More stories

  • in

    ProPublica Reveals the US Is a Tax Haven

    This week, ProPublica published a long, detailed article that blew the roof off two burning and intimately related questions currently in the news: wealth inequality and taxation. In the wake of the 2008 financial crisis, Thomas Piketty, Branko Milanovic and numerous pundits in the media have written reams on the topic. Politicians like Bernie Sanders and Elizabeth Warren have highlighted the issue and made proposals to address the problem. When Sanders suggested during the Democratic presidential primary that “billionaires shouldn’t exist,” the Democratic Party turned to one of the richest billionaires, Michael Bloomberg, counting on his financial clout to prevent the Vermont senator from winning the party’s nomination.

    In the US, people are more easily impressed by wealth itself than by the serious problem that wealth inequality has created. ProPublica’s article may help to change the public’s focus.

    They Are Coming for Us

    READ MORE

    ProPublica exposes the brutal fact that, contrary to the tenets of conservative Republican orthodoxy, the wealthy are the “takers” and people who work for a living, the “makers.” Worse, the taking they do no longer requires much effort. The tax system delivers everything they take away from others directly to their doorstep. Between 2014 and 2018, the 25 richest Americans “paid a total of $13.6 billion in federal income taxes.” The article calls it “a staggering sum, but it amounts to a true tax rate of only 3.4%.”

    Among the many details, ProPublica highlights the case of Warren Buffett, signaling “his public stance as an advocate of higher taxes for the rich.” Between 2014 and 2018, “Buffett reported paying $23.7 million in taxes.” But given the increase in his wealth over that period, that impressive sum “works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.” Who wouldn’t be happy paying taxes at that rate? And for Buffett, it isn’t even on earnings, which for most people permit survival, but on the absolute growth of his net worth.

    The article also cites the case of George Soros, the man who single-handedly broke the Bank of England. “Between 2016 and 2018,” according to a spokesman for the billionaire, “George Soros lost money on his investments, therefore he did not owe federal income taxes in those years.” The same spokesman, ProPublica reports, is quoted as affirming that “Mr. Soros has long supported higher taxes for wealthy Americans.”

    Today’s Daily Devil’s Dictionary definition:

    Support:

    To sit on the sidelines and verbally encourage other people to do things one is disinclined to do or incapable of doing on one’s own

    Contextual Note

    ProPublica has provided the world with a truly enlightening trove of information that sends a clear message. And this is only the beginning. The publication promises in the coming months to “explore how the nation’s wealthiest people — roughly the .001% — exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens.” Its reporting will certainly serve to clarify a debate that, for many, may have seemed too abstract and too polemical to try to take on board.

    Embed from Getty Images

    The numbers demonstrate the extreme, hyperreal nature of wealth distribution today. When the public learns that, in 2011, Jeff Bezos — who is, on and off, the richest man in the world — “claimed and received a $4,000 tax credit for his children” and that his true tax rate over time is less than 1%, they may begin to take the measure of how the tax system works and to whose benefit.

    The figures, nevertheless, show that between 2006 and 2018, Bezos paid out $1.4 billion, a staggering amount for any ordinary wage-earner to even try to comprehend. But his personal fortune over that time ballooned to reach close to $200 billion today. Has he earned it through his hard work? No, it earns itself. That’s what money does. And thanks to his ability to hire tax advisers and clever accountants, all but crumbs of his wealth stay in his hands, never to pollute (or contribute to improving) the public sphere.

    Historical Note

    ProPublica went to great lengths to gather, verify and publish these carefully guarded tax secrets. Its editors were not surprised when, as Forbes reports, IRS Commissioner Charles Rettig “told lawmakers that internal and external investigators are working to determine whether the data ProPublica used was illegally obtained.” In the land that enshrined free speech as a right (First Amendment) apparently even more fundamental than the right to own an AR-15 (Second Amendment), all speech is legitimate except when it is blown through a whistle.

    This simply means that the act of reporting certain types of scandalous abuse in the public interest is now deemed to violate the republic’s interest. We can expect the US government to spare no expense in its pursuit of the anonymous whistleblower who provided ProPublica with the tax returns it has put on display, whose secrecy is protected by the law.

    This is not a great time for whistleblowers. The cases of Edward Snowden, Julian Assange and Chelsea Manning have made headlines over the past decade. They all did something that could be interpreted as technically illegal, especially when laws such as the Espionage Act happen to be on the books. But they clearly exposed essential information about how a democracy functions that purports to be “of the people, by the people and for the people.” Thomas Drake, John Kiriakou and Jeffrey Sterling and Reality Winner are among others who were prosecuted by the Obama and Trump administrations for making significant contributions to our understanding of how government manages and sometimes mismanages people’s lives, fortunes and deaths.

    Last week, Natalie Mayflower Sours Edwards, who worked as a senior adviser at the US Treasury Department’s Financial Crimes Enforcement Network, was sentenced to six months in prison for revealing to BuzzFeed News what the International Consortium of Investigative Journalists qualifies as “financial corruption on a global scale.” She was arrested in 2018. Her crime consisted of sharing confidential bank documents with a journalist, an act that sparked “a global investigation into illicit money flows,” which, had she not acted, the public would never have known about.

    .custom-post-from {float:right; margin: 0 10px 10px; max-width: 50%; width: 100%; text-align: center; background: #000000; color: #ffffff; padding: 15px 0 30px; }
    .custom-post-from img { max-width: 85% !important; margin: 15px auto; filter: brightness(0) invert(1); }
    .custom-post-from .cpf-h4 { font-size: 18px; margin-bottom: 15px; }
    .custom-post-from .cpf-h5 { font-size: 14px; letter-spacing: 1px; line-height: 22px; margin-bottom: 15px; }
    .custom-post-from input[type=”email”] { font-size: 14px; color: #000 !important; width: 240px; margin: auto; height: 30px; box-shadow:none; border: none; padding: 0 10px; background-image: url(“https://www.fairobserver.com/wp-content/plugins/moosend_form/cpf-pen-icon.svg”); background-repeat: no-repeat; background-position: center right 14px; background-size:14px;}
    .custom-post-from input[type=”submit”] { font-weight: normal; margin: 15px auto; height: 30px; box-shadow: none; border: none; padding: 0 10px 0 35px; background-color: #1878f3; color: #ffffff; border-radius: 4px; display: inline-block; background-image: url(“https://www.fairobserver.com/wp-content/plugins/moosend_form/cpf-email-icon.svg”); background-repeat: no-repeat; background-position: 14px center; background-size: 14px; }

    .custom-post-from .cpf-checkbox { width: 90%; margin: auto; position: relative; display: flex; flex-wrap: wrap;}
    .custom-post-from .cpf-checkbox label { text-align: left; display: block; padding-left: 32px; margin-bottom: 0; cursor: pointer; font-size: 11px; line-height: 18px;
    -webkit-user-select: none;
    -moz-user-select: none;
    -ms-user-select: none;
    user-select: none;
    order: 1;
    color: #ffffff;
    font-weight: normal;}
    .custom-post-from .cpf-checkbox label a { color: #ffffff; text-decoration: underline; }
    .custom-post-from .cpf-checkbox input { position: absolute; opacity: 0; cursor: pointer; height: 100%; width: 24%; left: 0;
    right: 0; margin: 0; z-index: 3; order: 2;}
    .custom-post-from .cpf-checkbox input ~ label:before { content: “f0c8”; font-family: Font Awesome 5 Free; color: #eee; font-size: 24px; position: absolute; left: 0; top: 0; line-height: 28px; color: #ffffff; width: 20px; height: 20px; margin-top: 5px; z-index: 2; }
    .custom-post-from .cpf-checkbox input:checked ~ label:before { content: “f14a”; font-weight: 600; color: #2196F3; }
    .custom-post-from .cpf-checkbox input:checked ~ label:after { content: “”; }
    .custom-post-from .cpf-checkbox input ~ label:after { position: absolute; left: 2px; width: 18px; height: 18px; margin-top: 10px; background: #ffffff; top: 10px; margin: auto; z-index: 1; }
    .custom-post-from .error{ display: block; color: #ff6461; order: 3 !important;}

    BuzzFeed’s spokesman, Matt Mittenthal, helpfully explained that the resulting “investigation has helped to inspire major reform and legal action in the United States, the E.U., and countries around the world.” In other words, sometimes it is necessary to break the law to make it stronger and more equitable.

    Ben Smith, a New York Times columnist, summed up Edwards’ plight in a tweet: “This woman is going to prison for six months for her role in revealing systemic global financial corruption, and inspiring legal changes all over the world.” The law did not go after BuzzFeed in this case. Nor did it end up going after ProPublica in a 2012 case concerning tax filings for Karl Rove’s nonprofit, Crossroads GPS, in which the IRS initially told BuzzFeed “that it would consider [the] publication of them to be criminal.”

    In the eyes of the IRS, ProPublica has once again committed the crime of letting the truth out of the bag. It may well escape any punishment. The pattern is always to prosecute the whistleblower, but that requires identifying that person. If, as in the case of Edwards, the government does succeed in prosecuting and sentencing the whistleblower, that will not serve to put the truth back in the bag. That is why the government will be relentless in seeking the whistleblower and why the public should be grateful both to that person and to ProPublica.

    The government’s aim is not to repair the damage already done, but to instill fear in any other courageous individual in the position to reveal the inner workings of a system designed for the financial elite and managed by the political elite. In Edwards’ case, US District Judge Gregory H. Woods made this point clear when he “said that it was necessary to impose a ’substantial meaningful sentence’ in order to discourage others from committing similar crimes.”

    Publishing substantial meaningful truth will always provoke the call for a substantial meaningful sentence.

    *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

  • in

    Warren Buffett, Amazon, Starbucks and others condemn voting restrictions in letter

    Amazon, BlackRock, Google, Starbucks, billionaire investor Warren Buffett and hundreds of other companies published a letter on Wednesday condemning “discriminatory legislation” designed to hinder voting rights in the US.The letter – the biggest statement yet from corporate America – follows weeks of heated debate over corporate opposition to a series of Republican-sponsored bills that critics charge will restrict voting rights in states across the US.“We Stand for Democracy,” the double-page, centrefold advertisement published in the New York Times and Washington Post, begins. “Voting is the lifeblood of our democracy and we call upon all Americans to take a nonpartisan stand for this basic and most fundamental right of all Americans,” the statement reads.The statement was organized by two of the US’s most prominent Black executives, Kenneth Chenault, former chief executive of American Express, and Kenneth Frazier, the chief executive of Merck. Both executives have been prominent in opposition to restrictive voting laws and in leading a response from the business community.The statement does not address specific election legislation in states but it is the clearest indication yet that US corporations are looking to present a united front despite calls from several senior Republicans, including the former president Donald Trump and Senator Mitch McConnell, to stay out of politics.In an interview with the Times, Chenault said: “It should be clear that there is overwhelming support in corporate America for the principle of voting rights.” Frazier added that the statement was intended to be non-partisan.“These are not political issues,” he said. “These are the issues that we were taught in civics.”The effort to rise above partisan politics comes after several companies, including Coca-Cola and Delta Airlines, found themselves at the center of a dispute over voting rights legislation passed in Georgia. Lawmakers in the state threatened to withdraw tax breaks after the companies spoke out against the measures and others, including Trump, called for boycotts.The new statement comes after Chenault and Frazier convened a Zoom call of 100 CEOs over the weekend and is notable also for several companies that did not add their names, including Coca-Cola, Delta, Home Depot and JP Morgan.Coca-Cola and Delta declined to comment, according to the Times, while Home Depot said in a statement on Tuesday that “the most appropriate approach for us to take is to continue to underscore our belief that all elections should be accessible, fair and secure.”The JPMorgan Chase chief executive, Jamie Dimon, made a statement on voting rights before many other companies, saying: “We believe voting must be accessible and equitable.”Some signatories, including Buffett, chief executive of Berkshire Hathaway, elected to sign personally rather than on behalf of their companies. Buffett has previously stated that businesses should not be involved in politics but he did not put his personal political views “in a blind trust at all when I took the job”.The statement follows a declaration on Tuesday by automakers ahead of voting legislation hearings in Michigan that they oppose election laws that would inhibit voting.In a separate statement, GM posted on Twitter: “We are calling on Michigan lawmakers and state legislatures across the nation to ensure that any changes to voting laws result in protecting and enhancing the most precious element of democracy.“Anything less falls short of our inclusion and social justice goals,” the company said. More