Wednesday's Top 10 with NZ Mint: Do companies pay their fair share of taxes?; NZ and US world's lowest pollution taxers; China's big debt shuffle; UK house prices falling fast; Cartoons galore; Dilbert

I'm back from five days off. Haven't looked at a computer screen for days on end. A record.

Here's my Top 10 links from around the Internet at 12 midday  in association with NZ Mint.

I'll pop the extras into the comment stream. See all previous Top 10s here.

I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

1. One reason for America's budget crisis - Large corporates don't pay much tax in America. In many cases they actually get rebates and subsidies.

Here's a report from Citizens for Tax Justice in America.

I worry that New Zealand's largest companies, particularly foreign owned ones, don't pay their fair share.

The banks have already been forced into paying their fair share.

Fonterra pays hardly any tax.

Google routes its revenues from New Zealand through a tax haven in Ireland.

Anyone know of others not paying their fair share?

Here's the American situation.

CTJ looked at a sample of a dozen major corporations and analyzed both their profits and their effective federal corporate income tax rates between 2008 and 2010. CTJ found that from 2008 to 2010, these major corporations earned $173 billion in profits put together.

Yet these major corporations paid an average federal corporate income tax rate during this period of -1.5 percent, meaning they actually got money back from the Treasury in the form of tax benefits.

2. The bailouts have started in China too - This Reuters story from last week is proving very influential.

It detailed plans for China's government to essentially bail out bankrupt local governments and bolster the banking system that lent huge amounts to these local governments for 'bridges to nowhere' type infrastructure spending.

It's another sign that the giant debt shuffle has started there.

America and Europe have been doing it for three years. The transfer of private debt to public balance sheets has been the main tactic in developed countries, along with moves to 'extend and pretend' the terms of the debt to avoid crystallising losses on unsustainable debt in haircuts that would destroy banks.

There is just too much debt in the world.

China's regulators plan to shift 2-3 trillion yuan ($308-463 billion) of debt off local governments, sources said, reducing the risk of a wave of defaults that would threaten the stability of the world's second-biggest economy.

As part of Beijing's overhaul of the finances of heavily-indebted local governments, the central government will pay off some of their loans and state banks including some of the "Big Four" will be forced to take some losses on the bad debt, said the sources, both of whom have direct knowledge of the plans.

Part of the debt will also be shifted to newly created companies, while private investors would be welcomed in projects previously off-limits to them, sources said.

3. Another view - Ryan Avent from Economist has just returned from a visit to China and is more positive about the outlook there than some.

I came away from China a bit less worried about property issues than I'd been going in. Don't get me wrong, China is building an enormous amount of new housing, and quite a lot of that new housing is standing empty, even as prices rise. But this isn't necessarily the problem many people suspect, for a few reasons. For one thing, the flow of new demand for housing seems sure. Millions of Chinese remain underhoused while real incomes are soaring.

In some cases, the Chinese government is coordinating the construction of several years' worth of demand for new homes all at once, justifiably confident that new units will ultimately be occupied. In other cases, Chinese workers are buying up new units as investment vehicles—but are using savings, rather than debt, to fund the purchases. It's not impossible, or even that unlikely, that prices in the main cities may fall, but it would be wrong to assume that China's property markets operate in the way American markets do and share the same vulnerabilities.

4. Falling house prices - The Telegraph reports UK house prices fell 4.2% in the three months to May, the biggest fall since October 2009. HT Hugh

Britain's housing market has been slowing since the middle of last year and recent data show mortgage approvals - a leading indicator of house prices - fell in April to just half their long-run average before the financial crisis of 90,000 per month.

Halifax economist Martin Ellis said the housing market was coming under pressure from low earnings growth, higher taxes, rising inflation and concerns about the outlook for jobs and growth.

5. Weak US consumer confidence - US consumer confidence is now weaker than it was just after the Lehman crisis, Hurrican Katrina and the 9-11 attacks. HT Zerohedge.

6. Accusing the Fed of counterfeiting - An American citizen is suing the Atlanta Federal Reserve, arguing it is counterfeiting money because it has no intention to make good on the notes it's printing. HT Washington's blog.

The complaint alleges that all of the Federal Reserve Banks (including Atlanta) stopped allowing Federal Reserve Notes to be redeemed in the early 2000's and that - because 12 United States Code Section 411 requires the notes to be redeemable - continuing to issue notes without allowing redemption amounts to counterfeiting.

7. 'On the verge of a great depression' - Yastrow Origer strategist Peter Yastrow told CNBC a few days ago that America was on the verge of a great depression.

The Bernanke knows this and admitted he didn't have a solution this morning.

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything," Yastrow said. "We’re on the verge of a great, great depression. The [Federal Reserve] knows it.

"We have many, many homeowners that are totally underwater here and cannot get out from under. The technology frontier is limited right now. We definitely have an innovation slowdown and the economy’s gonna suffer."

8. We need pollution taxes - So does America. This chart below explains why. Brad Plumer at the Washington Post has the story.

New Zealand is right down the bottom left next to America in the chart in terms of the portion of tax revenue collected from pollution taxes.

9. How broken Wall St is - Jesse Eisinger at ProPublica writes about a whistleblower analyst who exposed an accounting fraud at a company called Biovail but was still fired by his investment bank bosses.

For his success, he was sued, fired and stripped of compensation. He also lost access to the world of bulge-bracket Wall Street, was shunned by some institutional investors, and because of the settlement for which he said he felt he had no choice than to enter, he couldn’t sue Biovail to seek vindication.

It’s well known that analysts rarely put sell ratings on the stocks they cover. Typically, the explanation for this is that banks don’t want to jeopardize their investment banking business.

The reality is much more complicated. Skeptics and whistle-blowers risk huge career costs that go beyond conflicts of interest. Investors think they want unvarnished advice, but many don’t truly appreciate it. Most banks don’t want employees to play detective. Regulators abandon whistle-blowers, acting tardily and ineffectually.

10. Totally Clarke and Dawe video - It seems a diversity of views is a good thing and so is unity....