A weekly newsletter from the Institute for Policy Studies
Are you using outlays for oil spill cleanups to zero out your tax bill when you hold full responsibility for causing those spills in the first place? Paying a lower effective tax rate than a $45,000-a-year stadium worker when you own the team that plays there? Donating $20 million to support a politician whose concerted lobbying for pass-through tax breaks will net you hundreds of millions?
If any of these scenarios apply to you, congrats! You’ve figured out how to maneuver the U.S. tax code just like a billionaire.
Back a few years ago, ProPublica revealed a host of these enraging tax-dodging tales in its Secret IRS Files series. This week, former IRS contractor Charles Littlejohn pleaded guilty in federal court for revealing tax info to news outlets. He may now spend as many as five years in prison.
“Some have argued that, in leaking the tax returns, Littlejohn violated the privacy rights of billionaires," notes Guthrie Scrimgeour in Jacobin. “But the tax machinations of the super rich have public consequences, and there is no legitimate reason to keep them private, let alone imprison those who reveal them."
Coming in next week’s issue we have an in-depth look at a just-released blockbuster EU report on the colossal tax evasion of the world's super rich. In the United States, billionaires are now paying less in total taxes — as a share of their pre-tax income — than any American income group in our entire bottom 99.9 percent.
Also coming your way: We're co-sponsoring a global workers’ forum on the growing movement against corporate stock buybacks. On November 2, Asia-based workers who produce Nike gear will join U.S. workers to share their experiences and discuss our extensive research on how big companies are siphoning off worker wages to buy back stock and inflate CEOs' paychecks. Please join us! You can register for the virtual event here.
Chuck Collins and Bella DeVaan
for the Institute for Policy Studies' Inequality.org team
INEQUALITY BY THE NUMBERS
Prosecutors Win Rare Criminal Case Against Corporate Execs
Corporate executives almost never face prison time for putting profits above worker safety. But thanks to Todd Kim’s team at the U.S. Justice Department’s Environment Division, a jury has just convicted two Didion Milling officials in connection with a 2017 plant explosion that left five employees dead.
Assistant Attorney General Kim should be in the media spotlight right now. But no major national outlets have reported on this rare instance of federal prosecutors holding executives personally liable for failing to enforce workplace safety regulations. Fortunately, we can rely on veteran researcher Phil Mattera of Good Jobs First to keep us informed. Check his Didion Milling case analysis below.
The UAW Wins A Crucial Fight for Just Transition
Earlier this month, United Auto Workers president Shawn Fain announced a huge development in his union’s negotiations with General Motors: The manufacturer agreed to situate their electric car battery facilities under the UAW’s national union contract.
“The agreement short-circuits industry efforts to make the new battery facilities run on low-wage labor,” explains labor expert Les Leopold. “These green jobs of the future will now come with the higher wages and benefits received by UAW members.”
Our warming climate and globalized economy are transforming the conditions of labor and industry, making protecting workers against job loss, plant closings, and communal precarity — via a “Just Transition” — more important than ever. Read on to learn how the UAW is carrying the “Just Transition” torch.
Amid Discouraging New Inequality Stats, Encouraging Rays of Hope
In 1928, just before the Great Depression began, America’s richest 0.1 percent held nearly a quarter of the nation’s wealth. By mid-century, that top 0.1 percent’s share of U.S. wealth was hovering down close to 5 percent. But our income and wealth concentration at the top today has now returned to pre-Depression levels, as two new studies out of the Federal Reserve system make abundantly clear. Can we turn our current wealth-concentrating dynamics around? New education legislation just approved in California points the way to a more hopeful future. Inequality.org’s Sam Pizzigati has more.
PETULANT PLUTOCRAT OF THE WEEK
‘Union-Busting With a Smile’ Still Amounts to Union-Busting
This week’s dour deep pocket: Bryan Palbaum, the CEO of the Trader Joe’s supermarket chain since early July.
What has him sour: Palbaum has served on Trader Joe’s top executive team since 2002. The chain has experienced explosive growth over those years, cleverly positioning itself as a charming alternative to traditional supermarkets that play games like reserving eye-level shelving space for more expensive items. But the Trader Joe’s charm offensive seems to be wearing thin.
Palbaum, since becoming CEO, has found himself having to publicly deny “longstanding rumors that staff at the supermarket have been trained to flirt with customers.” And workers at Trader Joe’s, inspired by organizing campaigns at Starbucks and other trendy retailers, have started unionizing, with four stores voting for union representation since July 2022.
This union drive shouldn’t surprise Palbaum any. He ran Trader Joe’s daily operations for ten years before his elevation to the privately held company’s CEO suite. Over that decade, Trader Joe’s workers lost significant health care and retirement benefits.
The last word: Execs at Trader Joe’s are “using their unlimited resources and union-busting lawyers to intimidate employees and retaliate against union support, all in the hopes that our movement will lose momentum,” notes Maeg Yosef of Trader Joe’s United, the independent union now running an online poll asking shoppers if they’ll “stand with us if we call for a customer strike!”
This week on Inequality.org
Kalea Foo, Fifth-Grader Takes on the Powerful Climate-Polluting Private Jet Set. This youth climate activist has called out the tiny number of rich people who are stealing the future of her generation.
Elsewhere on the Web
Dearbail Jordan, Billionaires should face a minimum tax rate, report says,
BBC News. Billionaires should face a minimum tax rate, according to a new EU Tax Observatory report that finds that some of the world's mega-wealthy are paying little to nothing in tax.
Daniel Finn, Crypto Finance Is a Speculative Scam That’s Worsening the Instability of Global Capitalism, Jacobin. Advocates of crypto claim they’re liberating ordinary people from Big Finance. Crypto has become instead a vehicle for high-risk financial speculation, with the same narrow elite harvesting the gains.
Edward Wolff, Is There Really an Inflation Tax? Not For the Middle Class and the Ultra-Wealthy, National Bureau of Economic Research. Inflation over the past four decades has clobbered the real incomes of the bottom two wealth quintiles. They’ve lost almost half their real income.
Casey Quinlan, UAW focuses on soaring CEO pay in strike for better wages at the Detroit Three, Michigan Advance. In 2022, all three U.S. Big Auto top execs made over $20 million each.
Paul Kunert, Microsoft CEO Nadella's compensation drops...to $48M, The Register. The annual pay of the other four members of the Microsoft top executive team averaged a mere $16 million each.
Neva Butkus, Eliminating Indiana’s Income Tax Would Jeopardize Public Services & Create a Windfall for the Well-Off, Institute on Taxation and Economic Policy. Ending Indiana’s individual income tax, a move many current state lawmakers want to see, would annually save households in the state’s top 1 percent an average of nearly $34,000 each.
Michael Roberts, Israel: the shattering of a dream, The Next Recession. The concentration of wealth in Israel has become the western world’s second highest. The population’s bottom 50 percent earns 13 percent of total national income. The top 10 percent share: 49 percent.
Steph Brawn, Plans to limit land ownership in Scotland given seal of approval, The National. Lawmaker Mercedes Villalba’s Land Ownership and Public Interest bill, if enacted, would place a limit on the amount of land a wealthy person can own, sell, or transfer without triggering a public interest test.
Sean Fisher, Why Even Wealthy Americans Feel So Poor, GoBankingRates. Bombarded with images of lavish lifestyles, the wealthy feel the pressure to continuously upscale their lives, and that leaves them feeling they never have enough, a phenomenon known as “relative deprivation.”
Jane Martinson, Why own a newspaper in 2023? Ask the very rich men trying to buy the Telegraph, Guardian. The desire to own a major newspaper says more about power than profit.
David Doorey and Jim Stanford, Union Density Lowers the Income Share Going to the Top 1%, Jacobin. Across Canada, union coverage turns out to be inversely proportionate to inequality.
McKinsey, Last Week Tonight with John Oliver. Taking down the oldest and largest management consulting firm, a satirical recruitment commercial concludes: "We're McKinsey. We're capable of anything... and culpable for nothing."
How States Can Take On Big Medicine, American Economic Liberties Project. Minnesota State Senator Erin Murphy explains how lawmakers like her are on the frontlines fighting concentrated corporate power in health care and its inhumane consequences.
Behind the News: UAW's Strategy, Jacobin Radio. Stephanie Ross outlines the UAW’s innovative strike strategy against the Big Three automakers, and Christopher Morten and Amy Kapczynski discuss how to stop corporate America from profiting off publicly funded research.
Intergenerational Mobility at Home and Abroad, The Inequality Podcast. Dr. Xi Song details how intergenerational mobility declined in the United States after World War II and trends in mobility as broken down by race, immigration status, and gender.
The world’s richest 1 percent, a new Credit Suisse analysis reveals, now own 45.8 percent of all the world’s wealth. By contrast, adults with less than $10,000 in wealth make up 52.5 percent of the world’s population but hold just 1.2 percent of global wealth. For an interactive version of this chart and other global inequality charts, check out the link below.
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Inequality.org | www.inequality.org | firstname.lastname@example.org
Managing Editor: Isabella DeVaan
Co-Editors: Sarah Anderson, Chuck Collins, and Sam Pizzigati
Production: Isabella DeVaan