– Informed Comment Thoughts on the Middle East, History and Religion Mon, 04 Sep 2023 04:00:56 +0000 en-US hourly 1 On Labor Day: Low-Wage Employers say they Have no Money for Raises, but spent $341 Billion on Stock Buybacks Mon, 04 Sep 2023 04:04:29 +0000

A new report reveals how stock buybacks have inflated CEO paychecks and widened pay gaps at the 100 largest low-wage corporations.

By Sarah Anderson

( ) – In response to strikes and union organizing drives, corporate leaders routinely insist that they simply lack the wherewithal to raise employee pay. And yet top executives seem to have little trouble finding resources for enriching themselves and wealthy shareholders.

In 2021 and 2022, S&P 500 corporations spent record sums on stock buybacks, a maneuver that pumps up stock prices by reducing the supply on the open market. Since stock-based pay makes up the bulk of executive compensation, CEOs reap huge — and completely undeserved — windfalls.

CEOs could watch cat videos all day and still reap huge windfalls through stock buybacks.

The Low-Wage 100

A new Institute for Policy Studies report, Executive Excess 2023, reveals how these financial shenanigans have widened disparities at the 100 S&P 500 corporations with the lowest median worker pay, a group we’ve dubbed the “Low-Wage 100.”

Between January 1, 2020 and May of this year, these companies reported a combined $341 billion in stock buyback spending.

Lowe’s led the buybacks list, plowing nearly $35 billion into share repurchases over the past three and a half years. In 2022 alone, Lowe’s spent more than $14 billion on buybacks — enough to give every one of its 301,000 U.S. employees a $46,923 bonus.

I’m guessing rank-and-file Lowe’s employees, half of whom make less than $30,000 per year, could find more productive uses for that money.


During their stock buyback spree, Low-Wage 100 CEOs’ personal stock holdings increased more than three times as fast as their firms’ median worker pay. At the 65 buyback companies where the same person held the top job between 2019 and 2022, the Low-Wage 100 CEOs’ personal stock holdings soared 33 percent to an average of $184.7 million. Median pay at these firms rose only 10 percent to an average of $31,972.

Image by Jonathan from Pixabay

FedEx founder and CEO Frederick Smith has the largest stockpile in the Low-Wage 100. With $3.6 billion in stock buybacks since January 2020, Smith’s personal stock holdings have grown 65 percent to more than $5 billion. By contrast, median pay for workers at the notoriously anti-union company fell by 20 percent to $39,177 during this period.

Taxpayer support for huge CEO-worker pay gaps

What makes all this even more upsetting? Taxpayers are actually supporting, through federal contracts, the buyback-fueled disparities at FedEx and 50 other Low-Wage 100 firms.

FedEx pocketed $6.2 billion in fiscal years 2020-2023 for mail services for the Veterans Administration and other agencies. The largest federal contractor in the Low-Wage 100 is another company known for union-busting — Amazon. Over the past few years, Amazon has pocketed more than $10 billion in web services deals from Uncle Sam while spending nearly $6 billion repurchasing their shares.

Fortunately, support is growing for solutions to our CEO pay problem.

Solutions to executive excess

Before 1982, stock buybacks were viewed as market manipulation and largely banned. President Joe Biden hasn’t yet called for reinstating that ban, but he did rail against buybacks in his State of the Union address this year and called for quadrupling a new 1 percent excise tax on share repurchases.

The Biden administration is also starting to use federal money going to corporations as a lever for change. In an important first step, the administration is giving preferential treatment in the awarding of new semiconductor manufacturing subsidies to companies that agree to give up buybacks. Now they should extend that policy to all corporations receiving taxpayer money.

Buybacks are not the only trick CEOs can use to inflate their own paychecks. Over my decades of research, I’ve documented how corporate leaders have used myriad shady means to hit personal jackpots, from cooking the books and moving executive bonus goalposts to creating housing bubbles and other reckless financial schemes.

To tackle this systemic problem, policymakers need to go bolder. Executive Excess 2023 offers an extensive menu of CEO pay reforms. One of the most innovative: tax penalties for companies with huge CEO-worker pay gaps. Two major cities — San Francisco and Portland, Oregon — are already generating significant revenue through such taxes. Seattle is now considering a similar approach.

The idea that the person in the corner office is hundreds of times more valuable than other employees is a myth — even if that person is not just watching cat videos. All employees contribute to the profits of a corporation, and our economy would be far healthier if the fruits of our labor were more equitably shared.

Sarah Anderson directs the Global Economy Project and co-edits at the Institute for Policy Studies. She is the author of the report Executive Excess 2023.


The Big Money behind the Fight to Ban Environmentally and Socially Conscious Investing Mon, 17 Jul 2023 04:06:27 +0000

The fossil fuel industry and other corporations are funding the campaign against responsible investing (ESG) to protect profits at the expense of workers and our environment.

by Jessica Church

( ) – In a recent Gallup poll, the vast majority of Americans surveyed said they were not even “somewhat familiar” with the term “ESG.” But on Capitol Hill, Republicans have developed a fixation on the issue, holding not one but two intensely partisan hearings on the topic.

“Republicans Are Losing Their Minds Over ESG” read one headline.

“Anti-ESG talk leads to partisan fireworks” read another.

Now you may be wondering, what the heck is ESG? What’s anti-ESG? What the heck is “woke” capitalism? And why should I care?

What is ESG?

ESG stands for “Environmental, Social, and Governance,” which are categories of metrics that businesses use to assess performance and risk on a range of issues. To reduce risk and create value over the long term, businesses may seek to reduce carbon emissions (Environmental), improve working conditions for workers through racial equity and other measures (Social), or take steps to bring executive compensation closer in line with the company’s median salary (Governance).

Companies’ practices on ESG metrics can have an impact on future performance, so there is tremendous value in understanding long-term risks associated with environmental, social, and governance factors.

The simple concept that businesses should care about their communities and their workers and govern themselves accordingly is not new. In the 1980s, some companies and banks stopped doing business in South Africa to protest racial Apartheid. In the 1990s, a number of institutional investors divested from the tobacco industry as a way to take a stand against the harmful and deceptive practices of companies like Phillip Morris and R.J. Reynolds. And in the 2000s and 2010s, support for environmental shareholder proposals grew substantially in response to the worsening climate crisis.

Who’s Against It?

This leads us to the current backlash. “Anti-ESG” efforts, promulgated by long-time conservative organizations like the Heritage Foundation and American Legislative Exchange Council (ALEC) and newly prominent groups like the Committee to Unleash Prosperity, Consumers’ Research, and the State Financial Officers Foundation all have one things in common — connections to conservative big money donors in the oil and gas industry.

“The anti-‘woke investing’ movement was not created by financial experts,” observed environmental reporter Emily Aktin, “It was created by two of the fossil fuel industry’s most notorious climate disinformers.”

Big Oil wants to end ESG investing and ESG business practices because they’re at odds with the continued growth of the fossil fuel industry. Big Oil would rather let our planet burn and increase short-term profits than adjust its business practices to stave off the worst of the climate crisis and invest in long-term profits.

Big Oil also wants you to think that this “anti-ESG” movement is organic, that it emerged from the conservative grassroots, but that could not be further from the truth. The anti-ESG movement is a well-funded and well-organized campaign led by top conservative political operatives. I recently corresponded with Meaghan Winter, author of All Politics Is Local, who explained that:

“Ideological donors and their foundations and think tanks have deliberately chosen to push their agendas through obscure-seeming front groups that work incrementally on the state level because they don’t want to call attention to the profound (and very unpopular) changes they are initiating. This strategy is decades-old, it has worked against unions and abortion and more, and the anti-ESG effort is just one of the latest incarnations.”

One shining example of this is the recent House Oversight Subcommittee hearing on ESG, where the majority witnesses (those called by the GOP, because Republicans control the House of Representatives right now) were Mandy Gunasekara from the Independent Women’s Forum, Jason Isaac from the Texas Public Policy Foundation, and Stephen Moore from the Heritage Foundation. These organizations have a long history of receiving financial support and carrying water for the oil and gas industry, including Koch Industries, ExxonMobil, and Chevron.

Why does this matter?

While the right wing foments a culture war crusade and attempts to make ESG the next critical race theory (“CRT”), the fear mongering campaign has real-world impacts on investors and companies who are scared of being caught in the backlash. For example, some private companies are now backpedaling on their climate commitments.

To be clear, this is what the funders of this movement want.

In December, Vanguard, the world’s second largest asset management firm, pulled out of the Net Zero Asset Managers initiative, which was a voluntary industry-led effort to reach net-zero emission targets by 2050. This was a major setback for anyone who cares about the health and shape of our environment, because Vanguard manages roughly $7 trillion in assets. In order to meet the goals of the Paris Agreement — less than 1.5° C of global warming above pre-industrial levels — global markets must shift capital away from the fossil fuel industry and toward renewable energy systems.

Image by Mediamodifier from Pixabay

But this goes beyond the climate crisis. In recent years, workers and shareholders have been demanding more corporate accountability on workplace safety, workers’ freedom of association, data privacy, racial equity, and executive compensation, among other issues that fall into the Social and Governance categories of ESG. The right-wing campaign against ESG is a campaign to roll back these victories.

How do we fight back?

My organization, Take on Wall Street, is organizing with unions, public interest groups, and grassroots groups to fight back against this regressive movement. But it’s not just about playing defense. We also need a forward-looking vision for worker power, climate justice, and racial equity. Watch this space.

Original version published by Take on Wall Street.

The Modern Form of Colonialism: Climate Change Thu, 22 Jun 2023 04:02:53 +0000

We praise charity efforts to combat climate change in countries like Bangladesh as generous, without critiquing why they are made necessary in the first place.


By Tapti Sen

( ) – I am from a disappearing nation.

My country, Bangladesh, is one of several at risk of becoming submerged partially or completely by rising sea levels caused by climate change in the coming decades. 75 percent of the country lies below sea level. 

Bangladesh, a tropical country on top of a low-lying delta, is no stranger to flooding, especially during monsoon season. But the extent to which this flooding has taken place in recent years is unprecedented. Flooding in Sylhet and other northeastern districts of Bangladesh between May and June of 2022 displaced an estimated 15 million people – approximately 9 percent of the country – and toppled hundreds of villages in 2022 alone. Flooding and torrential rains in July 2020 led to the submerging of  nearly a quarter of Bangladesh

All of this flooding and damage has taken an undeniable toll on the nation. Data demonstrates that between 2000 and 2019, Bangladesh suffered $3.72 billion dollars worth of economic losses due to climate change. Despite its low carbon output both historically and in the present-day, the country is disproportionately impacted by climate change due to its location.

International and humanitarian organizations have responded to these annual crises as they always do: with donations upon donations upon donations. But using relief and donation requests to combat climate problems is a flawed approach. Humanitarianism stems from noble intentions, but societies have grown complacent with philanthropic interventions during crises, which avoid the duty to deal with structural issues. 

Image by Maruf Rahman from Pixabay

We praise charity efforts as generous, without critiquing why they are made necessary in the first place. Take, for example, the members of the Bangladeshi army who gave up a day’s worth of their salary to contribute to flood-related fundraising efforts. Some international organizations are enacting  preventative measures for climate disasters. The United Nations Office for the Coordination of Humanitarian Affairs, for instance, has established different anticipatory action frameworks in what they deem “high risk countries,” which allowed them to allocate relief funds to Bangladesh even before the monsoon flooding started this year. Given the subsequent toll of the floods, it’s clear that even these preventative measures aren’t enough to mitigate these disasters. 

All of this considered, it’s no surprise that numerous Bangladeshi politicians, who formerly took on active roles during national humanitarian crises, took a back seat

We talk about Bangladesh’s climate crisis as if it was inevitable, as though Bangladesh is simply a victim of its location.

But the reality is much more sinister. Developed nations are largely responsible for the state of Bangladesh’s climate catastrophes.

Between 1765 and 1938, Britain plundered almost $45 trillion  from the Indian subcontinent. Within this looting was “the financial bleeding of Bengal”, filled not only with the ransacking of its treasuries and towns for money,  but the exploitation of its workers and artisans for complex and raw materials alike. It’s no surprise that British colonization and imperialism goes hand in hand with its industrialization, considering that the Industrial Revolution demanded cheap raw materials and money in order for factories to produce and over-produce and pollute. Essentially, it’s not inaccurate to say that a major reason for Bangladesh’s climate and flooding crisis is its colonization under the British Raj. 

When we talk about CO2 emissions and responsibility, we need to focus on cumulative historical emissions, as those are the causes of the ongoing climate crisis. The data shows that 23 rich, developed countries, including the United States, Germany, the United Kingdom, and France are responsible for half of all historical CO2 emissions, with more than 150 countries responsible for the other half.

Up until 1950, more than half of historical CO2 emissions were emitted by Europe, with the vast majority of European emissions being emitted by the UK. While the UK’s carbon imprint has lessened since then, should it not take responsibility for the consequences of its past actions? And today, rich countries like the U.S., Germany, and the UK are among the top 5 CO2-emitting countries. Why should Bangladesh have to suffer for the past and present extravagances of its colonizers? 

Developed countries are primarily responsible for our current climate crisis, but it is developing countries that are the most vulnerable to its effects. Global warming, which has increased the economic inequality gap between the Global South and Global North by a whopping 25 percent, punishes the economically vulnerable over the rich, the colonized over the colonizers, and it’s clear, therefore, that this climate crisis isn’t just an environmental issue: it’s about colonialism and imperialism and poverty and every systemic structure that has inequality enshrined in its foundations. 

Developed countries must take responsibility for the climate crisis they initiated by paying reparations for developing countries. And there’s a number of ways they could do this.  

One very tangible way for developed countries to pay reparations is the reallocation of Special Drawing Rights (SDRs). SDRs are supplementary foreign exchange reserve assets maintained by the International Monetary Fund. Certain numbers of them are distributed to banks and treasuries around the world, allowing financial institutions fallback options when they need to dip into their financial reserves during crises. However, SDRs are currently allocated by quota, which means that low-income developing countries like Bangladesh receive 1.4 percent, high-income developing countries like China receive 22 percent, and rich countries such as the US and the UK receive over 60 percent. Of course, rich countries rarely, if ever, need to dip into their SDRs, whereas low-income countries often rely upon theirs. Ending this quota system and reallocating SDRs to the countries most vulnerable to climate change is a feasible way to dedicate  existing resources to climate change mitigation. Considering that they don’t even use their SDRs, developed countries have no incentive not to do this.

In the same vein,  countries could assist developing countries in undertaking various climate mitigation and adaptation projects. Climate mitigation refers to actions that involve reducing the levels of greenhouse gases in the atmosphere, either by reducing the point source pollution (eg. the burning of fossil fuels for electricity) or by enhancing the sinks that store these gases (eg. forests).

In DeSantis’ “Free” State of Florida, Union Freedom is under Attack Thu, 18 May 2023 04:08:53 +0000 by Rebekah Entralgo

A slate of new bills signed by Florida’s billionaire-friendly governor will make it harder for public sector unions to collect dues, worsening the state’s teacher shortage and public school funding.

( ) – In what Governor Ron DeSantis likes to call his “freedom state” of Florida, the freedom to belong to an effective union is under a ferocious attack.

DeSantis, with the school year winding down, has just appeared at a Miami charter school to sign a new slate of bills that aim to undermine quality public services. One of the bills — described preposterously by DeSantis as “paycheck protection” — eliminates dues check offs for teachers and other public employees.

Check-off provisions in Florida have for years given public-sector workers like educators and nurses the option to have their union dues deducted from their paychecks and remitted straight to their union.

Eliminating dues check off weakens public-sector unions. Without automatic payroll deduction, unions have a harder time collecting the dues they need to function effectively. But the legislation DeSantis signed does not extend the “freedom” of check-off elimination into the law enforcement sector. Law enforcement unions, not so coincidentally, have endorsed DeSantis in his gubernatorial campaigns.

The new DeSantis-signed dues legislation also includes, hidden deep in the text, a killer provision that requires public-sector unions outside law enforcement to have an arbitrary super majority of eligible employees — 60 percent, not just a 50-percent-plus — if they want to keep the right to represent and bargain for public-sector workers.

Teachers in Florida feel especially targeted by the legislation DeSantis has so enthusiastically signed into law.

“This will hurt working people and the middle class,” says Karla Hernández-Mats, the president of United Teachers of Dade, the largest teacher union local in the entire Southeast. “This is about going after our freedom, about going after workers and their right to a fair contract.”

Via Pixabay.

The increased 60-percent threshold to qualify for bargaining rights, Hernández-Mats points out, could be particularly devastating, solidifying Florida, a “right-to-work” state, as a “work-with-no-right state.” Nearly two-thirds of all local teacher unions in Florida would fail to meet the new super-majority threshold and face decertification.

In the face of this challenge, public-sector unions across the state are working to find creative ways to collect dues through electronic banking applications. They’re also mobilizing to help all teachers and other public employees understand the importance of becoming dues-paying union members.

“We are in constant communication with teachers, and a lot of our members are stepping up and talking to their colleagues about how important this is,” Hernández-Mats notes. “They’re talking about how the state could make us ‘at-will’ employees and how this bill could turn our public schools into a revolving door where no one is committed to education.”

Florida currently stands 48th in the nation when it comes to teacher pay and, not surprisingly, is facing a massive teacher shortage, opening 2023 with over 5,000 vacancies. Weakening unions, Hernández-Mats believes, will only exacerbate the crisis and speed the larger right-wing agenda to defund public education.

Another bill signed into Florida law this year advances that agenda by expanding the state’s charter school voucher program, a move that will allow parents to opt out of public schools and send their children to private schools on the state dime. This “school choice” bill will cost the state an estimated $4 billion in funding and starve local school districts. In the Tampa Bay area, for example, almost $850 million will be routed out of public schools for the 2023-2024 school year.

Florida hasn’t always been a testing ground for attacks on public educators and their unions. In fact, back in 1968, educators in Florida staged the nation’s first successful statewide teacher strike to protest chronic school funding shortages and bargain-basement teacher pay. But today the Florida Constitution and state law bar teachers from striking and threaten “hefty penalties” if they do.

That reality has the current struggle against the DeSantis attack on public education and public educators going down a different lane. The statewide teacher union, the Florida Education Association, has just filed a lawsuit in federal court to prevent the implementation of the newly signed DeSantis legislation.

Governor DeSantis, says FEA president Andrew Spar, “has made it clear that he is targeting educators because we exercise our constitutional right to speak out against attempts by this governor and others to stymie the freedom to learn and to stifle freedom of thought.”

The governor, adds Spar, “is using this legislation to retaliate against his critics,” a retaliation “very similar to what we’ve seen in the attacks on Disney.”

DeSantis, a still-unannounced candidate for the GOP presidential nomination, has ample resources for continuing his offensive against unions and their support for higher taxes on the rich to fund better public services. DeSantis, as an analysis in one of Florida’s top daily newspapers detailed last year, has “extraordinary” billionaire support.

Rebekah Entralgo is the managing editor of You can follow her on Twitter at @rebekahentralgo. )

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Our Climate Crisis: The Ultra-Wealthy have a Private Jet Problem, Therefore so do We Thu, 11 May 2023 04:04:05 +0000

This expensive, carbon-intensive form of travel is bad for both the earth and the taxpayers who subsidize it for the ultra-rich.

Blogging Our Great Divide

by Omar Ocampo

America’s Racial Wealth Divide Mon, 09 Jan 2023 05:02:23 +0000 ( ) – By the middle of the 21st century, the United States will be a “majority minority” nation. If we hope to ensure a strong middle class, historically the backbone of the national economy, then improving the financial health of households of color will become even more urgent than it is today. Closing the persistent “wealth divide” between white households and households of color, already a matter of social justice, must become a priority for broader economic policy.


According to Survey of Consumer Finances data, the median Black family has $24,100 in wealth. This is just 12.7 percent of the $189,100 in wealth owned by the typical white family. The median Latino family, with $36,050, owns just 19.1 percent of the wealth of the median white family. The Institute for Policy Studies Racial Wealth Divide report provides more detail on this disturbing trend and proposed solutions.


Families that have zero or even “negative” wealth (meaning the value of their debts exceeds the value of their assets) live on the edge, just one minor economic setback away from tragedy. Institute for Policy Studies analysis of Federal Reserve data shows that while the racial wealth gap has improved slightly, an estimated 28 percent of Black households and 26 percent of Latinx households had zero or negative wealth in 2019, twice the level of whites.


As with total wealth, homeownership is heavily skewed towards white families, our Racial Wealth Divide report shows. In 2016, 72 percent of white families owned their home, compared to just 44 percent of Black families. Between 1983 and 2016, Latino homeownership increased by a dramatic nearly 40 percent, but it remains far below the rate for whites, at just 45 percent.


Black people also have to deal with larger student debt burdens. Black students on average have to take out larger loans to get through college than their white peers. A National Center for Education Statistics study reveals that Black Bachelor’s degree and Associate’s degree graduates face 13 percent and 26 percent more student debt, respectively, than their white peers. The challenge of paying off greater student debt is also worsened for Black graduates due to their lower average incomes. Black Bachelor’s degree and Associate’s degree holders earn 27 percent and 14 percent lower incomes, respectively, than whites with the same degree.


The Top 10 Inequality Victories of 2022 Mon, 26 Dec 2022 05:02:42 +0000 By Sarah Anderson | | –

Congratulations to everyone who worked to move the country and the world towards greater equity in 2022. Herewith are 10 of the most inspiring economic inequality victories of the year.

1. The Union Boom 

No question. The union organizing surge has been this year’s top story. Petitions for union representation jumped 53 percent over 2021. What made the surge truly historic? The explosion of activity in workplaces once considered hopeless for unionization.

Champions of a more egalitarian society made important strides, building the power of workers while reducing the power of wealthy tax dodgers and greedy pharma execs.

Warehouse workers shook the foundation of Amazon, prevailing against harsh intimidation tactics to win the first U.S. union election at the e-commerce giant and building campaigns in several other states, most recently in Minnesota.

Via Pixabay

A survey commissioned by the Institute for Policy Studies found that nearly two-thirds of local residents support the ongoing Black worker-led union drive at an Amazon warehouse in Bessemer, Alabama – a remarkable shift in what’s been historically a fiercely anti-union state.

Starbucks baristas busted the myth that fast food workers are impossible to organize. They voted union in at least 260 stores and inspired comrades at Chipotle and elsewhere.

Now the overpaid CEOs at Amazon and Starbucks need to negotiate fair contracts with these employees. The top execs at both companies grabbed far more than 1,000 times as much as their company’s median worker pay in 2021.

Union power can both raise worker wages – and rein in excessive wealth at the top. In the middle of the 20th century, as our Sam Pizzigati points out, unions helped “flatten grand private plutocratic fortunes.”

2. Taxing the Rich 

Remember the heady days of 2021 when the Build Back Better negotiations had a billionaire tax and other bold inequality-busting tax proposals in play, all with strong public support? When Republicans and two Democratic Senators blocked that deal, I thought we’d have to wait until 2024 before seeing any progress on the fair taxation front. But 2022 saw some important victories – at the federal, state, and municipal levels.

Via Pixabay.

In a piece for CNN, Rebekah Entralgo and I run down the tax wins in the Inflation Reduction Act, the Democrats’ $700 billion climate and social spending bill. The law’s biggest revenue-raiser: a 15 percent minimum tax on big corporations that will help curb rampant tax dodging.

The new law will also boost IRS enforcement so the ultra-rich pay what they owe instead of getting away with hiding their wealth through complex accounting tricks. Republicans have over recent years squeezed the agency’s funding to the point where today the IRS actually has fewer expert staff to audit the complex tax returns of the wealthy and big corporations than the agency had in the 1950s.

Fair tax advocates also notched big wins this year through ballot initiatives. In Massachusetts, voters approved an income surtax of 4 percent on annual individual income above $1 million, with revenue going mostly towards public education and transportation. Can we get similar campaigns going in other Democratic trifecta states?

Two California cities passed ballot measure taxes to fund affordable housing. San Franciscans approved a groundbreaking tax on vacant buildings and Los Angeles voters backed a “mansion tax.”

3. Cracking Down on a CEO Pay Scam

As consumers have struggled with rising costs, corporate CEOs have splurged on stock buyback sprees. This legal form of stock manipulation artificially inflates the value of executive stock-based pay – while doing nothing for workers.

Get this: We calculated that Lowe’s could’ve given every one of its 325,000 employees a $40,000 raise with the $13 billion they blew on buybacks in 2021. Instead, the company’s median worker pay fell 7.6 percent to $22,697. The Lowe’s CEO, meanwhile, pocketed $17.9 million.

In 2022, we started to see some blowback against buybacks. The Inflation Reduction Act introduced a 1 percent excise tax on such share repurchases. Biden officials have also started wielding the power of the public purse against this CEO pay inflation scam. The administration is giving a leg up in the awarding of new semiconductor manufacturing subsidies to companies that agree to forego buybacks.

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We Can’t Afford NOT to Have a Wealth Tax Sat, 03 Dec 2022 05:06:49 +0000 By Jack Metzgar | –

( – Every time I hear that we as a nation cannot afford something — whether that might be assuring non-toxic water in Jackson and Flint or universal pre-K or an industrial policy with teeth — I have wondered how many dollars a national wealth tax might yield. So I looked the numbers up.

Just a small annual levy on America’s grandest fortunes could finance a better future for all of America’s kids and families

Wealth turns out to run way bigger than income. Our total U.S. wealth in 2021 sat at $150 trillion. Total income, combining personal income and company profits, amounted to about $25 trillion. A small wealth tax would clearly produce much more government revenue than a much larger income tax.

Like income, wealth in the United States remains highly concentrated. The wealthiest 1 percent of Americans hold about one-third of that $150 trillion in U.S. wealth. That comes to $50 trillion, twice the total annual income of all Americans, everyone from the millions of workers making less than $15 an hour to the corporate executives making multiple millions. Again, you don’t need an algorithm to figure out that even a tiny wealth tax on the top 1 percent could produce as much — or more — than a large income tax on everybody.

A modest national wealth tax could solve a lot of problems and fund a lot of common good, even if that tax only somewhat reduced our savage economic inequality.

Senators Elizabeth Warren and Bernie Sanders have offered pioneering proposals to introduce national wealth taxes to the United States. Critics have raised various objections to these proposals. Collecting a wealth tax would prove impractical, some charge. Others say that taxing wealth at the federal level would be unconstitutional. Senator Warren has convincingly addressed these objections, but I’d just like to add one point: Taxing wealth would provide a nearly inexhaustible source of government revenue. Collecting that revenue may well hit some administrative or political obstacles. But overcoming those obstacles would be well worth the effort.

Via Pixabay

Let’s look at what a 1 percent wealth tax on our top 1 percent could buy and then see how much pain and suffering that levy would impose on those who would pay the tax. A 1 percent wealth tax on the top 1 percent would produce $500 billion a year in revenue, or $5 trillion over the 10-year budget calculation demanded of federal legislation.

That $500 billion could buy something like a revolution in child-rearing. President Biden’s original Build Back Better proposal had elements of such a revolution, but never won full funding because implementing family-friendly policies will always be so damned expensive. With a 1 percent tax on the top 1 percent, we could meet that expense.

Here’s what a plan concentrated on helping children and making parenting more manageable could do with a 1-percent-on-the-1-percent tax:

From “Build Back Better” Annual Cost 10-Year Cost
Expanded child tax credit $160 billion $1.6 trillion
Childcare subsidies and universal Pre-K $125 billion $1.25 trillion
Paid family leave $20 billion $200 billion
Expanded earned income tax credit $13 billion $130 billion
My add-on
Baby Bonds proposed by Sen. Corey Booker $60 billion $600 billion
TOTALS $378 billion $3.78 trillion
Remaining revenue from 1-percent-
on-the-1-percent tax of $500 billion
$122 billion $1.22 trillion

Sources: Congressional Budget Office, Committee for a Responsible Federal Budget, CNBC.

This package would provide $3,000 per child for virtually all parents, save an average of $11,000 for those now using day care for pre-schoolers, and open up employment opportunities for those parents with pre-schoolers who cannot now afford day care. This would all be great for children’s academic, psychological, and social development — and would transform the economics of parenting, most especially for low- and moderate-income families.

Senator Booker’s Baby Bonds would create and seed a savings account of $1,000 at the birth of every child in the United States and then add up to $2,000 each year depending on household income. The funds would earn income that would not be available for the children until they reach 18. At that point, they could use the money for education, to buy a home, start a business, or continue as a retirement account.

Taken as a whole, this package would cut child poverty by more than half, greatly improve general educational levels over time, and immediately provide substantial support for families during their most challenging years for managing both time and money. A modest wealth tax could provide all this benefit, with money left over to do still more common good. But at what cost? How much harm would a wealth tax do to those elite few who would have to pay the tax?

As illustrated below, the amount individuals would pay in wealth taxes would indeed be very hefty, often running into the millions, even billions of dollars. But in most years and on average, America’s top 1 percent would continue to get wealthier even with this wealth tax in effect. Given that the S&P 500’s annual average stock market return since 1957 has topped 11 percent, a mere 1 percent tax on wealth would amount to little more than a rounding error for anyone in the top 1 percent.

The impact of a 1% wealth tax on the top 1%


Wealth tax
Assuming 11% annual income from investments Increase in annual wealth with a wealth tax in effect
$10 million $100,000 $1.1 million $1 million
$50 million $500,000 $5.5 million $5 million
$1 billion $10 million $110 million $100 million
$190 billion $1.9 billion $20.9 billion $19 billion

Once established, a wealth tax could easily expand in small increments to a perhaps more reasonable 4 percent, producing $2 trillion a year in revenues, based on current levels of wealth. Or we could tax higher levels of wealth at higher percentages, as Senator Warren proposes, with tax rates on billionaires reaching 6 percent. Even at those higher rates, the wealthy would go on getting wealthier. But taxing the wealth of these wealthy would open a cornucopia of public capital to invest in addressing our multitude of problems and in bettering working people’s lives.

By not taxing wealth we are failing to tap by far the largest source of our potential public revenues. And because the wealth of the wealthy confers both economic and political power, we cannot adequately defend democracy if we go on allowing our economic oligarchy a completely free lunch.

A clear majority of Americans support most of the family-friendly policies listed above. Even larger majorities support the notion of a wealth tax, with nearly two-thirds of Americans favoring a tax on grand fortune. Imagine that. The polls are showing higher support for taxing the rich than for the beneficial programs that taxing the rich could finance. Makes you wonder why our elected representatives, especially Democrats, are not standing in line to support such a combination of policy and pay-fors.

Next time you hear a politician say “we” can’t afford something that clearly needs doing, just stop a moment and think — about what a wealth tax on a very small proportion of Americans could accomplish.

Jack Metzgar, a retired adult educator from Roosevelt University in Chicago, is the author of Bridging the Divide: Working-Class Culture in a Middle-Class Society (Cornell 2021).

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COP27 Climate Summit sparks Action Against Investment Treaties Favoring Fossil Fuel Corporations Over People and Planet Tue, 22 Nov 2022 05:06:55 +0000 By Manuel Pérez-Rocha | –

( ) – Regarding the global climate negotiations in Egypt, several countries announced important actions to curb the power of the fossil fuel industry.

Climate activists are demanding total elimination of the anti-democratic investor-state dispute settlement system.

For decades now, a global web of international investment agreements has given corporations excessive powers to block government policies they don’t like. Through “investor-state dispute settlement” mechanisms, these agreements grant corporations the right to sue governments in unaccountable supranational tribunals, demanding huge payouts in retaliation for actions that might reduce the value of their investments. Corporations are able to file such lawsuits over a wide array of government actions — including actions designed to protect people and the planet.

Poland, Italy, France, the Netherlands, and Spain have now announced they will withdraw from one of these anti-democratic agreements: the Energy Charter Treaty, a 1991 pact signed by about 50 countries. The ECT offers special protections to oil, gas, and mining corporations and energy companies, undermining governments’ abilities to address climate change.

These countries’ rejection of the Energy Charter Treaty is welcome, but much more needs to be done. The United States is not a member of the ECT, but the U.S. government has been a major driver of the investor-state system, insisting on including such corporate powers in dozens of trade agreements and bilateral investment treaties and only partially rolling back some of these rules in recent years.

Via Pixabay.

Altogether, the nearly 3,000 free trade and investment treaties across the globe that include ISDS clauses have led corporations to file lawsuits against governments totaling many billions of dollars. And that’s just the cases we know about. Many of these suits remain secret.

With climate negotiators meeting in Egypt, more than 350 organizations in more than 60 countries have issued a joint letter calling on governments to get rid of the investor-state dispute settlement (ISDS) system altogether.

As the letter explains, the key risks posed by the ISDS system are: 1. Increased costs for governments to act on climate if corporations are able to claim exorbitant amounts of taxpayer money through an opaque lawsuit system of supranational courts, and 2. “regulatory chill,” which may cause governments, out of fear of being sued, to delay or refrain from taking necessary climate action, a phenomenon seen in the past.

“Communities on the frontlines of the climate crisis are often at the heart of ISDS claims through struggles against destructive mining and other extractive projects,” the statement points out. “The evidence of years of damage to the environment, land, health and self-determination of peoples all around the world is stark, and the renewed urgency of the climate imperative is beyond doubt.”

The statement notes that a significant number of governments have already rejected the ISDS system. “Countries such as South Africa, India, New Zealand, Bolivia, Tanzania, Canada, and the US have all taken steps toward getting rid of ISDS.” (Canada and the United States eliminated investor-state provisions between each other in the United States-Mexico-Canada Agreement while that NAFTA replacement deal left key elements of the system intact with Mexico.)

Communities on the frontlines of the climate crisis are often at the heart of ISDS claims through struggles against destructive mining and other extractive projects.

The civil society statement urges governments to stop negotiating, signing, ratifying, or joining agreements that include ISDS clauses, such as the Energy Charter Treaty or the euphemistically titled Comprehensive and Progressive Agreement for Trans-Pacific Partnership (better known as TPP). Mexico is a party to TPP, which can actually be used by Canada to allow its mining companies to file claims against Mexico.

There are plenty of alternatives to this anti-democratic system. Governments could resolve investment issues between themselves, through state-to-state dispute settlement, rather than allowing private corporations to bring cases against governments to supranational tribunals. An alternative system could also include investment risk insurance, international cooperation to strengthen national legal systems, and regional and international human rights mechanisms.

But will the recent withdrawal of some European countries from the Energy Charter be a turning point? These actions clearly demonstrate how the European Union’s strategy as the main promoter of that treaty has backfired, leading to its own member countries being sued for billions of dollars over CO2 emission control policies.

A report by Lucia Barcena of the Transnational Institute documents how Spain stands at the top of the list of countries facing the most suits, with 50 claims (as of October 2021). But while Spain and some other European countries decided the ECT did not meet their required environmental standards, the EU is aiming to impose these exact same standards in other agreements, for instance through the “modernization” of its free trade agreements with Mexico and Chile.

And so we’re seeing rich countries move away from investor-state dispute settlement mechanisms while intending to keep imposing this system on developing countries. And many developing country governments seem willing to allow themselves to be dragged along. Indeed, several countries in Asia, Africa, and even Latin America are waiting to join the ECT (and other FTAs). For example, Guatemala, Panama, Colombia, and Chile are queuing up.

We can hope that the progressive governments of Gustavo Petro in Colombia and Gabriel Boric in Chile will both distance themselves from this system, but it is disconcerting to see Boric already supporting the ratification of the Trans-Pacific Partnership (TPP) in Chile. And the AMLO government in Mexico is also upholding its support for free trade and investment protection treaties.

This neoliberal investor-state system is a threat to the future of democracy and the future of our planet. It must end.

Original in Spanish available in La Jornada.

Manuel Pérez-Rocha is an Associate Fellow at the Institute for Policy Studies. Twitter: @ManuelPerezIPS