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Inequality Raging: Average One-Percent Over $2.5M Richer This Year

Inequality Raging: Average One-Percent Over $2.5M Richer This Year

Reprinted with permission from AlterNet.

Inequality, like a malignant tumor, is growing out of control, and the only response from Congress is to make it even worse. Those at the richest end of the nation seem to have lost all capacity for understanding the meaning and values of an interdependent society. They’ve convinced themselves that they deserve their passively accumulated windfalls, and that poorer people have only themselves to blame for their own misfortunes.

It’s Getting Uglier Every Year

The average 1% household made nearly $2.6 million in the 12 months to mid-2017, mostly from the stock market. Here’s how:

  • The U.S. increased its wealth by over $8.5 trillion (see Table 2-4, mid-2016 to mid-2017).
  • The 1% took $3.27 trillion of that (38.3 percent: see Table 6-5).
  • Each of 1.26 million households, on average, took nearly $2.6 million. In greater detail, the poor segment of the 1% averaged about $1.44 million for the year, the .1% averaged about $7.2 million, and the .01% (12,600 households) averaged nearly $65 million in just the past year.

This is the second year in a row that the average 1% household has taken over $2.5 million of our national wealth. The pattern has worsened every year since the recession, as the U.S. stock market has more than tripled in value, with about 90 percent of the $18 trillion dollar gain going to the richest 10% of Americans. Despite all this, the super-rich are essentially blackmailing Congress into approving a 1%-pleasing tax bill by threatening to withhold their political payoffs.

Americans Dying, Congress Does Nothing

According to the Centers for Disease Control, there were over 60,000 drug overdose deaths last year, and according to the National Institutes of Health about 88,000 Americans die each year from alcohol-related causes. The number of teenagers hospitalized for suicidal tendencies has doubled in the past 10 years.

Yet Congress is considering a tax bill that would eventually cause many middle- and low-income American families to pay more in income taxes.

The children of poor Americans would be hit hardest. The Republican plan excludes 10 million children whose parents work for low wages—that’s about 1 in 7 of all U.S. children in working families. To turn the screws a little more, rich families would benefit more than the poor. According to one source, “a family making $1 million would get 44 times more money from the government than a single mother earning the minimum wage.”

Americans Without Housing, Congress Does Nothing

From New York City and New Orleans to San Francisco and Seattle, Americans are losing their homes as builders and landlords look for ways to make money off of high-paying customers.

More and more Americans cannot afford rent. There are only 12 rural counties in the whole country where a one-bedroom apartment is affordable for minimum-wage workers, based on the 30-percent-of-income standard. Between 2010 and 2016, according to Freddie Mac, the availability of low-income housing declined by over 60 percent.

How Can It Get Worse? Ask Congress

While underpaid American workers struggle with the basic needs of health and housing, households at the other end are each taking millions of dollars of our wealth, mostly from the surging stock market, tax-free until the stocks are cashed in.

Yet, unbelievably, Congress is considering the elimination of the alternative minimum tax, which is the only assurance that the nation’s numerous tax avoiders will pay for some of their plentiful benefits. And it’s considering the elimination of the estate tax, which will leave untaxed windfall fortunes in the hands of people who did nothing to earn them.

It’s a frightening thought, but with inequality ripping us apart, and with few of our national leaders willing or able to confront the problem, we may never again be an equitable and functional society. That appears to be just fine with the 1%.

Paul Buchheit is the author of “Disposable Americans” (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.

 

3 Ways The Greediest Corporations Cheat America

3 Ways The Greediest Corporations Cheat America

Corporate cheating goes well beyond federal tax reporting, as big companies have used various forms of deception to keep taking from America, especially with a complicit corporate media unwilling to report the facts about their behavior.

1. Give Us Your Technology, Infrastructure, Security, Patent Law…But Sorry, Our Profits Were Made in Another Country

Microsoft: Rediscovering its soul while skipping out on its taxes.

Microsoft CEO Satya Nadella writes about the “Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone,” and the company’s commitment to “humans and the unique quality we call empathy.”

The empathy apparently doesn’t apply to the Americans who rely on tax dollars to support basic needs. Microsoft made over half its 2017 revenue in the U.S., and it has 57 percent of its long-lived assets in our country. Yet for 2016 it claimed a loss in the U.S. and a $20 billion profit in other countries. Microsoft goes on to tell its shareholders, “As of June 30, 2017, $127.9 billion was held by our foreign subsidiaries and would be subject to material repatriation tax effects.”

Few other companies have benefited as much as Microsoft  from 75 years of technological research and development in the United States. But the company refuses to own up to its tax responsibility and its social responsibility.

Caterpillar: Blaming everyone else while skipping out on its taxes.

Former Caterpillar CEO Doug Oberhelman said, “Legislators in Illinois have created an environment that is unfriendly to business and investment.”

But friendly enough to tolerate Caterpillar’s blatant U.S. tax avoidance. The heavy equipment company has 56 percent of its property, plants and equipment in the U.S., along with over 40 percent of its sales and 43 percent of its employees. But in 2016 it claimed a loss of over $2 billion in the U.S. and a profit of over $2 billion overseas. It took tax credits at both the federal and state levels.

Despite being under investigation by the IRS for overseas tax fraud, Caterpillar’s annual report  includes a “Worldwide Code of Conduct,” which boasts about the company’s “high standard for honesty and ethical behavior by every employee, including the principal executive officer, principal financial officer, controller and principal accounting officer.”

Apparently the company’s tax department is exempt from the code.

Other Notable Profit Shifters 

Exxon  has over half of its natural gas facilities, half its developed acreage, the great majority of its productive and development wells, and half its retail sites in the U.S. but declared $5.8 billion in U.S. losses along with $13.8 billion in foreign profits in 2016. Exxon claimed a credit on its U.S. income tax.

Pfizer CEO Ian Read complained that U.S. taxes had his company fighting “with one hand tied behind our back.” The other hand must be fudging the books. Pfizer  had half of its sales in the U.S. in 2016, yet claimed an $8.5 billion loss in the U.S. along with nearly $17 billion in foreign profits. Pfizer paid just 4 percent of its total income on U.S. taxes in 2016, and was one of the nine  pharmaceutical  companies among the top 30 Fortune 500 firms in offshore tax hoarding.

Dow Chemical had 63 percent of its assets and 35 percent of its sales in the U.S. in 2016, but declared almost 90 percent of its income in other countries.

Abbott reported 40 percent of its revenues in the U.S., but just 7 percent of its profits.

Amgen  reported 78 percent of its revenues in the U.S., but just 38 percent of its profits.

The deceit gets even worse with another form of “profit shifting,” by which understated U.S. profits may be understated even more. Some of the profits reported to shareholders as U.S.-earned may be reported to the IRS as foreign-earned. The result is that profits allegedly earned in foreign countries are held indefinitely overseas, with all taxes deferred. S&P 500 companies—including Apple, Microsoft and Pfizer—have stashed away $2.3 trillion [18], which represents a loss to America of over $800 billion in tax revenue. Apple itself has moved about two-thirds [19] of its worldwide profits to Ireland, waiting perhaps, for a minimal-tax repatriation deal.

Again the deceit worsens [20], as tax policy experts note that this tax-deferred hoard of money can be put to use in the U.S. even as it’s being withheld from the U.S., through the purchase of Treasury bonds or stock in other companies.

2. Pass Around the State Tax Deals…You Take This Governor, I’ll Take That One 

Amazon is the most recent example of this phenomenon, as Chicago, Minneapolis, Nashville, Cincinnati, Indianapolis and a slew of other contenders are tripping over each other to give tax breaks to the company, to subsidize a warehouse that they would need to build anyway.

Big companies are playing one state government against another, looking for the best tax deal while the rest of us have to make up the lost tax revenue. The Institute on Taxation and Economic Policy (ITEP and Good Jobs First have done comprehensive studies of the farcical practices.

The worst offenders are the richest corporations, which entice dazzled state officials with promises of jobs. Google, Microsoft, Amazon, Apple and Facebook are together making well over $100 billion a year n pre-tax profits, yet demanded state subsidies to build new data centers. Apple is getting over $200 million from Iowa ; Amazon took tens of millions from Illinois and Kentucky; iPhone maker Foxconn negotiated for tax credits from Wisconsinthat could amount to $500,000 per job.

The very worst may be Boeing, with more state subsidies than any other company, and which took billions from the state of Washington  and then moved to Illinois , where it has become the state’s biggest tax avoider.

Then there’s GE in Massachusetts; Exxon in Texas; Disney’s luxury hotel in California; Chiquita playing off Ohio and North Carolina; Panasonic and Pearson doing the same in New Jersey; Aetna getting $34 million from New York for just 250 jobs; economic incentives from Indiana to keep Carrier from moving to Mexico; and the state of Michigan offering tax breaks to anyone who brings in jobs.

3. To Hell With American Jobs…Just Make Our Stocks Go Up 

Forbes [40] calls stock buybacks “fool’s gold,” because they temporarily make a business look good by boosting stock prices, while at the same time resulting in cutbacks [42] in hiring and R&D.

Buybacks were once illegal. But from 2003 to 2012, S&P companies spent over 90 percent of their profits on buybacks and dividends. In 2016, 119 companies in the S&P 500 spent more on buybacks than they generated in earnings. In the future, the threat of corporate tax cuts is likely [47] to accelerate the buyback frenzy. A Goldman Sachs analyst predicted [43] that S&P 500 companies will have spent $780 billion on buybacks by the end of 2017.

All the big companies—technology, pharmaceutical, oil, chemical, agriculture, finance—owe their great profit-making success not so much to individual, self-made, “start with nothing” innovation and entrepreneurship, but rather to the taxpayer-funded research and development that built the foundations for these industries while the middle class trusted in the American work ethic. Now the middle-income jobs are going away [48], leaving underpaid service-oriented jobs. The tax money withheld by the big corporations is desperately needed to restore living-wage opportunities to millions of workers. Yet these companies refuse to pay for all the benefits they’ve happily taken over the years.

Paul Buchheit is the author of “Disposable Americans” (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.

How The Food And Drug Companies Ensure That We Get Sick And They Make Money

How The Food And Drug Companies Ensure That We Get Sick And They Make Money

Reprinted with permission from AlterNet.

Another reason for single-payer health care: The documentary What the Health shows how the lives and health of human beings are considered insignificant, and in many ways threatened, by the pursuit of profits in the meat and dairy and drug industries.

The corporate disdain revealed by this film is nearly beyond belief. And our trusted watchdog agencies, both non-profit and government, are beholden to the biggest companies, accepting money in return for their silence about the dangers of animal and pharmaceutical products.

Some of the contentions in the documentary have been disputed, most notably the implication that sugar is not a major factor in diabetes, and that dairy is. Indeed, there may be flaws in the documentary. But it clearly reveals the damaging behavior of the businesses and organizations that are contributing to human and animal suffering.

Despicable: Corporate Profits at the Expense of Our Health

According to the documentary (and other sources), the World Health Organization and other major health groups have labeled both processed and red meats as carcinogenic. Yet powerful lobbying efforts have kept America near the top of the world in meat consumption. The drug and chemical industries do their part by providing pesticide-filled GMO corn and soy, fed mostly to dairy cows, and with most of their antibiotic products going to fatten up the animals most of us eat.

Hypocritical: Our Watchdog Non-Profits on the Payroll of Big Ag

At the time of the documentary, beef and/or dairy menu items were promoted on the websites of the American Diabetes Association, the American Cancer Society, the American Heart Association, and the Susan G. Komen Foundation, prompting the narrator to say, “It seemed all the large health organizations were encouraging people to eat the very foods linked to the diseases they’re supposed to be fighting against.”

It all started to make sense when some of the health organization funders were discovered: Kraft Foods, Oscar Mayer, Tyson Chicken, Dannon and Yoplait Yogurts, Pizza Hut, KFC, Taco Bell, Subway, Domino’s, and the beef and dairy industries themselves. Not a single one of the four health organizations was willing to be interviewed.

It gets worse. ACS, AHA and ADA are accepting millions of dollars from pharmaceutical companies that are making billions of dollars from the diseases the health organizations are supposedly trying to combat. That includes Pfizer, Merck, Lilly, Johnson & Johnson, Abbott, and others. These Big Pharma firms have a vested interest. A Time report explains the diabolical “cascading” of drugs through our lives: “If you become addicted to painkillers, there are pills to help you stop taking the pills, by reducing the symptoms of withdrawal. And if you take too many pills, there’s a pill for that too.”

Detestable: U.S. Government Assisting Big Ag

We Americans are unknowingly helping to promote the very products that are making us sick.

The United States Department of Agriculture explains its industry-funded checkoff programs: “Promoting a commodity as a whole instead of by individual businesses means everyone in the industry benefits through increased sales, consumer awareness and higher overall demand.”

Through checkoffs and lobbying (Big Pharma is the #1 industry lobbyist), food and drug industries have coerced government officials to make it even harder for us to fight back against big business bullies.

Consider: We can’t sue the industries that make us fat and sick.

The average American has gained 25-30 pounds since 1960, along with the growth of the meat and dairy and sugar industries. But we can’t fight the system. The so-called “Cheeseburger Law” bans lawsuits related to industry culpability for our obesity woes.

We can’t even know what’s in our food.

In a world of common sense, we would have the right to know what we’re eating. Just the opposite. The food industry’s DARK Act (Deny Americans the Right to Know) negated existing GMO labeling laws.

We are labeled terrorists if we object to animal cruelty.

The Animal Enterprise Terrorism Act denies the free speech rights of those who object to the sickening practices used in animal production and factory farming.

The Absurdity of the Capitalist Approach to Health

Our system of health care focuses on symptoms rather than causes. A plant-based diet promotes good health, but thanks to Big Ag and Big Pharma, our diets are built around meat and dairy products, and then drugs to fix the inevitable problems.

Where are the nutrition classes? Every child, every young adult, every doctor-in-training should get this information, but they don’t. So we wallow in ignorance, as corporations thrive on the tobacco industry’s old slogan, “Doubt Is Our Product.”

The less we know, the better for them.

Paul Buchheit is the author of Disposable Americans (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.

Much Wealth As Half The World’s Population

Much Wealth As Half The World’s Population

Reprinted with permission from Alternet.

Last year it was eight men, then down to six, and now almost five.

While Americans fixate on Trump, the super-rich are absconding with our wealth, and the plague of inequality continues to grow. An analysis of 2016 data found that the poorest five deciles of the world population own about $410 billion in total wealth. As of June 8, 2017, the world’s richest five men owned over $400 billion in wealth. Thus, on average, each man owns nearly as much as 750 million people.

Why Do We Let a Few People Shift Great Portions of the World’s Wealth to Themselves?

Most of the super-super-rich are Americans. We the American people created the internet, developed and funded artificial intelligence, and built a massive transportation infrastructure, yet we let just a few individuals take almost all the credit, along with hundreds of billions of dollars.

Defenders of the out-of-control wealth gap insist that all is OK, because after all, America is a meritocracy in which the super-wealthy have earned all they have. They heed the words of Warren Buffett: “The genius of the American economy, our emphasis on a meritocracy and a market system and a rule of law has enabled generation after generation to live better than their parents did.”

But it’s not a meritocracy. Children are no longer living better than their parents did. In the eight years since the recession the Wilshire Total Market valuation has more than tripled, rising from a little over $8 trillion to nearly $25 trillion. The great majority of it has gone to the very richest Americans. In 2016 alone, the richest 1% effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves, with nearly half of the wealth transfer ($1.94 trillion) coming from the nation’s poorest 90% — the middle and lower classes. That’s over $17,000 in housing and savings per lower-to-middle-class household lost to the super-rich.

A meritocracy? Bill Gates, Mark Zuckerberg and Jeff Bezos have done little that wouldn’t have happened anyway. All modern U.S. technology started with, and to a great extent continues with, our tax dollars and our research institutes and our subsidies to corporations.

Why Do We Let Unqualified Rich People Tell Us How To Live? 

In 1975, at the age of 20, Bill Gates founded Microsoft with high school buddy Paul Allen. At the time, Gary Kildall’s CP/M operating system was the industry standard. Even Gates’ company used it. But Kildall was an innovator, not a businessman, and when IBM came calling for an OS for the new IBM PC, his delays drove the big mainframe company to Gates. Even though the newly established Microsoft company couldn’t fill IBM’s needs, Gates and Allen saw an opportunity, and so they hurriedly bought the rights to another local company’s OS — which was based on Kildall’s CP/M system. Kildall wanted to sue, but intellectual property law for software had not yet been established. Kildall was a maker who got taken.

So Bill Gates took from others to become the richest man in the world. And now, because of his great wealth and the meritocracy myth, many people look to him for solutions in vital areas of human need, such as education and global food production.

Gates on Education: He has promoted galvanic skin response monitors to measure the biological reactions of students, and the videotaping of teachers to evaluate their performances. About schools he said, “The best results have come in cities where the mayor is in charge of the school system. So you have one executive, and the school board isn’t as powerful.”

Gates on Africa: With investments in or deals with Monsanto, Cargill and Merck, Gates has demonstrated his preference for corporate control over poor countries deemed unable to help themselves. But no problem: according to Gates, “By 2035, there will be almost no poor countries left in the world.”

Warren Buffett: Demanding To Be Taxed at a Higher Rate (As Long As His Own Company Doesn’t Have To Pay)

Warren Buffett has advocated for higher taxes on the rich and a reasonable estate tax. But his company Berkshire Hathaway has used “hypothetical amounts” to pay its taxes while actually deferring $77 billion in real taxes.

Jeff Bezos: $50 Billion in Less Than Two Years, and Fighting Taxes All the Way

Since the end of 2015 Jeff Bezos has accumulated enough wealth to cover the entire $50 billion U.S. housing budget, which serves five million Americans. Bezos, who has profited greatly from the internet and the infrastructure built up over many years by many people with many of our tax dollars, has used tax havens and high-priced lobbyists to avoid the taxes owed by his company.

Mark Zuckerberg (6th Richest in World, 4th Richest in America)

While Zuckerberg was developing his version of social networking at Harvard, Columbia University students Adam Goldberg and Wayne Ting built a system called Campus Network, which was much more sophisticated than the early versions of Facebook. But Zuckerberg had the Harvard name and better financial support.

Now with his billions he has created a charitable foundation, which in reality is a tax-exempt limited liability company, leaving him free to make political donations or sell his holdings, all without paying taxes.

The False Promise of Philanthropy

Many super-rich individuals have pledged the majority of their fortunes to philanthropic causes. That’s very generous, if they keep their promises. But that’s not really the point.

American billionaires all made their money because of the research and innovation and infrastructure that make up the foundation of our modern technologies. They have taken credit, along with their massive fortunes, for successes that derive from society rather than from a few individuals. It should not be any one person’s decision about the proper use of that wealth. Instead a significant portion of annual national wealth gains should be promised to education, housing, health research, and infrastructure. That is what Americans and their parents and grandparents have earned after a half-century of hard work and productivity.

Paul Buchheit is the author of “Disposable Americans” (2017). He is an advocate for social and economic justice. His essays, videos, and poems can be found at YouDeserveFacts.org.

This article was made possible by the readers and supporters of AlterNet.

U.S. Health Care System Is Condemning Thousands Of Americans To An Early Death

U.S. Health Care System Is Condemning Thousands Of Americans To An Early Death

Reprinted with permission from Alternet.
ByPaul Buchheit

In his report, “This is how American health care kills people,” Ryan Cooper tells the story of 29-year-old Matthew Stewart, who required emergency surgery for hepatitis-induced liver damage, but learned that only about $10,000 of his $74,000 bill was covered by his “gold plan” insurance policy, partly because of out-of-network rules even in emergencies.

When his insurance provider decided to quit the insurance exchange, Stewart was left without a liver specialist, and he couldn’t obtain Medicaid because his state of Texas had refused the option to carry it. His alternative—declaring bankruptcy and leaving the state—would be delayed by a lengthy legal process exacerbated by the physical and mental stress of his illness. But the hospitals kept sending their bills.

The poorest 90% of Americans lost nearly $2 trillion in wealth in 2015-’16, an average of $8,500 per adult. Every sector of society lost money except for the richest 1%, whose members gained an average of $1.5 million in that single year.

Wealth is down in part because income is down. Median household income is about $2,000 less than it was 10 years ago.

There’s much more evidence for the decline of all sectors except the upper class. Almost three-quarters of American consumers die with debt. Anywhere from two-thirds to 80% lack the savings needed for unexpected expenses.

Pew Research recently found that major U.S. metropolitan areas experienced significant growth in upper-income and lower-income households since the year 2000, with a dramatic dropoff in between. Two out of every five middle-income households, as reported by the New York Times, have dropped out of the middle-class income range, becoming either upper-income or lower-income. If wealth is considered rather than income, it becomes evident that most of the middle class is heading down rather than up, because the total net worth (home and financial assets minus debt) of the richest adult in the bottom 70% of North Americans is only about $150,000 (Table 6-5).

And that “growing” job market? A Princeton study concluded that a stunning 94 percent of the 9 million new jobs created in the past decade were temporary or contract-based, rather than traditional full-time positions. There are a lot of high-tech jobs with six-figure salaries available today, but those jobs are out of reach for most of the new members of a swollen lower class.

A much-publicized study documents the early deaths of white Americans with less than a college degree. Many of them suffer “deaths of despair”—death by drugs, alcohol and suicide, attributed in part to a deterioration in economic well-being.

One out of every six Americans, the great majority of them white, has taken a psychiatric drug such as an antidepressant or sedative in the past year. Incredibly, a half-million of our children under the age of four are taking anxiety drugs.

The Centers for Disease Control reported that deaths involving opioid use have quadrupled since 1999. Drug overdoses now kill more people than gun homicides and automobile accidents combined. Drug overdoses killed more people in 2015 than HIV/AIDS at its 1995 peak. In some states, there are more painkiller prescriptions than there are people. And the painkiller plague is spreading into previously little-touched areas. According to a new study, “large suburban metro counties went from having the lowest to the highest rate of premature death due to drug overdose within the past decade.”

Americans are also dying from alcoholism at a record rate. Suicide is at its highest level in 30 years.

But despite the surge in mental health problems, especially among young people, mental health budgets have been continually and recklessly cut, leaving many mentally ill people in jails (or morgues) rather than in psychiatric hospitals.

The president and his Republicans could further sabotage the health care program they hate, despite the damage such an action would inflict on millions of vulnerable people. Possibly they will reduce federal cost-sharing, thus jeopardizing the health care of over 6 million people. Possibly they will cut Medicaid in some manner. Medicaid, which serves more people than Medicare.

The New England Journal of Medicine published the life-saving effects of Medicaid, estimated to be nearly 44,000 lives per year. The Centers for Disease Control builds on this, challenging the Republican-favored block grants that would hinder cooperation among federal and state and local health specialists.

According to an analysis by the Center on Budget and Policy Priorities, the Republican health care plan, had it passed, would have paid more in tax cuts to the richest 400 Americans than it would have paid in health insurance tax credits for 813,000 poor Americans.

Depriving vulnerable people of health care is disturbingly reminiscent of the Nazi-era “Lebensunwertes Leben”—Life Unworthy Of Life, based on certain groups being a drain on resources and thus disposable to the people in power. It’s a harsh interpretation of a troubled time in America. But it’s an apt description of reality. Health care is a human right, not just a privilege for those with money. The merciless attacks on low-income health care programs effectively condemn thousands of people to an early death.

 
This article was made possible by the readers and supporters of AlterNet.