Below we’ve embedded the new video, along with the text of the video.
Your life could get a lot more dangerous. Republican appointees on the Supreme Court seem poised to strip away basic safety standards for our workplaces, our food, our air and water.
Congress gives federal agencies the authority to enact regulations that protect us in our daily lives. Congress defines the goals, but leaves it up to the health and safety experts in those agencies to craft and enforce regulations. I know regulations don’t sound very exciting, but they’re how our government keeps us safe.
Remember when lots of romaine lettuce was recalled because it was causing E.coli outbreaks? That was the Food and Drug Administration protecting us from getting sick. Working in a warehouse? The Occupational Safety and Health Administration sets standards to ensure you don’t breathe in dangerous chemicals like asbestos. Enjoying the fresh air on a clear, sunny day? Thank the Environmental Protection Agency for limiting the amount of pollution that can go into our air.
These agencies save lives. Since OSHA was established a half-century ago, its workplace safety regulations have saved more than 618,000 workers’ lives.
Republicans have been trying to gut these agencies for decades. Now, with the Supreme Court’s right-wing majority solidly in place, they have their best chance yet.
The Court claimed that Covid isn’t an “occupational hazard” because people can become infected outside of work, and that allowing OSHA to regulate in this manner “would significantly expand” its authority without clear Congressional authorization.
This is absurd on its face. Section 2 of the Occupational Safety and Health Act of 1970 clearly spells out OSHA’s authority to enact and enforce regulations that protect workers from illness, injury, and death in the workplace. Congress doesn’t need to list every specific workplace hazard before OSHA can protect workers.
What this ruling tells us is that the Republican appointees on the Supreme Court are intent on gutting the power of agencies to issue regulations.
This term, the Court will also hear a case regarding the EPA’s authority to enforce the Clean Water Act. If the Court undermines the EPA’s authority, it will put our environment – and our health – at risk. Remember when the Cuyahoga River caught on fire because it was brimming with oil, acid, and factory chemicals? That’s what we may be returning to.
And what’s next? Will they gut the Federal Trade Commission and put us all at risk of being defrauded? Target the Securities and Exchange Commission and deregulate the financial sector, sparking another financial crisis?
Beware. If Republican appointees on the Supreme Court succeed in gutting regulatory agencies, we all lose. This agenda is anti-worker, anti-consumer, and anti-environment. The only thing it’s good for is corporate profits.
In a new video from Robert Reich, former secretary of labor and accomplished author, the phenomena we are all experiencing on a daily basis, such as incredible high gas prices, crazy energy prices, more out-of-pocket at the grocery store, and what sure looks like price gouging and price hikes on almost everything, he takes on the root of it all, in other words: Inflation.
Naturally, with all of this being so obvious to you and me there’s no shortage of folks to explain the purported causes, from media outlets like The Washington Post, to Biden administration officials and pundits from left, right and center.
One explanation you will seldom hear, however, is that much of the pain we are experiencing is due to monopoly power, the inequality growing out of the economic concentration of the American economy and the ever increasing concentration of financial and market power to a relative handful of big corporations.
This perspective is not only refreshingly direct, but it actually has a remedy attached, unlike the usual reasons given, such as economic policy, government spending, irresponsible actions by the federal government and federal reserve and so on. While all of these are certainly good candidates for finger pointing, they generally have only one response attached that is suggested as a remedy: higher interest rates.
“How can this structural problem be fixed? Fighting corporate concentration with more aggressive antitrust enforcement. Biden has asked the Federal Trade Commission to investigate oil companies, and he’s appointed experienced antitrust lawyers to both the FTC and the Justice Department.”
– Robert Reich
The idea that corporate greed, massive corporate profits that keep rising, in spite of supply chain disruptions and other issues, could be at the root of the problems, and that aggressive use of antitrust law might just be an appropriate response to the deeper structural issue is spot on.
A real change via antitrust might help to reinstate tough competition, weed out greedy businesses and even slow down the increasing consolidation of the economy, and the concept comes across as a welcome revelation, or at least beats a job and economy crushing series of Paul Volcker-style (huge) interest rate hikes.
There’s an even bigger challenge on the horizon, however, which is the sheer size of the biggest tech firms, who make the companies mentioned in the video, such as Coke, Pepsi, Procter & Gamble, meat conglomerates and the pharmaceutical industry seem tiny by comparison. As noted by the Wall Street Journal, during the pandemic the behemoths such as Facebook, Amazon and Microsoft have surged.
This is evidence of even less competition than in the sectors mention and presented in the video, and yes, the energy sector, consumer goods, food prices are all showing little competition and that situation is getting worse.
At least we have Mark Zuckerberg, from a recent YouTube interview with Lex Fridman, with his sunny personality shining through, saying that “what if playing with your friends is the point [of life]?, and further “I think over time, as we get more technology, the physical world is becoming less of a percent of the real world, and I think that opens up a lot of opportunities for people because you can you can work in different places you can stay closer to people who are in different places removing barriers of geography”. At least, then, there’s that. Thanks Mark.
The video text reads well also on the page. Charts, graphics and the charismatic voice of Robert Reich are worth the watch, but here is the full text, in case you prefer:
Inflation! Inflation! Everyone’s talking about it, but ignoring one of its biggest causes: corporate concentration.
Now, prices are undeniably rising. In response, the Fed is about to slow the economy — even though we’re still at least 4 million jobs short of where we were before the pandemic, and millions of American workers won’t get the raises they deserve. Republicans haven’t wasted any time hammering Biden and Democratic lawmakers about inflation. Don’t fall for their fear mongering.
Everybody’s ignoring the deeper structural reason for price increases: the concentration of the American economy into the hands of a few corporate giants with the power to raise prices.
If the market were actually competitive, corporations would keep their prices as low as possible as they competed for customers. Even if some of their costs increased, they would do everything they could to avoid passing them on to consumers in the form of higher prices, for fear of losing business to competitors.
But that’s the opposite of what we’re seeing. Corporations are raising prices even as they rake in record profits. Corporate profit margins hit record highs last year. You see, these corporations have so much market power they can raise prices with impunity.
So the underlying problem isn’t inflation per se. It’s a lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.
Take the energy sector. Only a few entities have access to the land and pipelines that control the oil and gas powering most of the world. They took a hit during the pandemic as most people stayed home. But they are more than making up for it now, limiting supply and ratcheting up prices.
Or look at consumer goods. In April 2021, Procter & Gamble raised prices on staples like diapers and toilet paper, citing increased costs in raw materials and transportation. But P&G has been making huge profits. After some of its price increases went into effect, it reported an almost 25% profit margin. Looking to buy your diapers elsewhere? Good luck. The market is dominated by P&G and Kimberly-Clark, which—NOT entirely coincidentally—raised its prices at the same time.
Another example: in April 2021, PepsiCo raised prices, blaming higher costs for ingredients, freight, and labor. It then recorded $3 billion in operating profits through September. How did it get away with this without losing customers? Pepsi has only one major competitor, Coca-Cola, which promptly raised its own prices. Coca-Cola recorded $10 billion in revenues in the third quarter of 2021, up 16% from the previous year.
Food prices are soaring, but half of that is from meat, which costs 15% more than last year. There are only four major meat processing companies in America, which are all raising their prices and enjoying record profits. Get the picture?
The underlying problem is not inflation. It’s corporate power. Since the 1980s, when the U.S. government all but abandoned antitrust enforcement, two-thirds of all American industries have become more concentrated. Most are now dominated by a handful of corporations that coordinate prices and production. This is true of: banks, broadband, pharmaceutical companies, airlines, meatpackers, and yes, soda.
Corporations in all these industries could easily absorb higher costs — including long overdue wage increases — without passing them on to consumers in the form of higher prices. But they aren’t. Instead, they’re using their massive profits to line the pockets of major investors and executives — while both consumers and workers get shafted.
How can this structural problem be fixed? Fighting corporate concentration with more aggressive antitrust enforcement. Biden has asked the Federal Trade Commission to investigate oil companies, and he’s appointed experienced antitrust lawyers to both the FTC and the Justice Department.
So don’t fall for Republicans’ fear mongering about inflation. The real culprit here is corporate power.
Early in 2020, as the pandemic gripped the nation, JPMorgan Chase offered to help customers weather the crisis by taking a temporary pause on mortgage, auto and credit card payments. Chase’s CEO, Jamie Dimon, sounded sympathetic about a year later as he offered broader reflections on what was ailing the country. “Americans know that something has gone terribly wrong,” he wrote in a letter to shareholders. “Many of our citizens are unsettled, and the fault line for all this discord is a fraying American dream — the enormous wealth of our country is accruing to the very few. In other words, the fault line is inequality.”
But even as those words were published, the bank had quietly begun to unleash a lawsuit blitz against many of its struggling customers. Starting in early 2020 and continuing to today, Chase has filed thousands of lawsuits against credit card customers who have fallen behind on their payments.
Chase had stopped pursuing credit card lawsuits in 2011, in the wake of the last major economic downturn, after regulators found that the company was filing tens of thousands of flimsy suits, sometimes overstating what customers owed. Rather than being backed by extensive billing records to document the debts, according to the regulators, the suits were typically filed with a short affidavit from one of a half-dozen Chase employees in one office in San Antonio who vouched for the accuracy of the bank’s information in thousands of suits.
Chase “filed lawsuits and obtained judgments against consumers using deceptive affidavits and other documents that were prepared without following required procedures,” the Consumer Financial Protection Bureau concluded in 2015. At times, Chase employees signed affidavits “without personal knowledge of the signer, a practice commonly referred to as ‘robo-signing.’” According to the CFPB’s findings, there were mistakes in about 10% of cases Chase won and the judgments “contained erroneous amounts that were greater than what the consumers legally owed.”
Chase neither admitted nor denied the CFPB’s findings, but it agreed, as part of a consent order, to provide significant evidence to make its cases in the future. The company also agreed it would provide “relevant information and documentation maintained by [Chase] to support their claims” in cases — the vast majority of those it filed — in which customers did not respond to the lawsuit.
But that provision expired on New Year’s Day 2020. And since then the bank has gone back to bringing lawsuits much as it did before 2011, according to lawyers who have defended Chase customers.
“From what I can see, nothing has changed,” said Cliff Dorsen, a consumer-rights attorney in Georgia who represents Chase credit card customers.
Chase declined to make executives available for interviews. It said in a statement that the timing of the resumption of its credit card lawsuits was just a coincidence. “We have engaged with our regulators throughout this process,” said Tom Kelly, a bank spokesperson. “We continue to meet the requirements of the consent order.” (Kelly said Chase also filed some credit card lawsuits in 2019.)
Kelly declined to say how many suits it has filed in its blitz of the past two years, but civil dockets from across the country give a hint of the scale — and its accelerating pace. Chase sued more than 800 credit card customers around Fort Lauderdale, Florida, last year after suing 70 in 2020 and none in 2019, according to a review of court records. In Westchester County, in New York’s suburbs, court records show that Chase has sued more than 400 customers over credit card debt since 2020; a year earlier, the equivalent figure was one.
A similar surge is occurring in Texas, according to January Advisors, a data-science firm. Chase filed more than 1,000 consumer debt lawsuits around Houston last year after filing only seven in 2020, the analytics firm’s review of court records in Harris County shows. Chase instigated 141 consumer debt cases in Austin last year after filing only one such case in 2020, according to January Advisors, which is conducting research for a nationwide study ofdebt collection cases.
Today, just as it did before running afoul of the CFPB, Chase is mass-producing affidavits from the same San Antonio office where low-level employees generated hundreds of thousands of affidavits in the past, according to defense attorneys and court documents. Those affidavits are often the main piece of evidence that Chase uses to win its case while detailed customer records — and any errors they may contain — remain out of sight.
“Our clients deserve to see everything that Chase has in its files,” Dorsen said. “Instead, Chase gives us these affidavits and says: ‘You can trust us about the rest.’”
Before the robo-signing scandal a decade ago, Chase recovered about a billion dollars a year with its credit card collections business, according to the CFPB. Why would Chase stop suing customers for years, forgoing billions of dollars, only to ramp up its suits once key provisions of the CFPB settlement had expired?
Craig Cowie thinks he has an answer. “Chase did not think it could make money if it had to sue customers and abide by the CFPB settlement,” said Cowie, who worked as an enforcement attorney at the CFPB during the Obama administration and now teaches at the University of Montana Law School. “That’s the only explanation that makes sense for why the bank would have held back.”
Cowie, who did not work on the CFPB’s case against Chase, said he doesn’t know why the agency agreed to a time limit on some settlement provisions. He pointed out that such agreements are negotiated and the CFPB cannot just dictate the terms. The agency may have felt it had to let some provisions of the settlement expire to get Chase to agree to the deal, Cowie said.
The CFPB declined to comment.
For its part, Chase said it waited years to restart its lawsuits because it took that long to get the system working right. “We rebuilt the litigation program slowly and methodically to make sure we had the right controls in place,” said its spokesperson, Kelly.
At the time, the CFPB had found numerous flaws in Chase’s suits. The agency concluded that Chase used “unfair” legal tactics when it promised that its credit card account information was reliable and mistake-free. It wasn’t simply a matter of errors in calculating how much was owed; in some cases the company even got the customer’s name wrong. Chase would sometimes pass accounts with errors — including instances where customers had been victims of credit card fraud, others who had tried to settle their debts and even some who had died — on to outside debt collectors, who might then take action based on that information.
Once Chase won a victory in court, the bank could seek to garnish a customer’s wages or raid their bank accounts, and those customers would pay a further price: a stain on their credit report that could make it harder to “obtain credit, employment, housing, and insurance,” the CFPB wrote.
Those sued by Chase, then and now, might spot errors if the company provided full records in its court filings, consumer advocates say. Instead, Chase typically submits copies of a few credit card statements along with a two-page affidavit attesting that the bank’s records were accurate and complete.
Consumer advocates say they do not expect that the majority of Chase’s credit card records are tainted with errors. But if today’s error rate is the same 10% that the CFPB estimated in the past and the Chase lawsuit push continues, thousands of customers may be sued for money they don’t owe. And there is no easy way to check when Chase keeps so many of its records out of sight.
Chase said that its current system for processing credit card lawsuits is sound and reliable. “We quality-check 100% of our affidavits today,” the company said in a statement.
Credit card customers do not respond to collections lawsuits in roughly 70% of cases, according to research from The Pew Charitable Trusts. In those instances, the customer typically loses by default.
In the small percentage of cases where a customer gets a lawyer or otherwise fights back, Chase still has the advantage because it can access all of the customer’s account records easily, according to consumer lawyers. (The bank typically closes accounts of customers who have failed to pay their debts, leaving them unable to access their records online.) Chase usually shares the complete credit card account file only after a legal fight, according to attorneys and pleadings from across the country. “Chase has all the evidence and we have to beg to get it,” said Jerry Jarzombek, a consumer-rights attorney in Fort Worth, Texas, who is defending several Chase customers.
The result leaves many defendants in a bind: They don’t have enough information to know whether they should dispute the company’s claims. “Chase wants us to believe its records are reliable so we don’t need to see them,” Jarzombek said. “Well, I’m sorry. I’ve dealt with Chase for decades. I’d prefer to see what evidence they’ve actually got.”
The robo-signing scandal exposed Chase’s affidavit-signing assembly line. Before the settlement, Chase had about a half-dozen employees churning through affidavits stacked a foot high or taller, according to the former Chase executive who brought the practices to light at the time. Kamala Harris, who was then California’s attorney general and is now vice president, likened the process to anaffidavit mill.
The current operation involves roughly a dozen “signing officers” working from the same San Antonio offices as before and performing many of the same tasks, according to Chase employees and outside lawyers who have represented the company.
Chase used to prepare affidavits “in bulk using stock templates,” according to the 2015 CFPB findings. That is again happening today, according to two of Chase’s outside lawyers who requested anonymity because they were not authorized to discuss the process.
The lawyers said they typically send their affidavit requests in batches. The requests already contain the basic details of the customer’s account when they arrive in Chase’s San Antonio office, they said. An affidavit request that is sent one day can typically be processed and returned the next business day, the lawyers said.
Chase affidavits contain stock language that the “signing officer” has “personal knowledge of and access to [Chase’s] books and records.” That “personal knowledge” is limited, said one signing officer who declined to be named. Chase does not expect signing officers to perform a forensic review of an account but rather to follow computer prompts to complete the affidavit, said the employee. “We just work with what’s on the screen.”
Chase declined to discuss its process for creating affidavits, but the bank said it satisfies the rules set by courts in the places where it operates. “Judges, clerks and other judiciary staff are well versed in the court rules and laws in their jurisdictions,” said the statement by the bank’s spokesperson, Kelly. “Through our counsel, we provide the information those parties require in matters before them.”
Courts around the country have grown too accepting of what big banks and debt collectors say, according to consumer advocates. And the justice they dispense can feel as cursory and hurried as the suits that Chase files.
In Texas a decade ago, lawmakers pushed most credit card cases into the state’s version of small claims courts, known as justice courts. The rules of evidence are more lax there and the judge might not even be a lawyer. A retired basketball player presides over one suchcourtroom in Houston. “One of these judges said to me: ‘What’s the point of seeing a bunch of evidence? We already know these people borrowed the money,’” said Jarzombek, the Fort Worth attorney. “I said: ‘Why even have a trial, then? Let the banks take whatever they want.’”
In Houston, where Chase has more than 1,000 consumer credit suits on the docket, only one defendant in those cases has fought to a trial on her own, according to court records.
That person’s experience is instructive. Like many, Melissa Razo struggled financially during the early pandemic. A former restaurant manager, the 42-year-old Razo had gone back to school, the University of Houston, to study psychology, and she supported herself by doing typing for an online transcription service. That work suddenly dried up when the pandemic hit, and Razo began missing credit card payments. Her debt escalated. Chase sued her in January 2021, claiming she owed a total of about $8,500 on two credit cards.
Razo had a previous court experience stemming from an acrimonious divorce, where she had learned that a plaintiff needs facts and evidence to win. “Nothing I presented was good enough,” she recalled of the divorce case.
Using what she’d learned, Razo prepared for her day in court against Chase. She could not access her account anymore, she said, because the bank had shut it down. So in late June, as her hearing date approached, Razo pulled together as many of her credit card statements as she could find. They told a story of grocery runs and shopping at Target and Goodwill, along with missed payments and penalties.
Razo presumed Chase would have to back up its claims just as she had been expected to do in divorce court. She expected the company’s lawyers would have five years of statements and documents to show that she owed exactly what they said she owed. This was a trial, after all.
The trial lasted perhaps a minute, according to Razo. It boiled down to two questions. Was Razo present? the judge asked over Zoom. When she announced herself, the judge asked if she had a Chase credit card. Yes, Razo said, that was true. Then, she said, the judge ruled in favor of Chase.
Chase declined to comment on the case. The judge was not authorized to speak about the matter, according to a court clerk. And the justice courts do not transcribe their hearings, so ProPublica could not verify what was said. (The court’s docket did confirm that a judgment was entered in Chase’s favor after a judge trial.)
Razo’s courtroom experience, though, sounds typical, according to Rich Tomlinson, a lawyer with Lone Star Legal Aid. “I can’t recall ever seeing a live witness in a debt case,” said Tomlinson, who has represented hundreds of debtors in his career. “These trials are not like Perry Mason. They’re not even Judge Judy.”
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“No,” said Sen Bernie Sanders. “Congress should not provide a $10 billion handout to Jeff Bezos for space exploration as part of the defense spending bill. Unbelievable.”
Progressives on Wednesday slammed what they called a proposed $10 billion handout to Amazon founder Jeff Bezos—the world’s first multi-centibillionaire—in the 2022 National Defense Authorization Act as a “giveaway of galactic proportions” in the face of growing wealth inequality and the inability of U.S. lawmakers to pass a sweeping social and climate spending package.
“Jeff Bezos’s business model includes feasting on public subsidies—and the U.S. Senate must not acquiesce to his demands.”
According toDefense News, Senate Majority Leader Chuck Schumer (D-N.Y.) plans to merge the $250 billion U.S. Innovation and Competition Act of 2021 (USICA)—aimed largely at countering the rise of China—with next year’s NDAA, which would authorize up to $778 billion in military spending. That’s $37 billion more than former President Donald Trump’s final defense budget and $25 billion more than requested by President Joe Biden. The NDAA includes a $10 billion subsidy to Bezos’ Blue Origin space exploration company.
“Providing Jeff Bezos with $10 billion of taxpayer money would be an inappropriate giveaway of galactic proportions,” Stuart Appelbaum, president of the Retail, Wholesale, and Department Store Union (RWDSU), said in a statement Wednesday.
STATEMENT on Blue Origin subsidy in #NDAA: “Until Jeff Bezos changes the way his employees are mistreated and dehumanized at Amazon and elsewhere, no elected official should support the passage of subsidies for him or any of his projects” –@sappelbaumhttps://t.co/LOppvCfXdcpic.twitter.com/t30afGKQzc
“Jeff Bezos shouldn’t receive taxpayer subsidies for his personal projects—period,” he continued. “In at least two recent years, one of the richest people on the planet paid no income tax; yet he then demands billions in taxpayer funds for a project that’s already been awarded to another company. This is the height of hubris.”
“Rather than waste $10 billion on a redundant space contract for Bezos, that money could be used to adequately fund Social Security Disability, Medicare and Medicaid, and the food stamps that many of his own employees at Amazon and elsewhere have to rely on to make ends meet,” Appelbaum said.
“Jeff Bezos’s business model includes feasting on public subsidies—and the U.S. Senate must not acquiesce to his demands,” he added. “Furthermore, until Jeff Bezos changes the way his employees are mistreated and dehumanized at Amazon and elsewhere, no elected official should support the passage of subsidies for him or any of his projects.”
No. Congress should not provide a $10 billion handout to Jeff Bezos for space exploration as part of the defense spending bill. Unbelievable.
Sen. Bernie Sanders (I-Vt.) has condemned the NDAA for containing $52 billion in “corporate welfare” for Big Tech. Explaining why he would vote against the NDAA, Sanders said Tuesday that “combining these two pieces of legislation would push the price tag of the defense bill to over $1 trillion—with very little scrutiny.”
“Meanwhile,” he added, “the Senate has spent month after month discussing the Build Back Better Act and whether we can afford to protect the children, the elderly, the sick, the poor, and the future of our planet. As a nation, we need to get our priorities right.”
Originally published in Common Dreams by BRETT WILKINS and republished under Creative Commons license (CC BY-NC-ND 3.0)
Organizers of the deadly assault on the U.S. Capitol say that several congressional Republicans and White House officials helped plan former President Donald Trump’s coup attempt.
In response to new reporting that several congressional Republicans and White House officials were “intimately involved” in planning the January 6 Capitol attack—part of former President Donald Trump’s far-reaching election subversion plot—Rep. Alexandria Ocasio-Cortez on Sunday night demanded the expulsion of any lawmaker who aided and abetted the violent assault on U.S. democracy.
“Any member of Congress who helped plot a terrorist attack on our nation’s Capitol must be expelled,” tweeted Ocasio-Cortez (D-N.Y.). “This was a terror attack. 138 injured, almost 10 dead. Those responsible remain a danger to our democracy, our country, and human life in the vicinity of our Capitol and beyond.”
Any member of Congress who helped plot a terrorist attack on our nation’s capitol must be expelled.
This was a terror attack. 138 injured, almost 10 dead. Those responsible remain a danger to our democracy, our country, and human life in the vicinity of our Capitol and beyond. https://t.co/D0qLlaFjTh
Rep. Cori Bush (D-Mo.) tweeted in response to the Rolling Stone report that her “resolution to investigate and expel the members of Congress who helped incite the deadly insurrection on our Capitol,” House Resolution 25, “is just waiting for a vote.”
My resolution to investigate and expel the Members of Congress who helped incite the deadly insurrection on our Capitol is just waiting for a vote.
On Sunday night, the magazine detailed “explosive allegations” about the January 6 riot, wherein a right-wing mob fueled by Trump’s lie that the 2020 presidential election had been stolen stormed the halls of Congress in an attempt to prevent lawmakers from certifying President Joe Biden’s Electoral College victory.
Amid an ongoing probe led by the House Select Committee on the January 6 Attack, Rolling Stone has spoken with two unnamed individuals who were “involved in organizing the main event aimed at objecting to the electoral certification, which took place at the White House Ellipse,” and who are cooperating with the panel’s investigators. According to the magazine:
These two sources also helped plan a series of demonstrations that took place in multiple states around the country in the weeks between the election and the storming of the Capitol. According to these sources, multiple people associated with the March for Trump and Stop the Steal events that took place during this period communicated with members of Congress throughout this process.
Among other things, the magazine reported that prior to January 6:
The two sources say they engaged in “dozens” of planning conversations, in which Reps. Andy Biggs (R-Ariz.), Lauren Boebert (R-Colo.), Mo Brooks (R-Ala.), Madison Cawthorn (R-N.C.), Louie Gohmert (R-Texas), Paul Gosar (R-Ariz.), and Marjorie Taylor Greene (R-Ga.) participated or “had top staffers join”;
The two sources say they “interacted with members of Trump’s team.” That includes former White House Chief of Staff Mark Meadows, “who they describe as having had an opportunity to prevent the violence,” as well as Katrina Pierson, a former member of Trump’s 2016 and 2020 campaigns whom one organizer called “our go-to girl” and “our primary advocate”;
Gosar, “who has been one of the most prominent defenders of the Jan. 6 rioters,” allegedly “dangled the possibility of a ‘blanket pardon’ in an unrelated ongoing investigation to encourage them to plan the protests.”
Both organizers received “several assurances” about the “blanket pardon” from Gosar, one source told Rolling Stone.
“Our impression was that it was a done deal,” said the source, “that he’d spoken to the president about it in the Oval… in a meeting about pardons and that our names came up. They were working on submitting the paperwork and getting members of the House Freedom Caucus to sign on as a show of support.”
“I was just going over the list of pardons and we just wanted to tell you guys how much we appreciate all the hard work you’ve been doing,” Gosar said, according to the organizer.
The magazine has separately obtained documentary evidence that on January 6, both organizers were in contact with Boebert and Gosar, whose office is being investigated by the House select committee.
In addition, Rolling Stone reported, “both Brooks and Cawthorn spoke with Trump at the Ellipse on Jan. 6. In his speech at that event, Brooks, who was reportedly wearing body armor, declared, ‘Today is the day American patriots start taking down names and kicking ass.’ Gosar, Greene, and Boebert were all billed as speakers at the ‘Wild Protest,’ which also took place on Jan. 6 at the Capitol.”
One of the leading organizers of the latter event was Ali Alexander, leader of Stop the Steal, a key group promoting efforts to challenge Biden’s victory. In a since-deleted livestream broadcast, Alexander said that Gosar, Brooks, and Biggs helped develop the strategy for the so-called “Wild Protest.”
At a December 2020 Stop the Steal event in Phoenix, Alexander called Gosar, one of the main speakers, “my captain,” and he also heaped praise on Biggs, describing him as “one of the other heroes.”
Both sources maintain that ahead of January 6, “the plan they had discussed with other organizers, Trump allies, and members of Congress was a rally that would solely take place at the Ellipse, where speakers—including the former president—would present ‘evidence’ about issues with the election. This demonstration would take place in conjunction with objections that were being made by Trump allies during the certification on the House floor that day,” Rolling Stonereported.
During his speech at the Ellipse, however, Trump encouraged his supporters to make their way to the Capitol, and before he had finished talking, the barricades were being stormed.
According to the two organizers, Alexander had agreed to not hold his “Wild Protest” at the Capitol, but when it appeared that the event may materialize, Meadows—one of four Trump allies subpoenaed by the House select committee—was made aware of concerns about the potential for violence.
Although there were earlier indications that the Trump administration and members of Congress “played some role in the Jan. 6 events and similar rallies that occurred in the lead-up to that day,” Rolling Stone noted, “the two sources say they can provide new details about the members’ specific roles in these efforts.”
“The sources plan to share that information with congressional investigators right away,” according to the magazine. “While both sources say their communications with the House’s Jan. 6 committee thus far have been informal, they are expecting to testify publicly.”
Just hours after the violent right-wing attack they helped foment through baseless allegations of voter fraud was contained, 147 GOP lawmakers—including more than two-thirds of House Republicans plus several Senate Republicans—voted in the early morning of January 7 to overturn election results in key states, attempting to disenfranchise millions of voters in the process.
Rep. Bill Pascrell (D-N.J.) on Sunday urged people to “never forget” Trump’s failed coup attempt.
291 days ago terrorists ransacked the US Capitol and *hours later* 138-of-202 (68%) House republicans voted to make trump a dictator. They tried to finish the rioters’ job and end democracy. Never forget it.
Yale historian Timothy Snyder, meanwhile, warned that “a failed coup is a trial run for a successful coup.”
“Instead of just a person who makes a disorganized attempt,” said the expert on authoritarianism, “we now have that person, plus institutional machinery, time to plan, and the Big Lie.”
Since last year’s election, GOP lawmakers at the state level have weaponized lies about electoral fraud to legitimize anti-democratic electoral review mechanisms and a nationwide campaign of voter suppression, prompting University of Pennsylvania political scientist Adolph Reed Jr. to declare in a recent essay that maintaining Democratic majorities in both chambers of Congress is necessary to prevent 2022 or 2024 from marking “the end of the proceduralist democracy to which we’ve been accustomed.”
Originally published on Common Dreams by KENNY STANCIL and republished under a Creative Commons License (CC BY-NC-ND 3.0).
Conviction of Steven Donziger, said one critic, “perfectly encapsulates how corporate power has twisted the U.S. justice system to protect corporate interests and punish their enemies.”
Environmental justice advocates and other progressives on Friday condemned a federal judge’s decision Friday to sentence human rights lawyer Steven Donziger to six months in prison—following more than two years of house arrest related to a lawsuit he filed decades ago against oil giant Chevron.
The sentence, delivered by U.S. District Judge Loretta Preska in New York City, represents “an international outrage,” tweeted journalist Emma Vigeland following its announcement.
Donziger’s sentence came a day after the United Nations Working Group on Arbitrary Detention said it was “appalled” by the U.S. legal system’s treatment of the former environmental lawyer and demanded the U.S. government “remedy the situation of Mr. Steven Donziger without delay and bring it in conformity with the relevant international norms” by immediately releasing him.
Donziger represented a group of farmers and Indigenous people in the Lago Agrio region of Ecuador in the 1990s in a lawsuit against Texaco—since acquired by Chevron—in which the company was accused of contaminating soil and water with its “deliberate dumping of billions of gallons of cancer-causing waste into the Amazon.”
An Ecuadorian court awarded the plaintiffs a $9.5 billion judgment in 2011—a decision upheld by multiple courts in Ecuador—only to have a U.S. judge reject the ruling, accusing Donziger of bribery and evidence tampering. Chevron also countersued Donziger in 2011.
In 2019, U.S. District Judge Lewis A. Kaplan of the Southern District of New York—a former corporate lawyer with investments in Chevron—held Donziger in contempt of court after he refused to disclose privileged information about his clients to the fossil fuel industry. Kaplan placed Donziger under house arrest, where he has remained under strict court monitoring for 787 days.
In addition to Kaplan’s own connections to Chevron, the judge appointed private attorneys to prosecute the case, including one who had worked for a firm that represented the oil giant.
Preska, who found Donziger guilty of the contempt charges in July, is a leader of the right-wing Federalist Society, which counts Chevron among its financial backers.
“As I face sentencing on Day 787 of house arrest, never forget what this case is really about,” tweeted Donziger on Friday morning, as he awaited the sentencing. “Chevron caused a mass industrial poisoning in the Amazon that crushed the lives of Indigenous peoples. Six courts and 28 appellate judges found the company guilty.”
Donziger indicated Friday afternoon that he plans to appeal the sentence.
“Stay strong,” he tweeted along with a photo from a rally attended by his supporters Friday.
BREAKING: Flouting the U.N. decision ordering my release, Judge Preska sentenced me to 6 months in prison. Still on house arrest until the appeals court rules on my motion for release pending appeal. Picture is from rally this morning.
350.org co-founder and author Bill McKibben said on social media that Donziger “deserves our thanks and support” for “daring to point out that Big Oil had poisoned the rainforest.”Rick Claypool, research director for Public Citizen, tweeted that Donziger’s case “perfectly encapsulates how corporate power has twisted the U.S. justice system to protect corporate interests and punish their enemies”—noting that as Donziger is ordered to prison for six months, members of the Sackler family recently won immunity from opioid lawsuits targeting their private company, Purdue Pharma.
“This ruling was done to deter ANYONE from crossing corporate special interests,” said progressive former congressional candidate Jen Perelman.
Originally published on Common Dreams by JULIA CONLEY and republished under a Creative Commons License (CC BY-NC-ND 3.0).
This story was originally published by ProPublica.
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In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.
Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.
The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.
America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.
To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.
We’re going to call this their true tax rate.
The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.
It’s a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.
No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.
That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.
In the coming months, ProPublica will use the IRS data we have obtained to explore in detail how the ultrawealthy avoid taxes, exploit loopholes and escape scrutiny from federal auditors.
Experts have long understood the broad outlines of how little the wealthy are taxed in the United States, and many lay people have long suspected the same thing.
But few specifics about individuals ever emerge in public. Tax information is among the most zealously guarded secrets in the federal government. ProPublica has decided to reveal individual tax information of some of the wealthiest Americans because it is only by seeing specifics that the public can understand the realities of the country’s tax system.
Consider Bezos’ 2007, one of the years he paid zero in federal income taxes. Amazon’s stock more than doubled. Bezos’ fortune leapt $3.8 billion, according to Forbes, whose wealth estimates are widely cited. How did a person enjoying that sort of wealth explosion end up paying no income tax?
In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”
In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
His tax avoidance is even more striking if you examine 2006 to 2018, a period for which ProPublica has complete data. Bezos’ wealth increased by $127 billion, according to Forbes, but he reported a total of $6.5 billion in income. The $1.4 billion he paid in personal federal taxes is a massive number — yet it amounts to a 1.1% true tax rate on the rise in his fortune.
The revelations provided by the IRS data come at a crucial moment. Wealth inequality has become one of the defining issues of our age. The president and Congress are considering the most ambitious tax increases in decades on those with high incomes. But the American tax conversation has been dominated by debate over incremental changes, such as whether the top tax rate should be 39.6% rather than 37%.
ProPublica’s data shows that while some wealthy Americans, such as hedge fund managers, would pay more taxes under the current Biden administration proposals, the vast majority of the top 25 would see little change.
ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions. ProPublica reporters spent months processing and analyzing the material to transform it into a usable database.
We then verified the information by comparing elements of it with dozens of already public tax details (in court documents, politicians’ financial disclosures and news stories) as well as by vetting it with individuals whose tax information is contained in the trove. Every person whose tax information is described in this story was asked to comment. Those who responded, including Buffett, Bloomberg and Icahn, all said they had paid the taxes they owed.
A spokesman for Soros said in a statement: “Between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years. Mr. Soros has long supported higher taxes for wealthy Americans.” Personal and corporate representatives of Bezos declined to receive detailed questions about the matter. ProPublica attempted to reach Scott through her divorce attorney, a personal representative and family members; she did not respond. Musk responded to an initial query with a lone punctuation mark: “?” After we sent detailed questions to him, he did not reply.
One of the billionaires mentioned in this article objected, arguing that publishing personal tax information is a violation of privacy. We have concluded that the public interest in knowing this information at this pivotal moment outweighs that legitimate concern.
The consequences of allowing the most prosperous to game the tax system have been profound. Federal budgets, apart from military spending, have been constrained for decades. Roads and bridges have crumbled, social services have withered and the solvency of Social Security and Medicare is perpetually in question.
There is an even more fundamental issue than which programs get funded or not: Taxes are a kind of collective sacrifice. No one loves giving their hard-earned money to the government. But the system works only as long as it’s perceived to be fair.
Our analysis of tax data for the 25 richest Americans quantifies just how unfair the system has become.
By the end of 2018, the 25 were worth $1.1 trillion.
For comparison, it would take 14.3 million ordinary American wage earners put together to equal that same amount of wealth.
The personal federal tax bill for the top 25 in 2018: $1.9 billion.
The bill for the wage earners: $143 billion.
The idea of a regular tax on income, much less on wealth, does not appear in the country’s founding documents. In fact, Article 1 of the U.S. Constitution explicitly prohibits “direct” taxes on citizens under most circumstances. This meant that for decades, the U.S. government mainly funded itself through “indirect” taxes: tariffs and levies on consumer goods like tobacco and alcohol.
With the costs of the Civil War looming, Congress imposed a national income tax in 1861. The wealthy helped force its repeal soon after the war ended. (Their pique could only have been exacerbated by the fact that the law required public disclosure. The annual income of the moguls of the day — $1.3 million for William Astor; $576,000 for Cornelius Vanderbilt — was listed in the pages of The New York Times in 1865.)
By the late 19th and early 20th century, wealth inequality was acute and the political climate was changing. The federal government began expanding, creating agencies to protect food, workers and more. It needed funding, but tariffs were pinching regular Americans more than the rich. The Supreme Court had rejected an 1894 law that would have created an income tax. So Congress moved to amend the Constitution. The 16th Amendment was ratified in 1913 and gave the government power “to lay and collect taxes on incomes, from whatever source derived.”
In the early years, the personal income tax worked as Congress intended, falling squarely on the richest. In 1918, only 15% of American families owed any tax. The top 1% paid 80% of the revenue raised, according to historian W. Elliot Brownlee.
But a question remained: What would count as income and what wouldn’t? In 1916, a woman named Myrtle Macomber received a dividend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The dividend had not come in cash, however. It came in the form of an additional share for every two shares she already held. She paid the taxes and then brought a court challenge: Yes, she’d gotten a bit richer, but she hadn’t received any money. Therefore, she argued, she’d received no “income.”
Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that income derived only from proceeds. A person needed to sell an asset — stock, bond or building — and reap some money before it could be taxed.
Since then, the concept that income comes only from proceeds — when gains are “realized” — has been the bedrock of the U.S. tax system. Wages are taxed. Cash dividends are taxed. Gains from selling assets are taxed. But if a taxpayer hasn’t sold anything, there is no income and therefore no tax.
Contemporary critics of Macomber were plentiful and prescient. Cordell Hull, the congressman known as the “father” of the income tax, assailed the decision, according to scholar Marjorie Kornhauser. Hull predicted that tax avoidance would become common. The ruling opened a gaping loophole, Hull warned, allowing industrialists to build a company and borrow against the stock to pay living expenses. Anyone could “live upon the value” of their company stock “without selling it, and of course, without ever paying” tax, he said.
Hull’s prediction would reach full flower only decades later, spurred by a series of epochal economic, legal and cultural changes that began to gather momentum in the 1970s. Antitrust enforcers increasingly accepted mergers and stopped trying to break up huge corporations. For their part, companies came to obsess over the value of their stock to the exclusion of nearly everything else. That helped give rise in the last 40 years to a series of corporate monoliths — beginning with Microsoft and Oracle in the 1980s and 1990s and continuing to Amazon, Google, Facebook and Apple today — that often have concentrated ownership, high profit margins and rich share prices. The winner-take-all economy has created modern fortunes that by some measures eclipse those of John D. Rockefeller, J.P. Morgan and Andrew Carnegie.
In the here and now, the ultrawealthy use an array of techniques that aren’t available to those of lesser means to get around the tax system.
Certainly, there are illegal tax evaders among them, but it turns out billionaires don’t have to evade taxes exotically and illicitly — they can avoid them routinely and legally.
Most Americans have to work to live. When they do, they get paid — and they get taxed. The federal government considers almost every dollar workers earn to be “income,” and employers take taxes directly out of their paychecks.
The Bezoses of the world have no need to be paid a salary. Bezos’ Amazon wages have long been set at the middle-class level of around $80,000 a year.
For years, there’s been something of a competition among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he returned to Apple in the 1990s. Facebook’s Zuckerberg, Oracle’s Larry Ellison and Google’s Larry Page have all done the same.
Yet this is not the self-effacing gesture it appears to be: Wages are taxed at a high rate. The top 25 wealthiest Americans reported $158 million in wages in 2018, according to the IRS data. That’s a mere 1.1% of what they listed on their tax forms as their total reported income. The rest mostly came from dividends and the sale of stock, bonds or other investments, which are taxed at lower rates than wages.
As Congressman Hull envisioned long ago, the ultrawealthy typically hold fast to shares in the companies they’ve founded. Many titans of the 21st century sit on mountains of what are known as unrealized gains, the total size of which fluctuates each day as stock prices rise and fall. Of the $4.25 trillion in wealth held by U.S. billionaires, some $2.7 trillion is unrealized, according to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley.
Buffett has famously held onto his stock in the company he founded, Berkshire Hathaway, the conglomerate that owns Geico, Duracell and significant stakes in American Express and Coca-Cola. That has allowed Buffett to largely avoid transforming his wealth into income. From 2015 through 2018, he reported annual income ranging from $11.6 million to $25 million. That may seem like a lot, but Buffett ranks as roughly the world’s sixth-richest person — he’s worth $110 billion as of Forbes’ estimate in May 2021. At least 14,000 U.S. taxpayers in 2015 reported higher income than him, according to IRS data.
There’s also a second strategy Buffett relies on that minimizes income, and therefore, taxes. Berkshire does not pay a dividend, the sum (a piece of the profits, in theory) that many companies pay each quarter to those who own their stock. Buffett has always argued that it is better to use that money to find investments for Berkshire that will further boost the value of shares held by him and other investors. If Berkshire had offered anywhere close to the average dividend in recent years, Buffett would have received over $1 billion in dividend income and owed hundreds of millions in taxes each year.
Many Silicon Valley and infotech companies have emulated Buffett’s model, eschewing stock dividends, at least for a time. In the 1980s and 1990s, companies like Microsoft and Oracle offered shareholders rocketing growth and profits but did not pay dividends. Google, Facebook, Amazon and Tesla do not pay dividends.
In a detailed written response, Buffett defended his practices but did not directly address ProPublica’s true tax rate calculation. “I continue to believe that the tax code should be changed substantially,” he wrote, adding that he thought “huge dynastic wealth is not desirable for our society.”
The decision not to have Berkshire pay dividends has been supported by the vast majority of his shareholders. “I can’t think of any large public company with shareholders so united in their reinvestment beliefs,” he wrote. And he pointed out that Berkshire Hathaway pays significant corporate taxes, accounting for 1.5% of total U.S. corporate taxes in 2019 and 2020.
Buffett reiterated that he has begun giving his enormous fortune away and ultimately plans to donate 99.5% of it to charity. “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt,” he wrote.
So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.
For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax.
The tax math provides a clear incentive for this. If you own a company and take a huge salary, you’ll pay 37% in income tax on the bulk of it. Sell stock and you’ll pay 20% in capital gains tax — and lose some control over your company. But take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that.
The vast majority of the ultrawealthy’s loans do not appear in the tax records obtained by ProPublica since they are generally not disclosed to the IRS. But occasionally, the loans are disclosed in securities filings. In 2014, for example, Oracle revealed that its CEO, Ellison, had a credit line secured by about $10 billion of his shares.
Last year Tesla reported that Musk had pledged some 92 million shares, which were worth about $57.7 billion as of May 29, 2021, as collateral for personal loans.
With the exception of one year when he exercised more than a billion dollars in stock options, Musk’s tax bills in no way reflect the fortune he has at his disposal. In 2015, he paid $68,000 in federal income tax. In 2017, it was $65,000, and in 2018 he paid no federal income tax. Between 2014 and 2018, he had a true tax rate of 3.27%.
The IRS records provide glimpses of other massive loans. In both 2016 and 2017, investor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no federal income taxes despite reporting a total of $544 million in adjusted gross income (which the IRS defines as earnings minus items like student loan interest payments or alimony). Icahn had an outstanding loan of $1.2 billion with Bank of America among other loans, according to the IRS data. It was technically a mortgage because it was secured, at least in part, by Manhattan penthouse apartments and other properties.
Borrowing offers multiple benefits to Icahn: He gets huge tranches of cash to turbocharge his investment returns. Then he gets to deduct the interest from his taxes. In an interview, Icahn explained that he reports the profits and losses of his business empire on his personal taxes.
Icahn acknowledged that he is a “big borrower. I do borrow a lot of money.” Asked if he takes out loans also to lower his tax bill, Icahn said: “No, not at all. My borrowing is to win. I enjoy the competition. I enjoy winning.”
He said adjusted gross income was a misleading figure for him. After taking hundreds of millions in deductions for the interest on his loans, he registered tax losses for both years, he said. “I didn’t make money because, unfortunately for me, my interest was higher than my whole adjusted income.”
Asked whether it was appropriate that he had paid no income tax in certain years, Icahn said he was perplexed by the question. “There’s a reason it’s called income tax,” he said. “The reason is if, if you’re a poor person, a rich person, if you are Apple — if you have no income, you don’t pay taxes.” He added: “Do you think a rich person should pay taxes no matter what? I don’t think it’s germane. How can you ask me that question?”
Skeptics might question our analysis of how little the superrich pay in taxes. For one, they might argue that owners of companies get hit by corporate taxes. They also might counter that some billionaires cannot avoid income — and therefore taxes. And after death, the common understanding goes, there’s a final no-escape clause: the estate tax, which imposes a steep tax rate on sums over $11.7 million.
ProPublica found that none of these factors alter the fundamental picture.
Take corporate taxes. When companies pay them, economists say, these costs are passed on to the companies’ owners, workers or even consumers. Models differ, but they generally assume big stockholders shoulder the lion’s share.
For some of the nation’s wealthiest people, particularly Bezos and Musk, adding corporate taxes to the equation would hardly change anything at all. Other companies like Berkshire Hathaway and Walmart do pay more, which means that for people like Buffett and the Waltons, corporate tax could add significantly to their burden.
It is also true that some billionaires don’t avoid taxes by avoiding incomes. In 2018, nine of the 25 wealthiest Americans reported more than $500 million in income and three more than $1 billion.
In such cases, though, the data obtained by ProPublica shows billionaires have a palette of tax-avoidance options to offset their gains using credits, deductions (which can include charitable donations) or losses to lower or even zero out their tax bills. Some own sports teams that offer such lucrative write-offs that owners often end up paying far lower tax rates than their millionaire players. Others own commercial buildings that steadily rise in value but nevertheless can be used to throw off paper losses that offset income.
Michael Bloomberg, the 13th-richest American on the Forbes list, often reports high income because the profits of the private company he controls flow mainly to him.
In 2018, he reported income of $1.9 billion. When it came to his taxes, Bloomberg managed to slash his bill by using deductions made possible by tax cuts passed during the Trump administration, charitable donations of $968.3 million and credits for having paid foreign taxes. The end result was that he paid $70.7 million in income tax on that almost $2 billion in income. That amounts to just a 3.7% conventional income tax rate. Between 2014 and 2018, Bloomberg had a true tax rate of 1.30%.
In a statement, a spokesman for Bloomberg noted that as a candidate, Bloomberg had advocated for a variety of tax hikes on the wealthy. “Mike Bloomberg pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law,” the spokesman wrote. And he cited Bloomberg’s philanthropic giving, offering the calculation that “taken together, what Mike gives to charity and pays in taxes amounts to approximately 75% of his annual income.”
The statement also noted: “The release of a private citizen’s tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy. In the United States no private citizen should fear the illegal release of their taxes. We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible.”
Ultimately, after decades of wealth accumulation, the estate tax is supposed to serve as a backstop, allowing authorities an opportunity to finally take a piece of giant fortunes before they pass to a new generation. But in reality, preparing for death is more like the last stage of tax avoidance for the ultrawealthy.
University of Southern California tax law professor Edward McCaffery has summarized the entire arc with the catchphrase “buy, borrow, die.”
The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20% capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
Then comes the estate tax, which, at 40%, is among the highest in the federal code. This tax is supposed to give the government one last chance to get a piece of all those unrealized gains and other assets the wealthiest Americans accumulate over their lifetimes.
It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
The result is that large fortunes can pass largely intact from one generation to the next. Of the 25 richest people in America today, about a quarter are heirs: three are Waltons, two are scions of the Mars candy fortune and one is the son of Estée Lauder.
In the past year and a half, hundreds of thousands of Americans have died from COVID-19, while millions were thrown out of work. But one of the bleakest periods in American history turned out to be one of the most lucrative for billionaires. They added $1.2 trillion to their fortunes from January 2020 to the end of April of this year, according to Forbes.
That windfall is among the many factors that have led the country to an inflection point, one that traces back to a half-century of growing wealth inequality and the financial crisis of 2008, which left many with lasting economic damage. American history is rich with such turns. There have been famous acts of tax resistance, like the Boston Tea Party, countered by less well-known efforts to have the rich pay more.
One such incident, over half a century ago, appeared as if it might spark great change. President Lyndon Johnson’s outgoing treasury secretary, Joseph Barr, shocked the nation when he revealed that 155 Americans making over $200,000 (about $1.6 million today) had paid no taxes. That group, he told the Senate, included 21 millionaires.
“We face now the possibility of a taxpayer revolt if we do not soon make major reforms in our income taxes,” Barr said. Members of Congress received more furious letters about the tax scofflaws that year than they did about the Vietnam War.
Congress did pass some reforms, but the long-term trend was a revolt in the opposite direction, which then accelerated with the election of Ronald Reagan in 1980. Since then, through a combination of political donations, lobbying, charitable giving and even direct bids for political office, the ultrawealthy have helped shape the debate about taxation in their favor.
One apparent exception: Buffett, who broke ranks with his billionaire cohort to call for higher taxes on the rich. In a famous New York Times op-ed in 2011, Buffett wrote, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”
Buffett did something in that article that few Americans do: He publicly revealed how much he had paid in personal federal taxes the previous year ($6.9 million). Separately, Forbes estimated his fortune had risen $3 billion that year. Using that information, an observer could have calculated his true tax rate; it was 0.2%. But then, as now, the discussion that ensued on taxes was centered on the traditional income tax rate.
In 2011, President Barack Obama proposed legislation, known as the Buffett Rule. It would have raised income tax rates on people reporting over a million dollars a year. It didn’t pass. Even if it had, however, the Buffett Rule wouldn’t have raised Buffett’s taxes significantly. If you can avoid income, you can avoid taxes.
Today, just a few years after Republicans passed a massive tax cut that disproportionately benefited the wealthy, the country may be facing another swing of the pendulum, back toward a popular demand to raise taxes on the wealthy. In the face of growing inequality and with spending ambitions that rival those of Franklin D. Roosevelt or Johnson, the Biden administration has proposed a slate of changes. These include raising the tax rates on people making over $400,000 and bumping the top income tax rate from 37% to 39.6%, with a top rate for long-term capital gains to match that. The administration also wants to up the corporate tax rate and to increase the IRS’ budget.
Some Democrats have gone further, floating ideas that challenge the tax structure as it’s existed for the last century. Oregon Sen. Ron Wyden, the chairman of the Senate Finance Committee, has proposed taxing unrealized capital gains, a shot through the heart of Macomber. Sens. Elizabeth Warren and Bernie Sanders have proposed wealth taxes.
Aggressive new laws would likely inspire new, sophisticated avoidance techniques. A few countries, including Switzerland and Spain, have wealth taxes on a small scale. Several, most recently France, have abandoned them as unworkable. Opponents contend that they are complicated to administer, as it is hard to value assets, particularly of private companies and property.
What it would take for a fundamental overhaul of the U.S. tax system is not clear. But the IRS data obtained by ProPublica illuminates that all of these conversations have been taking place in a vacuum. Neither political leaders nor the public have ever had an accurate picture of how comprehensively the wealthiest Americans avoid paying taxes.
Buffett and his fellow billionaires have known this secret for a long time. As Buffett put it in 2011: “There’s been class warfare going on for the last 20 years, and my class has won.”
The end-all and be-all of memes emerged out of the inauguration…
In a move that transcends the presidential, Bernie Sanders now owns the internet. All he needed was the right mittens and a countenance of equanimity, rising above to see into the center of all being and nothingness.
Like a zen monk or Yoda on steroids, he accomplishes all by doing little, even nothing, beyond his mind bending position and posture. Ever modest and with a meaningful invisible wink, he disavows any knowledge of his splendor or any plan to conquer all:
“I was just sitting there trying to keep warm, trying to pay attention to what was going on,”
-Bernie Sanders / Interview Late Night With Seth Meyers
Meanwhile, there has been a meaningful and valid response to the triumph, and it all gets back to a t-shirt and mittens.
Now that there has been an endless stream of replication and iteration based on the genius moment, we best begin at the beginning and trace this new species of viral wonderfulness back to its humble source: the photo:
#BernieSanders We love the Bernie memes being shared all day. Taking special requests where do you want to see Bernie? Bernie – our heart will go on pic.twitter.com/zPSJVlfuSG
And to you, Amazon, you can not have this meme for your endless self-aggrandizement, and here is the obvious reason why:
On #PrimeDay, let's not forget. During the pandemic, Jeff Bezos became $97 billion richer by increasing prices by up to 1,000% on essential items and denying hazard pay and paid sick leave to over 450,000 of his workers. It's time to break up Amazon and tax the rich.
