The New Old Age: Murray Span, 1922-2012

One consequence of our elders’ extended lifespans is that we half expect them to keep chugging along forever. My father, a busy yoga practitioner and blackjack player, celebrated his 90th birthday in September in reasonably good health.

So when I had the sad task of letting people know that Murray Span died on Dec. 8, after just a few days’ illness, the primary response was disbelief. “No! I just talked to him Tuesday! He was fine!”

And he was. We’d gone out for lunch on Saturday, our usual routine, and he demolished a whole stack of blueberry pancakes.

But on Wednesday, he called to say he had bad abdominal pain and had hardly slept. The nurses at his facility were on the case; his geriatrician prescribed a clear liquid diet.

Like many in his generation, my dad tended towards stoicism. When he said, the following morning, “the pain is terrible,” that meant agony. I drove over.

His doctor shared our preference for conservative treatment. For patients at advanced ages, hospitals and emergency rooms can become perilous places. My dad had come through a July heart attack in good shape, but he had also signed a do-not-resuscitate order. He saw evidence all around him that eventually the body fails and life can become a torturous series of health crises and hospitalizations from which one never truly rebounds.

So over the next two days we tried to relieve his pain at home. He had abdominal x-rays that showed some kind of obstruction. He tried laxatives and enemas and Tylenol, to no effect. He couldn’t sleep.

On Friday, we agreed to go to the emergency room for a CT scan. Maybe, I thought, there’s a simple fix, even for a 90-year-old with diabetes and heart disease. But I carried his advance directives in my bag, because you never know.

When it is someone else’s narrative, it’s easier to see where things go off the rails, where a loving family authorizes procedures whose risks outweigh their benefits.

But when it’s your father groaning on the gurney, the conveyor belt of contemporary medicine can sweep you along, one incremental decision at a time.

All I wanted was for him to stop hurting, so it seemed reasonable to permit an IV for hydration and pain relief and a thin oxygen tube tucked beneath his nose.

Then, after Dad drank the first of two big containers of contrast liquid needed for his scan, his breathing grew phlegmy and labored. His geriatrician arrived and urged the insertion of a nasogastric tube to suck out all the liquid Dad had just downed.

His blood oxygen levels dropped, so there were soon two doctors and two nurses suctioning his throat until he gagged and fastening an oxygen mask over his nose and mouth.

At one point, I looked at my poor father, still in pain despite all the apparatus, and thought, “This is what suffering looks like.” I despaired, convinced I had failed in my most basic responsibility.

“I’m just so tired,” Dad told me, more than once. “There are too many things going wrong.”

Let me abridge this long story. The scan showed evidence of a perforation of some sort, among other abnormalities. A chest X-ray indicated pneumonia in both lungs. I spoke with Dad’s doctor, with the E.R. doc, with a friend who is a prominent geriatrician.

These are always profound decisions, and I’m sure that, given the number of unknowns, other people might have made other choices. Fortunately, I didn’t have to decide; I could ask my still-lucid father.

I leaned close to his good ear, the one with the hearing aid, and told him about the pneumonia, about the second CT scan the radiologist wanted, about antibiotics. “Or, we can stop all this and go home and call hospice,” I said.

He had seen my daughter earlier that day (and asked her about the hockey strike), and my sister and her son were en route. The important hands had been clasped, or soon would be.

He knew what hospice meant; its nurses and aides helped us care for my mother as she died. “Call hospice,” he said. We tiffed a bit about whether to have hospice care in his apartment or mine. I told his doctors we wanted comfort care only.

As in a film run backwards, the tubes came out, the oxygen mask came off. Then we settled in for a night in a hospital room while I called hospices — and a handyman to move the furniture out of my dining room, so I could install his hospital bed there.

In between, I assured my father that I was there, that we were taking care of him, that he didn’t have to worry. For the first few hours after the morphine began, finally seeming to ease his pain, he could respond, “OK.” Then, he couldn’t.

The next morning, as I awaited the hospital case manager to arrange the hospice transfer, my father stopped breathing.

We held his funeral at the South Jersey synagogue where he’d had his belated bar mitzvah at age 88, and buried him next to my mother in a small Jewish cemetery in the countryside. I’d written a fair amount about him here, so I thought readers might want to know.

We weren’t ready, if anyone ever really is, but in our sorrow, my sister and I recite this mantra: 90 good years, four bad days. That’s a ratio any of us might choose.


Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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New High for Tuna at Tokyo Fish Sale



TOKYO — Tokyo’s main fish market ushered in the new year with an auction on Saturday that resulted in the highest price paid here, and probably anywhere, for a tuna.


A Tokyo-based sushi restaurant chain owner paid 155.4 million yen, or about $1.76 million, for a 488-pound bluefin, or about $3,600 per pound.


The record price was offered at the year’s first auction at the Tsukiji fish market, which provides Tokyo with much of its fresh fish. Restaurant owners from Japan and elsewhere in Asia compete annually for the prestige of buying the year’s first tuna, whose meat is prized by sushi fans. Conservationists warn that bluefin has been severely overfished.


The winning bidder was Kiyoshi Kimura, president of the company that runs the Sushi Zanmai chain. The bluefin was caught by a fisherman from Oma, a town renowned in Japan as the source of the most delicious tuna.


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China Says Reporter for The Times Was Not Expelled





BEIJING — Responding for the first time publicly to the case of a reporter for The New York Times who was forced to leave mainland China, the country’s Foreign Ministry said on Friday that he had not been expelled but that his visa application had simply been filed incorrectly.




Speaking at the Foreign Ministry’s daily news briefing, Hua Chunying, a spokeswoman, said foreign news organizations were to blame for the departure on Monday of Chris Buckley, a 45-year-old Australian who had been a correspondent for Reuters until September, when he rejoined The Times.


Ms. Hua said the ministry had not been properly informed of his changed status.


“So far, we have neither received any notice of resignation (from Reuters), nor has the press card, which was issued by the information department (of the Foreign Ministry), been returned by Chris Buckley,” Ms. Hua said, according to the Xinhua news agency. “So, we do not know who his real boss is now.”


When Mr. Buckley’s visa, which had been issued while he worked for Reuters, ran out on Dec. 31, he and his family were forced to fly to Hong Kong, despite repeated requests from The Times for a new visa to be issued.


Ms. Hua said Mr. Buckley had not been expelled.


“There has been no such thing as a rejection of a visa extension, and there is no such thing as Chris being expelled,” Ms. Hua said, according to The Associated Press.


On a related matter, The Times is also waiting for the visa of its new Beijing bureau chief, Philip P. Pan, to be issued. Mr. Pan first requested a visa last March. The English- and Chinese-language Web sites of The Times have been blocked in China since October, when it published an investigative article about the finances of the family of China’s premier, Wen Jiabao.


This article has been revised to reflect the following correction:

Correction: January 4, 2013

An earlier version of this article misstated the job title of Philip P. Pan. He is the new Beijing bureau chief of The New York Times, not the China bureau chief.



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Media Decoder Blog: Hulu's Chief Is Leaving, Raising Questions About Its Future

8:39 p.m. | Updated
Jason Kilar, the Web wizard who turned Hulu from a punch line into a popular source of online video, said on Friday that he would step down as the site’s founding chief executive in the next three months.

The announcement is certain to turn up the volume on something that’s a constant hum in the media industry: speculation about the future of Hulu — and if it has one at all. Its owners, the Walt Disney Company, Comcast and the News Corporation, also run the ABC, Fox and NBC networks, and they do not agree about what to do with the Web site. Perversely, the more popular Hulu becomes, the more of a problem it is for the owners, since it may be taking viewers and advertising dollars away from their core television businesses.

Mr. Kilar never saw it that way, however. He was Hulu’s best advocate, sometimes clashing with the network executives on Hulu’s board and arguing that they had to keep investing in the site, since television’s future will surely involve Internet distribution.

For many Americans, that future is already here: Hulu’s streams of TV shows attract 30 million unique visitors a month via computers and untold millions more via tablets and Internet-connected television sets. Three million pay for Hulu Plus, its subscription arm — not bad for a start-up once ridiculed as “ClownCo.”

Mr. Kilar declined an interview request on Friday. In an e-mail message to employees, he gave no indication why he was moving on or what he might do next. “My decision to depart has been one of the toughest I’ve ever made,” he said.

He said his departure would take effect within the first quarter of the year. No successor was named.

Mr. Kilar, a former executive at Amazon, has in the past been mentioned for a number of prominent jobs in Silicon Valley. He was a top candidate last year for the chief executive position at Yahoo, but Hulu said he declined to be considered. The job later went to Marissa Mayer, a longtime Google employee.

His departure comes just several months after the only independent owner of Hulu, Providence Equity Partners, sold its 10 percent stake, originally bought for $100 million, for $200 million. Mr. Kilar and other employees also sold their stakes in the company at that time, netting Mr. Kilar about $40 million, according to an executive with knowledge of the transaction.

On Friday, there was widespread praise for Mr. Kilar for steering Hulu through sometimes turbulent seas. “He defied enormous odds, built from scratch one of the top five digital video brands, created two viable and growing businesses (free and pay) and got his well-deserved payday — not bad for five years’ work,” J. B. Perrette, who used to help oversee NBC’s investment in Hulu and now runs Discovery Communication’s digital operations, said in an e-mail.

That said, Mr. Kilar’s announcement did not entirely surprise many in the industry. During his tenure, he sometimes clashed with the owners on Hulu, exemplifying the divide between new, disruptive modes of distribution like the Internet and the more traditional operations at major media companies. As the parent companies pulled back on the amount of ABC, Fox and NBC programming provided to Hulu, the Web site invested in original content to fill the gaps and attract attention. That investment effort continues, led by one of Mr. Kilar’s deputies, Andy Forssell, but many in the industry say they believe that Hulu’s future remains fuzzy.

An internal memo obtained by Variety in August showed that the owners may want to change their agreements with Hulu so that it is no longer the exclusive distributor of repeats of television shows like “The Office” and “Family Guy.” That way, the owners could also sell repeat rights to online video services like YouTube, Netflix or Amazon.

Some of the owners also wanted more advertisements on the site, which had revenue of about $700 million last year but is not yet believed to be profitable. Much of the revenue came from Hulu Plus, and therein lies another fault line: the owners may concentrate on the paid part to the detriment of the free streaming part.

The owners had no comment about any of that on Friday, though. Robert Iger, Disney’s chief executive, called Mr. Kilar an integral part of the Hulu story and said in a statement, “We are proud of his achievements, we appreciate what he’s built, and we share his confidence in his team’s ability to drive Hulu forward from here.”

Rich Tom, the site’s chief technology officer, will also depart in the first quarter.

This month, Richard Greenfield, an analyst at BTIG Research, predicted that News Corporation would seek to acquire its competitors’ stakes in Hulu in 2013. Comcast, he said, has no managerial control of Hulu and Disney “appears increasingly less interested” in the site.

In August, News Corporation said that Jonathan Miller, the company’s chief digital officer since 2009 and a vocal champion of Hulu, would leave the company. Mr. Miller represented News Corporation on the Hulu board and had helped the media company broker a stake in Roku. News Corporation has had some high-stakes stumbles in technology with both Myspace and its tablet-only publication, The Daily, which has led some analysts to expect the company to tread cautiously with future digital investments like Hulu. And Chase Carey, the No. 2 to the chief executive of News Corporation, Rupert Murdoch, is said to be less enamored with the service.

Mr. Murdoch, however, praised Mr. Kilar for “building Hulu into one of the leading online video services available today.” He added, “It’s incredibly well positioned for the road ahead.”

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F.D.A. Offers Rules to Stop Food Contamination





The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, which has sickened tens of thousands of Americans annually in recent years.







Nicole Bengiveno/The New York Times

A new rule imposed by the F.D.A. would establish different standards for ensuring the purity of water that touches fruits and vegetables.







The proposed rules represent a sea change in the way the agency polices food, a process that currently involves taking action after contamination has been identified. It is a long-awaited step toward codifying the food safety law that Congress passed two years ago.


Changes include requirements for better record keeping, contingency plans for handling outbreaks and measures that would prevent the spread of contaminants in the first place. While food producers would have latitude in determining how to execute the rules, farmers would have to ensure that water used in irrigation met certain standards and food processors would need to find ways to keep fresh food that may contain bacteria from coming into contact with food that has been cooked.


New safety measures might include requiring that farm workers wash their hands, installing portable toilets in fields and ensuring that foods are cooked at temperatures high enough to kill bacteria.


Whether consumers will ultimately bear some of the expense of the new rules was unclear, but the agency estimated that the proposals would cost food producers tens of thousands of dollars a year.


A big question to be resolved is whether Congress will approve the money necessary to support the oversight. President Obama requested $220 million in his 2013 budget, but Dr. Margaret Hamburg, commissioner of the F.D.A., said “resources remain an ongoing concern.”


Nonetheless, agency officials were optimistic that the new rules would protect consumers better.


“These new rules really set the basic framework for a modern, science-based approach to food safety and shift us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine, said in an interview. The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.


One in six Americans becomes ill from eating contaminated food each year, the government estimates; most of them recover without concern, but roughly 130,000 are hospitalized and 3,000 die. The agency estimated the new rules could prevent about 1.75 million illnesses each year.


Congress passed the Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.


But it took the Obama administration two years to move the rules through the regulatory agency, prompting complaints that the White House was more concerned about protecting itself from Republican criticism than about public safety.


Mr. Taylor said that the delay was a function of the wide variety of foods and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.


The first rule would require manufacturers of processed foods sold in the United States to come up with ways to reduce the risk of contamination. Food companies would be required to have a plan for correcting problems and for keeping records that government inspectors could audit.


An example might be to require the roasting of raw peanuts at a temperature guaranteed to kill salmonella, which has been a problem in nut butters in recent years. Roasted nuts would then have to be kept separate from raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.


“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”


The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat bacterial contamination like E. coli, which is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.


Read More..

F.D.A. Offers Rules to Stop Food Contamination





The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, which has sickened tens of thousands of Americans annually in recent years.







Nicole Bengiveno/The New York Times

A new rule imposed by the F.D.A. would establish different standards for ensuring the purity of water that touches fruits and vegetables.







The proposed rules represent a sea change in the way the agency polices food, a process that currently involves taking action after contamination has been identified. It is a long-awaited step toward codifying the food safety law that Congress passed two years ago.


Changes include requirements for better record keeping, contingency plans for handling outbreaks and measures that would prevent the spread of contaminants in the first place. While food producers would have latitude in determining how to execute the rules, farmers would have to ensure that water used in irrigation met certain standards and food processors would need to find ways to keep fresh food that may contain bacteria from coming into contact with food that has been cooked.


New safety measures might include requiring that farm workers wash their hands, installing portable toilets in fields and ensuring that foods are cooked at temperatures high enough to kill bacteria.


Whether consumers will ultimately bear some of the expense of the new rules was unclear, but the agency estimated that the proposals would cost food producers tens of thousands of dollars a year.


A big question to be resolved is whether Congress will approve the money necessary to support the oversight. President Obama requested $220 million in his 2013 budget, but Dr. Margaret Hamburg, commissioner of the F.D.A., said “resources remain an ongoing concern.”


Nonetheless, agency officials were optimistic that the new rules would protect consumers better.


“These new rules really set the basic framework for a modern, science-based approach to food safety and shift us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine, said in an interview. The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.


One in six Americans becomes ill from eating contaminated food each year, the government estimates; most of them recover without concern, but roughly 130,000 are hospitalized and 3,000 die. The agency estimated the new rules could prevent about 1.75 million illnesses each year.


Congress passed the Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.


But it took the Obama administration two years to move the rules through the regulatory agency, prompting complaints that the White House was more concerned about protecting itself from Republican criticism than about public safety.


Mr. Taylor said that the delay was a function of the wide variety of foods and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.


The first rule would require manufacturers of processed foods sold in the United States to come up with ways to reduce the risk of contamination. Food companies would be required to have a plan for correcting problems and for keeping records that government inspectors could audit.


An example might be to require the roasting of raw peanuts at a temperature guaranteed to kill salmonella, which has been a problem in nut butters in recent years. Roasted nuts would then have to be kept separate from raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.


“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”


The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat bacterial contamination like E. coli, which is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.


Read More..

Wealth Matters: The End of a Decade of Uncertainty Over Gift and Estate Taxes





FOR many of the wealthy, the American Taxpayer Relief Act, passed this week by Congress, is aptly named.




For estate and gift taxes in particular, all but the richest of the rich will probably be able to protect their holdings from taxes, now that Congress has permanently set the estate and gift tax exemptions at $5 million (a level that will rise with inflation).


“You could say this eliminates the estate tax for 99 percent of the population, though I’ve seen figures that say 99.7 or 99.8,” said Richard A. Behrendt, director of estate planning at the financial services firm Baird and a former inspector for the Internal Revenue Service. “From a policy point of view, the estate tax is not there for raising revenue. It’s there for a check on the massive concentration of wealth in a few hands, and it will still accomplish that.”


And while Congress also agreed to increase tax rates on dividends and capital gains to 20 percent from 15 percent for top earners — in addition to the 3.8 percent Medicare surcharge on such earnings — the rates are still far lower than those on their ordinary income. For the earners at the very top, whose income comes mostly from their portfolios of investments, and not a paycheck like most of the rest of us, this is a good deal.


The estate tax, once an arcane assessment, has been in flux and attracting significant attention since 2001. That was when the exemption per person for the estate tax began to rise gradually from $675,000, with a 55 percent tax for anything above that amount, to $3.5 million in 2009 with a 45 percent tax rate for estates larger than that. Estate plans were written to account for the predictable increases in exemptions.


Then in 2010, contrary to what every accountant and tax lawyer I spoke to at the time believed would happen, the estate tax disappeared. Congress and President Obama could not reach an agreement on the tax. So that year, for the first time since 1916, Americans who died were not subject to a federal estate tax. (Their estates still paid state estate taxes, where they existed, and other taxes, including capital gains, on the value of the assets transferred.)


At the end of 2010, President Obama and House Speaker John A. Boehner reached an agreement that was just as unlikely as the estate tax expiring in the first place: the new exemption was $5 million, indexed to inflation, with a 35 percent tax rate on any amount over that, and it would last for two years. The taxes and exemptions for gifts made during someone’s lifetime to children and grandchildren were also raised to the same level, from $1 million and a 55 percent tax above that.


As I have written many times, this was a far better rate and exemption than anyone expected. It also created a deadline of Dec. 31, 2012, for people who could make a major gift up to the exemption level or above the amount and pay the low gift tax.


Using the gift exemption was enticing because it meant those assets would appreciate outside of the estate of the person making the gift. Even paying the tax became attractive to the very rich because of how estate and gift taxes are levied. Take, for example, someone who has used up his exemption and wants to give an heir $1 million. The amount it would take to accomplish this differs depending on when it is given. In life, it would cost $1.4 million because the 40 percent gift tax is paid like a sales tax. If it was given after death, the estate would have to set aside about $1.65 million after the 40 percent estate tax was deducted. But this presented a conundrum: while it may make perfect sense to give away a lot of money during your lifetime and save on estate taxes, it means ceding control of cash, securities or shares now. What if you end up needing them? It wasn’t an easy decision, and it led to a fourth-quarter rush.


As of this week, this is no longer an issue. The estate and gift tax exemptions are permanently set at the same $5 million level, indexed for inflation, and the tax rate above that exemption is 40 percent, up from 35 percent. With indexing, the exemption is already about $5.25 million per person — double for a couple — and it will rise at a rate that means most Americans will continue to avoid paying any federal estate tax.


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An Inquiry Into Tech Giants’ Tax Strategies Nears an End





Congressional investigators are wrapping up an inquiry into the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States.







J. Scott Applewhite/Associated Press

Congressional investigators, led by Senator Carl Levin, a Michigan Democrat, have been interested in the impact on the budget deficit of offshore tax strategies.







The Senate Permanent Subcommittee on Investigations inquiry now drawing to a close began more than a year ago and involves at least a half dozen technology companies, according to people with firsthand knowledge of it, who declined to be identified.


Those people said the subcommittee had subpoenaed or otherwise asked the companies to explain methods they used to avoid domestic taxes. They said Apple had become a focus of the inquiry and was cooperating with the subcommittee, which is expected to issue wide-ranging recommendations that are likely to play a significant role in Congressional tax code negotiations.


Apple’s domestic tax bill has drawn the interest of corporate tax experts and policy makers because although the majority of Apple’s executives, product designers, marketers, employees, research and development operations and retail stores are in the United States, in the past Apple’s accountants have found legal ways to allocate about 70 percent of the company’s profits overseas, where tax rates are often much lower, according to corporate filings.


Apple, in a statement on Thursday, said the company was “one of the top corporate income taxpayers in the country, if not the largest.” The statement said the company “conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.”


It is unclear how broadly Senate investigators are looking into the technology industry, if any laws are thought to have been broken and how many companies are involved. The subcommittee is also known to be looking at Google, Hewlett-Packard, Microsoft and firms in such fields as biotechnology.


The subcommittee, which is overseen by Senator Carl Levin, a Michigan Democrat, has been interested in the impact on the budget deficit of offshore tax strategies. Representatives from Microsoft and Hewlett-Packard testified at a subcommittee hearing on the subject in September. Both companies were criticized sharply by Senator Levin for using intellectual property accounting rules to allocate revenue to other nations to avoid paying taxes in the United States.


“This subcommittee has demonstrated in hearings and comprehensive reports how various schemes have helped shift income to offshore tax havens and avoid U.S. taxes,” Senator Levin said at that hearing. “The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear.”Apple has long been a pioneer in developing innovative tax strategies that lessen its domestic taxes. At the September hearing, Senator Levin said the investigation indicated that Apple had deferred taxes on over $35.4 billion in offshore income between 2009 and 2011.


Tech companies are able to easily shift “intellectual property, and the profit that goes along with it, to tax havens,” said a former Treasury Department economist, Martin A. Sullivan, who has studied the company. “Apple went out of its way to try and ensure that its tax savings didn’t attract too much public attention, because tax avoidance of that magnitude — even though it’s legal and permissible — isn’t in keeping with the image of a socially progressive company.”


In its statement, Apple said it paid “an enormous amount of taxes” to local, state and federal governments. “In fiscal 2012 we paid $6 billion in federal corporate incomes taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government,” it said.In the 1980s, Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies. More recently, Apple has moved revenue to states like Nevada and overseas nations where the company pays less, or in some cases no, taxes.


Almost every major corporation tries to minimize its taxes. However, technology companies are particularly well positioned to take advantage of tax codes written for an industrial age and ill-suited to today’s digital economy.


Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft emerge from royalties on intellectual property, like the patents on software. At other times, products are digital, such as downloaded songs or movies. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers.


Although technology is now one of the nation’s largest and most highly valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’, according to a New York Times analysis. (Cash taxes may include payments for multiple years.)


Companies report their cash outlays for income taxes in their annual Form 10-K, but it is impossible from those numbers to determine precisely how much, in total, corporations pay to governments.


This article has been revised to reflect the following correction:

Correction: January 3, 2013

An earlier version of this article included outdated information on Apple’s tax payments. The company paid $6 billion in federal corporate income taxes in fiscal year 2012; it did not pay $3.3 billion “last year.” (That was the amount of cash taxes the company paid in fiscal year 2011.)




Read More..

An Inquiry Into Tech Giants’ Tax Strategies Nears an End





Congressional investigators are wrapping up an inquiry into the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States.







J. Scott Applewhite/Associated Press

Congressional investigators, led by Senator Carl Levin, a Michigan Democrat, have been interested in the impact on the budget deficit of offshore tax strategies.







The Senate Permanent Subcommittee on Investigations inquiry now drawing to a close began more than a year ago and involves at least a half dozen technology companies, according to people with firsthand knowledge of it, who declined to be identified.


Those people said the subcommittee had subpoenaed or otherwise asked the companies to explain methods they used to avoid domestic taxes. They said Apple had become a focus of the inquiry and was cooperating with the subcommittee, which is expected to issue wide-ranging recommendations that are likely to play a significant role in Congressional tax code negotiations.


Apple’s domestic tax bill has drawn the interest of corporate tax experts and policy makers because although the majority of Apple’s executives, product designers, marketers, employees, research and development operations and retail stores are in the United States, in the past Apple’s accountants have found legal ways to allocate about 70 percent of the company’s profits overseas, where tax rates are often much lower, according to corporate filings.


Apple, in a statement on Thursday, said the company was “one of the top corporate income taxpayers in the country, if not the largest.” The statement said the company “conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules.”


It is unclear how broadly Senate investigators are looking into the technology industry, if any laws are thought to have been broken and how many companies are involved. The subcommittee is also known to be looking at Google, Hewlett-Packard, Microsoft and firms in such fields as biotechnology.


The subcommittee, which is overseen by Senator Carl Levin, a Michigan Democrat, has been interested in the impact on the budget deficit of offshore tax strategies. Representatives from Microsoft and Hewlett-Packard testified at a subcommittee hearing on the subject in September. Both companies were criticized sharply by Senator Levin for using intellectual property accounting rules to allocate revenue to other nations to avoid paying taxes in the United States.


“This subcommittee has demonstrated in hearings and comprehensive reports how various schemes have helped shift income to offshore tax havens and avoid U.S. taxes,” Senator Levin said at that hearing. “The resulting loss of revenue is one significant cause of the budget deficit, and adds to the tax burden that ordinary Americans bear.”Apple has long been a pioneer in developing innovative tax strategies that lessen its domestic taxes. At the September hearing, Senator Levin said the investigation indicated that Apple had deferred taxes on over $35.4 billion in offshore income between 2009 and 2011.


Tech companies are able to easily shift “intellectual property, and the profit that goes along with it, to tax havens,” said a former Treasury Department economist, Martin A. Sullivan, who has studied the company. “Apple went out of its way to try and ensure that its tax savings didn’t attract too much public attention, because tax avoidance of that magnitude — even though it’s legal and permissible — isn’t in keeping with the image of a socially progressive company.”


In its statement, Apple said it paid “an enormous amount of taxes” to local, state and federal governments. “In fiscal 2012 we paid $6 billion in federal corporate incomes taxes, which is 1 out of every 40 dollars in corporate income taxes collected by the U.S. government,” it said.In the 1980s, Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies. More recently, Apple has moved revenue to states like Nevada and overseas nations where the company pays less, or in some cases no, taxes.


Almost every major corporation tries to minimize its taxes. However, technology companies are particularly well positioned to take advantage of tax codes written for an industrial age and ill-suited to today’s digital economy.


Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft emerge from royalties on intellectual property, like the patents on software. At other times, products are digital, such as downloaded songs or movies. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers.


Although technology is now one of the nation’s largest and most highly valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’, according to a New York Times analysis. (Cash taxes may include payments for multiple years.)


Companies report their cash outlays for income taxes in their annual Form 10-K, but it is impossible from those numbers to determine precisely how much, in total, corporations pay to governments.


This article has been revised to reflect the following correction:

Correction: January 3, 2013

An earlier version of this article included outdated information on Apple’s tax payments. The company paid $6 billion in federal corporate income taxes in fiscal year 2012; it did not pay $3.3 billion “last year.” (That was the amount of cash taxes the company paid in fiscal year 2011.)




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Scant Proof Is Found to Back Up Claims by Energy Drinks





Energy drinks are the fastest-growing part of the beverage industry, with sales in the United States reaching more than $10 billion in 2012 — more than Americans spent on iced tea or sports beverages like Gatorade.




Their rising popularity represents a generational shift in what people drink, and reflects a successful campaign to convince consumers, particularly teenagers, that the drinks provide a mental and physical edge.


The drinks are now under scrutiny by the Food and Drug Administration after reports of deaths and serious injuries that may be linked to their high caffeine levels. But however that review ends, one thing is clear, interviews with researchers and a review of scientific studies show: the energy drink industry is based on a brew of ingredients that, apart from caffeine, have little, if any benefit for consumers.


“If you had a cup of coffee you are going to affect metabolism in the same way,” said Dr. Robert W. Pettitt, an associate professor at Minnesota State University in Mankato, who has studied the drinks.


Energy drink companies have promoted their products not as caffeine-fueled concoctions but as specially engineered blends that provide something more. For example, producers claim that “Red Bull gives you wings,” that Rockstar Energy is “scientifically formulated” and Monster Energy is a “killer energy brew.” Representative Edward J. Markey of Massachusetts, a Democrat, has asked the government to investigate the industry’s marketing claims.


Promoting a message beyond caffeine has enabled the beverage makers to charge premium prices. A 16-ounce energy drink that sells for $2.99 a can contains about the same amount of caffeine as a tablet of NoDoz that costs 30 cents. Even Starbucks coffee is cheap by comparison; a 12-ounce cup that costs $1.85 has even more caffeine.


As with earlier elixirs, a dearth of evidence underlies such claims. Only a few human studies of energy drinks or the ingredients in them have been performed and they point to a similar conclusion, researchers say — that the beverages are mainly about caffeine.


Caffeine is called the world’s most widely used drug. A stimulant, it increases alertness, awareness and, if taken at the right time, improves athletic performance, studies show. Energy drink users feel its kick faster because the beverages are typically swallowed quickly or are sold as concentrates.


“These are caffeine delivery systems,” said Dr. Roland Griffiths, a researcher at Johns Hopkins University who has studied energy drinks. “They don’t want to say this is equivalent to a NoDoz because that is not a very sexy sales message.”


A scientist at the University of Wisconsin became puzzled as he researched an ingredient used in energy drinks like Red Bull, 5-Hour Energy and Monster Energy. The researcher, Dr. Craig A. Goodman, could not find any trials in humans of the additive, a substance with the tongue-twisting name of glucuronolactone that is related to glucose, a sugar. But Dr. Goodman, who had studied other energy drink ingredients, eventually found two 40-year-old studies from Japan that had examined it.


In the experiments, scientists injected large doses of the substance into laboratory rats. Afterward, the rats swam better. “I have no idea what it does in energy drinks,” Dr. Goodman said.


Energy drink manufacturers say it is their proprietary formulas, rather than specific ingredients, that provide users with physical and mental benefits. But that has not prevented them from implying otherwise.


Consider the case of taurine, an additive used in most energy products.


On its Web site, the producer of Red Bull, for example, states that “more than 2,500 reports have been published about taurine and its physiological effects,” including acting as a “detoxifying agent.” In addition, that company, Red Bull of Austria, points to a 2009 safety study by a European regulatory group that gave it a clean bill of health.


But Red Bull’s Web site does not mention reports by that same group, the European Food Safety Authority, which concluded that claims about the benefits in energy drinks lacked scientific support. Based on those findings, the European Commission has refused to approve claims that taurine helps maintain mental function and heart health and reduces muscle fatigue.


Taurine, an amino acidlike substance that got its name because it was first found in the bile of bulls, does play a role in bodily functions, and recent research suggests it might help prevent heart attacks in women with high cholesterol. However, most people get more than adequate amounts from foods like meat, experts said. And researchers added that those with heart problems who may need supplements would find far better sources than energy drinks.


Hiroko Tabuchi contributed reporting from Tokyo and Poypiti Amatatham from Bangkok.



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