lesser extent, criticism. Some cyclists recently have taken to social media to complain about racks with no bikes to rent and racks with no spaces to drop off bikes.

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The Southern: Public sector labor unions in the spotlight

Martha Bowman, a retired special education teacher who taught for years in Williamson County schools, said public sector unions are as important now as they ever were.

Issues important to school teachers, including tenure and pay, are under attack in states across the country, and Bowman said unions play a major role in protecting the rights of workers.

It’s been 30 years since a comprehensive bargaining law arrived in Illinois, and three decades later people continue to debate the pros and cons of union representation in the public sector. While public sector unions existed before, the law established a “duty to bargain and granted a broad right to strike,” according to an article published in the National Bureau of Economic Research.

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Chicago Sun Times: Ald. Pope rehired city worker who quit after harassment claim

Nine years ago, Thomas J. Sadzak quit his job at the Chicago Department of Streets and Sanitation just as he was about to be fired over sexual harassment allegations leveled by a female laborer who said Sadzak threatened to rape her if she didn’t stop complaining about him.

The female laborer, Harriette B. McPherson, filed a federal lawsuit against the city, which paid her $99,000 on Aug. 22, 2008, to settle the case.

Three months later, Sadzak was back at work for the city, even though his name had been placed on the city’s “do-not-hire” list after his “resignation — in lieu of discharge.”

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WTTW: Big Pharma Biz May Be Moving to Boston

Speculation about the future of Baxter International Inc., the Deerfield-based biopharmaceutical company, continues into September.

In March, the company announced its plan to split into two divisions: a side for research and development of biopharmaceuticals, and a side for distribution of medical products. Two months later, the Boston Business Journal, reported on “Project Tiger,” detailing a major life sciences company’s plans to relocate to Cambridge, Mass. Baxter denied reports that they were the company in question.

“As we stated in March, when we announced plans to create two separate, independent global health care companies, the corporate headquarters of both companies will be located in northern Illinois,” Baxter Global Communications Director Deborah Spak said in an emailed statement.

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Crain’s: Quinn moving fast to find new lottery manager

The Quinn administration is moving fast to replace the firm that’s being ousted as manager of the Illinois Lottery, saying it intends to have a successor on board by the end of the fiscal year.

In an exchange of emails, Lottery Superintendent Michael Jones says his team “will begin immediately” to draft a formal Request for Proposals for firms interested in succeeding Northstar Lottery Group LLC, which, as I reported two weeks ago, is being shown the door by Gov. Pat Quinn after mounting criticism of its performance.

Mr. Jones declined to discuss how talks with Northstar are going about a possible voluntary separation, saying only that the state’s deal with Northstar allows the agreement to be voided “for cause, for convenience, or for consistent income shortfalls.”

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WSJ: Health Care and the $20,000 Bruise

As a doctor and a lawyer, I like to think I’m pretty good at navigating the health-care system. So when my wife and I found a large swollen bruise on our 3-year-old son’s head more than a week after he had fallen off his scooter, I was confident we could get him a CT scan at a reasonable cost.

We live near one of the top pediatric emergency rooms in the country. The care was spectacular. My son was diagnosed with a small, 11-day-old bleed inside his head, which was healing, and insignificant.

I was proud to see the health-care system working, to see academic medicine working, and most of all to see my son run as fast as he could out of the ER two hours later.

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