New Zealand officials on Thursday heralded passage of a groundbreaking law requiring financial institutions to disclose climate-related risks.
“This is a landmark day,” Commerce and Consumer Affairs Minister David Clark said in a speech to Parliament.
At issue is the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill, which had its third reading Thursday.
A summary of the measure from the Business Ministry touts the bill as a step toward making the country’s “financial system more resilient” and reaching New Zealand’s goal of net zero CO2 emissions by 2050. According to the ministry, the goals of the bill are to:
ensure that the effects of climate change are routinely considered in business, investment, lending, and insurance underwriting decisions;
help climate reporting entities better demonstrate responsibility and foresight in their consideration of climate issues; and
lead to more efficient allocation of capital, and help smooth the transition to a more sustainable, low emissions economy.
A joint statement Thursday from Clark and Climate Change Minister James Shaw frames the bill, which will require the annual disclosures starting in 2023, as the first of its kind across the globe.
“This bill will require around 200 of the largest financial market participants in New Zealand to disclose clear, comparable, and consistent information about the risks, and opportunities, climate change presents to their business,” Clark said in the statement. “In doing so, it will promote business certainty, raise expectations, accelerate progress and create a level playing field.”
Shaw, for his part, said the measure would “encourage entities to become more sustainable by factoring the short, medium, and long-term effects of climate change into their business decisions.”
“New Zealand is a world-leader in this area and the first country in the world to introduce mandatory climate-related reporting for the financial sector,” added Shaw. “We have an opportunity to pave the way for other countries to make climate-related disclosures mandatory.”
Originally published on Common Dreams by ANDREA GERMANOS and republished under a Creative Commons License (CC BY-NC-ND 3.0).
The tweak, which targets the code in accessibility features for visually impaired users, drew ire from researchers and those who monitor the platform
Facebook has begun rolling out an update that is interfering with watchdogs monitoring the platform.
The Markup has found evidence that Facebook is adding changes to its website code that foils automated data collection of news feed posts—a technique that groups like NYU’s Ad Observatory, The Markup, and other researchers and journalists use to audit what’s happening on the platform on a large scale.
The changes, which attach junk code to HTML features meant to improve accessibility for visually impaired users, also impact browser-based ad blocking services on the platform. The new code risks damaging the user experience for people who are visually impaired, a group that has struggled to use the platform in the past.
The updates add superfluous text to news feed posts in the form of ARIA tags, an element of HTML code that is not rendered visually by a standard web browser but is used by screen reader software to map the structure and read aloud the contents of a page. Such code is also used by organizations like NYU’s Ad Observatory to identify sponsored posts on the platform and weed them out for further scrutiny.
“We constantly make code changes across our services, but we did not make any code changes to block these research projects,” Lindy Wagner, communications manager at Facebook, said in an email to The Markup.
Following the changes, the Citizen Browser project experienced a drop in data collection rates from early September, prompting the investigation that uncovered these changes to the code. At around the same time, users of certain ad blockers noticed a decrease in their effectiveness.
Laura Edelson, a Ph.D. candidate in computer science at NYU’s Tandon School of Engineering and founder of the Ad Observatory project, expressed dismay at Facebook’s latest move impacting data collection. The website update had at first caused a sharp drop in the amount of data collected by the Ad Observatory, she said, but a fix was found that allowed the team to collect data at normal levels.
“I think it’s unfortunate that Facebook is continuing to fight with researchers rather than work with them,” she said.
Facebook has used similar tweaks to attempt to frustrate researchers and ad blockers in the past, often with the result of making the platform less accessible to visually impaired users.
In 2019, the company made changes to obfuscate its code in a way that blocked ad collection efforts by ProPublica, Mozilla, and British ad transparency group WhoTargetsMe. And in 2020, Quartz reported that visually impaired users had been unable to hear a legible label distinguishing between sponsored and nonsponsored posts for the previous two years because the platform had added numerous junk characters to the text to reduce the efficiency of ad blocking software.
In its latest update, Facebook seems to have implemented the code in a way that prevents screen readers from reading the new tags. As the update has not yet been rolled out to all users, it’s unclear what, if any, impact the change may have on visually impaired users. In at least one circumstance, a developer from The Markup who was testing the new code found that the Microsoft Narrator screen reader read aloud a string of junk characters as an unintelligible word when accessing the site through the Google Chrome browser.
“Our accessibility features largely appear to be working as normal, however we are investigating the claim,” Facebook’s Wagner said.
Jared Smith, associate director of accessibility research and training nonprofit WebAIM, expressed concerns about the code in Facebook’s web update after reviewing it for The Markup.
According to Smith, the new updates break many basic rules of accessibility design. Rather than presenting a clear and simplified structure, he said, the accessibility code was hugely complex, potentially heralding problems down the road.
“When you see thousands and thousands of patterns of ARIA attributes—code that could be used for accessibility but doesn’t seem to support accessibility—it poses a scenario where things could jump the rails and really negatively impact accessibility,” said Smith.
“We’ve seen misuse of technologies like this for things like search engine optimization, but this is on an entirely different scale,” he added.
In July 2020, a blog post from the Facebook engineering team trumpeted an extensive rebuild of the site that was apparently made with accessibility in mind. This included requirements for Facebook developers to use a code linting plugin (similar to a spelling autocorrect) that would highlight violations of ARIA standards.
“I suspect that the Facebook team implementing these apparent anti-transparency mechanisms does not realize that there are potential accessibility consequences to what they’re doing,” said Blake E. Reid, a professor at the University of Colorado Law School who focuses on accessibility and technology policy.
Sen. Ron Wyden, who has been critical of the company in the past, told The Markup in an emailed statement that Facebook’s latest move showed a disregard for visually impaired users.
“It is contemptible that Facebook would misuse accessibility features for users with disabilities just to foil legitimate research and journalism,” he said.
Facebook has long claimed that it wants to share data with researchers, Edelson said, but in practice numerous social scientists have faced obstacles when trying to work with the platform.
In August of this year, Facebook disabled the accounts of NYU Ad Observatory researchers for alleged violations of its terms of service with the researchers’ own ad collector. (At the time, The Markup’s senior executives published a press release critical of Facebook’s actions.)
And reporting by The New York Times brought to light the fact that Facebook had given incomplete data to misinformation researchers from the high profile Social Science One research group, potentially undermining the findings of years of academic studies. The error was first uncovered by a university professor who found discrepancies between numbers in the Social Science One data and Facebook’s recently published Widely Viewed Content Report.
“At what point does the research community stop thinking of Facebook as a positive actor in this space?” Edelson said.
Senate Finance Committee Chairman Ron Wyden said on Thursday he is revisiting proposed legislation that would crack down on the giant tax-free retirement accounts amassed by the ultrawealthy after a ProPublica story exposed that billionaires were shielding fortunes inside them.
“I feel very strongly that the IRA was designed to provide retirement security to working people and their families, and not be yet another tax dodge that allows mega millionaires and billionaires to avoid paying taxes,” Wyden said in an interview.
ProPublica reported Thursday that the Roth IRA, a retirement vehicle originally intended to spur middle-class savings, was being hijacked by the ultrawealthy and used to create giant onshore tax shelters. Tax records obtained by ProPublica revealed that Peter Thiel, a co-founder of PayPal and an investor in Facebook, had a Roth IRA worth $5 billion as of 2019. Under the rules for the accounts, if he waits till he turns 59 and a half, he can withdraw money from the account tax-free.
The story is part of ProPublica’s ongoing series on how the country’s richest citizens sidestep the nation’s income tax system. ProPublica has obtained a trove of IRS tax return data on thousands of the wealthiest people in the U.S., covering more than 15 years. The records have allowed ProPublica to begin, this month, an unprecedented exploration of the tax-avoidance strategies available to the ultrawealthy, allowing them to avoid taxes in ways most Americans can’t.
Wyden said ProPublica’s stories have shifted the debate about taxes at the grassroots level, underscoring a “double standard” that would have a nurse in Medford, Oregon, dutifully paying taxes “with every single paycheck” while the wealthiest Americans “just defer, defer, defer paying their taxes almost until perpetuity.”
Wyden said, “Now, the American people are with us on the proposition that everybody ought to pay their fair share, and in that sense, the debate about taxes has really changed a lot.”
The focus on recouping lost tax revenue comes at a critical time, Wyden and others say, as lawmakers look for ways to fund President Joe Biden’s infrastructure plan and other domestic spending.
Wyden had worried for years that Roth IRAs were being abused by the ultrawealthy. In 2016, he put forth a proposal that would have reined in the amount of money that could be stowed inside them.
“If I had my way back in 2016, my bill would have passed, there would have been a crackdown on these massive Roth IRA accounts built on assets from sweetheart deals,” Wyden said.
The proposal was known as the Retirement Improvements and Savings Enhancements Act. It would have required owners of Roth accounts worth more than $5 million to take out money over time, capping the accounts’ growth. It also would have slammed shut a back door that allowed the wealthy to move fortunes into Roths from less favorable retirement accounts. This maneuver, known as a conversion, allows a taxpayer to transform a traditional IRA into a Roth after paying a one-time tax.
Ted Weschler, a deputy of Warren Buffett at Berkshire Hathaway, told ProPublica he supported reforms to rein in giant Roth IRAs like his. Weschler’s account hit the $264.4 million mark in 2018 after he converted a whopping $130 million and paid a one-time tax years earlier, according to tax records obtained by ProPublica.
In a statement to ProPublica earlier this week, Weschler didn’t address any specific reform plan but said: “Although I have been an enormous beneficiary of the IRA mechanism, I personally do not feel the tax shield afforded me by my IRA is necessarily good tax policy. To this end, I am openly supportive of modifying the benefit afforded to retirement accounts once they exceed a certain threshold.”
Wyden’s proposal also targeted the stuffing of undervalued assets into Roths, which congressional investigators had flagged as the foundation of many large accounts. Under the Wyden draft bill, purchasing an asset for less than fair market value would strip the tax benefits from the entire IRA.
ProPublica’s investigation showed that Thiel purchased founder’s shares of the company that would become PayPal at $0.001 per share in 1999. At that price, he was able to buy 1.7 million shares and still fall below the $2,000 maximum contribution limit Congress had set at the time for Roth IRAs. PayPal later disclosed in an SEC filing that those shares, and others issued that year, were sold at “below fair value.”
A spokesperson for Thiel accepted detailed questions on Thiel’s behalf last week, then never responded to phone calls or emails.
The RISE Act was never introduced because, Wyden said, Republicans controlled the Senate at the time and made clear they opposed the effort. The proposal was also heartily opposed by promoters of nontraditional retirement investments. One of them wrote, at the time: “Everything about the RISE Act Proposal is opposed to capitalism and economic freedom.”
Following ProPublica’s story on Roths, Sen. Elizabeth Warren, D-Mass., said the way to address the gargantuan accounts would be a wealth tax, which would impose an annual levy on households with a net worth over $50 million.
Warren tweeted a link to the story and wrote: “Yes, our tax system is rigged with loopholes and tax shelters for billionaires like Peter Thiel. And stories like this will keep popping up until we pass a simple #WealthTax on assets over $50 million to make these guys pay their fair share.”
Yes, our tax system is rigged with loopholes and tax shelters for billionaires like Peter Thiel. And stories like this will keep popping up until we pass a simple #WealthTax on assets over $50 million to make these guys pay their fair share. https://t.co/6aP6l8tG3A
Daniel Hemel, a tax law professor at the University of Chicago who has been researching large Roths, said that Congress should simply prohibit IRAs from purchasing assets that are not bought and sold on the public market.
“There’s no reason people should be able to be gambling their retirement assets on pre-IPO stocks,” Hemel said.
He added that lawmakers should go beyond reforms targeting the accounts directly and address a potential estate tax dodge related to Roths.
If the holder of a large Roth dies, the retirement account is considered part of the taxable estate, and a significant tax is due. But, Hemel said, there’s nothing to stop an American who has amassed a giant Roth from renouncing their citizenship and moving abroad to a country with no estate taxes. It’s rare, but not unheard of, for the ultrawealthy to renounce their U.S. citizenship to avoid taxes.
Under federal law, U.S. citizens who renounce their citizenship are taxed that day on assets that have risen in value but are not yet sold. But there’s an exception for certain kinds of assets, Hemel said, including Roth retirement accounts.
Thiel acquired citizenship in New Zealand in 2011. Unlike the United States, New Zealand has no estate tax. It’s not clear whether estate taxes figured into Thiel’s decision.
A spokesperson for Thiel did not immediately respond to questions on Friday about whether estate taxes factored into Thiel’s decision to become a New Zealand citizen.
In his application for citizenship, Thiel wrote to a government minister: “I have long admired the people, culture, business environment and government of New Zealand, as well as the encouragement which is given to investment, business and trade in New Zealand.”
Patching the hole in the expatriation law, Hemel said, “should be a top policy priority because we’re talking about, with Thiel alone, billions of dollars of taxes.”
by Justin Elliott, Patricia Callahan and James Bandler for ProPublica via Creative Commons.
