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How These Ultrawealthy Politicians Avoided Paying Taxes

As a member of Congress, Jared Polis was one of the loudest Democrats demanding President Donald Trump release his tax returns.

At a rally in Denver in 2017, he warned the crowd that Trump “might have something to hide.” That same year, on the floor of the House, he introduced a resolution to force the president to release the records, calling them an “important baseline disclosure.”

But during Polis’ successful run for governor of Colorado in 2018, his calls for transparency faded. The dot-com tycoon turned investor broke with recent precedent and refused to disclose his returns, blaming his Republican opponent, who wasn’t disclosing his.

Polis may have had other reasons for denying requests to release the records.

Despite a net worth estimated to be in the hundreds of millions, Polis paid nothing in federal income taxes in 2013, 2014 and 2015. From 2010 to 2018, his overall rate was just 8.2% — less than half of the 19% paid by a worker making $45,000 in 2018.

The revelations about Polis are contained in a trove of tax information obtained by ProPublica covering thousands of the nation’s wealthiest people. The Colorado governor is one of several ultrarich politicians who, the data shows, have paid little or no federal income taxes in multiple years, exploited loopholes to dodge estate taxes or used their public offices to fight reforms that would increase their tax bills.

The records show that rich Democrats and Republicans alike have slashed their taxes using strategies unavailable to most of their constituents. Among them are governors, members of Congress and a cabinet secretary.

Richard Painter, the chief White House ethics lawyer during the George W. Bush administration, said the tax avoidance of these top politicians is “very, very worrisome” since both parties “spend like crazy” and depend on taxes to fund their priorities, from the military to Medicare to Social Security.

“They have the power to decide how much the rest of us pay and the power to spend the money, and then they’re not paying their fair share?” Painter said. “That should be troubling to voters, both conservative and liberal. It should be troubling for everyone.”

West Virginia Gov. Jim Justice, for example, is a Republican coal magnate who has made the Forbes list of wealthiest Americans. Yet he’s paid very little or no federal income taxes for almost every year since 2000.

California Rep. Darrell Issa, one of the richest people in Congress, was one of the few Republicans to break with his party during the 2017 tax overhaul to fight for a deduction that — unbeknownst to the public — helped him avoid millions in taxes.

And the tax records of Republican Sen. Rick Scott of Florida and Trump’s education secretary, Betsy DeVos, showed that both employed a loophole, which was accidentally created by Congress, to escape estate and gift taxes.

As ProPublica has revealed in a series of articles this year, these tactics, if sometimes aggressive, are completely legal. And they’re not universal among wealthy politicians. ProPublica reviewed tax data for a couple dozen wealthy current and former government officials. Their data shows that many of them paid relatively high tax rates while employing more modest use of the fairly standard deductions of the rich.

The politicians who paid little or exploited loopholes either defended their practices as completely proper or declined to comment.

“The Governor has paid every cent of taxes he owes, he has championed tax reform and tax fairness to fix this broken system for everybody, to report otherwise would be inaccurate,” Polis’ spokesperson wrote in an email.

During the late 1990s dot-com era, Polis earned a reputation as a boy wonder. He turned his parents’ small greeting card company into a website, bluemountain.com, which was among the first to enable users to send free virtual cards. He and his family sold the site in 1999 for $780 million.

With the windfall from the sale, Polis continued to start new ventures and invest, but he also began laying the groundwork for a career in politics. He landed in the governor’s office in 2019 when he was just 43.

One of his tools for raising his profile was philanthropy. His generous donations to charity became a theme of both his 2008 run for Congress and his 2018 run for Colorado’s highest office.

Philanthropy also helped keep his tax rate enviably low. In many years, the deductions he claimed for his charitable giving were large enough to wipe out half the income he would have owed taxes on. His giving allowed him, in essence, to take some of the money he would have paid into the public coffers and donate it instead to causes of his choosing.

But an examination of Polis’ philanthropy shows that while he has given to a wide variety of causes, some of his donations served to promote him, blurring the lines between charity and campaigning.

According to the tax filings of his charity, the Jared Polis Foundation, the organization spent more than $2 million from 2001 to 2008 on a semiannual mailer sent to “hundreds of thousands of households throughout Colorado” that was intended to build “on a foundation of familiarity with Jared Polis’ name and his support of public education.” It was one of the charity’s largest expenditures.

A 2005 edition of the mailer reviewed by ProPublica had the feel of a campaign ad. It was emblazoned with the title “Jared Polis Education Report,” included his name six times on the cover and featured photos of Polis, a former state board of education member, surrounded by smiling school children.

The newsletters were discontinued just as he was elected. Because the mailers did not explicitly advocate for his election, they would have been legally allowed as a charitable expenditure.

A decade later, when he ran for governor in a race that he personally poured more than $20 million into, Polis featured his philanthropy in his campaign. In one ad, he used testimonials from an employee and a graduate of a business training charity he founded for military veterans.

Polis’ spokesperson, Victoria Graham, defended the mailers, saying they were intended “to promote innovations and successful models in public education and to raise awareness for the challenges facing public education.” She also pointed to a range of other philanthropy Polis was involved in, from founding charter schools, which she noted were not named after him, to distributing computers to organizations in need.

“His philanthropy is not and has never been motivated by receiving a tax write-off, and to state otherwise is not only inaccurate but fabricating motives and intent and cynical in its view of charity,” Graham said.

While Polis’ charitable giving has helped keep the percentage of his income he pays in taxes low, he has also been able to keep his total taxable income relatively small by using another strategy common among the wealthy: investing in businesses that grow in value but produce minimal income.

It sounds counterintuitive, but it’s a basic principle of the U.S. tax system — one that typically benefits wealthy people who can afford not to take income. Investments only trigger income taxes when they produce “realized” gains, such as dividends from a stock holding, the sale of an asset or profits from a company. But an investment’s growth in value, while it makes its owner richer, is not taxable.

Polis acknowledged his use of the strategy in 2008 after he released tax information during his first run for Congress and faced criticism for paying so little in taxes. “I founded several high-growth companies, and we would manage those for growth rather than for profit,” he said. “When I make money, I pay taxes. When I don’t make money, I don’t.”

In one of the recent years Polis paid no income taxes, his losses were larger than his income. In two of the years, it was about a million dollars. From 2010 to 2018, when he paid an overall rate of just 8.2%, including payroll taxes, his income averaged $1.5 million.

During that period of low taxes and relatively low income, Polis’ estimated net worth rose sharply. Members of Congress only have to report the value of each of their assets in ranges, so assigning a precise number is impossible. But the nonprofit data site OpenSecrets, which makes estimates by taking the midpoint of the ranges, shows Polis’ wealth growing from $143 million in 2010 to $306 million in 2017, making him the third richest-member of the House at the time. (Graham said congressional disclosure forms are confusingly formatted, potentially causing certain assets to be counted more than once, “so these numbers are likely wildly off.” She did not provide alternative net worth figures.)

One of Polis’ primary vehicles for building his fortune, while avoiding taxable income, appears to have been a family office, Jovian Holdings. The board of directors included his father, sister and a rather surprising outsider: Arthur Laffer. The famed conservative economist’s Laffer Curve provided the Reagan administration with the intellectual basis for arguing that cutting taxes would increase tax revenue. (Polis’ sister is a ProPublica donor.)

The term family office has a mom-and-pop feel, but it is actually part of the infrastructure of protecting the fortunes of the ultrawealthy, from crafting investment and tax strategy to succession and estate planning to concierge services. Depending on how they’re organized, for instance as a business, their costs — the salaries of the staff, rent — can be deductible.

One of the executives at Polis’ family office, according to her LinkedIn profile, is a seasoned tax expert who specializes in “maximizing cost savings both operationally and with all taxing authorities.” She removed that detail around the time ProPublica approached Polis about his taxes.

Unlike ordinary investors, Polis was able to claim millions in deductions for some of the costs of his money management, specifically his family office, which contributed to lowering his tax burden. Ironically, the investment apparatus that helped Polis avoid taxable income became a tax break.

ProPublica discussed the scenario, without naming Polis, with Bob Lord, tax counsel for the advocacy group Americans for Tax Fairness. He said the public appears to be essentially subsidizing Polis’ investing while getting little in return. With a typical business, he said, you get the tax break but also relatively quickly make taxable income.

The costs of a family office are “being taken even though the income may be way out in the future. It’s just a giveaway,” Lord said. “What is the public getting from it? This really, really rich politician gets to shelter his income while his investments grow and doesn’t pay tax on it until he sells.”

Deferring paying taxes is a valuable perk. But the strategy, Lord said, may allow Polis an even more lucrative outcome. Now that Polis has made his fortune, he may be able to largely dodge the tax system forever. Should he die before selling his investments, his heirs would never owe income taxes on the growth.

Graham acknowledged that the tax system unfairly benefits the wealthy but said Polis is not purposely avoiding income that would result in taxes.

“The Governor has long championed tax reforms precisely because the income tax is inadequate and a mismatched way to tax most wealthy people who do not have a regular income but who make money in other ways and should be taxed,” she said. “Since 2006, Governor Polis has paid over $20 million in taxes on the money he earned on his gains and he has championed tax reforms that would lower the tax burden on middle-income earners and eliminate loopholes to ensure higher earners pay their share.”

ProPublica’s data shows that at least two federal officials have already taken steps to preserve their family fortunes for their heirs, exploiting loopholes that divert revenue from the federal government.

Scott, the Florida senator who ran one of the world’s largest health care companies, and DeVos, Trump’s education secretary and believed to be the richest member of his cabinet, have both stored assets in grantor retained annuity trusts — a form of trust used to avoid gift and estate taxes.

GRATs, as they’re commonly known, were accidentally created by Congress in 1990. Lawmakers were trying to close another estate tax loophole and in doing so unintentionally paved the way for another one. The lawyer who pioneered the trusts estimated in 2013 that they had cost the federal government about $100 billion over the prior 13 years.

To use this tax-avoidance technique, you put an asset, like stocks or real estate, into a trust assigned to your heirs. The trust pays you back the starting value of the asset (plus some interest). If the original asset rises in value, the gains can go to your heirs tax-free.

GRATs have become widely used among the superrich. A ProPublica investigation found that more than half of the nation’s richest individuals have employed them and other trusts to avoid estate taxes.

It’s unclear from ProPublica’s data how much DeVos, 63, and Scott, 68, were able to transfer tax-free.

DeVos and her husband employed a GRAT from at least 2000 to 2003. DeVos’ father was a wealthy industrialist. Her husband was the president of Amway, a multilevel marketing company that focuses on health, beauty and home products. Her family is believed to be worth billions.

Her causes both before and during her time in government depended on tax dollars. As a donor and fundraiser for Republican causes, she pushed for charter schools and government subsidies to allow parents to send their kids to private schools. As education secretary, she pushed to send millions of federal dollars intended for public schools to private and religious schools instead.

Scott, one of the wealthiest senators, with a net worth likely in the hundreds of millions, used a GRAT for much longer, from at least 2001 through 2009. His tax data shows the assets in the trust — stakes of a private investment fund and family partnership he and his wife created — receiving millions in income.

When he was in the private sector, Scott benefited from federal programs like Medicare, which are funded by taxes. He built and ran Columbia/HCA, a massive chain of for-profit hospitals. After a fraud investigation became public, he resigned and the company paid $1.7 billion to settle allegations it overbilled government health programs. Scott has previously emphasized that he was never charged, though he acknowledged the company made mistakes.

Scott declined to comment. Nick Wasmiller, a spokesman for DeVos, said she “pays her taxes in full as required by law. Your ‘reporting’ is not only factually wrong but also doubles-down on the criminal actions that underpin ProPublica’s political campaign to prop up the Biden Administration’s failing agenda.”

California Congressman Darrell Issa was one of a handful of Republicans who bucked his party in 2017 and voted against Trump’s tax overhaul.

Issa said he opposed the legislation because it all but eliminated the deduction taxpayers could take on their federal returns for state and local taxes. That provision was particularly contentious in high tax blue states like California, but most Republicans from his state still fell in line. The other GOP congressman in the San Diego area, for example, voted yes.

Limiting the write-off, known as the SALT deduction, was one of the few progressive changes in the Trump tax law. The deduction had long disproportionately benefited the wealthiest because they pay the most in state and local taxes. According to one projection, if the cap were removed from the deduction, households with income in the top 1% would reap the most benefit, paying $31,000 less a year on average — amounting to more than half of the total taxes avoided through the write-off. The top 25% of households would average less than $3,000 in savings a year, and the savings drop precipitously from there, with most households deriving no benefit.

In interviews and public statements, Issa said in fighting to preserve the deduction, he was defending the interests of middle-class taxpayers. “I didn’t come to Washington to raise taxes on my constituents,” he said at the time, “and I do not plan to start today.”

It’s true that more than 40% of taxpayers in Issa’s former district, a relatively affluent swath of Southern California, were able to make at least some use of the deduction.

But the 68-year-old congressman, who made a fortune in the car alarm business, was in the top echelon of its beneficiaries. Between 2003 and 2017, his tax data shows, Issa generally paid a relatively high tax rate but was able to claim more than $51 million in write-offs thanks to the SALT deduction, an average of more than $3 million a year.

By contrast, households in his district that made between $100,000 and $200,000 and took the SALT deduction claimed an average of $14,843 in 2017.

Issa’s spokesman, Jonathan Wilcox, declined to say if the SALT deduction’s impact on the congressman’s taxes factored into his decision to advocate for it.

“So much stupid,” Wilcox said. “Be sure to write back if you ever do better than trolling for garbage.”

Gov. Jim Justice is believed to be the richest person in West Virginia, controlling vast reserves of valuable steelmaking coal and owning The Greenbrier luxury resort. He made an appearance in 2014 on the Forbes list of 400 wealthiest Americans. Estimates of his net worth have ranged from the hundreds of millions to well over a billion.

Nonetheless, he’s paid little or no federal income taxes for almost every year between 2000 and 2018, ProPublica’s trove of tax records shows. In 12 of those years he paid nothing, and in all but two of those years, his rate didn’t exceed 4%.

His largest tax payment came in 2009, when his family sold off much of its mining holdings to a Russian company for more than half a billion dollars. That year, after deductions, his tax rate rose to a modest 13.4%.

In more recent years, Justice, 70, has reported tens of millions in losses each year. That not only helped him to minimize his federal income taxes, it also allowed him to apply those losses to his profits from previous years — and get refunds for the taxes he initially paid in those years.

Justice’s income was low enough in 2018 for his family to qualify for and receive a $2,400 coronavirus stimulus check, aid meant for low- and middle-income Americans.

The recent years of large losses reported on Justice’s tax returns have coincided with real signs of financial problems. The coal industry’s fortunes have rapidly declined. He’s been hounded for unpaid bills and loans. The Russian company that bought much of his coal empire sued him and got him to buy back the assets — at a much discounted price but attached to significant debt. Forbes knocked him off its wealth ranking, citing escalating battles with two major lenders over unpaid debt. Justice’s representatives have said he pays what he owes, and his business empire is in good shape.

But even before his empire began showing significant cracks, Justice was reporting losses or little income for a man so wealthy. From 1996 to 2008, Justice, who received a coal and farming fortune from his father, who died in 1993, either reported losses to the IRS or just a few hundred thousand dollars in income.

The disconnect could be explained by the generous deductions afforded to coal business owners.

For example, owners are allowed a depletion deduction, which allows them to take 10% of the revenue from coal they extract and write it off against their profit. This spin on depreciation can have outsized benefits because unlike normal depreciation — in which the write-offs are based on how much you paid for an asset — the write-off amount here faces no such limit, and can therefore exceed the initial investment. The deduction has been criticized by environmentalists and congressional Democrats as an overly generous giveaway.

Another benefit coal owners get is the ability to immediately expense much of their mine development costs on their taxes instead of being forced to stretch such deductions over a longer period of time. Justice has said that in the 15 years after his father’s death, he oversaw “a massive expansion of multiple businesses which included significant coal reserve expansion” — development that could have provided him with a significant stockpile of such write-offs. (ProPublica has previously reported on other generous write-offs. Sports team owners, for example, are allowed to deduct the value of their intangible assets — such as media deals and franchise rights — as wasting assets, even as they rise in value.)

Experts said this could explain how Justice could have reported negative income of $15 million in 2008, a year in which Mechel, the Russian company that subsequently bought much of his family’s coal empire, said that business alone produced about $94 million in EBITDA — a common measure of a business’ profitability before taxes and some other expenses.

Justice declined to answer a list of specific questions about his taxes. In a statement, his lawyer, Steve Ruby, said Justice “has paid millions upon millions of dollars in state and federal income taxes and has always followed the law. In many years, his businesses have suffered losses as the result of weak coal prices combined with substantial outlays to save jobs at local businesses that other companies were abandoning.

“When many other coal producers were filing for bankruptcy, the Justice companies persevered and refused to take the easy way out through a bankruptcy proceeding, a decision that contributed to those losses. Like any other taxpayer, Gov. Justice does not owe income taxes in years in which his income is negative,” the statement read.

Ruby confirmed that Justice received coronavirus stimulus checks but said he did not cash them.

Like Scott and DeVos, Justice has used GRATs to sidestep estate and gift taxes, his returns and court records suggest.

In 2008, the year before he sold much of his coal empire to the Russian company, two GRATs appeared on his returns for the first time. And when the Russian company sued Justice, it also sued him in his capacity as the trustee for those GRATs. Justice had placed at least some of the coal assets into the trusts before the sale, according to the lawsuit.

Ruby’s statement did not address Justice’s use of GRATs.

Originally published on ProPublica by Ellis SimaniRobert Faturechi and Ken Ward Jr. and republished under a Creative Commons License (CC BY-NC-ND 3.0)

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.Series: The Secret IRS Files Inside the Tax Records of the .001%

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Facebook has a misinformation problem, and is blocking access to data about how much there is and who is affected

Leaked internal documents suggest Facebook – which recently renamed itself Meta – is doing far worse than it claims at minimizing COVID-19 vaccine misinformation on the Facebook social media platform. 

Online misinformation about the virus and vaccines is a major concern. In one study, survey respondents who got some or all of their news from Facebook were significantly more likely to resist the COVID-19 vaccine than those who got their news from mainstream media sources.

As a researcher who studies social and civic media, I believe it’s critically important to understand how misinformation spreads online. But this is easier said than done. Simply counting instances of misinformation found on a social media platform leaves two key questions unanswered: How likely are users to encounter misinformation, and are certain users especially likely to be affected by misinformation? These questions are the denominator problem and the distribution problem.

The COVID-19 misinformation study, “Facebook’s Algorithm: a Major Threat to Public Health”, published by public interest advocacy group Avaaz in August 2020, reported that sources that frequently shared health misinformation — 82 websites and 42 Facebook pages — had an estimated total reach of 3.8 billion views in a year.

At first glance, that’s a stunningly large number. But it’s important to remember that this is the numerator. To understand what 3.8 billion views in a year means, you also have to calculate the denominator. The numerator is the part of a fraction above the line, which is divided by the part of the fraction below line, the denominator.

Getting some perspective

One possible denominator is 2.9 billion monthly active Facebook users, in which case, on average, every Facebook user has been exposed to at least one piece of information from these health misinformation sources. But these are 3.8 billion content views, not discrete users. How many pieces of information does the average Facebook user encounter in a year? Facebook does not disclose that information.

Without knowing the denominator, a numerator doesn’t tell you very much. The Conversation U.S., CC BY-ND

Market researchers estimate that Facebook users spend from 19 minutes a day to 38 minutes a day on the platform. If the 1.93 billion daily active users of Facebook see an average of 10 posts in their daily sessions – a very conservative estimate – the denominator for that 3.8 billion pieces of information per year is 7.044 trillion (1.93 billion daily users times 10 daily posts times 365 days in a year). This means roughly 0.05% of content on Facebook is posts by these suspect Facebook pages. 

The 3.8 billion views figure encompasses all content published on these pages, including innocuous health content, so the proportion of Facebook posts that are health misinformation is smaller than one-twentieth of a percent.

Is it worrying that there’s enough misinformation on Facebook that everyone has likely encountered at least one instance? Or is it reassuring that 99.95% of what’s shared on Facebook is not from the sites Avaaz warns about? Neither. 

Misinformation distribution

In addition to estimating a denominator, it’s also important to consider the distribution of this information. Is everyone on Facebook equally likely to encounter health misinformation? Or are people who identify as anti-vaccine or who seek out “alternative health” information more likely to encounter this type of misinformation? 

Another social media study focusing on extremist content on YouTube offers a method for understanding the distribution of misinformation. Using browser data from 915 web users, an Anti-Defamation League team recruited a large, demographically diverse sample of U.S. web users and oversampled two groups: heavy users of YouTube, and individuals who showed strong negative racial or gender biases in a set of questions asked by the investigators. Oversampling is surveying a small subset of a population more than its proportion of the population to better record data about the subset.

The researchers found that 9.2% of participants viewed at least one video from an extremist channel, and 22.1% viewed at least one video from an alternative channel, during the months covered by the study. An important piece of context to note: A small group of people were responsible for most views of these videos. And more than 90% of views of extremist or “alternative” videos were by people who reported a high level of racial or gender resentment on the pre-study survey.

While roughly 1 in 10 people found extremist content on YouTube and 2 in 10 found content from right-wing provocateurs, most people who encountered such content “bounced off” it and went elsewhere. The group that found extremist content and sought more of it were people who presumably had an interest: people with strong racist and sexist attitudes. 

The authors concluded that “consumption of this potentially harmful content is instead concentrated among Americans who are already high in racial resentment,” and that YouTube’s algorithms may reinforce this pattern. In other words, just knowing the fraction of users who encounter extreme content doesn’t tell you how many people are consuming it. For that, you need to know the distribution as well.

Superspreaders or whack-a-mole?

A widely publicized study from the anti-hate speech advocacy group Center for Countering Digital Hate titled Pandemic Profiteers showed that of 30 anti-vaccine Facebook groups examined, 12 anti-vaccine celebrities were responsible for 70% of the content circulated in these groups, and the three most prominent were responsible for nearly half. But again, it’s critical to ask about denominators: How many anti-vaccine groups are hosted on Facebook? And what percent of Facebook users encounter the sort of information shared in these groups? 

Without information about denominators and distribution, the study reveals something interesting about these 30 anti-vaccine Facebook groups, but nothing about medical misinformation on Facebook as a whole.

These types of studies raise the question, “If researchers can find this content, why can’t the social media platforms identify it and remove it?” The Pandemic Profiteers study, which implies that Facebook could solve 70% of the medical misinformation problem by deleting only a dozen accounts, explicitly advocates for the deplatforming of these dealers of disinformation. However, I found that 10 of the 12 anti-vaccine influencers featured in the study have already been removed by Facebook.

Consider Del Bigtree, one of the three most prominent spreaders of vaccination disinformation on Facebook. The problem is not that Bigtree is recruiting new anti-vaccine followers on Facebook; it’s that Facebook users follow Bigtree on other websites and bring his content into their Facebook communities. It’s not 12 individuals and groups posting health misinformation online – it’s likely thousands of individual Facebook users sharing misinformation found elsewhere on the web, featuring these dozen people. It’s much harder to ban thousands of Facebook users than it is to ban 12 anti-vaccine celebrities.

This is why questions of denominator and distribution are critical to understanding misinformation online. Denominator and distribution allow researchers to ask how common or rare behaviors are online, and who engages in those behaviors. If millions of users are each encountering occasional bits of medical misinformation, warning labels might be an effective intervention. But if medical misinformation is consumed mostly by a smaller group that’s actively seeking out and sharing this content, those warning labels are most likely useless.

[You’re smart and curious about the world. So are The Conversation’s authors and editors. You can read us daily by subscribing to our newsletter.]

Getting the right data

Trying to understand misinformation by counting it, without considering denominators or distribution, is what happens when good intentions collide with poor tools. No social media platform makes it possible for researchers to accurately calculate how prominent a particular piece of content is across its platform. 

Facebook restricts most researchers to its Crowdtangle tool, which shares information about content engagement, but this is not the same as content views. Twitter explicitly prohibits researchers from calculating a denominator, either the number of Twitter users or the number of tweets shared in a day. YouTube makes it so difficult to find out how many videos are hosted on their service that Google routinely asks interview candidates to estimate the number of YouTube videos hosted to evaluate their quantitative skills. 

The leaders of social media platforms have argued that their tools, despite their problems, are good for society, but this argument would be more convincing if researchers could independently verify that claim.

As the societal impacts of social media become more prominent, pressure on the big tech platforms to release more data about their users and their content is likely to increase. If those companies respond by increasing the amount of information that researchers can access, look very closely: Will they let researchers study the denominator and the distribution of content online? And if not, are they afraid of what researchers will find?

This article was originally published on The Conversation By Ethan Zuckerman and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license (CC BY-NC-ND 4.0).

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Profits Before People: ‘The Facebook Papers’ Expose Tech Giant Greed

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“This industry is rotten at its core,” said one critic, “and the clearest proof of that is what it’s doing to our children.”

Internal documents dubbed “The Facebook Papers” were published widely Monday by an international consortium of news outlets who jointly obtained the redacted materials recently made available to the U.S. Congress by company whistleblower Frances Haugen.

“It’s time for immediate action to hold the company accountable for the many harms it’s inflicted on our democracy.”

The papers were shared among 17 U.S. outlets as well as a separate group of news agencies in Europe, with all the journalists involved sharing the same publication date but performing their own reporting based on the documents.

According to the Financial Times, the “thousands of pages of leaked documents paint a damaging picture of a company that has prioritized growth” over other concerns. And the Washington Post concluded that the choices made by founder and CEO Mark Zuckerberg, as detailed in the revelations, “led to disastrous outcomes” for the social media giant and its users.

From an overview of the documents and the reporting project by the Associated Press:

The papers themselves are redacted versions of disclosures that Haugen has made over several months to the Securities and Exchange Commission, alleging Facebook was prioritizing profits over safety and hiding its own research from investors and the public.

These complaints cover a range of topics, from its efforts to continue growing its audience, to how its platforms might harm children, to its alleged role in inciting political violence. The same redacted versions of those filings are being provided to members of Congress as part of its investigation. And that process continues as Haugen’s legal team goes through the process of redacting the SEC filings by removing the names of Facebook users and lower-level employees and turns them over to Congress.

One key revelation highlighted by the Financial Times is that Facebook has been perplexed by its own algorithms and another was that the company “fiddled while the Capitol burned” during the January 6th insurrection staged by loyalists to former President Donald Trump trying to halt the certification of last year’s election.

CNN warned that the totality of what’s contained in the documents “may be the biggest crisis in the company’s history,” but critics have long said that at the heart of the company’s problem is the business model upon which it was built and the mentality that governs it from the top, namely Zuckerberg himself.

On Friday, following reporting based on a second former employee of the company coming forward after Haugen, Free Press Action co-CEO Jessica J. González said “the latest whistleblower revelations confirm what many of us have been sounding the alarm about for years.”

“Facebook is not fit to govern itself,” said González. “The social-media giant is already trying to minimize the value and impact of these whistleblower exposés, including Frances Haugen’s. The information these brave individuals have brought forth is of immense importance to the public and we are grateful that these and other truth-tellers are stepping up.”

While Zuckerberg has testified multiple times before Congress, González said nothing has changed. “It’s time for Congress and the Biden administration to investigate a Facebook business model that profits from spreading the most extreme hate and disinformation,” she said. “It’s time for immediate action to hold the company accountable for the many harms it’s inflicted on our democracy.”

“Kids don’t stand a chance against the multibillion dollar Facebook machine, primed to feed them content that causes severe harm to mental and physical well being.”

With Haugen set to testify before the U.K. Parliament on Monday, activists in London staged protests against Facebook and Zuckerberg, making clear that the giant social media company should be seen as a global problem.

Flora Rebello Arduini, senior campaigner with the corporate accountability group, was part of a team that erected a large cardboard display of Zuckerberg “surfing a wave of cash” outside of Parliament with a flag that read, “I know we harm kids, but I don’t care”—a rip on a video Zuckerberg posted of himself earlier this year riding a hydrofoil while holding an American flag.

While Zuckerberg refused an invitation to tesify in the U.K. about the company’s activities, including the way it manipulates and potentially harms young users on the platform, critics like Arduini said the giant tech company must be held to account.

“Kids don’t stand a chance against the multibillion dollar Facebook machine, primed to feed them content that causes severe harm to mental and physical well being,” she said. “This industry is rotten at its core and the clearest proof of that is what it’s doing to our children. Lawmakers must urgently step in and pull the tech giants into line.”

“Right now, Mark [Zuckerberg] is unaccountable,” Haugen told the Guardian in an interview ahead of her testimony. “He has all the control. He has no oversight, and he has not demonstrated that he is willing to govern the company at the level that is necessary for public safety.”

Correction: This article has been updated to more accurately reflect the context of the comments made by Jessica González of Free Press, who responded to the revelations of a second whistleblower not those of Frances Haugen.

Originally published on Common Dreams by JON QUEALLY and republished under a Creative Commons License (CC BY-NC-ND 3.0).

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In World First, New Zealand Law Will Force Banks to Disclose Climate Impacts of Investments

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“This is a landmark day.”

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.

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).

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Exposed: How Pfizer Exploits Secretive Vaccine Contracts to Strong-Arm Governments

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“Pfizer has used its monopoly on a lifesaving vaccine to extract concessions from desperate governments,” said the report’s author, urging action from the Biden administration.

Pfizer has used its position as a producer of one of the leading Covid-19 vaccines to “silence governments, throttle supply, shift risk, and maximize profits” through secret contracts with countries around the world, according to a Public Citizen report published Tuesday.

“The contracts consistently place Pfizer’s interests before public health imperatives.”

“Behind closed doors, Pfizer wields its power to extract a series of concerning concessions from governments,” report author Zain Rizvi, law and policy researcher at Public Citizen’s Access to Medicines program, said in a statement. “The global community cannot allow pharmaceutical corporations to keep calling the shots.”

The new report begins by noting February reporting about accusations of Pfizer—an American pharmaceutical giant that developed its mRNA vaccine with the German firm BioNTech—”bullying” Latin American governments during contract negotiations for doses.

Public Citizen obtained unredacted term sheets, drafts, or final agreements between Pfizer and Albania, Brazil, Colombia, the Dominican Republic, the European Commission, and Peru. The consumer rights advocacy group also examined redacted contracts with Chile, the U.S., and the U.K.

Based on those contracts, the report identifies six tactics Pfizer is using to serve the company rather than public health in the midst of a deadly pandemic:

1. Pfizer Reserves the Right to Silence Governments

The Brazilian government complained earlier this year that the company insisted on “unfair and abusive” terms but ultimately accepted a contract that “waived sovereign immunity; imposed no penalties on Pfizer for late deliveries; agreed to resolve disputes under a secret private arbitration under the laws of New York; and broadly indemnified Pfizer for civil claims.”

Brazil also agreed to a nondisclosure provision similar to those found in contracts with the European Commission and the U.S. government.

2. Pfizer Controls Donations

Again using Brazil as an example, the report points out that the South American nation must first get a go-ahead from Pfizer to accept donations or buy its vaccines from others. The country is also barred from “donating, distributing, exporting, or otherwise transporting the vaccine outside Brazil without Pfizer’s permission.”

3. Pfizer Secured an “IP Waiver” for Itself

Pfizer CEO Albert Bourla “has emerged as a strident defender of intellectual property in the pandemic,” the report says, noting his opposition to a proposal that members of the World Trade Organization who signed on to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) waive IP protections for Covid-19 vaccines and treatments during the crisis.

“But, in several contracts, Pfizer seems to recognize the risk posed by intellectual property to vaccine development, manufacturing, and sale,” Public Citizen explains. “The contracts shift responsibility for any intellectual property infringement that Pfizer might commit to the government purchasers. As a result, under the contract, Pfizer can use anyone’s intellectual property it pleases—largely without consequence.”

4. Private Arbitrators, Not Public Courts, Decide Disputes in Secret

While the U.K. contract requires that disputes are settled by secret panel of three private arbitrators under the Rules of Arbitration of the International Chamber of Commerce, the report says, “the Albania draft contract and Brazil, Chile, Colombia, Dominican Republic, and Peru agreements require the governments to go further, with contractual disputes subject to ICC arbitration applying New York law.”

5. Pfizer Can Go After State Assets

“Pfizer required Brazil, Chile, Colombia, the Dominican Republic, and Peru to waive sovereign immunity,” the report highlights, detailing that the doctrine can sometimes protect states from companies trying to enforce decisions reached by the previously noted secret arbitral panels. Some of the contracts enable the company to “request that courts use state assets as a guarantee that Pfizer will be paid an arbitral award and/or use the assets to compensate Pfizer if the government does not pay,” according to Public Citizen.

6. Pfizer Calls the Shots on Key Decisions

“What happens if there are vaccine supply shortages? In the Albania draft contract and the Brazil and Colombia agreement, Pfizer will decide adjustments to the delivery schedule based on principles the corporation will decide” the report notes, concluding that “under the vast majority of contracts, Pfizer’s interests come first.”

Public Citizen calls on world leaders, especially U.S. President Joe Biden, to “push back” against Pfizer’s negotiating tactics and “rein in” its monopoly power.

According to the group, the Biden administration can “call on Pfizer to renegotiate existing commitments and pursue a fairer approach in the future” as well as “further rectify the power imbalance by sharing the vaccine recipe, under the Defense Production Act, to allow multiple producers to expand vaccine supplies.”

The U.S. administration “can also work to rapidly secure a broad waiver of intellectual property rules,” the report adds, declaring that “a wartime response against the virus demands nothing less.”

https://twitter.com/zainrizvi/status/1450499674436214784?s=20

In response to Public Citizen’s report, Sharon Castillo, a spokesperson for Pfizer, told The Washington Post that confidentiality clauses were “standard in commercial contracts” and “intended to help build trust between the parties, as well as protect the confidential commercial information exchanged during negotiations and included in final contracts.”

Castillo also said that “Pfizer has not interfered and has absolutely no intention of interfering with any country’s diplomatic, military, or culturally significant assets,” adding that “to suggest anything to the contrary is irresponsible and misleading.”

Meanwhile, Peter Maybarduk, director of Public Citizen’s Access to Medicines program, accused Pfizer of “taking advantage of countries’ desperation” with the far-reaching contracts.

“Most of us have sacrificed during the pandemic; staying distant to protect family and friends,” Maybarduk said Tuesday. “Pfizer went the other way, using its control of scarce vaccines to win special privileges, from people that have little choice.”


This article was originally published on Common Dreams by JESSICA CORBETT was republished under the Creative Commons license (CC BY-NC-ND 3.0).

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Trump Won the County in a Landslide. His Supporters Still Hounded the Elections Administrator Until She Resigned.

Michele Carew, an elections administrator with 14 years of experience, has resigned after a monthslong campaign by Trump loyalists to oust her. “I’m leaving on my own accord,” she said.

An elections administrator in North Texas submitted her resignation Friday, following a monthslong effort by residents and officials loyal to former President Donald Trump to force her out of office.

Michele Carew, who had overseen scores of elections during her 14-year career, had found herself transformed into the public face of an electoral system that many in the heavily Republican Hood County had come to mistrust, which ProPublica and The Texas Tribune covered earlier this month.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Her critics sought to abolish her position and give her duties to an elected county clerk who has used social media to promote baseless allegations of widespread election fraud.

Carew, who was hired to run elections in Hood County two-and-a-half months before the contested presidential race, said in an interview that she worried that the forces that tried to drive her out will spread to other counties in the state.

“When I started out, election administrators were appreciated and highly respected,” she said. “Now we are made out to be the bad guys.”

Critics accused Carew of harboring a secret liberal agenda and of violating a decades-old elections law, despite assurances from the Texas secretary of state that she was complying with Texas election rules.

Carew said she is joining an Austin-based private company and will work to help local elections administrator offices across the country run more efficiently. She will oversee her final election in early November before leaving Nov. 12.

David Becker, executive director of the Center for Election Innovation and Research, a nonprofit that seeks to increase voter participation and improve the efficiency of elections administration, said Carew’s departure is the latest example of an ominous trend toward independent election administrators being forced out in favor of partisan officials.

“She is not the first and won’t be the last professional election official to have to leave this profession because of the toll it is taking, the bullies and liars who are slandering these professionals,” said Becker, a former Department of Justice lawyer who helped oversee voting rights enforcement under presidents Bill Clinton and George W. Bush. “We are losing a generation of professional expertise. We are only beginning to feel the effects.”

Though experts say it is difficult to determine how many elections officials have left their positions nationally, states like Pennsylvania and Ohio have seen numerous departures. According to the AP, about a third of Pennsylvania’s county election officials have left in the last year and a half; in Ohio, one in four directors or deputy auditors of elections have left in the southwestern part of the state, according to The New York Times.

Hood County would seem an unlikely place for disputes over the last presidential election given that Trump won 81% of the vote there, one of his largest margins of victory in the state. Across the country, partisans’ demands for audits have mostly focused on counties and states carried by President Joe Biden, particularly those that went for Trump four years earlier.

But Texas, despite going for Trump by 6 percentage points, has seen its fair share of blowback. Last month, the Texas secretary of state announced a “comprehensive forensic audit” of four of the state’s largest counties hours after Trump issued a public letter demanding audits of the state’s results.

Before that, in July, Texas passed sweeping voting legislation that critics say disenfranchises vulnerable voters and unfairly targets administrators and other elections officials. Among the law’s provisions are new criminal penalties for election workers accused of interfering with expanded powers given to poll watchers.

On Saturday, after blasting the four-county audit plan as “weak,” Trump threatened the speaker of the Texas House of Representatives with a primary challenge if the speaker didn’t advance a bill that would allow audits in more counties.

In Hood County, the local GOP executive committee likewise issued warnings to Republican officials who defended Carew. In July, the committee threatened County Judge Ron Massingill with a social media campaign that would tell voters he was “incapable of providing them with free and fair elections” if he didn’t convene the county’s elections commission to discuss Carew’s termination.

Massingill refused, arguing that no political party should be able to direct the activities of the independent elections administrator. Katie Lang, the county clerk and vice chair of the county’s election commission, convened the meeting and moved to fire Carew. Carew survived the vote by a 3-2 margin, with Massingill and the county tax assessor, both Republicans, joining the Hood County Democratic chair.

Republican County Chair David Fischer called on county commissioners to dissolve the independent office of elections administrator and transfer election duties to Lang, which he said would make the election administration process more accountable to the county’s Republican majority.

Counties in Texas can choose between hiring an independent elections administrator, who is meant to be insulated from political pressures, or letting a county official, often an elected county clerk, run elections. County clerks, who manage functions like property records and birth certificates, run elections in many of the state’s smallest counties.

Fischer has declined to speak with ProPublica and The Texas Tribune.

On social media, Lang has shared “Stop the Steal” and “Impeach Biden” memes and videos. Lang made national headlines in 2015 after refusing to issue a marriage license to a gay couple following the U.S. Supreme Court’s landmark decision legalizing same-sex marriage. Lang did not respond to a request for comment on Monday, but she previously told the Hood County News she wished Carew “the best in her future endeavors.”

Over the last year, Carew has come under fire for everything from her connection with the League of Women Voters, which critics say is anti-Trump, to her interest in a $29,000 grant, funded in part by Facebook founder Mark Zuckerberg, that would have been used to pay for costs related to the pandemic.

She was also accused of harboring a hidden agenda after refusing to allow a reporter with the fervently pro-Trump One America News Network into a private training for election professionals in March when she headed the Texas Association of Elections Administrators.

The most sustained criticism of Carew came from critics who accused her of violating the law by not adhering to an obscure election law that requires ballots to be consecutively numbered.

But seven election experts and administrators told ProPublica and the Tribune that consecutively numbering ballots is out of step with best practices in election security and voter privacy, and that consecutive numbering is not required to conduct effective election audits.

Despite the toll the last year has taken on her, Carew on Monday remained defiant. “I’m leaving on my own accord,” she said. “I’m the one who wins in the end.”

Originally published on ProPublica by Jeremy Schwartz and republished under a Creative Commons License (CC BY-NC-ND 3.0)

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Congress want Amazon to Prove Bezos didn’t give perjured Testimony

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While still CEO of Amazon, Jeff Bezos testified in Congress by video conference on July 29, 2020. Now, there are at least Five members of a congressional committee alleging that he and other executives may have lied under oath andmisled lawmakers.

In a press release by the House Judiciary Antitrust Subcommittee the lawmakers state that they are giving Amazon a “Final Chance to Correct the Record Following a Series of Misleading Testimony and Statements”.

CurrentAmazon CEO Andy Jassy, who, in July, succeeded Bezos is being asked to respond to the discrepancies, including information found by The Markup published in a recent article

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After Docs ‘Show What We Feared’ About Amazon’s Monopoly Power, Warren Says ‘Break It Up’

Leaked documents reveal the e-commerce company’s private-brands team in India “secretly exploited internal data” to copy products from other sellers and rigged search results.

U.S. Sen. Elizabeth Warren on Wednesday renewed her call to break up Amazon after internal documents obtained by Reuters revealed that the e-commerce giant engaged in anti-competitive behavior in India that it has long denied, including in testimonies from company leaders to Congress.

“These documents show what we feared about Amazon’s monopoly power—that the company is willing and able to rig its platform to benefit its bottom line while stiffing small businesses and entrepreneurs,” tweeted Warren (D-Mass.) “This is one of the many reasons we need to break it up.”

Warren is a vocal advocate of breaking up tech giants including but not limited to Amazon. The company faces investigations regarding alleged anti-competitive behavior in the United States as well as Europe and India. The investigative report may ramp up such probes.

Aditya Karla and Steve Stecklow report that “thousands of pages of internal Amazon documents examined by Reuters—including emails, strategy papers, and business plans—show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets.”

“The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform,” according to the reporters. “The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results.”

As Reuters notes:

In sworn testimony before the U.S. Congress in 2020, Amazon founder Jeff Bezos explained that the e-commerce giant prohibits its employees from using the data on individual sellers to help its private-label business. And, in 2019, another Amazon executive testified that the company does not use such data to create its own private-label products or alter its search results to favor them.

But the internal documents seen by Reuters show for the first time that, at least in India, manipulating search results to favor Amazon’s own products, as well as copying other sellers’ goods, were part of a formal, clandestine strategy at Amazon—and that high-level executives were told about it. The documents show that two executives reviewed the India strategy—senior vice presidents Diego Piacentini, who has since left the company, and Russell Grandinetti, who currently runs Amazon’s international consumer business.

While neither Piacentini nor Grandinetti responded to Reuters‘ requests for comment, Amazon provided a written response that did not address the reporters’ questions.

“As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated,” Amazon said. “We believe these claims are factually incorrect and unsubstantiated.”

“We display search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not,” the company said, adding that it “strictly prohibits the use or sharing of nonpublic, seller-specific data for the benefit of any seller, including sellers of private brands.”

Warren was not alone in calling for the breakup of Amazon following the report.

“This is not shocking. But it is appalling,” the American Economic Liberties Project said in a series of tweets. “Independent businesses have sounded the alarm for years—providing evidence that Amazon stole their intellectual property.”

“We said back in 2020 that a perjury referral was in order—and it still is,” the group added, highlighting testimony from Bezos and Nate Sutton, Amazon’s associate general counsel. “But Amazon will remain an anti-business behemoth, flagrantly breaking the law and daring policymakers to stop them.”

Highlighting a report from a trio of its experts, Economic Liberties added that “it’s time to break Amazon up.”

Originally published on Common Dreams by JESSICA CORBETT and republished under a Creative Commons license  (CC BY-NC-ND 3.0).

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‘System Is Blinking Red’: Experts Condemn Facebook’s Profit-Seeking Algorithms

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“How many more insurrections have to happen before we hold Facebook to account?” one group asked after whistleblower Frances Haugen said the corporation is unwilling to confront hate speech and disinformation.

Following whistleblower Frances Haugen’s Sunday night allegation that Facebook’s refusal to combat dangerous lies and hateful content on its platforms is driven by profit, social media experts denounced the corporation for embracing a business model that encourages violence and endangers democracy—and urged the federal government to take action.

Haugen, who copied a “trove of private Facebook research” before she resigned from the social media company in May, told CBS‘s Scott Pelley during a “60 Minutes” interview that the tech giant took some steps to limit misinformation ahead of the 2020 election because it understood that then-President Donald Trump’s incessant lies about voter fraud posed a serious threat. Many of the safety measures that Facebook implemented, however, were temporary, she added.

“As soon as the election was over,” Haugen said, “they turned them back off or they changed the settings back to what they were before to prioritize growth over safety. And that really feels like a betrayal of democracy to me.”

Facebook officials claim that some of the anti-misinformation systems remained in place, but in the interregnum between Election Day and President Joe Biden’s inauguration, far-right extremists used the social networking site to organize the deadly January 6 coup attempt—something acknowledged by an internal task force’s report on Facebook’s failure to neutralize “Stop the Steal” activity on its platforms.

There is, according to Haugen, a simple explanation for why executives at the company refuse to do more to mitigate harmful social media behavior: “Facebook has realized that if they change the algorithm to be safer, people will spend less time on the site, they’ll click on less ads, they’ll make less money,” she said.

“The thing I saw at Facebook over and over again was there were conflicts of interest between what was good for the public and what was good for Facebook,” Haugen told Pelley. “And Facebook, over and over again, chose to optimize for its own interests, like making more money.”

Haugen—who first revealed her identity on Sunday after having secretly shared internal documents with federal regulators, reported on in the Wall Street Journal‘s series, “The Facebook Files”—also said the corporation is lying to the public about how effective it is at curbing hate speech and disinformation, arguing that “Facebook has demonstrated it cannot operate independently.”

In the wake of Haugen’s bombshell interview, social media experts condemned Facebook for prioritizing “profits above all else.”

“Facebook runs on a hate-and-lie-for-profit business model that amplifies all sorts of toxicity on its platforms,” Jessica J. González, co-CEO of Free Press, said Monday in a statement. “Thanks to this brave whistleblower, we now have further proof that Facebook’s executives—all the way up to CEO Mark Zuckerberg and COO Sheryl Sandberg—routinely chose profits over public safety.”

González, co-founder of Ya Basta Facebook and the Change the Terms coalition, added that Facebook executives “designed the company’s algorithms to put engagement, growth, and profits above all else, even allowing lies about the 2020 election results to spread to millions in advance of the white-nationalist assault on the U.S. Capitol.”

Longtime critics of Facebook argued that the “new revelations” about the company demand immediate federal intervention.

“How many more insurrections have to happen before we hold Facebook to account?” the Real Facebook Oversight Board, a coalition of civil rights leaders and academics, asked in a statement released after Haugen’s interview aired. “The system is blinking red, and without real, meaningful, independent, and robust oversight and investigation of Facebook, more lives will be lost.”

“The goal,” added the group, “is no longer to save Facebook—Facebook is beyond hope. The goal now is to save democracy.”

Free Press summarized the Journal‘s key findings on Facebook, which we now know stem from internal documents provided by Haugen:

Facebook exempted high-profile users from some or all of its rules; Instagram is harmful to millions of young users; Facebook’s 2018 algorithm change promotes objectionable or harmful content; Facebook’s tools were used to sow doubt about Covid-19 vaccines; and globally, Facebook is used to incite violence against ethnic minorities and facilitat[e] action against political dissent. 

Shireen Mitchell, founder of Stop Online Violence Against Women, praised Haugen for exposing Facebook’s “amplification and use of hate to keep users on the platform engaged.”

Facebook has “weaponized… data in harmful ways against users,” Mitchell continued, and failed to consider the negative effects of “hate-filled rhetoric” even after the Myanmar military used Facebook to launch a genocide in 2018.

González argued that Haugen “turned evidence of this gross negligence over to the government at great personal risk, and now we need the government to respond with decisive action to hold the company responsible for protecting public safety.”

“The government must demand full transparency on how Facebook collects, processes, and shares our data, and enact civil rights and privacy policies to protect the public from Facebook’s toxic business model,” said González.

“Facebook must also act swiftly to remedy the harms it is continuing to inflict on the public at large,” she added. “It must end special protections for powerful politicians, ban white supremacists and dangerous conspiracy theorists, and institute wholesale changes to strengthen content moderation in English and other languages—and we need this all now.”

According to Carole Cadwalladr, a journalist at The Guardian and co-founder of the Real Facebook Oversight Board, “Facebook is a rogue state, lying to regulators, investors, and its own oversight board.”

“What we are seeing today is a market failure with profound, devastating global consequences,” she said. “Executives and board members must be held to account. There is evidence to suggest that their behavior was not just immoral but also criminal.”

Shoshana Zuboff, professor emeritus at Harvard Business School and author of The Age of Surveillance Capitalismargued that “even as we feel outrage toward Mr. Zuckerberg and his corporation, the cause of this crisis is not a single company, not even one as powerful as Facebook.”

“The cause is the economic institution of surveillance capitalism,” said Zuboff. “The economic logic of these systems, the data operations that feed them, and the markets that support them are not limited to Facebook.”

“The imperatives of surveillance economics determine the engineering of these operations—their products, objectives, and financial incentives—along with those of the other tech empires, their extensive ecosystems, and thousands of companies in diverse sectors far from Silicon Valley,” she continued. “The damage already done is intolerable. The damage that most certainly lies ahead is unthinkable.”

Zuboff added that the only “durable solution to this crisis” is to “undertake the work of interrupting and outlawing the dangerous operations of surveillance capitalism and its predictable social harms that assault human autonomy, splinter society, and undermine democracy.”

Haugen is scheduled to testify on Tuesday at a Senate subcommittee hearing on “Protecting Kids Online.”

Originally published on Common Dreams by KENNY STANCIL and republished under a Creative Commons license  (CC BY-NC-ND 3.0).

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In Scathing Senate Testimony, Whistleblower Warns Facebook a Threat to Children and Democracy

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Frances Haugen said the company’s leaders know how to make their platforms safer, “but won’t make the necessary changes because they have put their astronomical profits before people.

Two days after a bombshell “60 Minutes” interview in which she accused Facebook of knowingly failing to stop the spread of dangerous lies andhateful content, whistleblower Frances Haugen testified Tuesday before U.S. senators, imploring Congress to hold the company and its CEO accountable for the many harms they cause.

Haugen—a former Facebook product manager—told the senators she went to work at the social media giant because she believed in its “potential to bring out the best in us.”

“But I’m here today because I believe Facebook’s products harm children, stoke division, and weaken our democracy,” she said during her opening testimony. “The company’s leadership knows how to make Facebook and Instagram safer, but won’t make the necessary changes because they have put their astronomical profits before people.”

“The documents I have provided to Congress prove that Facebook has repeatedly misled the public about what its own research reveals about the safety of children, the efficacy of its artificial intelligence systems, and its role in spreading divisive and extreme messages,” she continued. “I came forward because I believe that every human being deserves the dignity of truth.”

“I saw Facebook repeatedly encounter conflicts between its own profits and our safety,” Haugen added. “Facebook consistently resolved its conflicts in favor of its own profits.”

“In some cases, this dangerous online talk has led to actual violence that harms and even kills people,” she said.

Addressing Monday’s worldwide Facebook outage, Haugen said that “for more than five hours, Facebook wasn’t used to deepen divides, destabilize democracies, and make young girls and women feel bad about their bodies.”

“It also means that millions of small businesses weren’t able to reach potential customers, and countless photos of new babies weren’t joyously celebrated by family and friends around the world,” she added. “I believe in the potential of Facebook. We can have social media we enjoy that connects us without tearing apart our democracy, putting our children in danger, and sowing ethnic violence around the world. We can do better.”

Doing better will require Congress to act, because Facebook “won’t solve this crisis without your help,” Haugen told the senators, echoing experts and activists who continue to call for breaking up tech giants, banning the surveillance capitalist business model, and protecting rights and democracy online.

She added that “there is nobody currently holding Zuckerberg accountable but himself,” referring to Facebook co-founder and CEO Mark Zuckerberg.

Sen. Richard Blumenthal (D-Conn.)—chair of the Senate Consumer Protection, Product Safety, and Data Security Subcommittee—called on Zuckerberg to testify before the panel.

“Mark Zuckerberg ought to be looking at himself in the mirror today and yet rather than taking responsibility, and showing leadership, Mr. Zuckerberg is going sailing,” he said.

“Big Tech now faces a Big Tobacco, jaw-dropping moment of truth. It is documented proof that Facebook knows its products can be addictive and toxic to children,” Blumenthal continued.

“The damage to self-interest and self-worth inflicted by Facebook today will haunt a generation,” he added. “Feelings of inadequacy and insecurity, rejection, and self-hatred will impact this generation for years to come. Our children are the ones who are victims.”

Originally published on Common Dreams by BRETT WILKINSand republished under Creative Commons (CC BY-NC-ND 3.0).

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Recent White House Study on Taxes Shows the Wealthy Pay a Lower Rate Than Everybody Else

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Recent White House Study on Taxes Shows the Wealthy Pay a Lower Rate Than Everybody Else

A decade ago, in an essay for The New York Times, Warren Buffett disclosed that he had paid nearly $7 million in federal taxes in 2010. “That sounds like a lot of money,” he wrote. “But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

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The words “taxable income” are doing a lot of work in that sentence.

Buffett owns a substantial number of shares in Berkshire Hathaway, the fabulously successful holding company he founded decades ago. As the company’s shares have soared nearly every year, his wealth has grown by billions. Under the U.S. tax code, none of that is taxed until he sells shares at a profit.

A little math shows that Buffett’s 17.4% rate meant he reported roughly $40.2 million in income in a year where Forbes said his wealth grew by $3 billion. His revelation made it possible to compare how much he was paying the government to the increase in the size of his fortune.

No one did so, and Buffett became something of a folk hero for calling for any increase in taxes.

When we obtained access to a trove of tax data on the richest Americans, it quickly became clear to our reporters that Buffett’s comparison of his own tax rate to his employees’ vastly understates the inequity of our tax system. Buffett is far from unique; the documents showed that the amount of money people like Michael Bloomberg, Jeff Bezos or Elon Musk reported to the IRS as income was infinitesimal when measured against their annual gains in wealth.

And so the first story in our “Secret IRS Files” series set out a new concept that makes more sense in our 21st century Gilded Age; we called it “the true tax rate.” We compared the annual taxes paid by the ultrarich to their wealth gains to give readers a sense of how the system really works.

From 2014 to 2018, we pointed out, Buffett paid $125 million in federal taxes. As he said, that sounds like a lot. But according to Forbes, his riches rose $24.3 billion during that period, making his true tax rate 0.1%. In a detailed written response, Buffett defended his practices but did not directly address ProPublica’s true tax rate calculation.

When we published this story, howls of rage rang out from the freewheeling corners of Twitter to the ornate offices on Wall Street. Some of the most irate critics wrote to me directly and demanded to know whether I was so @#$!@ stupid that I didn’t understand the meaning of the word “income tax.”

“This story, sadly, reeks with ‘class envy,’” one angry reader wrote. “If this was intended to get clicks, you made your money.” We’re a nonprofit and our revenue from advertising adds almost nothing to our annual budget, but I understand this reader’s larger point, which we noted in the story: The ultrarich are doing only what the current tax code invites them to do.

The debate intensified, and the White House-backed proposals on taxes advanced by congressional Democrats largely followed the traditional approach of raising rates on income. A separate bill introduced by Sens. Elizabeth Warren and Bernie Sanders to impose a 3% tax on all wealth above $1 billion is seen as having little chance of passing.

The reluctance to embrace a wealth tax is deeply rooted. The biggest donors to both parties would be hit hard by such a law. And as we pointed out in our initial story, the complexities of taxing wealth are not trivial. Several countries have tried and struggled to figure out a fair way to tax stock gains. Does an entrepreneur whose stock skyrockets in one year, and pays a big tax, deserve a rebate if his company’s shares plummet the next year?

All of that said, we took note when White House economists issued a study that used publicly available data to estimate “the average Federal individual income tax rate paid by the 400 wealthiest American families’ in recent years, determined using a more comprehensive measure of income.” Their methodology was similar to ours, and their findings — that those families gained $1.8 trillion from 2010 to 2018 and paid 8.2% in taxes — are in line with what we found in the tax data.

The authors say their findings are evidence in support of President Joe Biden’s plan for tweaking the existing system; the words “wealth tax” are not mentioned. They point to the administration’s proposal to impose higher tax rates on stock dividends and on capital gains, the profit an investor reaps when selling a stock whose value has risen.

(The Biden administration has proposed getting rid of a provision in the tax code that shields heirs who inherit stock from paying capital gains tax on the growth in value that occurred before the shares were transferred.)

None of the proposed changes come close to addressing the biggest hole in the system, which is that an ultrarich person can live comfortably off gains in wealth while never selling a single share. As our initial story pointed out, the Buffetts and Bezos of the world can borrow against the value of their considerable holdings and live comfortably without selling stock or receiving any income from dividends, which new companies like Tesla and Amazon don’t pay.

The strategy, known as “buy, borrow and die,” allows the wealthy to amass fast fortunes, pay no taxes on those gains and pass on much of the wealth to their descendants.

Herb and Marion Sandler, the founders of ProPublica, made it clear from the outset that they hoped our journalism would spur real-world change. They were not particularly interested in stories whose biggest effect was that they had “started a conversation.”

We still measure our success by tangible effects. But over the years, we have seen that the road to impact on very complex issues can begin by changing the conversation.

Lawmakers have said that some of the most egregious tax loopholes we’ve exposed, notably multibillion-dollar Roth IRA accounts, will be scrutinized as Congress takes up tax legislation in coming months.

There’s no telling where the larger conversation about taxing wealth will lead. As the White House paper suggests, a new way of thinking about equality and taxation has taken center stage. Whether that ultimately results in change remains very much an open question.

Originally published on ProPublica by Stephen Engelberg and republished under a Creative Commons License (CC BY-NC-ND 3.0)

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Manchin Rejects $3.5 Trillion Social Investment After Backing $9+ Trillion for Pentagon


“Ever notice how ‘deficit hawks’ vote for record-high defense spending, yet claim bills that help people and challenge lobbyists are ‘too much?'” asked Rep. Alexandria Ocasio-Cortez.

October 1, 2021 by JAKE JOHNSON


Sen. Joe Manchin on Thursday derided his own party’s plan to spend $3.5 trillion over the next decade to combat the climate crisis, invest in child care, and expand Medicare as “fiscal insanity.”

“All this operatic moaning about $3.5 trillion is ridiculous hypocrisy. Manchin has casually voted for nearly three times that for defense spending.”

But progressive lawmakers and commentators were quick to point out that Manchin (D-W.Va.)—along with other conservative Democrats who are currently standing in the way of Democrats’ reconciliation package—have had no problem greenlighting the Pentagon’s increasingly bloated budget year after year after year.

“Ever notice how ‘deficit hawks’ vote for record-high defense spending, yet claim bills that help people and challenge lobbyists are ‘too much?'” Rep. Alexandria Ocasio-Cortez (D-N.Y.) asked in a tweet Thursday evening.

“All this operatic moaning about $3.5 trillion is ridiculous hypocrisy. Manchin has casually voted for nearly three times that for defense spending”

Noting that the reconciliation package includes yearly spending of $350 billion while the proposed military budget for Fiscal Year 2022 is $770 billion, the New York Democrat wrote: “Guess which got rubber stamped and which gets deemed a ‘spending problem.'”

Last week, the House of Representatives passed the $770 billion military policy bill—which includes $740 billion for the Pentagon alone–by a vote of 316-113, with just 38 Democrats voting no. The Senate is expected to pass its version of the National Defense Authorization Act in the coming days.

In a column published late Thursday, The Week‘s Ryan Cooper observed that Manchin “voted for every single one of the military budgets over the last decade—in 201120122013201420152016201720182019, and 2020.”

“He voted for all $9.1 trillion,” Cooper wrote. “While he occasionally complained about wasteful military programs and asked for an audit of the Pentagon, these quibbles were never enough to get him to vote differently. He helped inflate the already-bloated war budget and regularly boasted about thus ‘supporting’ the troops. This year, he did it again.”

“So on one level, all this operatic moaning about $3.5 trillion is ridiculous hypocrisy,” Cooper continued. “Manchin has casually voted for nearly three times that for defense spending—money that killed hundreds of thousands of people and turned half the Middle East into a smoking crater. A modest fraction of that total to help parents pay their bills, give seniors dental coverage, fight climate change, and so forth is not some intolerable burden on the economy.”

West Virginia activists in kayaks presented that critique directly to Manchin on Thursday as the Democratic senator listened from his yacht:

https://twitter.com/jaisalnoor/status/1443906225922584577?s=20

In ongoing talks over the reconciliation package, Manchin is pushing for a top-line spending level of $1.5 trillion. That figure is at least $2 trillion less over 10 years than Democrats’ current plan, which would spend $3.5 trillion over the next decade.

As Win Without War executive director Stephen Miles noted Thursday, Manchin’s preferred $1.5 trillion number is “less than we’ll spend at the Pentagon over the next two years.”

“And Manchin’s talking about a DECADE of spending across the entire rest of the government,” Miles wrote on Twitter. “During that time we’ll spend somewhere north of $8 trillion, possibly closer to $10 trillion. Just. at. the. Pentagon.”

Originally published on Common Dreams by JAKE JOHNSON and republished under a Creative Commons license  (CC BY-NC-ND 3.0).


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The September Swoon has Started: Nasdaq drops 2.83%, collapse blamed on bond rate rise

Above: Photo Collage / Lynxotic

Bond jump should have been seen coming, yet the reaction is nevertheless a big rush to the exits

In what some are calling a Taper Tantrum, the markets dropped with a sense of purpose today, with little bounce after the close in the futures market. With Fed rate hikes now a certainty, inflation concerns real, and bond yields spiking today, there were plenty of things to point to as catalysts.

This could be, and this is extremely likely regardless of what endless permanent-bull commentators would have you believe, the start of a tough two months, with late September and October being known as a very dangerous time in markets, especially whey they exhibit pre-crash signs and warnings.

Insane valuations that have preceded past September / October disasters are back

It’s unbelievable that the fall of 2008, when the financial crisis came to a head with the Lehman Brothers collapse, was 13 years ago, and the prior peak in November 2007 was a full 14 years.

I guess we can observe that we now have the iPhone 13, with the iPhone “1” which was just called “iPhone” at the time, has been marking the time with yearly iterations, not always named in sequence:

iPhone: June 29, 2007

iPhone 3G: July 11, 2008

iPhone 3GS: June 19, 2009

iPhone 4: June 24, 2010

iPhone 4S: October 14, 2011

iPhone 5: September 21, 2012

iPhone 5S & 5C: September 20, 2013

iPhone 6 & 6 Plus: September 19, 2014

iPhone 6S & 6S Plus: September 19, 2015

iPhone 7 & 7 Plus: September 16, 2016

iPhone 8 & 8 Plus: September 22, 2017

iPhone XS, XS Max: September 21, 2018

iPhone 11, Pro, Pro Max: September 20, 2019

iPhone 12, Mini, Pro, Pro Max: October 23, 2020

iPhone 13, Mini, Pro, Pro Max, September 24, 2021

And during all these years, for the most part the artificially inflated Fed “bubble of everything” has continued.

Here is a disturbing chart, courtesy of Elliott wave International at Elliottwave.com:

This behavior, seen across nearly all markets since extreme measures were taken to respond when the March 2020 pandemic crash occurred, has been building to a crescendo. And today was a tiny pin-prick that could augur ill for October.

What this has led to, naturally, is an overvaluation beyond anything seen in modern times, perhaps 500 years. The previous all-time-peak for overvalued stocks (S&P) was in March 2000. August 2021 is far beyond that peak and likely will stand as the most overvalued moment for decades.

Above: photo courtesy of Elliott Wave International

Unless, that is, somehow the insane valuations are pushed even higher. Which is unlikely, but not impossible, given the state of delusional euphoria that pervades the financial markets.

Many 2021 characteristics, such as the Crypto, NFT frenzy will be seen in a similar light to the tech stocks in 2000 or Real estate in 2007

There’s a sense that it is normal for bored apes NFTs to experience a multimillion dollar bidding wars, or for crypto alt coins with dog mascots to explode 10,000% or more during this, possibly final phase, of what has been called the “everything bubble”.

And why not? If you bought and held almost anything in March 2009 or again at the bottom of the crash on March 16, 2020, then you have seen nearly continuous gains that you’d be eager to risk on, well, anything.

And if you were 10 years old in the year 2000, you’d not have known about NASDAQ drops that take around 13 years to regain what was lost after a 1 year bear market, so why worry?

Perhaps the Fed and the markets seemingly infinite ability to expand and inflate will go on for years. Or the next bear, possibly the one that already kicked off today, and will accelerate into October, is one to take seriously.


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Trump Sues His Niece Mary And ‘The New York Times’ Over Tax Return Stories

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Shocking. DTJ sues his own niece, Mary Trump along with The New York Times and several reporters (Suzanne Craig, David Barstow and Russ Buettner) for obtaining his tax documents used to investigate his finances.

The 2018 article which won a Pulitzer Prize which showcased how the former president “participated in dubious tax schemes during the 1990’s including instances of outright fraud, that greatly increased the fortune he received from his parents”.

The report reveal confidential tax returns and financial records, highlight that Trump received at least $413 million from his father’s real estate empire, although he always touted himself as a “self-proclaimed” billionaire.

Above – :Bob Woodward’s new book: Peril – out and available now!

Mary Trump did confirm she had been a source of the documents to The Times as described in her book about her uncle “Too Much and never Enough: How My Family Created the World’s Most Dangerous Man”.

Trump had previously glossed over tax claims, including that he only paid $750 in federal income taxes the year he was elected, as “fake news”

Trump has made legal threats to The New York Times in the past, however this marks the first time he sued the paper using his name.

He is seeking damages in the amount of $100 million.

In a statement, Mary Trump said of her uncle,

“I think he is a loser, and he is going to throw anything against the wall he can. It’s desperation. The walls are closing in and he is throwing anything against the wall that he thinks will stick. As is always the case with Donald, he’ll try and change the subject.”

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Facebook Execs ‘Shocked’ by Zuckerberg Plan to Artificially Boost Flattering News Stories, Says Report

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Facebook’s Mark Zuckerberg is said to be working on a rebranding plan. According to The New York Times, the plan which has come to be known internally as “Project Amplify” was signed off by the CEO and included a boost of pro-Facebook stories (written by the Facebook Team) onto its billions of users.

An internal meeting back in January hatched the initiative to showcase “positive” stories about the social network platform on its largest digital real estate, the News Feed.

Based on the report from the Times, some executives present at the meeting were “shocked” by the proposal.

Project Amplify also made strong attempts for the Facebook platform to distance itself from any scandals (i.e. minimizing access to negative reports) relating to Zuckerberg, while simultaneously, ramping up new stories that provided a more flattering spin on the social network.

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In iOS 15.1 you’ll be able to put Proof of Vaccination ID into your Wallet

Above: Photo Credit / Apple

When the iOS 15.1 update drops for the general public (likely soon as it’s already been seeded to beta testers since Monday) it will feature the ability to add your proof of vaccination status to the Health app and then create a vaccination ID card in Apple Wallet.

Many businesses, venues, restaurants, and more are requiring proof of vaccination for entry. For example California is the first state where proof of COVID vaccination or negative test for indoor events over 1,000 people.

The new feature in iOS 15.1 is made possible by the support Smart Health Cards which are valid for California, Louisiana, New York, Virginia, Hawaii, and some Maryland counties, as do Walmart, Sam’s Club, and CVS Health.

Above: ID in iPhone Wallet

Therefore, using this system you would be able to to look up their information in state databases, if you are in any of the states listed above, but if you were vaccinated through at Walmart or CVS it will also be feasible to add your information to the Health and Wallet.

Once you have gone to the web site for your state, for example in California it would be found at https://myvaccinerecord.cdph.ca.gov where you can type in personal information such as name and date of birth to get access to your records and status.

Though iOS 15 already has the ability to download the information to your Health app, and you can do this today, the last step, adding an ID to your wallet from the health app will not be possible until you have upgraded to iOS 15.1.

The record is locked to your name and can only be used by you. There will be a QR code that you will first download to your health app on the iPhone, then, once it is in the health app there will be a prompt to allow you to “add to wallet”. By clicking that link a vaccination ID car, with the QR code will be generated and added to your wallet.

iOS 15.1 is likely to be available under > General > software update in your phone’s Settings app within days. (Our guess is by Monday, September 27, 2021)

  1. Tap the download link on your iPhone or iPod touch.
  2. Tap Add to Health to add the record to the Health app.
  3. Tap Done.

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No, the Richest One Percent Don’t Pay 40 Percent of the Taxes

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NYMag Article details this deceptive talking point endlessly repeated by the Right

It’s hard to trace the origin of the partially accurate, yet highly misleading, stat that has been so often used to refute the idea that the current tax burden in the U.S. is not falling enough on the richest 1% compared to the rest of society.

The stat, which under the very narrow definition of “taxes” as federal income tax, calculated separately from any other form of tax, is, in this narrow sense, basically true. This isolated and totally meaningless fact does not address the overall taxes paid by the “top 1%” (which itself is an arbitrary category).

The reality, when overall taxes paid are taken into account, as the NT Mag article points out, is actually much less dramatic and has completely different implications for any call to “tax the rich” which was made by Alexandria Ocasio-Cortez’s Dress, as an example.

First, the top 1% represent 21% of all income, which means, by the narrow definition of declared income for tax purposes, that they “earn” more than 20% of the total income declared.

Above – :Bob Woodward’s new book: Peril – release date 09/21/2021 available to pre-order now

Further, this does not include the loopholes that allow billionaires to have virtually no declarable income and still avoid capital gains taxes via Roth IRAs and other methods, even as the calculated net worth of theses individuals increases by billions.

Opinion: ultimately, rather than defending the current system as if it is already adequate and somehow fair, the facts show that, on so many levels it’s hard to delineate them all, the system is functioning in a way that is not only unfair, but so corrupt that change would need to be nearly total before it could even be accurate to say that it was functioning fairly for the majority.

According to the article, the actual stat, with the above dodges, that are universally used, still not taken into account, is that: “the richest one percent earn about 21 percent of the income and pay 24 percent of the taxes”.

Which is a far cry from the ubiquitous sound byte that “1% pays 40% of taxes”.

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California May Be the First State to Legislate Amazon Warehouse Conditions

Photo by Adrian Sulyok on Unsplash

A bill headed to the governor’s desk aims to curb injuries in warehouse distribution centers run by a broad spectrum of employers and outlaw punishment for bathroom breaks

Yesenia Barrera was just finishing up her 10-hour shift at an Amazon fulfillment center in Rialto, Calif., she recalled, when a manager approached her. She said he was concerned that throughout the day she’d racked up about 60 minutes of “time off task,” Amazon parlance for when someone is not directly working on the assignment at hand or taking too long to complete it. He told her he was writing her up and asked what happened, she said.

“I used the restroom today,” Barrera said she told him.

“How many times did you use it?” she remembered he asked. 

“Three times,” she said she responded, thinking about how it took five minutes to walk each way across the warehouse floor to get to the bathroom.

When Barrera returned to Amazon for her next scheduled shift two days later, her badge wouldn’t let her into the building. She later learned she’d been terminated. Barrera has since become an organizer with the Warehouse Worker Resource Center, a nonprofit that advocates on behalf of warehouse workers.

The California Senate passed legislation last week that, if signed by the governor, would prohibit a spectrum of employers, including Amazon, from firing warehouse workers like Barrera for policies such as “time off task.” The bill, AB 701, would be the first law in the country to address productivity quotas and strict algometric metrics used to manage warehouse employees. (Governor Newsom’s office did not reply to a request for comment.)

Under AB 701, employers wouldn’t be able to punish workers for failing to meet quotas when health and safety issues come into play, such as a worker’s need to take bathroom and water breaks. And it would prohibit retaliation against workers who complain. The law would also require companies that run warehouses to report to the government—and their own employees—the quotas and speed metrics they mandate for workers.

“Right now, it’s very secretive,” said Christian Castro, communications director for the Los Angeles County Federation of Labor, AFL-CIO, which sponsored the bill. “E-commerce has been growing exponentially, it’s gotten even more popular during the pandemic…. Workers are telling us about an increase in quotas, not even knowing their quotas.”

Amazon spokesperson Rachael Lighty declined to comment on AB 701 and Barrera’s allegations but said in an email, The health and safety of our employees is our number one priority—and has been since day one,” adding, “We’re committed to giving our employees the resources they need to be successful, creating time for regular breaks and a comfortable pace.”

In opposition to AB 701 is a coalition of about two dozen business groups, including the California Chamber of Commerce, California Farm Bureau, and California Retailers Association. They say the law could raise costs for companies that run warehouses and effectively drive employers from the state.  

AB 701 is “burdensome and needlessly overbroad,” Steve McCarthy, vice president of public policy for the California Retailers Association, wrote in an Aug. 30 letter to all state senators. He said the bill could lead to increased litigation “by establishing potentially open-ended employee access to bathroom facilities which will make employers’ ability to enforce production standards  even more complex.”

AB 701 would cover all warehouse distribution centers, such as those run by Walmart, Target, and UPS, but the bill’s supporters say Amazon is the main target. The company, they say, is leading the charge to automate workforces, increase the speed of work, and use surveillance technologies to monitor worker productivity.  

Advocates who support the bill say they hope it will cause a ripple effect to other states. They say California’s labor laws have often served as a model for policymakers and worker organizations nationwide.  

“Chart Topping” Injury Rates 

Amazon is the largest private employer in California, with more than 150,000 employees in the state, and the second largest employer in the U.S. Over the years, several Californian cities have welcomed the influx of warehouses, which they say have brought in thousands of well-paying jobs to regions historically plagued by unemployment. 

But it’s been well documented that warehouse work can be dangerous. Several studies point to injury rates that exceed those of other industries.

The U.S. Bureau of Labor Statistics cites data that shows warehouse workers are injured nearly twice as often as other workers in the private sector. And when employers, like Amazon, add in productivity quotas, those injuries tend to increase, other studies show. A December 2019 report by the Athena coalition looked at data and internal documents that Amazon provided to OSHA and found the injury rate at the company’s warehouses was nearly three times the combined rate of all other private employers that submitted data to OSHA.

“Primed for Pain,” a report by a coalition of four labor unions called the Strategic Organizing Center, found that not only are injury rates higher at Amazon warehouses, but the injuries also tend to be more severe—with a “serious injury rate” nearly 80 percent higher than that of all other employers in the warehousing industry.

“The rate of injuries at Amazon is astronomical…. It’s chart topping by all measures,” said Irene Tung, senior researcher at the workers’ rights group National Employment Law Project, who co-wrote a report about injury and churn rate at Amazon’s California warehouses. “I don’t think people understand just how different Amazon is as an employer and how they’re ushering in this new paradigm.”

When asked about injury rates at Amazon’s warehouses, spokesperson Lighty said the company has more than 6,200 “safety professionals” throughout its facilities. “We also invest billions of dollars in new operations safety measures, technologies and other innovative solutions that protect our employees, work closely with health and safety experts and scientists, conduct thousands of safety inspections each day in our buildings, and have made hundreds of changes as a result of employee feedback on how we can improve their well-being at work,” she said.

Lighty added that the data on musculoskeletal injuries, such as sprains, strained muscles, and torn ligaments, at Amazon’s warehouses “is skewed.” She said that’s because the company’s workforce has many people in the 18 to 24 age range, which she said is more likely than other age groups to claim work-related musculoskeletal injuries.

In April, Amazon’s executive chairman and former CEO Jeff Bezos called the company “Earth’s Best Employer and Earth’s Safest Place to Work.”

Along with injuries, Amazon has also been accused of not allowing workers enough time for bathroom breaks. In a 2020 letter to Bezos, a group of 15 U.S. senators wrote, “Pressure to meet their quotas is so great that workers report urinating in plastic bottles on the warehouse floor.” Amazon responded, saying workers are “allowed and encouraged to take breaks as needed.”

Last December, Amazon settled a class-action lawsuit in California brought by 27 warehouse workers who said the company violated the state’s labor codes by denying them adequate bathroom and rest breaks. Amazon’s “production clock does not stop when employees need to use the restroom facilities,” the lawsuit said, which meant workers “have been forced to forego bathroom breaks completely, simply out of fear of termination.”

Lighty declined to comment on the lawsuit or settlement.

While California law mandates that employers must allow breaks, warehouses with production quotas can make it difficult for workers to use the bathroom while still being able to meet their tasks. Assemblywoman Lorena Gonzalez, AB 701’s author, said the bill aims to strengthen state law by creating standards around these quota systems.

“To make next-day delivery possible, corporations like Amazon have forced warehouse employees to work faster, service more customers with more orders in record amounts of time, and risk their own bodies in the process,” Gonzalez said in a statement. “No worker should be forced to sacrifice their basic human needs, or accept such undignified conditions for a paycheck.” 

When Barrera was working at Amazon’s Rialto warehouse, one of her jobs was scanning boxes on a conveyor belt. 

“The conveyor doesn’t stop,” she said. “Time is against you.”

She remembers at one point, she fell behind and boxes started piling up. She set down her scan gun to move some boxes aside, and it got buried in the pile. She said when she tried to pry it free, she pulled too hard, and it bounced back and smacked her in the eye. She said she went to the onsite clinic, where she was given ibuprofen and told to hold a wet paper towel on her eye. Barrera said she asked to sit down, and after about five minutes, both her manager and the clinic medic said she should be good to go back to work.

“You’re being tracked the moment you clock in,” Barrera said. “Unrealistic quotas are why workers are getting injured.”

Amazon’s Lighty did not respond when asked about the incident. 

Protecting Workers vs. Increasing Bureaucracy

AB 701 has two major components: creating more transparency around work quotas and banning policies that negatively affect worker health and safety, including  “time off task” policies.

For the transparency piece, employers that run warehouse distribution centers would be compelled to tell government agencies the quotas and speed metrics they require of employees and also disclose that information to workers. 

“This policy provides the tools that are needed to keep workers safe in a growing industry plagued with widespread injuries and labor violations,” said Ron Herrera, president of the Los Angeles County Federation of Labor and secretary treasurer of Teamsters Local 396, both of which are sponsors of AB 701.  

Tim Shadix, legal director of the Warehouse Worker Resource Center, which also sponsored AB 701, said they’ve been working on this type of legislation for the past two years. Last year, a similar bill stalled on the senate floor.

“This kind of speed-up on workers is breaking their bodies and churning them out,” Shadix said. “It undermines the argument that these are good stable jobs.”

While AB 701 would require transparency from companies around quotas, it would not create specific rules on worker surveillance and metrics.

Several Republican lawmakers in California have opposed AB 701, saying it would lead to more lawsuits, higher prices for consumer goods, and that the bill is part of an organized labor strategy to unionize warehouses.

“This bill is sponsored by union leaders as part of a campaign to tip the scales to coerce employees to unionize,” Sen. Brian Jones said in an email, adding that he doesn’t have confidence in Democratic legislators to run the state efficiently. “So now we’re supposed to trust them to micro-manage private warehouses throughout the state? No thanks.” 

Jones is one of 11 senators who voted no on AB 701 (26 voted yes, and three had no vote recorded).

At least four senators, including Jones, received campaign donations of $2,500 from Amazon, according to public records from the California secretary of state. Amazon also made payments of $2,500 and $4,900 to various state assembly members, including to nearly half of those who voted no on the bill in May. The company additionally made several donations to senators and assembly members who voted yes (though not to any authors or co-authors of the bill).

When asked about the donations, Jones’s chief of staff, Craig Wilson, said, “Campaign contributions are irrelevant when it comes to how Senator Jones votes on legislation.”

Amazon has hired at least four lobbying firms in California during this year’s legislative session, according to the public records. For comparison, in 2019 and 2020, it hired just two firms per year. And the company spent more than $425,000 on lobbying in the state from January to June. More recent lobbying expenditures aren’t yet publicly available. Amazon’s Lighty didn’t respond to questions about the company’s lobbying activity. 

While Amazon hasn’t publicly commented on AB 701, the coalition of business organizations and its members, including the California Retailers Association and California Chamber of Commerce, have spoken out against the bill.

Initially, the California Chamber of Commerce listed AB 701 on its “job killer” list—a label that often leads to dead bills—but then removed it in July after certain provisions around litigation and regulations were amended. The chamber still opposes the bill, however. When asked for comment, spokesperson Denise Davis referred The Markup to the letter McCarthy sent to state senators on behalf of the business coalition.  

This bill “establishes anti-retaliation provisions that will make it more costly and difficult to take job actions against underperforming employees,” McCarthy wrote in the letter. He added that AB 701 could “have a chilling effect on production at distribution centers that will ripple through the rest of the supply chain.” 

Amazon is on the California Retailers Association’s board of directors. McCarthy didn’t respond to a request for comment.

If AB 701 is signed by California governor Gavin Newsom, it would be slated to go into effect on Jan. 1, 2022. Newsom faces a recall election on Tuesday, but regardless of the outcome, he will determine the bill’s fate. Should Newsom lose Tuesday’s recall election, he would have 38 days to sign or veto all pending legislation before leaving office, according to California law

This article was originally published on The Markup By: Dara Kerr and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

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SpaceX Docu-series on Manned Mission about to Launch on Netflix

Above: Inspiration4 Crew Members / Photo / Netflix

What do a billionaire, cancer survivor, geoscientists and a data engineer have in common? 

 For the first time on the streaming platform, Netflix will offer a 5 part docuseries covering the SpaceX’s Inspiration4 Mission in near real-time.

The series will cover SpaceX’s first all civilian mission (no astronauts!) as they prepare and train for the mission, the live launch coverage from Kennedy Space Center in Florida, as well as footage from inside the Crew Dragon spacecraft as the 4 passenger crew orbit the Earth on the 3 day mission. 

Unlike recent flights from Virgin (Richard Branson) and Blue Orbit (Jeff Bezos) that led suborbital flights, Inspiration4 will reach higher altitudes than that of the International Space Station and make history as first all-civilian mission to orbit.

Multiple firsts and groundbreaking accomplishments that go beyond, way beyond…

Breakdown for Netflix’s “ Countdown: Inspiration4 Mission to Space”

  • Monday, September 6: Meet the four civilians heading to space
  • Monday, September 13: Watch them prepare
  • Wednesday, September 15: Watch the live launch
  • Thursday, September 30: Spend time with the crew in space

The Inspiration4 Mission which was brokered as a private deal by 38 year old Jared Isaacman, CEO of Shift4 Payments with SpaceX.

Isaacman will lead the mission along with his 3 other crew members:  29 year old Hayley Arceneaux who will act as chief medical officer , 51 year old Dr. Sian Proctor (mission pilot), who will become the fourth Black female American in space and 41 year old Christopher Sembroski, a veteran of the U.S. Air Force who will be the mission’s specialist. 

The mission also serves as a $200 million fundraising campaign for St. Jude Children’s Research Hospital.  

A day before the launch day, Netflix will also launch “A StoryBots Space Adventure” on Sept.14 which is a live-action/animation special where Inspration4 crew members will participate by answering some of kids’ most pressing space related questions. 

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‘A Monumental Mistake’: Wyden Warns House Democrats’ Tax Plan Lets Billionaires Off Easy

“It’s important to address the fact that billionaire heirs may never pay tax on billions in stock gains.”

Sen. Ron Wyden, chair of the Senate Finance Committee, warned Tuesday that House Democrats’ newly released tax plan would let U.S. billionaires off the hook by omitting key reforms that progressive lawmakers, advocacy organizations, and President Joe Biden have embraced.

“It would be a monumental mistake for Congress to pass a bill that really exempts billionaires,” Wyden (D-Ore.) told the New York Times in response to the House Ways and Means Committee’s proposal, which was spearheaded by Rep. Richard Neal (D-Mass.).

While the House plan (pdf) would hike taxes on large corporations and the top 1% of earners in the U.S., analysts and Democratic lawmakers have voiced concerns that it doesn’t go nearly as far as it should to raise revenue for policy priorities and tackle the nation’s runaway income inequality, which the coronavirus crisis has made even worse. According to one recent analysis, the collective wealth of U.S. billionaires has risen by $1.8 trillion—62%—during the pandemic.

Wyden’s committee is in the process of crafting a tax plan of its own as Democrats race to compile their sprawling budget reconciliation package, which is expected to include major investments in green energy, healthcare, housing, and other key areas.

Specifically, Wyden and progressive organizations criticized the House Ways and Means Committee for failing to tackle a loophole that allows the ultra-wealthy to pass on massive fortunes to their heirs tax-free. Earlier this year, Biden released a tax plan that would close the loophole.

“It’s important to address the fact that billionaire heirs may never pay tax on billions in stock gains,” Wyden told HuffPost on Monday. “The nurses, firefighters, and teachers who pay their taxes with every paycheck know the system is broken when billionaire heirs never pay tax on billions in stock gains.”

Steve Wamhoff, director of federal tax policy at the Institute for Taxation and Economic Policy (ITEP), echoed Wyden’s concern, noting in an interview with the Washington Post that “if the Ways and Means plan was enacted as is, Jeff Bezos and Elon Musk would still pay an effective rate of $0 on most of their income if they pass their assets on to their heirs.”

“It’s obviously a big improvement over the tax code we have now,” Wamhoff said of the House plan, “but there are a lot of things Biden suggested that would go a lot further.”

On Tuesday, the progressive advocacy group Patriotic Millionaires made the House plan’s shortcomings the focus of a new mobile billboard campaign that features an image of Bezos—the richest man in the world—accompanied by the caption, “Oops! Missed me! (Thanks, Richie Neal!)”

“Richard Neal and the House Ways and Means Committee failed the president, failed the country, and failed history. It’s that simple,” ​​Morris Pearl, chair of the Patriotic Millionaires, said in a statement. “This is not what the American people voted for when they elected Joe Biden as president.”

To remedy the proposal, the Patriotic Millionaires urged the House Democratic leadership to make several changes, including:

  1. End the preferential tax rate for capital gains income over $1 million as President Biden requested. There is no intellectual or economic justification for working people in America to pay a higher tax rate than investors.
  2. Eliminate the “stepped up basis” that allows the heirs of billionaires to avoid capital gains taxes on inherited assets (provide a reasonable exemption for family farms and small businesses). The committee’s failure to address this problem at all is particularly troubling.
  3. End the Carried Interest Loophole which allows fund managers to mischaracterize their “ordinary” income as capital gain income for tax purposes. The Ways and Means proposal extends the hold time for investments to five years. Given that most private equity firms hold investments for six years, this change will have essentially zero effect. The loophole should be eliminated entirely.

Rep. Alexandria Ocasio-Cortez (D-N.Y.), whose “Tax the Rich” dress at the lavish 2021 Met Gala made waves on social media, said Tuesday that “members of both parties have tried to halt taxing the wealthiest in our society” even after billionaires made enormous wealth gains during the pandemic.

“It’s unacceptable,” the New York Democrat added. “We must tax the rich.”

According to a June survey released by Americans for Tax Fairness, 72% of U.S. voters support closing “loopholes that let the wealthy avoid paying taxes on the profits from assets they transfer to heirs.” The poll also found that 62% of voters support raising the corporate tax rate from 21% to 28%.

The House Ways and Means Committee proposal would only raise the corporate rate to 26.5%.

As Chuck Collins and Sarah Anderson of the Institute for Policy Studies argued in a blog post on Monday, “The public has a tremendous appetite to do much more to address the grotesque concentrations of democracy-distorting wealth and power—and to shut down the ways that billionaires and a few hundred global corporations manipulate our tax system.”

“House Democratic tax writers do not go far enough to raise revenue or reduce extreme wealth inequality,” Collins and Anderson wrote. “The tax reforms would generate an estimated $2.2 trillion—just barely more than the revenue lost due to the 2017 Republican tax cuts.”

Originally published on Common Dreams by JAKE JOHNSON via Creative Commons

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Reese Witherspoon Crashes into Cryptocurrency

Above: Photo Collage / Lynxotic

Receives Lots of commentary: Support, Suggestions, NFT Requests and Memes

Actress, producer, entrepreneur – and now a recently, new owner and proponent of the Ethereum (ETH) cryptocurrency.  Aside from her characteristically ebullient tweet announcing her purchase there has, as of yet been little verbiage to to expand on her reasoning or perspective on the space.

Also not clear how she arrived at the choice of ETH rather than the obvious #1 crypto BitCoin.

While some twitter reactions were slanted toward the negative, implying that her entry into the space implies some sort of over commercialization that is a sign of impending decline or decay.

This could well be a possibility but there appears to be more going on here beneath the surface.

Though most of the attention toward Cryptocurrencies revolves around speculation on a given coins price vs. the US $, there is much more to the phenom than that very recent trend.
Even after the mania and the get-rich-quick schemes are long gone the use and existence of Bitcoin and Blockchain is likely to go on.

A new cryptocurrency called “Pi” (π) allows anyone to “mine” the currency from a cell phone. With over 23 million “Pioneers” mining the goal of 100 million is in sight and when reached the coin will launch. Until then there is no price for the coin and it can only be earned by mining with your phone.

The egalitarian and decentralized concept behind the coin is new and could take cryptocurrency to a whole new level, all without price speculation being the main driver. Learn more about Pi here.

Witherspoon launched Hello Sunshine back in 2016 to provide a digital space to showcase women storytelling.

The company recently sold, earlier this year, for a whopping $900 million.  And it sounds like she’s using some of that payout to test the crypto waters.

The “Legally Blonde” actress took to her social media account to trumpet the news, “Just bought my first ETH! Let’s do this #cryptotwitter”. As of this writing the current price of 1 ETH is $3,942.21 (although prices can fluctuate quickly in either direction).

This is not far off the all time high of over $4100 that was breached in May of this year.

Her tweet was liked instantly by 60k and her followers quickly sky rocketed, now at 2.9 million.

Many took the opportunity to comment on her account giving the actress a taste of Crypto Twitter (which as you read the comments, you can see are quite intense).  

Vocal Youtuber, social media star, brother to Jake and “boxer” Logan Paul didn’t waste any time by responding to Reese’s tweet offering her a NFT of the World of Women collection (a project aimed to foster diversity within the NFT space). 

This is not likely without a self-promoting aspect as Paul launched his new native ZOO” crypto token for his NFT game called CryptoZoo.

Another high profile blonde added to the Crypto Twitterati conversation with her preferred takes in digital coin.

It’s just more evidence that the crypto future is not going to disappear anytime soon – there are just too many strata of society that are taking a stake in the continued existence and growth of blockchain and crypto.

Other crypto coin users were compelled to let Witherspoon know how they feel, flooding her account with tweets explaining the benefits of competing crypto coins, sending unsolicited pitches for a varie f the obvious choices including Bitcoin and Dogecoin

DogeCoin is likely best known as the crypto alt-coin that Elon Musk has often championed from his twitter account, along with Mark Cuban and others.

During his stint hosting Saturday Night Live the billionaire (Musk) also broadcast his involvement with the Doge, and has received the moniker “DogeFather” as a result.

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Developing story: Explosions at Kabul with at least 4 Marines Reported among casualties

Above: Photo / Mohammad Rahmani / UnSplash

Thousands crowded near the only way out of Afghanistan ahead of U.S. August 31 deadline

It has been reported that at least two explosions and gunfire occurred just outside Kabul airport. The blast happened around one of the entry gates of the Hamid Karzai International Airport on Thursday August 26, 2021.

Based on an AMN report and Pentagon statements, the blast may have been the result of a suicide attack. There have been casualties and injuries, including U.S. service members among Afghan citizens, however no additional details have been confirmed.

This is an emerging, breaking story and various outlets, including Fox News, The Wall Street Journal and others have reported multiple, sometimes conflicting totals regarding the dead and wounded.

Fox News reported 10 Marines were killed, up from four, according to U.S. officials

“We can confirm that the explosion at the Abbey Gate was the result of a complex attack that resulted in a number of US & civilian casualties. We can also confirm at least one other explosion at or near the Baron Hotel, a short distance from Abbey Gate. We will continue to update,” Pentagon spokesman John Kirby tweeted.

The following bullet points were published in the Fox News article cited above:

  • A suicide bombing outside the Abbey Gate at Kabul’s airport in Afghanistan Thursday has killed at least 10 U.S. Marines and soldiers, U.S. officials tell Fox News.
  • A U.S. official indicated that the attack set off a firefight at Abbey Gate, where last night, there were 5,000 Afghans and potentially some Americans seeking access to the airport.
  • A second explosion happened outside the Baron Hotel, sources say.

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