The wealth of the top 1% of Americans has grown dramatically in the past four decades, squeezing both the middle class and the poor. This is in sharp contrast to Europe and Asia, where the wealth of the 1% has grown at a more constrained pace.
Report finds US corporations paid “zero to negative” income tax rate in 2018
Three hundred and seventy-nine highly profitable Fortune 500 corporations in the United States paid an average effective federal income tax of just 11.3 percent in 2018 as a result of the Tax Cuts and Jobs Act signed into law by President Donald Trump in December of 2017. This was one of the key findings of a report published Monday by the nonprofit tax policy organization, the Institute on Taxation and Economic Policy (ITEP).
The report also found that more than half of the 379 companies, or 195, paid less than half of the new statutory corporate tax rate of 21 percent. Fifty-six companies paid effective tax rates of between zero and 5 percent in 2018. Ninety-one highly profitable corporations paid zero or less (negative) income tax in 2018.
The report explains that negative corporate tax rates can occur “because a corporation carries back excess tax deductions and/or credits to an earlier year or years and receives a tax refund check from the US Treasury Department.” In total, these highly profitable corporations received $6.29 billion in tax rebates.
The Trump plan was passed without any serious opposition from Democratic lawmakers, who voted against the bill but refused to appeal to or mobilize popular opposition to it, knowing that the measure would pass in both the House and Senate, which at the time were both under Republican control. The Democrats openly supported a somewhat smaller tax windfall for corporations, along the lines of a bill introduced under the Obama administration.
The cut in the corporate tax rate to 21 percent was a decrease of 40 percent from the previous 35 percent rate. That some of the most profitable corporations paid so much less than this already lowered rate was, according to the report, “by design,” a result of loopholes in the 2017 tax law that affected the overall tax rate.
According to ITEP, just 25 companies accounted for over half of the federal tax subsidies doled out at the expense of the working class. Many of those 25 include financial giants such as JPMorgan Chase and Bank of America, and other monopolies like Wal-Mart, Comcast and AT&T.
Loopholes include accelerated depreciation, which allows companies to take larger upfront write-offs on the expected wear and tear of newly purchased equipment, and special deductions for the stock options included in executive compensation packages.
The corporations that were allowed to get away with paying zero or negative federal income tax rates include:
* Starbucks Corporation, which reaped $4.774 billion in profits in 2018 and received a $75 million tax rebate, effectively paying -1.6 percent in taxes. The corporation is notorious for paying workers low wages, forcing them to work unhealthy schedules and fostering an abusive and hostile work climate.
One worker wrote recently about his experience at Starbucks on the job review website indeed.com: “Terrible company with terrible leadership, can’t pay a living wage to their employees, all they do is threaten their managers, handicap them from doing their jobs, and make as much money as possible over the safety and well-being of their employees and customers. They don’t actually care about the experience, they just want money.”
* Amazon.com, which took in $10.84 billion in profits and was taxed -1.2 percent in 2018. The corporate giant received a $29 million rebate primarily due to a loophole in the tax code for treatment of stock options for executives.
Amazon’s CEO Jeff Bezos is currently the richest man in the world with a personal net worth of over $113 billion. The monopolistic corporation makes much of its profits through a web of warehouses worldwide where highly exploited workers are under constant surveillance. The company spies on employees and tracks their every move. Under physically demanding conditions, workers are paid just barely enough to survive. Many Amazon workers are homeless.
* FedEx, with $2.31 billion in profits in 2018, was taxed at an effective rate of -4.6 percent and received a rebate of $107 million. FedEx makes its profit off of a highly exploited global workforce that faces many of the same precarious and dangerous working conditions as UPS workers. The Teamsters union isolated the UPS workers from the FedEx workers and rammed through a sellout contract in 2018 despite a vote by the Teamsters rank and file against the contract.
* General Motors, which recorded $4.32 billion in profits in 2018, received a $104 million tax rebate, an effective tax rate of -2.4 percent. With the indispensable assistance of the United Auto Workers union, the company pushed through a sellout contract in October of this year following a 40-day strike.
General Motors headquarters in Detroit, Michigan
* United States Steel, which made a profit of $432 million, received a $40 million rebate and had an effective tax rate of -9.3 percent. Earlier this year, US Steel announced several hundred layoffs at its plants across the US and production shutdowns around the world after pushing through a concessions contract in 2018 with the help of the United Steelworkers union (USW) that stripped workers of job protections.
* Delta Airlines, which reaped $5.07 billion in profits during 2018, received $187 million in tax rebates, benefiting from an effective tax rate of -3.7 percent. Flight attendants have suffered serious injuries on the job only to be denied health care from the claims company Sedgwick, which Delta uses to process workers’ insurance claims.
Had the 379 corporations identified in the ITEP study paid 21 percent in federal income taxes, they would have owed $73.9 billion to the federal government. To put that $73.9 billion into perspective, it is more than the amount needed to make tuition free at public colleges across the US ($70 billion per year) and twice what it would cost per year to end world hunger ($30 billion).
Josh
Hawley: GOP Must Defend Middle Class Americans Against ‘Concentrated Corporate
Power,’ Tech Billionaires
The Republican Party must defend America’s working and middle
class against “concentrated corporate power” and the monopolization of entire
sectors of the United States’ economy, Sen. Josh Hawley (R-MO) says.
Sacha
Baron Cohen Calls Silicon Valley ‘Greatest Propaganda Machine in History’ for
Hate Groups
Kevin Winter/Getty Images
Actor Sacha Baron Cohen railed against social media firms giants
including Facebook, Google, and Twitter calling them “the greatest propaganda
machine in history” for hate groups.
The wealthiest
Americans are paying a lower tax rate than all other Americans, groundbreaking
analysis from a pair of economists reveals.
Census Says U.S.
Income Inequality Grew ‘Significantly’ in 2018
The Lessons of Theodore Roosevelt
Library
of Congress/Wikimedia Commons
Economists:
America’s Elite Pay Lower Tax Rate Than All Other Americans
The wealthiest Americans are paying a lower
tax rate than all other Americans, groundbreaking analysis from a pair of economists
reveals.
Census Says U.S. Income Inequality
Grew ‘Significantly’ in 2018
The
Democrats’ opposition to Trump is not based on his imposition of austerity
measures, or his vicious assault on immigrants. While they will not mount a
serious challenge to a proposal that will literally take food out of the mouths
of school children, they were complicit in passing the Republicans’ $1.3
trillion tax cuts in 2017 and the record $738 billion defense budget agreed to
earlier this year.
Trump
proposal denies free school meals to half a million children
A new Gilded Age has emerged in America — a 21st century
version.
The wealth of the top 1% of
Americans has grown dramatically in the past four decades, squeezing both
the middle class and the poor. This is in sharp contrast to Europe and Asia,
where the wealth of the 1% has grown at a more constrained pace.
Josh
Hawley: GOP Must Defend Middle Class Americans Against ‘Concentrated Corporate
Power,’ Tech Billionaires
The Republican Party must defend America’s working and middle
class against “concentrated corporate power” and the monopolization of entire
sectors of the United States’ economy, Sen. Josh Hawley (R-MO) says.
In an interview on The Realignment podcast,
Hawley said that “long gone are the days where” American workers can depend on
big business to look out for their needs and the needs of their communities.
Instead, Hawley explained that increasing “concentrated
corporate power” of whole sectors of the American economy — specifically among
Silicon Valley’s giant tech conglomerates — is at the expense of working and middle
class Americans.
“One of the things Republicans need to recover today is a
defense of an open, free-market, of a fair healthy competing market and the
length between that and Democratic citizenship,” Hawley said, and continued:
At the end of the day, we are trying to support and sustain here
a great democracy. We’re not trying to make a select group of people rich.
They’ve already done that. The tech billionaires are already billionaires, they
don’t need any more help from government. I’m not interested in trying to help
them further. I’m interested in trying to help sustain the great middle of this
country that makes our democracy run and that’s the most important challenge of
this day.
“You have these businesses who for years now have said ‘Well,
we’re based in the United States, but we’re not actually an American company,
we’re a global company,'” Hawley said. “And you know, what has driven profits
for some of our biggest multinational corporations? It’s been … moving jobs
overseas where it’s cheaper … moving your profits out of this country so you
don’t have to pay any taxes.”
“I think that we have here at the same time that our economy has
become more concentrated, we have bigger and bigger corporations that control
more and more of our key sectors, those same corporations see themselves as
less and less American and frankly they are less committed to American workers
and American communities,” Hawley continued. “That’s turned out to be a problem
which is one of the reasons we need to restore good, healthy, robust
competition in this country that’s going to push up wages, that’s going to
bring jobs back to the middle parts of this country, and most importantly, to
the middle and working class of this country.”
While multinational corporations monopolize industries, Hawley
said the GOP must defend working and middle class Americans and that big
business interests should not come before the needs of American communities:
A free market is one where you
can enter it, where there are new ideas, and also by the way, where people can
start a small family business, you shouldn’t have to be gigantic in order to
succeed in this country. Most people don’t
want to start a tech company. [Americans]
maybe want to work in their family’s business, which may be some corner shop in
a small town … they want to be able to make a living and
then give that to their kids or give their kids an option to do that. [Emphasis
added]
The problem with corporate
concentration is that it tends to kill all of that. The worst thing about corporate concentration is that it
inevitably believes to a partnership with big government. Big business and big government always get
together, always. And that is exactly what has happened now with the tech
sector, for instance, and arguably many other sectors where you
have this alliance between big government and big business … whatever you call
it, it’s a problem and it’s something we need to address. [Emphasis added]
Hawley blasted the free trade-at-all-costs doctrine that has dominated
the Republican and Democrat Party establishments for decades, crediting the
globalist economic model with hollowing “out entire industries, entire supply
chains” and sending them to China, among other countries.
“The thing is in this country is that not only do we not make
very much stuff anymore, we don’t even make the machines that make the stuff,”
Hawley said. “The entire supply chain up and down has gone overseas, and a lot
of it to China, and this is a result of policies over some decades now.”
As Breitbart News reported,
Hawley detailed in the
interview how Republicans like former President George H.W. Bush’s ‘New World
Order’ agenda and Democrats have helped to create a corporatist economy that
disproportionately benefits the nation’s richest executives and donor class.
The billionaire class, the top 0.01
percent of earners, has enjoyed more than 15 times as much
wage growth as the bottom 90 percent since 1979. That economy has been
reinforced with federal rules that largely benefits the wealthiest of
wealthiest earners. A study released last month
revealed that the richest Americans are, in fact, paying a lower tax rate than
all other Americans.
Sacha
Baron Cohen Calls Silicon Valley ‘Greatest Propaganda Machine in History’ for
Hate Groups
22 Nov 201918
3:52
Actor Sacha Baron Cohen railed against social media firms giants
including Facebook, Google, and Twitter calling them “the greatest propaganda
machine in history” for hate groups.
CNBC reports that British
comedian Sacha Baron Cohen has blamed tech giants Facebook, Google, and Twitter
for boosting the voices of hate groups and spreading fake news during a speech
before the Anti-Defamation League this week.
Baron Cohen is best known for
playing the lead characters in films such as Borat about a documentary filmmaker from
Kazakhstan coming to America, he also portrayed the character of Ali G on Da Ali G Show where he would
conduct interviews in character with guests who were often unaware that Baron
Cohen was an actor. The actor’s signature style has been to trick the people he
interviews into revealing their own biases or convincing them to say offensive
things or take part in outrageous scenarios.
But Baron Cohen lashed out at the
Masters of the Universe in Silicon Valley recently during a speech before the
ADL. Baron Cohen stated that hate groups and divisive rhetoric are on the rise
across the world and blamed Big Tech for acting as “the greatest
propaganda machine in history.” He stated during his speech:
Think about it. Facebook, YouTube
and Google, Twitter and others — they reach billions of people. The algorithms
these platforms depend on deliberately amplify the type of content
that keeps users engaged — stories that appeal to our baser instincts and that
trigger outrage and fear. It’s why YouTube recommended videos by the
conspiracist Alex Jones billions of times. It’s why fake
news outperforms real news, because studies show that lies
spread faster than truth. And it’s no surprise that the greatest propaganda
machine in history has spread the oldest conspiracy theory in history — the lie
that Jews are somehow dangerous.
Baron Cohen harshly criticized
Facebook CEO Mark Zuckerberg who promoted freedom of
speech to students during an event at Georgetown University recently. The actor
pointed out issues he had with Zuckerberg’s refusal to police speech on the
Facebook platform, stating:
If a neo-Nazi comes goose-stepping
into a restaurant and starts threatening other customers and saying he wants
[to] kill Jews, would the owner of the restaurant be required to serve him an
elegant eight-course meal? Of course not! The restaurant owner has every legal
right and a moral obligation to kick the Nazi out, and so do these internet
companies.
Baron Cohen stated that believes
Facebook should be regulated and that there should be an automated delay
between the time material is uploaded and it is posted to the platform in order
to ensure that violent content is not allowed on the platform. He stated:
There is such a thing as objective
truth. Facts do exist. And if these internet companies really want to make a
difference, they should hire enough monitors to actually monitor, work closely
with groups like the ADL, insist on facts and purge these lies and conspiracies
from their platforms.
Baron Cohen referred to the CEO’s of
Silicon Valley’s biggest firm as “The Silicon Six”, this includes Facebook CEO
Mark Zuckerberg, Twitter CEO Jack Dorsey, and four
executives from Google’s parent company Alphabet: Co-founders Larry Page and Sergey Brin, Google CEO Sundar Pichai, and YouTube CEO
Susan Wojcicki.
A Twitter spokesperson noted after
Baron Cohen’s speech that it had suspended the accounts of 186 hate groups so
far. The spokesperson stated: “Our rules are clear: There is no
place on Twitter for hateful conduct, terrorist organizations
or violent extremist groups.” Facebook, Google, and YouTube did not
respond to a request for comment from CNBC.
Lucas Nolan is a reporter for Breitbart News covering issues of
free speech and online censorship. Follow him on Twitter @LucasNolan or
email him at lnolan@breitbart.com
Economists: America’s Elite Pay Lower Tax Rate Than All Other
Americans
The wealthiest
Americans are paying a lower tax rate than all other Americans, groundbreaking
analysis from a pair of economists reveals.
For the
first time on record, the wealthiest 400 Americans in 2018 paid a lower tax
rate than all of the income groups in the United States, research highlighted by the New York Times from
University of California, Berkeley, economists Emmanuel Saez and Gabriel
Zucman finds.
The
analysis concludes that the country’s top economic elite are paying lower
federal, state, and local tax rates than the nation’s working and middle class.
Overall, these top 400 wealthy Americans paid just a 23 percent tax rate, which
the Times‘ op-ed columnist David Leonhardt notes is a
combined tax payment of “less than one-quarter of their total income.”
This 23
percent tax rate for the rich means their rate has been slashed by 47
percentage points since 1950 when their tax rate was 70 percent.
(Screenshot
via the New York Times)
The
analysis finds that the 23 percent tax rate for the wealthiest Americans is
less than every other income group in the U.S. — including those earning
working and middle-class incomes, as a Times graphic shows.
Leonhardt
writes:
For
middle-class and poor families, the picture is different. Federal
income taxes have also declined modestly for these families, but they haven’t
benefited much if at all from the decline in the corporate tax or estate tax. And
they now pay more in payroll taxes (which finance Medicare and Social
Security) than in the past. Over all, their taxes have remained fairly flat.
[Emphasis added]
The report
comes as Americans increasingly see a growing divide between the rich and
working class, as the Pew Research Center has found.
Sen. Josh
Hawley (R-MO), the leading economic nationalist in the Senate, has warned
against the Left-Right coalition’s consensus on open trade, open markets, and
open borders, a plan that he has called an economy that works solely for the
elite.
“The same
consensus says that we need to pursue and embrace economic globalization and
economic integration at all costs — open markets, open borders, open trade,
open everything no matter whether it’s actually good for American national
security or for American workers or for American families or for American
principles … this is the elite consensus that has governed our politics
for too long and what it has produced is a politics of elite ambition,”
Hawley said in an August speech in the
Senate.
That
increasing worry of rapid income inequality is only further justified by
economic research showing a rise in servant-class jobs,
strong economic recovery for elite zip codes but not for working-class
regions, and skyrocketing wage growth for the billionaire class at 15 times
the rate of other Americans.
Census Says U.S.
Income Inequality Grew ‘Significantly’ in 2018
(Bloomberg) -- Income
inequality in America widened “significantly” last year, according to a U.S.
Census Bureau report published Thursday.
A measure of inequality
known as the Gini index rose to 0.485 from 0.482 in 2017, according to the
bureau’s survey of household finances. The measure compares incomes at the top
and bottom of the distribution, and a score of 0 is perfect equality.
The 2018 reading is the
first to incorporate
the impact of President Donald Trump’s end-
2017 tax bill, which was reckoned by many
economists to be skewed in favor of the
wealthy.
the impact of President Donald Trump’s end-
2017 tax bill, which was reckoned by many
economists to be skewed in favor of the
wealthy.
But the distribution of
income and wealth in the U.S. has been worsening for decades, making America
the most unequal country in the developed world. The trend, which has persisted
through recessions and recoveries, and under administrations of both parties,
has put inequality at the center of U.S. politics.
Leading candidates for
the 2020 Democratic presidential nomination, including senators Elizabeth
Warren and Bernie Sanders, are promising to rectify the tilt toward the rich
with measures such as taxes on wealth or financial transactions.
Just five states --
California, Connecticut, Florida, Louisiana and New York, plus the District of
Columbia and Puerto Rico -- had Gini indexes higher than the national level,
while the reading was lower in 36 states.
A new Gilded Age has emerged in America — a 21st century
version.
The wealth of the top 1% of
Americans has grown dramatically in the past four decades, squeezing both
the middle class and the poor. This is in sharp contrast to Europe and Asia,
where the wealth of the 1% has grown at a more constrained pace.
The Lessons of Theodore Roosevelt
To get out of our Second Gilded Age, look no
further than how we got out of the first one.
September
6, 2019
We’ve been rocked by
scandals over the past year involving the nation’s most wealthy and powerful.
We’ve learned that a twisted multimillionaire allegedly procured and raped
girls in his Manhattan mansion and on his private Caribbean Island; entitled
celebrities and corporate plutocrats paid millions of dollars in bribes to get
their kids into elite universities; pillars of the Hollywood and media establishments
have used their stature to sexually prey upon underlings; and, yes, our
president was caught lying about possibly violating campaign finance laws with
hush money payoffs to a porn star and Playboy bunny.
This
moral corruption is accompanied by the regressive government policies of a
scandal-stained administration. President Donald Trump is rolling back programs
that protect consumers, voting rights, the environment, and competitive
commerce faster than Congress can issue subpoenas. His cabinet includes
17 millionaires, two centimillionaires, and one billionaire with a combined
worth of $3.2 billion, according to Forbes. He presides over the most
corrupt administration in American history, one marked by nepotism and
self-dealing. His so-called “A Team” of senior officials has undergone a record
75 percent turnover since he took office—most of whom
resigned under pressure, often caught up in
scandal.
Commerce
Secretary Wilbur Ross, whose net worth is estimated at $600 million, reflected the arrogance and empathy
deficit that typifies the Trump White House during last winter’s record-long
government shutdown. He suggested that federal workers just take out loans
until they got paid.
But
nobody tops the swamp king, Trump himself. Forget the sleaze, forget the
obstruction of justice, forget the constant dissing of Congress. His defying
the Constitution’s emoluments clause alone would, in a normally functioning
American democracy, make him the subject of impeachment. Instead, he flouts the
rules as if they don’t apply to him. If he gets his way and hosts next year’s
G-7 summit at Mar-a-Lago, we may as well send the Constitution to the shredder.
And yet, as more recent controversies have shown us, including the Varsity
Blues college admissions scandal and Jeffery Epstein’s sex trafficking racket,
this kind of indifference to moral values is not confined to government
grandees.
So,
what gives? Is America drowning in a marsh of unchecked corruption and
entitlement brought on by latter-day Louis XVI’s and Marie Antoinettes? Are the
uber-wealthy out of control? There’s something rotten in America and, if we
don’t fix it soon, we invite a new wave of national decline and social
disintegration.
The
good news is that we have faced similar challenges before. Some prescriptions
from a previous era may provide a lodestar for a future Democratic president to
steer the country in the right direction. As Mark Twain, who coined the term
“the Gilded Age,” once said, “The external glitter of wealth conceals a corrupt
political core that reflects the growing gap between the very few rich and the
very many poor.” He was talking about the original Gilded Age, but that
diagnosis could just as easily apply to our current American condition.
The
first Gilded Age was marked by rapid economic growth, massive immigration,
political corruption, and a high concentration of wealth in which the richest
one percent owned 51 percent of property, while the bottom 44 percent had a
mere one percent. The oligarchs at the top were popularly known as “robber
barons.”
Theodore
Roosevelt, who was president at the time, understood that economic inequality
itself becomes a driver of a dysfunctional political system that benefits the
wealthy but few others. As he once famously warned, “There can be no real political democracy unless there is
something approaching economic democracy.”
His
response to the inequities of his times, which came to define the Progressive
Era, have much to teach us now about how to sensibly tackle economic
inequality. It’s worthwhile to closely examine the Rooseveltian playbook. For
instance, his “Square Deal” made bold changes in the American workplace,
government regulation of industry, and consumer protection. These reforms
included mandating safer conditions for miners and eliminating the spoils
system in federal hiring; bringing forty-four antitrust suits against big
business, resulting in the breakup of the largest railroad monopoly, and
regulation of the nation’s largest oil company; and passing the Meat Inspection
Act and Pure Food and Drug Act, which created the FDA. He prosecuted more than twice as many antitrust suits
against monopolistic businesses than his three predecessors combined, curbing
the robber barons’ power. And he relentlessly cleaned up corruption in the
federal government. One-hundred-forty-six indictments were brought against a
bribery ring involving public timberlands, culminating in the conviction and
imprisonment of a U.S. senator, and forty-four Postal Department employees were
charged with fraud and bribery.
Now,
we are in a Second Gilded Age, facing many of the same problems, and, in some
ways, to an even greater degree. The gap between the rich and everyone else is
even greater than it was during the late 19th Century, when the richest two
percent of Americans owned more than a third of the nation’s wealth. Today, the
top one percent owns almost 40 percent of the nation’s wealth, or more than the
bottom 90 percent combined, according to the
nonpartisan National Bureau of Economic Research. The first Gilded Age saw the
rise of hyper-rich dynastic families, such as the Rockefellers, Mellons,
Carnegies, and DuPonts. Today, three individuals—Jeff Bezos, Bill Gates, and
Warren Buffett—own more wealth than the bottom half of the country combined.
And three families—the Waltons, the Kochs, and the Mars—have enjoyed a nearly
6,000 percent rise in wealth since Ronald Reagan took the oath as president,
while median U.S. household wealth over the same period has declined by three percent.
The
consequences of this wealth gap are dire. Steve Brill explains in his book Tailspin that, by
manipulating the tax and legal systems to their benefit, America’s most
educated elite, the so-called meritocracy, have built a moat that excludes the
working poor, limiting their upward mobility and increasing their sense of
alienation, which then gives rise to the populist streak that allowed
politicians like Trump to captivate enough of the American electorate.
Similarly,
psychologist Dacher Keltner’s research shows that power in and of itself is a
corrupting force. As he documents in The Power Paradox, powerful people
lie more, drive more aggressively, are more likely to cheat on their spouses,
act abusively toward subordinates, and even take candy from children. Too
often, they simply do not respect the rules.
For
example, in monitoring an urban traffic intersection, Keltner found that
drivers of the least expensive vehicles virtually always yielded
to pedestrians, whereas drivers of luxury cars yielded only about half of the
time. He cites surveys covering 27
countries that show that rich people are more likely to admit that it’s
acceptable to engage in unethical behavior, such as accepting bribes or
cheating on taxes.“The experience of power might be thought of as having
someone open up your skull and take out that part of your brain so critical to
empathy and socially appropriate behavior,” says Keltner.
That’s
why we need to reform our political system if we are to survive the rampant
amorality and lawlessness of the Second Gilded Age. Simply put, so very few
should not wield so much sway over so many.
One
of the first priorities of an incoming administration should be to narrow the
wealth and income gap. French economist Thomas Picketty favors a progressive
annual wealth tax of up to two percent, along with a progressive income tax as
high as 80 percent on the biggest earners to reduce inequality and avoid
reverting to “patrimonial capitalism” in which inherited
wealth controls much of the economy and could lead essentially to oligarchy.
The
leading 2020 Democratic candidates favor raising taxes, as well. Elizabeth
Warren has proposed something commensurate to Picketty’s two percent wealth tax
for those worth more than $50 million, and a three percent annual tax on
individuals with a net worth higher than $1 billion. She has also proposed
closing corporate tax loopholes. Joe Biden wants to restore the top individual
income tax rate to a pre-Trump 39.6 percent and raise capital gains taxes.
Bernie Sanders has proposed an estate tax on the wealth of the top 0.2 percent
of Americans.
Following
Theodore Roosevelt’s example, we need to aggressively root out the tangle of
corruption brought on by Trump and his minions. This has already begun with
multiple and expanding investigations led by House Democrats into the
metastasizing malfeasance within the Trump administration. Trump’s successor,
however, should work with Congress to appoint a bipartisan anti-corruption task
force to oversee prosecutions and draw up reform legislation to prevent future abuses.
“Of
all forms of tyranny, the least attractive and the most vulgar is the tyranny
of mere wealth, the tyranny of a plutocracy,” Roosevelt once warned. The free
market has made America the great success it is today. But history has shown
that unconstrained capitalism and a growing wealth gap leads to an unhealthy
concentration of wealth in the hands of a few. When the gap between the haves
and the have-nots goes unchecked, populism takes hold, leading to the election
of dangerous demagogues like Trump, and the disastrous politics they bring with
them. It is not too late to reverse course. But first, we need to re-learn the
lessons from our first Gilded Age if we are going to get out of the current
one.
Economists:
America’s Elite Pay Lower Tax Rate Than All Other Americans
The wealthiest Americans are paying a lower
tax rate than all other Americans, groundbreaking analysis from a pair of economists
reveals.
For the first time on record, the
wealthiest 400 Americans in 2018 paid a lower tax rate than all of the income
groups in the United States, research highlighted by the New York Times from
University of California, Berkeley, economists Emmanuel Saez and Gabriel
Zucman finds.
The analysis concludes that the country’s
top economic elite are paying lower federal, state, and local tax rates than
the nation’s working and middle class. Overall, these top 400 wealthy Americans
paid just a 23 percent tax rate, which the Times‘ op-ed columnist David Leonhardt notes
is a combined tax payment of “less than one-quarter of their total income.”
This 23 percent tax rate for the
rich means their rate has been slashed by 47 percentage points since 1950 when
their tax rate was 70 percent.
(Screenshot
via the New York Times)
The analysis finds that the 23
percent tax rate for the wealthiest Americans is less than every other income
group in the U.S. — including those earning working and middle-class incomes,
as a Times graphic
shows.
Leonhardt writes:
For middle-class and poor families,
the picture is different. Federal income taxes have also declined
modestly for these families, but they haven’t benefited much if at all from the
decline in the corporate tax or estate tax. And they now pay more
in payroll taxes (which finance Medicare and Social Security) than in
the past. Over all, their taxes have remained fairly flat. [Emphasis added]
The report comes as Americans
increasingly see a growing divide between the rich and working class, as the
Pew Research Center has found.
Sen. Josh Hawley (R-MO), the leading
economic nationalist in the Senate, has warned against the Left-Right
coalition’s consensus on open trade, open markets, and open borders, a plan
that he has called an economy that works solely for the elite.
“The same consensus says that we
need to pursue and embrace economic globalization and economic integration at
all costs — open markets, open borders, open trade, open everything no matter
whether it’s actually good for American national security or for American
workers or for American families or for American principles … this is the
elite consensus that has governed our politics for too long and what it has
produced is a politics of elite ambition,” Hawley said in an August speech in
the Senate.
That increasing worry of rapid
income inequality is only further justified by economic research showing a rise in
servant-class jobs, strong economic recovery for elite zip codes but not for
working-class regions, and skyrocketing wage growth for the billionaire class
at 15 times the rate of other Americans.
Census Says U.S. Income Inequality
Grew ‘Significantly’ in 2018
(Bloomberg) -- Income inequality in America widened
“significantly” last year, according to a U.S. Census Bureau report published
Thursday.
A measure of inequality known as the Gini index rose to 0.485
from 0.482 in 2017, according to the bureau’s survey of household finances. The
measure compares incomes at the top and bottom of the distribution, and a score
of 0 is perfect equality.
The 2018 reading is the first to incorporate the impact of
President Donald Trump’s end-2017 tax bill, which was reckoned by many
economists to be skewed in favor of the wealthy.
But the distribution of income and wealth in the U.S. has been
worsening for decades, making America the most unequal country in the developed
world. The trend, which has persisted through recessions and recoveries, and
under administrations of both parties, has put inequality at the center of U.S.
politics.
Leading candidates for the 2020 Democratic presidential
nomination, including senators Elizabeth Warren and Bernie Sanders, are
promising to rectify the tilt toward the rich with measures such as taxes on
wealth or financial transactions.
Just five states -- California, Connecticut, Florida, Louisiana
and New York, plus the District of Columbia and Puerto Rico -- had Gini indexes
higher than the national level, while the reading was lower in 36 states.
The
Democrats’ opposition to Trump is not based on his imposition of austerity
measures, or his vicious assault on immigrants. While they will not mount a
serious challenge to a proposal that will literally take food out of the mouths
of school children, they were complicit in passing the Republicans’ $1.3
trillion tax cuts in 2017 and the record $738 billion defense budget agreed to
earlier this year.
Trump
proposal denies free school meals to half a million children
The Trump
administration has provided a new analysis of how proposed changes to
eligibility for the Supplemental Nutrition Assistance Program (SNAP), commonly
known as food stamps, will impact children who participate in the National
School Lunch and School Breakfast programs. By the White House’s own admission,
these changes mean that about a half-million children would become ineligible
for free school meals.
Secretary of
Agriculture Sonny Perdue has described the changes as a tightening up of
“loopholes” in the SNAP system. But those affected by the changes are not
corporate crooks or billionaires, but hundreds of thousands of children who
stand to lose access to free meals. For many American children, free school
breakfasts and lunches make up the bulk of their nutritional intake, and they
stand to suffer permanent physical and psychological damage as a result of the
cuts.
Children receive a free
lunch at the Phoenix Day Central Park Youth Program in downtown Phoenix. (AP
Photo Matt York)
The sheer
vindictiveness of the proposed rule change is shown by the minimal savings that
would result—about $90 million a year beginning in fiscal year 2021, or a mere
0.012 percent of the estimated $74 billion annual SNAP budget. Put another way,
the savings would amount to two-thousandths of a percent of the $4.4 trillion
federal budget. But while this $90 million might appear as small change to the
oligarchs running and supporting the government, it will be directly felt as
hunger in the bellies of America’s poorest children.
SNAP provided benefits
to roughly 40 million Americans in 2018 and is the largest nutrition program of
the 15 administered by the federal Food and Nutrition Service. Along with
programs such as the Nutrition Program for Women, Infants and Children and
school breakfast and lunch programs, SNAP has been a major factor in making a
dent in the hunger of working-class families. But despite these programs’
successes, the Trump administration is seeking to claw them back, with the
ultimate aim of doing away with them altogether.
The US Department of
Agriculture (USDA), which administers the food stamp and school meal programs,
says that the new analysis presented last week is a more precise estimate of
the impact of rule changes in SNAP the USDA first announced in July. The main
component of the rule change is an end to “broad-based categorical eligibility”
for the food stamp program. Food stamps are cut off for households whose
incomes exceed 130 percent of the federal poverty line, or $33,475 per year for
a family of four, calculated after exemptions for certain expenses.
Under “broad-based
categorical eligibility,” which is currently used by over 40 states, households
can be eligible for food stamps based on their receiving assistance from other
anti-poverty programs, such as Temporary Assistance for Needy Families. Under this
rule, which has been in effect for about 20 years, states are allowed to raise
income eligibility and asset limits to promote SNAP eligibility. This prevents
many households from falling over the “benefit cliff,” which happens when a
small increase in income results in a complete cutoff of benefits, leaving a
family worse off than before the rise in income.
According to the USDA,
the rule change on broad-based eligibility would throw more than 680,000
households with children off SNAP. About 80 percent of these households have
school-age children, amounting to about 982,000 children. Of those, 55 percent,
or about 540,000, would no longer be eligible for free school meals, although
most would be eligible for reduced-price meals. About 40,000 would be required
to pay the full meal rate.
However, this does not
paint the full picture. Households thrown off SNAP would be required to apply
separately for access to free or reduced-price school meals. The USDA admits
that its cost estimates “do not account for potential state and local
administrative costs incurred due to collecting and processing household
applications … and also do not account for any increased responsibility placed
on the households to complete and submit a school meals application.”
While the Trump
administration claims that the proposed changes to SNAP eligibility are aimed
at closing up “loopholes” and stopping people from claiming benefits they’re
not entitled to, the reality is that there is no evidence that broad-based
eligibility has allowed significant numbers of people to supposedly “game the
system.” A 2012 Government Accountability Office investigation found that only
473,000 recipients, or just 2.6 percent of beneficiaries, received benefits
they would not have received without the broad-based eligibility offered by
many states.
There is consistent
evidence that SNAP contributes to a decrease in food insecurity, a condition
defined by the USDA as limited or uncertain access to adequate food. By one
estimate, SNAP benefits reduce the likelihood of food insecurity by about 30
percent and the likelihood of being very food insecure by 20 percent. Census
data has shown that SNAP also plays a critical role in reducing poverty, with
about 3.6 million Americans, including 1.5 million children, being lifted out
of poverty in 2016 as a result of the program.
The EconoFact Network
reports that SNAP has improved birth outcomes and infant health. When an
expectant mother has access to SNAP during pregnancy, particularly in the third
trimester, it decreases the likelihood that her baby will be born with low
birth weight. There is also evidence that the benefits of nutrition support can
persist well into adulthood when access to SNAP is provided before birth and
during early childhood. This can have a long-term impact on an individual’s
earnings, health and life expectancy. Conversely, food insecurity in childhood
correlates with greater risk of developing high blood pressure, diabetes,
obesity and cardiovascular disease later in life.
The proposed threat to
school lunches for half a million children has elicited little response from
Democrats in Congress, who are obsessively focused on the Trump impeachment
inquiry. Critical issues such as the health and nutrition of school children
are of little consequence to the Democratic Party, which instead gives voice to
those sections of the military intelligence apparatus that sees Trump’s
actions, particularly his sudden pullout from Syria, as endangering the global
interests of American imperialism.
The Democrats’
opposition to Trump is not based on his imposition of austerity measures, or
his vicious assault on immigrants. While they will not mount a serious
challenge to a proposal that will literally take food out of the mouths of
school children, they were complicit in passing the Republicans’ $1.3 trillion
tax cuts in 2017 and the record $738 billion defense budget agreed to earlier
this year. At $94.6 million, the cost of one of the US Air Force’s newest
and most technologically advanced fighter jets, the F-35A, would cover the $90
annual savings from depriving half a million US schoolchildren of free meals.
The Democrats’ opposition to
Trump is not based on his imposition of austerity measures, or his vicious
assault on immigrants. While they will not mount a serious challenge to a
proposal that will literally take food out of the mouths of school children,
they were complicit in passing the Republicans’ $1.3 trillion tax cuts in 2017
and the record $738 billion defense budget agreed to earlier this year.
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