1) Pepper-Spray Case Goes to Jury in California
By CAROLYN MARSHALL
SAN FRANCISCO, Sept. 21
http://www.nytimes.com/2004/09/22/national/22pepper.html

2) Study Finds Accelerating
Drop in Corporate Taxes
By LYNNLEY BROWNING
September 23, 2004
http://www.nytimes.com/2004/09/23/business/23income.html

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1) Pepper-Spray Case Goes to Jury in California
By CAROLYN MARSHALL
SAN FRANCISCO, Sept. 21
http://www.nytimes.com/2004/09/22/national/22pepper.html

SAN FRANCISCO, Sept. 21 - Maya Portugal says the majestic redwood
trees of Northern California changed her forever. Her love for the
sweeping forest canopies and lush old-growth groves has taken her
from child explorer to teenage protester to adult plaintiff in a seven-
year legal battle between the law enforcement officials of rural
Humboldt County and environmentalists opposed to logging the
redwoods.

"I grew up in the woods," she said. "Driving through Humboldt now
you can see all the clear-cuts. I wanted to do something so my kids
wouldn't have to see what I saw."

That is how Ms. Portugal, 22, explained to jurors in federal court
here what moved her, at the age of 16, to join protests against
logging of the trees. She is one of eight anti-logging activists,
known to their colleagues as the Pepper Spray 8, who are the
plaintiffs in a lawsuit against the City of Eureka and Humboldt
County authorities.

The lawsuit, sent to the jury in United States District Court for
Northern California on Tuesday, asserts that a county policy that
allows the authorities to smear pepper spray ointment on the eyes
of protesters constitutes an unnecessary and excessive use of force,
tantamount to torture.

The lawsuit stems from three incidents in 1997 when pepper spray
was daubed in the eyes of Ms. Portugal and at least seven others
after they refused to heed police orders to disperse. Closing
arguments in the trial were presented Tuesday. Judge Susan
Illston instructed the eight jurors that a unanimous verdict was
necessary to find for the protesters, who seek unspecified damages.

"It burned really bad," Ms. Portugal testified last week. "I felt scared.
I felt like I was being violated. I felt like the cops were out of control."

The Humboldt authorities testified Monday that pepper spray was
considered the safest way to make the arrests. The question of
whether the police used unreasonable force in violation of the
Fourth Amendment is at the heart of the trial.

The three incidents attracted attention far beyond Humboldt
in part because television news programs broadcast the protests,
including images of sheriff's deputies daubing the eyes of passive
protesters with cotton swabs soaked with pepper spray.

Since then the incidents have been the subject of numerous
lawsuits resulting in a jury deadlock, a mistrial, a series of
appellate court procedures, the removal of a judge and a United
States Supreme Court ruling remanding the case to the United
States Court of Appeals for the Ninth Circuit, instructing it to
consider whether the sheriffs were immune from suit. The Ninth
Circuit said the sheriffs had no immunity and ordered the new
trial, now under way.

Lawyers for the protesters include J. Tony Serra, who has
characterized the case as "a political trial." Mr. Serra and the
others argue that the police acted maliciously, using unreasonable
force to intentionally inflict pain, frighten the protesters and silence
the anti-logging movement. "When people are nonviolent they
do not deserve to be treated like wild beasts," he said in closing.

In testimony last week, protesters told the jury that the chemical
caused searing eye pain, gagging, dizziness, hyperventilation and
headaches that in some cases lasted days. To this day, protesters
said, they fear the police and suffer aftereffects, including impaired
vision and recurring growths on their eyelids.

But lawyers for the defendants - Humboldt County, the City of
Eureka and local law enforcement officials - argued that the use
of pepper spray came in response to "organized lawlessness" by
protesters, including the group Earth First, which helped arrange
sit-ins and rallies.

The demonstrators were directing their efforts at the Pacific Lumber
Company and the Texas investor Charles E. Hurwitz, chief executive
of Pacific Lumber's parent company, Maxxam, and their negotiations
with the state and federal governments that resulted in the so-
called Headwaters deal. It was created to preserve 10,000 acres
of redwoods but upset many environmentalists who felt it did not
go far enough.

Nancy Delaney, a Eureka lawyer representing the defendants, said,
"We believe the use of force was reasonable and the safest way for
officers to discharge their lawful duty."

Copyright 2004 The New York Times Company

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2) Study Finds Accelerating
Drop in Corporate Taxes
By LYNNLEY BROWNING
September 23, 2004
http://www.nytimes.com/2004/09/23/business/23income.html

America's largest and most profitable companies paid less in
corporate income taxes in the last three years, even as they
increased profits, according to a study released yesterday.

Companies have always used write-offs, depreciation, deductions
and loopholes to lower their taxes, but the study, by Citizens for
Tax Justice and its affiliate, the Institute on Taxation and Economic
Policy, suggested that tax breaks and subsidies enacted during the
Bush administration had accelerated the decline in tax payments.

The study also cited the proliferation of abusive tax shelters and
increasingly aggressive corporate lobbying as fueling the decline in
tax payments by corporations.

The study was done by nonprofit research and advocacy groups that
have been supported in part by labor unions. They contend that the
tax system favors wealthy corporations and individuals.

The study, Corporate Income Taxes in the Bush Years, surveyed
public filings by 275 of the nation's largest and most profitable
companies, based on revenue from the Fortune 500 list of 2004.
The 275 companies reported pretax profits from operations in
the United States of $1.1 trillion from 2001 through 2003, the
study said, yet reported to the Internal Revenue Service and paid
taxes on half that amount.

Robert S. McIntyre, the lead author of the study, wrote, "The fact
that America's companies were allowed to report less than half of
their actual U.S. profits to the I.R.S., while ordinary wage earners
have to report every penny of their earnings, has to undermine
public respect for the tax system."

The 275 companies surveyed include nearly all of the 2004
Fortune 500 companies that were profitable from 2001
through 2003. The list excluded those that reported losses
in any year, including General Motors and Ford ; certain
companies whose finances were considered too opaque to
; and about 25 companies to maintain a balance.

The study cited, among other things, tax breaks enacted in
2002 and 2003 as prompting the decline in corporate payments.
Such tax breaks, as used by the 275 companies, totaled more than
$175 billion over the last three years, including $71 billion last year,
up from $43.4 billion in 2001. That compares, roughly, with $98
billion in tax breaks for the top 250 profitable companies over 1996
through 1998, according to a similar study by Citizens for Tax
Justice in 2000.

Not all experts agreed with the study's findings. William W. Beach,
a tax policy expert at the Heritage Foundation, a conservative
research group in Washington, said that even though the study
surveyed the top 275 companies, he did not find it "typical of
corporate America," adding that smaller and midsize businesses
were "paying a lot in taxes."

According to the study, some 28 corporations paid no taxes
from 2001 to 2003, despite having profits in the period of nearly
$45 billion.

Industry sectors that paid the lowest taxes or no taxes included
aerospace and military, telecommunications, transportation, and
industrial and farm equipment.

The 2000 study found that from 1996 to 1998, 11 of the 250
largest and most profitable companies paid no taxes, even though
all reported profits. The earlier study found that the 250 companies
showed a 23.5 percent increase in pretax profit, while the tax
payments rose 7.7 percent.

The current study seemed to echo government data. Commerce
Department figures showed that pretax corporate profit rose 26
percent from 2001 to 2003 but that corporate tax payments fell
21 percent.

Corporate taxes as a share of the national economy are at their
lowest sustained level since World War II, the study said, and
financed only 6 percent of government expenses in the last
two fiscal years.

The current study found that nearly one in three companies, or
82, of the 275 examined paid no federal income tax in at least
one year from 2001 to 2003, the period covered by the study.
In the period, 82 companies had pretax profit of $102 billion.

Last year, 46 of the 275 companies surveyed paid no federal
income tax, up from 42 companies in 2002 and 33 in 2001,
according to the study. Over all, the number of companies that
paid no taxes increased 40 percent during the period.

The current study attributed lower corporate payments in part to
legislation supported by President Bush and enacted by Congress
in 2002 that increased accelerated depreciation, an accounting
move that allows profitable companies to write off capital
investments and claim tax deferrals. Accelerated depreciation
was intended in part to encourage capital investment, but the
study argued that it had done the opposite. Capital investment
by corporations dropped 12 percent in 2002 and 3 percent in
2003, the years when Congress enacted the new accelerated
depreciation rules.

As a result, Mr. McIntyre concluded, "the $175 billion in revenues
lost to the 2002- and 2003-enacted tax breaks appears to have
been exceedingly poorly spent."

Mr. Beach disagreed, saying that rates of capital investment were
at historic highs. "We're seeing an investment surge that's so
strong that you have to go back to the 1960's before you see a
comparable one."

Copyright 2004 The New York Times Company