The latest Wall Street bonuses really ought to disturb us, and not just because they’ll widen our economic divide.
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THIS WEEK
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Wall Street closed 2017 on quite the confident note. Just-released numbers show that Wall Street’s banking giants handed out $23.9 billion last year in bonuses to their New York employees. The average bonus, the Washington Post notes, tripled what most U.S. households made for the entire year.
As my colleague Sarah Anderson pointed out in the Post coverage, the latest Wall Street bonuses really ought to disturb us, and not just because they’ll widen our economic divide. These hefty rewards offer more proof that Wall Street has failed to rein in the reckless behaviors that led us to economic collapse just a decade ago.
This week, we look at how another reckless move, the passage of the GOP tax bill this past December, opens up massive new opportunities for tax evasion. We also have more on the state and local groups pushing for the needed tax reforms the December tax scam so studiously sidestepped.
Chuck Collins, for the Institute for Policy Studies Inequality.org team |
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INEQUALITY BY THE NUMBERS
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FACES ON THE FRONTLINES
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| Time to Close the Carried Interest Loophole |
| During his presidential campaign, President Donald Trump said he’d do away with a tax loophole that has made obscenely wealthy financial executives even wealthier. The president and Republicans in Congress conveniently forgot that promise, naturally, when the time came to pass last year’s catastrophic tax legislation. Now states are picking up the slack. Seven states and the District of Columbia are working on proposals that would prevent hedge fund and private equity managers from treating mega millions in income as capital gains for tax purposes. The tax revenue these proposals would generate, activists explained last week at a rally outside one of D.C.’s most profitable private equity firms, could help improve and expand programs in health care, education, and affordable housing, Inequality.org co-editor Sarah Anderson has the details in a dispatch from the protest. |
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WORDS OF WISDOM
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PETULANT PLUTOCRAT
OF THE WEEK
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| Reward Us Before They Put the Handcuffs On |
| Three years ago, the “dieselgate” emissions-test cheating scandal cost the German automaker Volkswagen billions in fines and other costs and left two VW heavy-hitters headed for prison on criminal charges. Now VW CEO Matthias Mueller is using that jail time for his management colleagues to defend his own $12.3 million 2017 pay package. A top corporate CEO, Mueller told the news weekly Der Spiegel, shoulders heavy responsibilities and “always has one foot in jail.” Added Mueller, Germany’s fifth-highest-paid CEO last year: “Considering these responsibilities, our salaries are justified.” |
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GREED AT A GLANCE
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TOO MUCH
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| A Bigger Welcome Mat for America’s Tax Evaders |
| The United States hasn’t hit — not yet at least — the levels of tax evasion that we often see elsewhere in today’s world. But we’re moving in that direction. This past winter saw lawmakers shove the United States further down this perilous path via two major pieces of legislation. Inequality.org co-editor Sam Pizzigati has more. |
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MUST READS
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This week on Inequality.org
Sarah Anderson, The Mosquito Gap. Poverty, climate change, and bad policy put poor people at greater risk from pest-borne diseases.
Brian Wakamo, How to Track CEO-Worker Pay Ratios. The retail industry lobby doesn't want transparency on pay gaps. Fortunately, it's gotten easier to find out whether companies are sharing the wealth.
Josh Hoxie, Cable TV Ignores Inequality; Here’s How to Get Around It. Media giants might sidestep the issue, but that won’t keep the public from demanding both news and action on inequality.
Dedrick Asante-Muhammad, Women and the Racial Wealth Divide. Tackling the gender gap must go hand-in-hand with taking on racial economic inequality.
Elsewhere on the web
Andrew Leigh, Do firms that pay less company tax create more jobs? Economic Analysis and Policy. From Australia, new research that undermines the rationale for handing corporate execs big tax breaks.
Anne Beston, Infants as young as 17 months expect fairness and equity, Medical Express. New research out of New Zealand shows that the principles of distributive justice can resonate with the very young.
Charlie May, Wealth inequality is as prominent as ever, but you won’t see that on TV, Salon. The ratings excuse just doesn't work anymore.
Jared Dillian, Private Equity? It's More Like Pirate Equity, Bloomberg. Only a matter of time before popular opinion turns against the world of private equity and its extremely well-compensated executives.
Paul Krugman, Putting the Ex-Con in Conservatism, New York Times. The goal of the GOP con: getting Americans to vote for pols who cut taxes on the rich, a policy Americans do not support.
Vanessa Bee, How We Can Get a More Equal Union, New York. Why striving for equality only with respect to opportunity remains a deeply myopic approach. |
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