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The Richest People in America Pay at a Lower Rate than the Bottom 50%

By dianeravitch
October 12, 2019 //
20

 

Two articles were published recently about a new book that makes the point that billionaires pay at a lower tax rate than middle-class Americans.

The book is The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez and Gabriel Zucman.

David Leonhardt writes in the New York Times, in a column called “The Rich Really Do Pay Lower Taxes Than You”: 

For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.

Since then, taxes that hit the wealthiest the hardest — like the estate tax and corporate tax — have plummeted, while tax avoidance has become more common.

President Trump’s 2017 tax cut, which was largely a handout to the rich, plays a role, too. It helped push the tax rate on the 400 wealthiest households below the rates for almost everyone else.

The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.

Christopher Ingraham writes in the Washington Post:

In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class.

“The Triumph of Injustice,” by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.

In 1980, by contrast, the 400 richest had an effective tax rate of 47 percent. In 1960, that rate was as high as 56 percent. The effective tax rate paid by the bottom 50 percent, by contrast, has changed little over time.

When you see these data, it becomes clear why our society can’t afford to pay for good education or healthcare that covers everyone.

Consider this:

Forbes annually publishes a list of the 400 richest people in America.

This is the 2019 list. 

Number one is Jeff Bezos. He lost some of his net worth because of his divorce. His ex-wife collected over $36 billion from Jeff, which made her one of the 400.

The rich have gotten so rich that 221 billionaires didn’t make the cut.

Under our current tax structure, the top 400 will continue to get richer and richer, while the public sector pays more for defense and less for social welfare.

Our tax structure is a statement of our priorities.

What do we value?

Why, in a democracy, do people who are living from paycheck to paycheck—or have no steady job— support politicians who voted to reduce the taxes of the Forbes 400? Why do they put on a red hat and cheer for the man who gave the Forbes 400 a hefty tax cut?

Categories Billionaires, Economy

Nick Hanauer Speaks Out Against Income Inequality in a Pair of TED Talks

By dianeravitch
September 24, 2019 //
8

Nick Hanauer, who may or may not be a billionaire, made a splash when he conspicuously dropped out of the Destroy Public Education Movement and the Billionaire Boys Club, which he had supported with donations of millions of dollars.

He loudly declared that his fellow plutocrats were wrong to blame the schools for the dysfunctions of our society, which he pinned on income inequality.

He has given some recent TED talks, which you should listen to and react to.

One is called “Beware, Fellow Plutocrats, the Pitchforks Are Coming.”

Another is “The Dirty Secret of Capitalism–and a New Way Forward.”

Unlike predictable plutocrats like Bill Gates, Eli Broad, Reed Hastings, and Betsy DeVos, Nick Hanauer thinks and reflects on what he is doing and where he is going and how it affects society. This is a sign of intelligence.

Categories Billionaires, Economy

Senator Sanders: This Is Where I Came From

By dianeravitch
June 4, 2019 //
65

 

This article by Senator Bernie Sanders appeared in the New York Times.

 

My father came to this country from Poland at the age of 17 with barely a nickel in his pocket. I spent my first 18 years, before I left home for college, in a three-and-a-half-room, rent-controlled apartment in Brooklyn. My mother’s dream was to own her own home, but we never came close. My father’s salary as a paint salesman paid for basic necessities, but never much more.

As a young man I learned the impact that lack of money had on family life. Every major household purchase was accompanied by arguments between my parents.

I remember being yelled at for going to the wrong store for groceries and paying more than I should have. I’ve never forgotten the incredible stress of not having much money, a reality that millions of American families experience today.

We are the wealthiest nation in the history of the world and, according to President Trump, the economy is “booming.” Yet most Americans have little or no savings and live paycheck to paycheck.

Today our rate of childhood poverty is among the highest of any developed country in the world, millions of workers are forced to work two or three jobs just to survive, hundreds of thousands of bright young people cannot afford to go to college, millions more owe outrageous levels of student debt, and half a million people are homeless on any given night. Over 80 million Americans have inadequate health insurance or spent part or all of last year without any insurance, and one out of five cannot afford the prescription drugs they need.

While wages in the United States have been stagnant for over 40 years, we have more income and wealth inequality than at any time since the 1920s.

Today, the wealthiest three families in the country own more wealth than the bottom half of the American people and the top 1 percent owns more wealth than the bottom 90 percent. Millions of workers earn starvation wages even as nearly half of all new income is going to the top 1 percent.

Gentrification is ravaging working-class neighborhoods, forcing many struggling Americans to spend half or more of their incomes to put a roof over their heads. The rent-controlled apartment I grew up in was small, but at least we could afford it.

I am running for president because we must defeat Donald Trump, the most dangerous president in the modern history of our country. But, if we are to defeat Mr. Trump, we must do more than focus on his personality and reactionary policies.

We must understand that unfettered capitalism and the greed of corporate America are destroying the moral and economic fabric of this country, deepening the very anxieties that Mr. Trump appealed to in 2016. The simple truth is that big money interests are out of control, and we need a president who will stand up to them.

Wall Street, after driving the United States into the worst economic downturn since the 1930s, now makes tens of billions in profits while forcing working-class Americans to pay usurious interest rates on their credit card debt. The top 10 American drug companies, repeatedly investigated for price fixing and other potentially illegal actions, made nearly $70 billion in profits last year, even as Americans paid the most per capita among developed nations for their prescription medicine.

Top executives in the fossil fuel industry spend hundreds of millions on campaign contributions to elect candidates who represent the rich and the powerful, while denying the reality of climate change.

Major corporations like Amazon, Netflix, General Motors and dozens of others make huge profits, but don’t pay federal income taxes because of a rigged tax system they lobbied to create.

Back in 1944, in his State of the Union speech, President Franklin Delano Roosevelt reminded the nation that economic security is a human right, and that people cannot be truly free if they have to struggle every day for their basic needs. I agree.

We must change the current culture of unfettered capitalism in which billionaires have control over our economic and political life. We need to revitalize American democracy and create a government and economy that works for all.

Categories Economy, Education Reform, Inequality, Injustice

Corps. That Pay No Federal Taxes

By dianeravitch
May 25, 2019 //
73

Most of us pay our taxes. Most of us are amazed to learn that some very profitable corporations pay no federal taxes. Some corporations move to states where they pay little or no state taxes. Their tax avoidance strategies starve our schools and other vital public services.

This article from the New York Times lists major corporations that make large profits and pay no federal taxes. 

It’s a topic that several presidential candidates, led by Senators Bernie Sanders and Elizabeth Warren, have hammered recently as they travel the campaign trail, spurred by a report that 60 Fortune 500 companies paid no federal taxes on $79 billion in corporate income last year. Amazon, which is reported to be opening a center in an abandoned Akron mall that will employ 500 people, has become the poster child for corporate tax avoidance; last year it had an effective tax rate of below zero — receiving a rebate — on income of $10.8 billion.

For decades, profitable companies have been able to avoid corporate taxes. But the list of those paying zero roughly doubled last year as a result of provisions in President Trump’s 2017 tax bill that expanded corporate tax breaks and reduced the tax rate on corporate income.

“Amazon, Netflix and dozens of major corporations, as a result of Trump’s tax bill, pay nothing in federal taxes,” Mr. Sanders said this month during a Fox News town hall-style event. “I think that’s a disgrace.”

These are the 30 most profitable companies that paid no federal income taxes in 2018. In many cases, the companies also received tax rebates that could be used to reduce their tax burdens in other years.

 

Corporations’ ability to whittle down their tax bills has long been a target of criticism by Democrats, and this presidential campaign is no exception, particularly among left-wing candidates who argue that corporations should be accountable for wage inequality and its impact on low- and middle-income workers.

Categories Economy

Robert Kuttner on the Role of Democrats in Gutting Unions

By dianeravitch
May 10, 2019 //
29

Robert Kuttner writes regularly for The American Prospect, where he is co-editor. He is brilliant.

 

ON TAP Today from the American Prospect
May 1, 2019

Kuttner on TAP

In Which the Superb Tom Edsall Gets One Big Thing Wrong About Unions. New York Times contributing columnist Tom Edsall is a national resource. In column after column, he provides encyclopedic research both scholarly and journalistic, extended interviews, astute insights, and hard questions for progressives on politically urgent topics.

 

His most recent column, on the political consequences of the decline of unions, is no exception. As Edsall demonstrates, the Republican right’s strategic war on unions has been devastating to Democrats, since union members and union families, with their sense of solidarity and better understanding of how capitalism works, are more likely to vote for Democrats than demographically similar nonunion families.

 

Edsall was not exaggerating when he wrote that the right has a better appreciation of unions than the left. Thus, the systematic union bashing. In Wisconsin, as Edsall shows, courtesy of Scott Walker’s anti-union crusade, the union share of Wisconsin employees was cut from just over 15 percent as recently as 2008 to just 8.1 percent by 2018.

 

Edsall ends his piece by wondering why “many liberals and Democrats” don’t get the importance of unions.

 

The problem in building support for a resurgent labor movement is that many liberals and Democrats do not appear to recognize the crucial role that unions continue to play not only in diminishing the effects of inequality, but in voter mobilization and campaign finance.

 

And here is where Edsall misses a key part of the story. The problem is not that “Democrats” fail to appreciate unions. It’s that the corporate and Wall Street Democrats who have dominated the presidential wing of the party since Jimmy Carter and Bill Clinton actively loathe unions.

 

Carter, Clinton, and Barack Obama all had the opportunity and the votes to put serious teeth back in the Wagner Act, in the face of vicious corporate union busting. All decided not to lift a finger on behalf of labor law reform.

 

All three presidents had progressive labor secretaries. But the real power players were elsewhere.

 

Most Democrats in Congress get unions. The problem has been the corporate influence on the presidential party and its domination of key positions at Treasury, OMB, and Legislative Affairs. Some of this is about campaign finance, but not all of it.

 

Edsall brilliantly depicts the class warfare that leads Republicans and their business allies to bash unions. He misses the fact that the same class warfare has infected the Democratic Party. ~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

A Conversation with Sherrod Brown
The senator from Ohio on the Green New Deal, trade, and how to beat Trump in 2020 By ROBERT KUTTNER
The Millennialization of American Labor
A generation of young workers is rebuilding a battered union movement. By KATIE BARROWS, ETHAN MILLER & KAYLA BLADO

 

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Categories Democrats, Deregulation, Economy, Education Reform, Republicans, Unions

Katie Porter: A Freshman Hero in Congress

By dianeravitch
April 13, 2019 //
21

Katie Porter is a freshman in Congress. She ran for Congress in the 45th District in California, which has not elected a Democrat since the District was created in 1953. Porter was born in Iowa and had an elite education, studying at Phillips Academy, Yale University, and Harvard Law School (where Elizabeth Warren was one of her professors). She is a consumer advocate and a master of complex financial transactions. She co-authored a book with Warren titled The Law of Debtors and Creditors. 

She has fought the abuse of mortgage holders by banks. She has planted herself firmly on the side of the little guy, the public interest, and the victims of the powerful.

In her role on the House Financial Services Committee, she has challenged some of the most powerful people in the nation. She does it with facts, logic, and subtlety. She quietly sets a trap, and then it snaps.

Watch her take apart Jamie Dimon, CEO of J.P. Morgan Chase, who received a salary of $31 million this year. She explains the difficulty of a teller in his bank in her district who is paid $16.50 an hour. Better than the minimum wage, but watch her quietly pin him to the wall. 

The video went viral.

Paul Waldman of the Washington Post says that Porter has framed the most important issue for the 2020 election: Inequality. 

He writes:

“Congratulations are in order to JPMorgan Chase, the largest bank in the United States. It just reported that in the first quarter of 2019 it made a record profit of $9.18 billion on $29.9 billion in revenue. Truly, we are living in an age of boundless prosperity.

“Well, some of us are. Jamie Dimon, the CEO of JPMorgan Chase, made $31 million last year. Which led to an interesting exchange between him and first-term Rep. Katie Porter (D-Calif.) this week in a Capitol Hill hearing, when Porter asked Dimon to consider the financial situation of a teller working at Dimon’s bank in Irvine, Calif., the location of her district.

”A video of Porter questioning Dimon is spreading, and it’s an excellent reminder of something with profound implications for next year’s presidential campaign:

“Rep. Katie Porter (D-Calif.) grills JPMorgan Chase CEO Jamie Dimon, who made $31 million last year, on how a low-paid bank teller is supposed to pay the bills. (Danielle Kunitz, Joshua Carroll/The Washington Post)

“Porter is uniquely situated to do this kind of questioning. A law professor with deep expertise in topics such as bankruptcy, she is quickly becoming one of the financial services industry’s most formidable critics on Capitol Hill. And she was doing more than making Dimon uncomfortable. She was obviously trying to make a larger point not just about JPMorgan Chase or even just about the banking industry, but about the American economy in general.

“That point is this: If you have a bank that’s making $9 billion in profit in a single quarter, with a CEO who makes $31 million a year, and yet people who work for that bank can’t possibly make ends meet, something is very, very wrong. And that should be at the center of the campaign of every Democrat running for president…

”Speaking of which, we just learned that as a result of that tax cut, twice as many of the largest corporations in the United States paid no taxes in 2018 as had the year before, despite making billions of dollars in profit. In many cases they even got large refunds, which means your taxes went right into their bank accounts. To take just one example, Chevron made a $4.5 billion profit and got a refund of $181 million. The banks did particularly well; the tax law increased bank profits by $28.8 billion. You’re welcome, Mr. Dimon…

”JPMorgan Chase could give every one of its 250,000 employees a $25,000 raise, and it would cost the bank only about two-thirds of the profit it made just in the first quarter of this year. But of course, it is not going to do that. We can’t rely on the generosity of corporations to tackle inequality. That’s the government’s job. Democrats just need to decide to do it, and to make clear to voters that it will be their top priority as president.”

Watch Katie Porter take on the CEO of Wells Fargo. (Ignore the misspelling on the placard she holds up. (Somebody goofed but not her.)

Watch her eviscerate the clueless head of Trump’s Consumer Financial Protection Bureau, explaining basic rules of consumer finance.

I love AOC.

I love Katie Porter.

These are two amazing and powerful people. They give me hope for the future.

 

 

Categories Accountability, Economics, Economy, Inequality

Wisconsin: FoxCon Job

By dianeravitch
January 31, 2019 //
39

 

Robert Kuttner of the American Prospect reports about the con job in Wisconsin:

 

Kuttner on TAP

Fox Con Job. Remember Foxconn? Then-governor Scott Walker of Wisconsin lured the Chinese company to create “up to” 13,000 jobs in his state, with tax subsidies paid by Wisconsin taxpayers that could to as high as $3 billion. Foxconn was going to build a $10 billion factory complex to produce liquid crystal displays and other tech equipment that it now makes in Asia.

As the Prospect reported in an investigative piece last September, the taxpayer cost per new employee was estimated at $230,000, or five or six times the normal figure in such deals.

Though the 13,000 jobs were an estimate, not a formal commitment, President Trump touted that number at a ground-breaking ceremony last year with Walker, then-House Speaker Paul Ryan, and Foxconn CEO Terry Gou.

Well, that was then.

It now turns out that Foxconn will hire a maximum of 1,000 Wisconsinites, and is not building a factory at all. The company now describes its Wisconsin facility as an R&D center, combined with the possibility of some low-skill final assembly jobs.

There are several morals of this story. One, which we already knew, is never to trust Scott Walker or Donald Trump, either separately or together. Moral two is to keep your hand on your wallet whenever corporate execs hold you up for tax subsidies.

But the more important moral is that if the U.S. is to have a real industrial policy to reclaim U.S. manufacturing jobs, it is utter folly to rely on white knights on the form of Chinese companies. Making American manufacturing great again is not at the top of their national agenda.

Better to spend the money directly, on industrial strategies that benefit companies that are committed to producing in the U.S. It remains to be seen how much of the tax breaks were already squandered and what might be recouped. ~ ROBERT KUTTNER

The New York Times describes the same hoax in polite terms.

It was heralded a year and a half ago as the start of a Midwestern manufacturing renaissance: Foxconn, the Taiwanese electronics behemoth, would build a $10 billion Wisconsin plant to make flat-screen televisions, creating 13,000 jobs. President Trump later called the project “the eighth wonder of the world.”

Now that prospect looks less certain.

Pointing to “new realities” in the market, the company said Wednesday that it was reassessing the plans, underscoring the difficult economics of manufacturing in the United States. “The global market environment that existed when the project was first announced has changed,” Foxconn said in a statement.

Company officials had signaled for months that their emphasis was increasingly on research and development rather than large-scale production, dampening the potential for blue-collar job creation.

That turn runs counter to Mr. Trump’s vision for the project, which he had cited as a milestone in reversing the decline in factory jobs. The twist also brought new friction in Wisconsin, where the initiative has been politically fraught from the start because of its billions of dollars in tax subsidies.

Foxconn said that it remained committed to creating 13,000 jobs in Wisconsin and that it was “moving forward with plans to build an advanced manufacturing facility.” But it did not address the share of jobs to be devoted to production, and economists questioned how such a large work force could be created if the plant’s focus was on other areas.

A White House spokeswoman did not respond to a request for comment.

The Foxconn statement followed a Reuters report that Louis Woo, a special assistant to the company’s chairman, Terry Gou, had said the costs of manufacturing screens for televisions and other consumer products were too high in the United States.

“In terms of TV, we have no place in the U.S.,” Mr. Woo told Reuters. “We can’t compete.”

Mr. Trump’s campaign promise to revitalize American manufacturing was considered an important factor in his capturing Wisconsin and other battleground states in 2016. Yet the cost of luring Foxconn set off a partisan battle in Wisconsin that extended into the midterm elections last year, when Gov. Scott Walker, a Republican, was defeated.

Mr. Walker and state lawmakers had agreed to more than $4 billion in tax credits and other inducements over a 15-year period, an unusually high figure, for a plant in Mount Pleasant, near Racine.

Wisconsin residents have had mixed feelings about the investment, polls show. And early on, economists questioned whether the large-scale manufacturing plant and the thousands of jobs would come to fruition. The increasing focus on research raised new doubts about the scale of hiring — economists said that strategy could produce a smaller number of higher-paying jobs.

“There aren’t that many R&D facilities in the world with 13,000 people,” said Susan Helper, an economist at Case Western Reserve University in Cleveland

 

Categories Economy, Education Reform, Walker, Scott

Harold Meyerson: How AOC is Driving the Right Crazy and Making Democrats into Progressives

By dianeravitch
January 29, 2019 //
16

 

 

Harold Meyerson of The American Prospect writes about the unique power of the youngest freshman in Congress:

 

AOC’s Achievement: Making Americans’ Progressive Beliefs Politically Acceptable. Of all the reasons that Representative Alexandria Ocasio-Cortez is driving the right crazy, one of the most important is this: She’s advancing presumably radical ideas (by the right’s standards, anyway) that actually have massive public support.

Green New Deal? Fuzzy though its meanings may be, it brings together regional development policies for the huge region of the country that private capital has long since abandoned, climate change policies in a nation where climate-change apprehension is at an all-time high, full employment and decent wage policies for a nation where even voters in Republican states are casting ballots for higher wages and better jobs. Before AOC, whose radar was a Green New Deal even on? Since she joined the protestors in Nancy Pelosi’s office, a far-flung majority of Americans now see it as a way to address all manner of problems.

Likewise with taxing the rich. When AOC made the case for a 70 percent tax rate on annual income over the $10 million threshold, CNN’s Anderson Cooper responded as if she’d just called for collective farms. Now that Senator Elizabeth Warren is proposing a wealth tax that would compel the rich to pay an even fairer share of their bounty to support the common good, pundits are beginning to notice that the public has been supporting much higher taxes on the rich for a very long time. Since 2003, Gallup has annually asked the public whether they believe the level of taxes the rich pay is too high, too low or just right. The percentage saying “too low” has been in the 60-percent-to-70-percent range every year.

So it’s not hard to see why AOC is driving the right crazy. Forget the dancing, not to mention the racism and sexism that underpins many of the right’s complaints. It’s that she’s giving voice to progressive ideas that the public actually supports but that have long gone unvoiced by nearly everyone in power who has a megaphone they could use. She’s game-changingly brilliant at promoting progressive public policy. To the right, if I may steal from the Bard, such women are dangerous. ~ HAROLD MEYERSON

Categories Economy, Environment, Equity

Nancy Bailey: Arne Duncan Can’t Stop Peddling the Dangerous Corporate Reform Dogma

By dianeravitch
January 6, 2019 //
47

Nancy E. Bailey is turning into a superstar of education blogging. She is a retired teacher and she has a firm understanding of corporate reform and its dangers.

In this post, she reviews Arne Duncan’s stubborn embrace of dangerous corporate reform.

I will copy only a portion of the post. I urge you to read it all, because it is priceless as an evisceration of failed “reformer” ideas. You should also see her links, which are many.

She writes:

With Education Secretary Betsy DeVos, it might be tempting to see Arne Duncan as an educational expert, but Duncan has never formally studied education, or been a teacher. Duncan paved the way for DeVos.

EdSurge recently brought us Arne Duncan’s 6 lessons about education. They are nothing but the same old corporate reforms that have destroyed public schools and the futures of children for years.

The lessons are wrong.

Here are his claims and my anti-arguments.

He emphasizes early childhood education and the economy.

While there’s a school-to-work connection, especially with older students in high school, teaching young children should be about their development, not promoting the economy.

Too often this message results in pushing young children to work at a higher level than they’re capable.

The report of which Duncan refers is by James J. Heckman, a professor of economics at the University of Chicago. It highlights the economy and the nation’s workforce.

Here are the subheadings of the article.

*Early childhood development drives success in school and life.
*Investing in early childhood education for at-risk children is an effective strategy for reducing social costs.
*Investing in early childhood education is a cost-effective strategy for promoting economic growth.
*Make greater investments in young children to see greater returns in education, health and productivity.

His thoughts about equity are misleading.

Duncan argues that poor children need something different than what wealthy students find in their schools.

But poor children deserve well-run schools, with resources and qualified teachers, not strict charter schools run by management companies and novices.

Most charter schools care more about their bottom line.

Feeding poor children and health screenings should be a part of every school plan.

If Duncan cared so much about grief and trauma in children, why didn’t we see an increase in counselors, school nurses, and school psychologists under his watch?

He claims class sizes don’t matter.

This has been the refrain by reformers like Bill Gates for years and it is false.

Here’s the STAR study as one example in favor of lowering class size.

Lowering class sizes would help teachers have better overall classroom management.

Students would be safer, and children would get a better grasp of reading and other subjects in the early years.

He says teachers matter more than class size.

Real teacher qualifications matter. But that’s not what Duncan is talking about.

He is promoting the faulty idea that a “good” teacher can manage huge class sizes. Of course, this makes no sense.

This is also connected in a roundabout way to replacing teachers with technology. Imagine one teacher teaching thousands online.

Duncan has always been on the side of Teach for America fast-track trained teachers. Consider that they will likely become charter school facilitators, babysitters, when students face screens for their schooling.

He uses teachers as the fix for poverty.

This is an old and dangerous refrain. This message drove No Child Left Behind and Race to the Top. It made standardized testing and one-size-fits all common practice.

Teachers can help students, but economic forces are greater than anything a child can learn at school.

Blaming teachers for the problems in the economy, has always been about getting the public to take their eyes off the real culprit of economic woes, the greed of those who run corporations!

Please read on. This is a great post!

Categories Charter Schools, Childhood, Class size, Corporate Reformers, Duncan, Arne, Economy, Education Industry, Poverty, Privatization, Teachers, Testing

The Greedy, Selfish Billionaires Who Rig Taxes in Washington State

By dianeravitch
January 2, 2019 //
68

Hanna Brooks Olsen writes here about the billionaires of Washington State and their clever strategies to stay very rich whileappearing to be philanthropists.

They give to the poor. They give toworking people. They give to the homeless.

But they make sure that Washington State has the most regressive Taxes in the nation, which protects their fortunes.

Because when billionaires do anything for anyone else, it’s cause for celebration.

We see this a lot out here in Washington state, a place that is uncommonly kind to people with ample wealth. This is not hyperbole; a report released in October found that, once again, the Evergreen State has the country’s most regressive tax structure. The richest percentile of residents — those who earn more than half a million dollars annually — pay three percent of their income in annual state and local taxes. Meanwhile, those who earn under $24,000 per year — many of whom live below the poverty line — shell out 17.8 percent.

This makes it difficult for lawmakers to tackle the big problems; for over a decade, Washington has struggled to fund basic education and provide critical mental health care to those in need. Every year, elected officials head into session wondering how they’re going to pay for new roads and transportation upgrades when property taxes are maxed out.

But this structure is not an accident. It is by design, crafted and upheld by the people it benefits. Washington state is home to a tax structure that benefits the wealthy because, and not in spite of, the fact that Washington state is also home to the nation’s wealthiest men.

And yet, those same wealthy men — and everyone who carries water for them — will tell you that they are doing everything they can and that anything we receive from them, collectively, should be praised.

Washington is proud of its billionaire population, and many people work hard to retain them; after Amazon announced that it was seeking a second (or, now, a second and third) location, lawmakers penned op-eds decrying Seattle’s “anti-business” climate as the reason the online vending behemoth might want to explore other options and made substantial political offers to try to get them to keep growing at break-neck pace. After all, these billionaires give money. They’re philanthropists. We would be sunk without them.

And yet, the same men — men like Bezos and the late Microsoft co-founder Paul Allen — who receive awards and accolades for their community involvement, for their substantial role in Washington’s booming economy, are also the ones who have piled cash reserves while the state government starved. Washington needs this philanthropy precisely because the wealthy don’t pay taxes.
The bar for the behavior of billionaires feels precariously low.

If you know just one single thing about Paul Allen, it’s probably that he had a lot of money and that he gave away a lot of money. Throughout his life, he donated about $2 billion to charitable causes and organizations he founded. But he also spent a lot of money, mostly quietly, to keep his money.
According to MIT researchers, more than 46 percent of Americans die with less than $10,000 to their name.

Just a few weeks before his death, Allen made headlines for donating $100,000 to a political action committee designed to retain Republican control of the House. He also, in the last several years, made substantial donations to Republican candidates, the majority of whom have backed the Trump administration’s tax plan. And the year he made headlines for joining the “Giving Pledge” to donate 10 percent of his income, he also donated heartily to defeat an initiative that would have created an income tax in Washington. That initiative—to increase taxes on the rich—was led by another billionaire, the father of his one-time business partner, Bill Gates Sr.

It worked. The campaign was defeated, and, to this day, Washington state has no income tax, no capital gains tax, and gaping loopholes for things that rich people buy, like jet planes. The bulk of tax money in Washington comes from sales taxes, property taxes, and a business tax that is woefully regressive, particularly to small businesses.

As such, our billionaires keep getting richer. At his death, Allen was worth an estimated $26 billion — an astronomical amount in a nation where, according to MIT researchers, more than 46 percent of Americans die with less than $10,000 to their name, and most have less than $1,000 in savings. Allen owned two yachts, one of which cost $100 million.

Categories Accountability, Billionaires, Economy
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