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      in US Politics

      Biden targets America’s wealthiest with proposed minimum tax on billionaires

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      Biden targets America’s wealthiest with proposed minimum tax on billionairesTax on households over $100m aims to ensure wealthiest Americans no longer pay lower rate than teachers and firefighters Joe Biden proposed a new tax on America’s richest households when he unveiled his latest budget on Monday.The Biden administration wants to impose a 20% minimum tax on households worth more than $100m. The proposal would raise more than $360bn over the next decade and “would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters”, according to a factsheet released by the White House.‘I make no apologies’: Biden stands by ‘Putin cannot remain in power’ remarkRead moreThe plan – called the “billionaire minimum income tax” – is the administration’s most aggressive move to date to tax the very wealthiest Americans.The tax is part of Biden’s $5.8tn budget proposal for 2023, which also sets aside billions for the police and military as well as investments in affordable housing, plans to tackle the US’s supply chain issues and gun violence.“Budgets are statements of values, and the budget I am releasing today sends a clear message that we value fiscal responsibility, safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America,” Biden said in a statement.Billionaire wealth grew significantly during the coronavirus pandemic, helped by soaring share prices and a tax regime that charges investors less on their gains than those taxed on their income.“In 2021 alone, America’s more than 700 billionaires saw their wealth increase by $1tn, yet in a typical year, billionaires like these would pay just 8% of their total realized and unrealized income in taxes. A firefighter or teacher can pay double that tax rate,” the White House factsheet notes.Under the plan households worth more than $100m would have to give detailed accounts to the Internal Revenue Service of how their assets had fared over the year. Those who pay less than 20% on those gains would then be subject to an additional tax that would take their rate up to 20%.The Biden administration calculates that the tax would affect only the top 0.01% of American households, those worth over $100m, and that more than half the revenue would come from households worth more than $1bn.The budget also looks set to tackle another issue that some economists have argued contributes to widening income inequality: share buybacks.In recent years cash-rich companies including Apple, Alphabet, Meta and Microsoft, have used their funds to buy back huge quantities of their own shares, boosting their share price. Last year companies in the S&P 500 bought back a record $882bn of their own shares and Goldman Sachs estimates that figure will rise to $1tn this year.Critics say that the purchases divert money from hiring new staff, raising wages and research and development.Research by the Securities and Exchange Commission (SEC) shows that there is “clear evidence that a substantial number of corporate executives today use buybacks as a chance to cash out”.The Biden proposal would stop executives from selling their shares for three years after a buyback is announced.Biden attempted to impose a 1% tax on share buybacks last year but the proposal failed in Congress. Both Biden’s billionaire tax and the share buyback proposal will also face tough opposition in Congress.TopicsUS taxationBiden administrationUS politicsUS economyJoe BidenUS domestic policynewsReuse this content More

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      in UK Politics

      Rishi Sunak has a cost-of-living mountain to climb

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      Energy bills can seem like a domestic problem: a bill falling on the household doormat.In fact, energy costs flood every artery of an economy, so when they rise sharply, it is a shock that goes right to the heart.Higher oil and natural gas prices are not the only pressure that is driving prices to grow at the fastest pace in thirty years, but they form a significant economic handbrake, the full force of which is only just starting to be felt.The latest inflation figures show that gas prices have risen close to a third in the year to February, electricity prices have risen by around a fifth. That’s not just a problem that faces consumers.For every household bill that drives up, there is a business using heating, a plastic toy that is ultimately derived from oil, clothing that uses fibres from plastics. Input costs for firms have hit a 14-year high, according to the Office for National Statistics.A fossil-fuel hungry world economy was already proving hard to get back on track after the impact of the COVID-19 pandemic. In fact, supply chains are facing significant on-going pressures from higher infection rates in China and beyond.Then Russia invaded Ukraine.This has driven up grain, food production, oil and natural gas costs in particular. The UK’s largest trading partner, the European Union is especially exposed as it scrambles to buy energy from other sources, driving up the cost of non-Russian fuels.As an import heavy economy, there’s not much the Bank of England can do when the cost of goods and raw materials rise overseas. Its interest rate helps curb domestic inflation, but when the UK is importing the effects of the EU’s energy dependency that’s not a problem the central bank can fix. And while Britain takes less Russian gas than continental counterparts, it takes considerable amounts of oil-products, like diesel, forcing up the cost of a tank of fuel. In short, Russia’s invasion is a matter of a shock-upon-shock for the global economy, and the UK.When he takes to his feet in the House of Commons at lunchtime today, Rishi Sunak will still be a chancellor in crisis mode. It’s just that from his, and some other economists’ perspective, there is more than the immediate cost-of-living crisis to consider.Present interventions on energy bills will only take some of the edge off the impact on households in April, and will become a drop in the ocean come October.Still, Mr Sunak faces the slow-moving fiscal avalanche of an ageing UK population and slow GDP growth by historical standards, on top of this wave of higher energy costs when the price cap leaps again this autumn.Some economists believe that the energy price shock is so great for businesses and households that Mr Sunak should act now, to avoid a recession before Christmas. Others speculate that he is performing a political juggling act: hiking taxes by an eye-watering 10 per cent via National Insurance contributions now, in order to trim taxes later, ahead of the next general election in 2024.He may, in fact, do little to help households now, in order to be seen to do something more drastic this coming winter. Tax cuts might have to be swapped by some language around fiscal prudence.For all the talk of windfalls – and some of the rhetoric around the impact of inflation on public finances has been overblown – the squeeze on households and the public purse has only just begun. The public finances are in a position that means the chancellor can afford to help more now, economists from Left and Right largely agree on that. However, he may be worried about the political expectations that sets when the cost-of-living crisis deepens in the months ahead. More

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      in UK Politics

      Chicken will cost more because of Ukraine crisis, says minister warning of 8% food inflation

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      The price of chicken will soon spike at the supermarket because of the Russian invasion of Ukraine, environment secretary George Eustice has warned.The minister also warned that Britons face food prices rises of up to 8 per cent this summer, as the chancellor Rishi Sunak comes under pressure to help families struggling with the mounting cost of living crisis.Mr Eustice warned that the impact of global price rises in wheat – with Ukraine a major exporter around the world – would impact on living costs in the UK.In a speech to the Food and Drink Federation, the minister said the rising costs of feed used by poultry farmers would have a particularly strong impact of the price of chicken at the supermarket.“Speaking roughly, there are three or four very large poultry producers in this country,” the environment secretary said.He added: “They have a situation where feed costs account for around half of their input costs, and they’re seeing a cost pressure of around 20 – 30 per cent. At some point, that’s got to feed through the system.”Mr Eustice said officials had estimated that food and drink inflation could reach 6 per cent over the summer, but price rises could increase by as much as 8 per cent.Experts have warned that the invasion of Ukraine could see the bulk of the country’s grain exports wiped out this year, leading to big price rises and adding to the financial pressure on British households.Known as “Europe’s breadbasket”, the country was expected to account for 12 per cent of global wheat exports and nearly a fifth of global maize production this year, according to ING Bank and the US Department of Agriculture figures.Last week Ronald Kers – chief executive of the 2 Sisters Food Group, one of the country’s biggest food producers – warned that food prices in the UK could soar 15 per cent by the middle of the year.He warned of particularly acute spike in chicken production costs, set to be made worse by the Ukraine crisis. “This conflict brings a major threat to food security in the UK and there is no doubt the outcome of this is that consumers will suffer as a result,” he said.“The input costs of producing chicken – with feed being the biggest component – have rocketed. Prices from the farm gate have already risen by almost 50 per cent in a year,” Mr Kers added.Mr Eustice also revealed on Tuesday that the government’s food resilience forum set up to deal with the Covid and Brexit crises was now meeting once a week.It comes as opposition parties, business groups and consumer experts all called on Mr Sunak to step in with support with energy costs as he prepares for Wednesday’s spring statement.Money Saving Expert founder Martin has told MPs that families are facing a “fiscal punch in the face” on 1 April with the imminent rise in the price of energy.Mr Lewis stressed that the chancellor current package of measures aimed at taking the sting fuel bills, including a £200 rebate to be repaid, were “clearly not enough”.Meanwhile, several business groups, representing both big and small firms, told MPs the government is listening to their concerns – but there has been very little action so far.“We argue that, given the scale of the cost increases that businesses are facing, that it would be right for the chancellor to step in and provide something analogous to that support that was provided to households,” said Paul Wilson, policy director at the Federation of Small Businesses.Mr Sunak is reportedly preparing to cut fuel duty by up to 5p per litre. However, a 5p-per-litre cut in fuel duty would fail to reverse even half of the increase in prices inflicted on motorists over the past fortnight, according to new figures. More

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      in UK Politics

      Cost-of-living: Grim economic outlook should worry chancellor more than debt costs, economists warn

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      The chancellor should be more worried about the risk of the cost-of-living crisis plunging the UK into a recession later this year, than higher debt costs, economists warn.Rishi Sunak faces a trade-off between trying to trim the public debt or easing pressures on households when he delivers his Spring Statement at the dispatch box on Wednesday. Public sector borrowing was almost £26 billion less in the financial year to February, than forecast by the Office for Budget Responsibility in October. This, combined with a higher tax take than expected, gives the chancellor sufficient fiscal headroom to east the cost-of-living sting for households, economists and analysts said.Still, some are concerned that the Treasury will only make tweaks to fiscal policy amid an ongoing real-terms drop in benefits, and as it introduces a hike in National Insurance Contributions equivalent to 10 per cent for most earners.“If you don’t cut taxes and increase benefits you increase the risk of a recession later this year. That will cause far more harm to the economy and the public finances,” Julian Jessop, an independent economist and fellow of the Institute of Economic Affairs, a think-tank, told The Independent.The Resolution Foundation has also warned that the risk of a recession “is looming into view” amid a worsening cost-of-living crunch.It comes as a clutch of international institutions including the global lender of last resort, the International Monetary Fund, have warned that elevated energy costs and the wider economic fallout from Russia’s invasion of Ukraine pose risks to global growth.“Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses,” the Washington-based lender said earlier this month. Meanwhile, Fitch Ratings, a credit-ratings company, has warned of a deteriorating outlook for global growth as inflation returns “with a vengeance”.Higher inflation can lead to some higher interest repayments on debt which is directly linked to measures of price growth in the economy – about a quarter of UK gilts are linked to the Retail Prices Index.Mr Sunak said on Tuesday that with inflation and interest rates on the rise, it is “crucial that we don’t allow debt to spiral and burden future generations with further debt”.But inflation also has a windfall effect on the public purse, as departmental budgets are fixed in cash terms, rather than keeping pace with prices. Higher nominal GDP growth, also results in a higher nominal tax take.“There are factors pulling in both directions with inflation. It costs more money to finance the stock of debt, but the tax take also increases,” said Mr Jessop. “But in the short-term, even without the windfall, it makes sense for borrowing to take the strain.”Without changes to the current course of fiscal policy, Mr Sunak would effectively be tightening the public purse strings.A cut in fuel duty, as signalled by Mr Sunak, and a small increase to the threshold for National Insurance Contributions, would do little to address the overall cost-living-crunch, economists believe.Although inflation has risen sharply, and is set to remain elevated, with the Bank of England warning it could stay above 8 per cent for three months from April, before a higher peak in October, interest rates are still only just returning to pre-pandemic levels.That’s significant for the three-quarters of the UK’s debt which is not linked to the Retail Prices Index, a volatile and imperfect measure of price growth.“On debt, and debt interest, it’s good not to lose our sense of perspective,” said Isabel Stockton, research economist at think-tank, the Institute for Fiscal studies. “While we should certainly keep an eye on that, we shouldn’t lose our heads on the interest costs just yet.”Meanwhile, there is a risk that a failure to take more radical action could push the UK into recession this autumn, if households drastically cut back on non-essential spending.“What we do know is that consumer confidence has plummeted,” Jonathan Portes, professor of economics at King’s College London, told The Independent. This can signal cutbacks in consumer spending – a key driver of GDP growth in the UK, though it is an imperfect recession indicator.Mr Portes has warned that the Spring Statement could be read as “austerity by stealth” if the chancellor does not use some of the windfall from a higher tax tax due to inflation, to ease real terms cuts to the public sector and pressure on households.With inflation cutting workers’ wages in real terms, even as it has an overall positive effect on the public finances, overall the economy faces a tough few months ahead with another hike in energy bills this autumn.“A lot of risks are on the downside,” Mr Portes said. More

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      in US Politics

      Biden’s ‘cursed presidency’: gas prices are latest headache as midterms loom

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      Biden’s ‘cursed presidency’: gas prices are latest headache as midterms loomIn his 14 months in office, the US president has grappled with Covid, inflation, the Russia-Ukraine war and energy prices – and seemingly can’t catch a break The left are urging a green energy revolution. The right are sounding a battle cry of “Drill, baby, drill”. And American voters, tired of political excuses, are feeling angry.Will Biden’s handling of the Ukraine crisis prove popular with US voters?Read moreRising gas prices pose a fresh election year headache for Joe Biden. Republicans accuse him of pushing “a radical anti-US energy agenda”. Democrats put the blame on greedy oil companies and the assault on Ukraine by the Russian leader, Vladimir Putin.While some argue that crisis offers opportunity, consumers are feeling the pinch in the latest knotty problem for a US president who, after 14 months in office, seemingly cannot catch a break.“Biden has a cursed presidency,” observed Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “He’s gotten nailed by the continuation of Covid, by inflation being out of control, by a lunatic leader in Russia and now soaring energy prices that are hitting voters in the pocketbook. They want to be able to get gas for their cars and not spend a hundred bucks.”Prices at the pump, which hit a record high of $4.43 a gallon on average last weekend, were rising long before Russia invaded Ukraine as demand recovered from coronavirus lockdowns. But in announcing a ban on US imports of Russian oil, Biden sought to reframe it as “Putin’s price hike”.Republicans, however, saw a political cudgel with which to beat him. They argue that Biden campaigned on a promise to “wage war” on domestic energy production, signed an executive order to eliminate fossil fuel subsidies and suspended or halted oil and gas leases on federal lands.Mitch McConnell, the Senate minority leader, tweeted: “Nobody buys Democrats’ efforts to blame 14 months of failed policies on three weeks of crisis in Europe. Inflation and gas prices were skyrocketing and hurting families long before late last month. The White House needs to stop trying to deny their mistakes and start fixing them.”Republicans have also condemned the White House for reportedly considering deals with autocratic regimes for a back-up oil supply, undermining Biden’s moral authority at a critical moment on the world stage. Former president Donald Trump told supporters at a rally in South Carolina: “Now Biden is crawling around the globe on his knees begging and pleading for mercy from Saudi Arabia, Iran and Venezuela.”Their solution? Vastly increase domestic oil and gas production to end reliance on foreign countries. Introducing legislation to that end, Senator Josh Hawley of Missouri said: “To be strong and free as a nation, we must be energy independent. My bill will reverse Joe Biden’s disastrous energy surrender that has allowed Russian energy dominance and instead open up American production full-throttle.”But critics say that, while “energy independence” appears a resonant campaign slogan, it is based on false premise. The price of oil is set on the global market, not by domestic producers. The US exported more petroleum than it imported in 2021, according to the Energy Information Administration, while also increasing overall crude oil production.Nikos Tsafos, an energy and geopolitics expert at the Center for Strategic and International Studies thinktank in Washington, said: “We are energy independent by the definition that people use. We are a net exporter of energy and it doesn’t do anything to protect us, which is not a surprise to anyone who has ever thought about energy markets.”There is a different potential culprit. Consumer gas prices usually move in tandem with oil prices but this week, when oil prices fell below $100 a barrel as China’s Covid-19 outbreak threatened demand, there was little relief for at the pump. Democrats accuse giant oil corporations, already raking in billions of dollars, of profiteering.Biden wrote in a tweet: “Oil prices are decreasing, gas prices should too. Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”Chuck Schumer, the Senate majority leader, and Frank Pallone, chair of the House of Representatives’ energy and commerce committee, requested that oil company chief executives testify before Congress on 6 April. Schumer said on the Senate floor: “The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging.”In an interview with the Guardian, Ed Markey, a Democratic senator for Massachusetts, pointed out that oil companies already have all the land they need to heed Republicans’ plea to “drill, baby, drill” – but will not do it because it is contrary to their business model.“Chevron, Exxon, BP, Shell – they made a combined $75bn in net profits last year and, despite all their crocodile tears right now about this crisis, they’ve already announced that they’re going to return $38bn to their shareholders instead of taking the $38bn and beginning to drill on the 12,000 leases that they have on federal land in the United States for oil and gas,” Markey said.“The reason they’re not going to do it is that they are hypocrites, they are liars. They don’t want to drill because if we produce more oil, that would lower prices for consumers. So it’s all one big lie.”Markey, who helped devise the Green New Deal platform to wean America off fossil fuels at home or abroad, welcomed Biden’s move to tap into the US Strategic Petroleum Reserve, which contains 600m barrels. But he added: “In the long term, we need a technology revolution. If we do it, we’re going to be looking at all these companies and countries in a rear-view mirror historically.“We need to go to ‘plug in, baby, plug in’. We need wind, solar, battery storage technologies, all-electric vehicles, all the other innovation technologies that reduce greenhouse gases, but also back out the need for oil and gas in our economy, the European economy, the economy of Japan and all of our allies.”Does Biden, juggling so many crises, still get that?Markey replied: “I was part of a meeting with the president last Wednesday night and he once again made a commitment to his effort to achieve that energy technology revolution in our country.”There is also grassroots pressure on Biden. More than 200 environmental and indigenous organizations signed a letter demanding that he use the Defense Production Act, normally deployed by presidents in wartime to force companies to make weapons, to compel businesses to produce solar panels, wind turbines and other clean energy sources.John Paul Mejia, national spokesperson for the Sunrise Movement, a youth movement to stop climate change, said: “The playbook of fossil fuel executives is clearer now than ever. They have used the crisis of war to surge prices at the expense of working people and the takeaway from this is that it is incredibly dangerous and anti-democratic to have an economy dependent on fossil fuels.“We need Biden to use the Defence Production Act to take decisive measures on the urgency, scope and scale of this crisis and transition to clean, renewable, reliable energy.”Biden has given little hint of such a move as he relies on Congress to take action. But his signature Build Back Better plan, which would have poured about $550bn into the clean energy and climate business, appears to be going nowhere fast. One of the chief obstacles is the Democratic senator Joe Manchin of West Virginia, who recently told an energy conference that he was “very reluctant” to see the development of electric vehicles. A key vote in the evenly divided chamber, Manchin has taken more money in political donations from fossil fuel interests than any other senator.Mejia added: “One of the things to view that’s specific to the United States right now is that the crook executives in the fossil fuel industry have a strong hold over American politics in the sense that they have incredibly powerful politicians bought out like Joe Manchin.“At this moment what we’re seeing, especially ahead of elections too, are the so-called conservative Democrats suddenly overnight flipping and pretending to be working-class champions as they morph themselves into caring about what working people are feeling at the gas pump right now. But they’re really just fulfilling their allegiances to their big oil donors.”Opinion polls suggest Biden’s handling of the war in Ukraine has broad public approval but, with hints of a fresh coronavirus wave, his list of problems never seems to shorten. Whatever the causes of inflation, history suggests that voters may punish him at the ballot box.The president’s legislative ambitions for the climate crisis and other priorities are about to collide with midterm elections in which all signs point to Republicans winning the House and possibly the Senate. Biden could find himself spending the second half of his presidency vetoing laws rather than signing them.Jamal Raad, co-founder and executive director of the campaign group Evergreen Action, said: “If there was ever a moment of need for moving to a 100% clean energy economy was more clear that now, I don’t know when would be with a fossil fueled enabled leader attacking another country and throwing the whole fossil fuel global market into chaos. I do believe this is a make-or-break moment.”TopicsJoe BidenUS politicsOilUS foreign policyCommoditiesfeaturesReuse this content More

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      in US Politics

      Big oil could bring US gas prices down but won’t – so hit it with a windfall tax | Robert Reich

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      Big oil could bring US gas prices down but won’t – so hit it with a windfall taxRobert ReichIn the US, in times of crisis, the poor pay the price and the rich cash in. Democrats know it doesn’t have to be this way This morning I filled my car with gas, costing almost six dollars a gallon. My car is a Mini Cooper I bought years ago, partly because it wasn’t a gas-guzzler. Now it’s guzzling dollars.Putin and Trump have convinced me: I was wrong about the 21st century | Robert ReichRead moreWhen I consider what’s happening in Ukraine, I say what the hell. It’s a small sacrifice.Yet guess who’s making no sacrifice at all – in fact, who’s reaping a giant windfall from this crisis?Big oil has hit a gusher. Even before Vladimir Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to a far bigger bonanza.How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead.So they’re buying back their own stock in order to give their stock prices even more of a boost. Last year they spent $38bn on stock buybacks – their biggest buyback spending spree since 2008. This year, thanks largely to Putin, the oil giants are planning to buy back at least $22bn more.Make no mistake. This is a direct redistribution from consumers who are paying through the nose at the gas pump to big oil’s investors and top executives (whose compensation packages are larded with shares of stock and stock options).Though it’s seldom discussed in the media, lower-income earners and their families bear the brunt of the burden of higher gas prices. Not only are lower-income people less likely to be able to work from home, they’re also more likely to commute for longer distances between work and home in order to afford less expensive housing.Big oil companies could absorb the higher costs of crude oil. The reason they’re not is because they’re so big they don’t have to. They don’t worry about losing market share to competitors. So they’re passing on the higher costs to consumers in the form of higher prices, and pocketing record profits.It’s the same old story in this country: when crisis strikes, the poor and working class are on the frontlines while the biggest corporations and their investors and top brass rake it in.What to do? Hit big oil with a windfall profits tax.The European Union recently advised its members to seek a windfall profits tax on oil companies taking advantage of this very grave emergency to raise their prices.Democrats just introduced similar legislation here in the US. The bill would tax the largest oil companies, which are recording their biggest profits in years, and use the money to provide quarterly checks to Americans facing sticker shock as inflation continues to soar.It would require oil companies producing or importing at least 300,000 barrels of oil per day to pay a per-barrel tax equal to half the difference between the current price of a barrel and the average price from the years 2015 to 2019.This is hardly confiscatory. Those were years when energy companies were already recording large profits. Quarterly rebates to consumers would phase out for individuals earning more than $75,000 or couples earning $150,000.Republicans will balk at any tax increase on big oil, of course. They and the coal-industry senator Joe Manchin even tanked the nomination of Sarah Bloom Raskin to the Fed because she had the temerity to speak out about the systemic risks that climate change poses to our economy.But a windfall profits tax on big oil is exactly what Democrats must do to help average working people through this fuel crisis. It’s good policy, it’s good politics and it’s the right thing to do.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
      TopicsOil and gas companiesOpinionOilCommoditiesEnergy industryUkraineRussiaUS domestic policycommentReuse this content More

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      in US Politics

      Pressure mounts on Koch Industries to halt business in Russia

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      Pressure mounts on Koch Industries to halt business in RussiaWhile hundreds of companies have paused operations, three Koch subsidiaries are still operating in the country Pressure is mounting on Koch Industries, the conglomerate run by the rightwing billionaire Charles Koch, to pull out of Russia after it was revealed it was continuing to do business in Russia through three wholly-owned subsidiaries.Hundreds of companies including Coca-Cola, KPMG, McDonald’s, Netflix and Starbucks have paused operations in Russia following its invasion of Ukraine. But, as news site Popular Information revealed last week, three Koch subsidiaries are still operating in the country.Burger King owner says operator in Russia refuses to shut shopsRead more“Koch Industries is shamefully continuing to do business in Putin’s Russia and putting their profits ahead of defending democracy,” the Senate majority leader, Chuck Schumer, and Senator Ron Wyden, said in a joint statement. “As the democracies of the world make huge sacrifices to punish Russia for Putin’s illegal and vicious invasion of Ukraine, Koch Industries continues to profit off of Putin’s regime.”“It must stop,” Schumer wrote on Twitter, adding that he and Wyden were “exploring legislation to add Russia to existing laws denying foreign tax credits for taxes paid to North Korea & Syria.”Koch has defended its Russian operations. The company has three subsidiaries still operating in the country: Guardian Industries, a glass manufacturer; Molex, an electronic components manufacturer; and Koch Engineered Solutions, a provider of industrial products.In a statement released on Wednesday Dave Robertson, Koch president, condemned the invasion. “The horrific and abhorrent aggression against Ukraine is an affront to humanity,” he wrote. But he said the company would not “walk away” from its employees.“Koch company Guardian Industries operates two glass manufacturing facilities in Russia that employ about 600 people. We have no other physical assets in Russia, and outside of Guardian, employ 15 individuals in the country. While Guardian’s business in Russia is a very small part of Koch, we will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them (which is what the Wall Street Journal has reported they would do). Doing so would only put our employees there at greater risk and do more harm than good,” he wrote.Robertson said the company was “complying with all applicable sanctions, laws and regulations” and would continue to monitor the situation.The statement was released on the same day that the Ukrainian president, Volodymyr Zelenskiy, made an address to Congress. “All American companies must leave their market immediately because it is flooded with our blood,” said Zelenskiy.The Kansas-based conglomerate – the second-largest private company in the US – is one of 40 companies “digging in” and refusing to leave Russia, according to a tally compiled by the Yale professor Jeffrey Sonnenfeld and his research team.Popular Information also revealed last week that a network of pundits and groups funded by Koch has been publicly advocating against imposing economic sanctions on Russia.TopicsKoch brothersUkraineUS politicsRussianewsReuse this content More

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      in UK Politics

      DP World: Spotlight turns onto Dubai-based owners of P&O Ferries

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      A sudden move to sack 800 staff from P&O Ferries has thrust its parent company, the Dubai-based DP World, into the spotlight.After scenes of dock-side protests dominated news bulletins, No 10 has signalled it will weigh the legality of P&O’s approach to its staff, who were made redundant without notice, only to be replaced with other crew.Such a step is tricky for officials, however. Relations between the British government and DP World have been very cordial to date.The shipping and logistics giant operates ports around the globe, handling around 10 per cent of global shipping container traffic worldwide, according to a company presentation to investors dated April 2021. In March 2022, the company reported “record” earnings of $3.8 billion.“While P&O Ferries and Ferrymasters have faced a particularly challenging time due to Covid-19, we continue to invest in the business as we believe it will emerge stronger from this crisis,” DP World said in an investor presentation in March 2021. DP World is state-owned via its parent behemoth company Dubai World, to which it sold and then repurchased P&O for £322m in 2019. DP World returned to private ownership in 2020, when it was delisted from the Nasdaq Dubai exchange.This holding company, Dubai World, is controlled by United Arab Emirates vice president and prime minister Sheikh Mohammed bin Rashid Al Maktoum. A shared passion for racing led the sheikh to form a bond with Queen Elizabeth over decades. The monarch has hosted the ruler of Dubai in her royal box at Ascot.However, reports claimed the Queen distanced herself following the UK court judgement which described the sheikh as waging a “campaign of fear and intimidation” against his former wife, Princess Haya, and their two children. DP World’s links to Britain have been used as an example of why closer trade ties with the Gulf are top priority for the UK government. The company’s name has been listed in a host of briefing notes for Britain’s leaders when they address stakeholders with examples of the ‘wins’ of post-Brexit trade policy.The company’s investment in the Thames Freeport, in particular, some £300m to expand its berth capacity, has also been used to substantiate claims that the UK’s post-Brexit efforts to attract foreign investment is bearing fruit.Britain has committed to trade discussions with the Gulf Cooperation Council (GCC) this year, too. This has been given renewed priority in Whitehall, after energy exporter Russia’s invasion of Ukraine.The prime minister, Boris Johnson, and top officials underlined the need to prioritise GCC relations in order to reduce dependence on Russia, and keep the lights on in Britain, in visits to the UAE and Saudi Arabia this week.Late last year, the chief executive of DP World, Sultan Ahmed bin Sulayem, shared a stage with chancellor Rishi Sunak at the Savoy Hotel in London. He was flown in for a photoshoot alongside Mr Sunak to mark the launch of Britain’s first post-Brexit freeport in September last year.“DP World plans to be at the heart of Britain’s trading future and this investment shows that we have the ambition and the resources to boost growth, support businesses, create jobs and improve living standards,” said the sultan.Mr Sunak’s interest in DP World’s ventures is long-standing. In his 2016 paper on freeports, he singled out the Jebel Ali Free Zone in UAE, operated by DP World, as an example of how a freeport policy could offer benefits to the UK.The benefits of freeports in a developed economy such as the UK, with low tariffs on industrial inputs, have been challenged by economists.Dubai World, owner of DP World, has spent a decade repaying creditors as part of a spider-web restructuring effort, after it scrambled to secure financing in 2009 following the global financial crisis. It made a final payment to its creditors for that tranche of borrowing in 2020.Global lender of last resort, the International Monetary Fund (IMF), in its latest health-check of the UAE economy published last month, warned that state-owned enterprises such as Dubai World, which has billions in loans, are a significant risk to the overall financial stability of the country.The Washington-based IMF also noted “data limitations” on the UAE’s contingent liabilities – financial risks which are effectively on the government’s balance sheet – such as the fiscal support state-owned enterprises like Dubai World may have had, or may need in the future.DP World did not respond to The Independent’s request for comment.On Thursday, a spokesperson for P&O Ferries said, in response to backlash over its decision to immediately make staff redundant over a video call, that the company had faced a “£100m loss year on year, which has been covered by our parent DP World”.They added that without such changes, there would be “no future” for the ferry operator.A government minister has suggested the company ought to return the £10m in government support it received to furlough 1,400 staff during the Covid-19 pandemic. The company also requested a £150m government bailout during this period.On Friday, in a separate statement a P&O spokesperson said they hoped to have their services up and running within a couple of days, as it cost the ferry company “£1m a day for each day they are not moving”. More