Category: inequality

Data Point of the Day

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Did you know that about 90% of Californians have lower taxes than Texas?

It’s true.  Texas, and this applies to a lot of so-called “Low Tax Jurisdictions”.

They are not low tax states for the bulk of their population, they are just low tax states for rich people and large corporations.

This certainly matches the experiences of two people I know/knew, an author and an artist.

The former found his taxes and fees lower in Maryland than in Pennsylvania, and the latter found the same case for New Hampshire and Massachusetts:

………

These statistics are relevant, though, to any discussion of why so many people have been leaving California. Taxes often dominate public discussions of such trends, thanks in part to the unrelenting efforts of Republican policy entrepreneurs Arthur Laffer and Stephen Moore, whose 14th annual, mostly tax-based economic competitiveness report for the conservative American Legislative Exchange Council is out this month. But it’s awfully hard to argue that taxes have been the main thing driving the California exodus, given that (1) it has been concentrated among the less affluent, (2) their No. 1 destination has been Texas, according to 2010-2018 Internal Revenue Service data that I tallied up early last year and (3) lower-income and middle-income people face higher effective tax rates in Texas than in California.

………

Middle-class taxes are lower in Nevada, the No. 2 beneficiary of net migration from the Golden State, but for a household at the 2019 California median income of $75,235 the 1.8 percentage point difference in effective tax rate adds up to $1,354 whereas the difference in average annual rent for an apartment or house between metropolitan Los Angeles and metro Las Vegas is $6,336, according to Apartment List’s April estimates.

For those in the top 1% of the income distribution, who in California in 2018 had adjusted gross incomes that started at $680,687 and averaged $2.2 million, the story is much different.

I’m thinking that people who protest against inequality should try to address things like states tax codes, particularly those with no income tax, like Washington, Texas, and Florida, and those with flat income tax rates, like Massachusetts, Illinois, and Pennsylvania.

Soaking the rich is popular right now, and the number of people who actually relocate for tax purposes is very small.

1000 Leona Helmsleys, Writ Small

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The not-for-profit news org Pro Publica has come into IRS records for some of the wealthiest people in America, and it turns out that the richest people in the United States pay little or no taxes.  They are claiming that they do not know the identity of their source.)

This has gotten notice from major mainstream news sources.

There has been some push-back from the usual suspects demanding, while the usual douche bags are demanding an aggressive criminal investigation.  Said douche bags include US Attorney General Merrick Garland.  (Multiple officials in the Biden administration has given every indication that it will extend the Jihad against whistle-blowers to the IRS leaker.)

We find a similar pattern in the tax filings of private equity (PE) firms, with the things like the carried interest loophole, the “fee waiver,” an under resourced IRS, and a revolving door of senior officials.

I kind of filed this under, “Same old, Same old,” until Pro Publica revealed that one of the leading candidates for Manhattan District Attorney was mentioned in the files as having paid little or no taxes on her husband’s multi-million dollar pay.

So, if these files become public, there is a pretty good chance that one of the go to sources for crappy candidates who stand for nothing that is routinely tapped by the Democratic Party establishment (There is no Democratic Party establishment), hedge fund managers, and PE types, who have lots of money, and spend profligately to get elected.

Now, it the people who are looking to cash in will have to go though a trove of tax data to make sure that THEY are not on that list:

The leading candidate to take over the investigation relating to former President Donald Trump’s taxes paid virtually no federal income taxes in four of six recent years.

Tali Farhadian Weinstein, who is married to hedge fund manager Boaz Weinstein, is running for Manhattan district attorney in the Democratic primary, in which early voting has already begun. She and her husband reported income as high as $107 million in 2011, and she recently donated $8.2 million to her campaign — more than her seven Democratic rivals have raised in total.

But in 2017, according to a trove of tax data obtained by ProPublica, she and her husband paid no federal income tax. In 2015 and 2013, they also paid no federal income tax. In 2014, she and her husband paid $6,584.

………

In two of the years in which the Weinsteins paid no federal income taxes, they reported negative income, losses that appear to be driven by the volatile performance of Boaz Weinstein’s hedge fund. They also claimed and received a refundable tax credit — a total of $5,000 over those two years — designed to help middle- and lower-income families with the costs of raising children.

In the other two years in which they paid little or no federal income taxes, they reported adjusted gross income of about a million dollars each year. They were able to reduce their income tax bill in those years by using a variety of deductions.

There’s no indication the Weinsteins did anything illegal.

That last bit is the REAL problem.

The fact that these sort of shenanigans are completely legal is a national embarrassment.

Bat Boy Billionaire to Ride Giant Space Dildo

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Compensating for Something?

As you may have heard, Amazon chief and Bat Boy look-alike Jeff Bezos plans to be on the first manned manned flight of his Blue Origin booster.

I guess he thinks that having more money than God qualifies him as a test pilot.

You give an egomaniac enough money, and they think that they are Buckaroo Banzai:

Jeff Bezos has already selected a hobby for his post-CEO life: space travel.

Just two weeks after he steps down as CEO of Amazon, Bezos will climb aboard a rocket made by his space exploration company Blue Origin.

“If you see the earth from space, it changes you. It changes your relationship with this planet, with humanity. It’s one earth,” Bezos said in a video posted to Instagram on Monday morning.

“Ever since I was five years old, I’ve dreamed of traveling to space.”

I want to go into space, but this desire is NOT strong enough for me to share a space capsule with Jeff Bezos.

Eat the Rich

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Am I the only one not surprised that rich people behaved like complete turds throughout the pandemic?

In study after study, the rich are shown to be less charitable, less empathic, and more likely to cheat, so bad behavior is the rule, not the exception:

Heather checked her phone when a text arrived from her mom saying her wealthy cousin from Los Angeles had just flown to Puerto Rico; it was his annual weeklong fishing trip with the boys and the pandemic wasn’t stopping them. He jetted off to stay in a private house with a chef, housekeeper, and fishing guides.

It was the peak of the pandemic in California, when 1 in 5 people in LA County were testing positive for COVID-19 in January, and Heather, who is a nurse and asked to be identified only by her first name to protect her privacy, was working a busy shift. “I had double the amount of patients I was legally allowed and they were all on death’s doorstep,” she said.

………

As the pandemic revealed stark inequalities in American society, it also changed how many people view money and privilege. Sen. Ted Cruz was caught flying to Cancun while Texas buckled under both COVID and a power crisis during a deadly winter storm. Kim Kardashian hosted an island birthday romp for friends and family in Tahiti while the pandemic raged. They were just two of many wealthy people who were seen carelessly using their vast resources for their own pleasure rather than to help as millions struggled with the impacts of COVID: unemployment, displacement, poverty, and hunger. Meanwhile, essential workers like Heather stayed put to provide necessary services, sometimes for low wages.

………

Jacquelyn Delgado, a 53-year-old graduate student, said years of living in Mamaroneck, New York, an affluent area, prepared her for how the wealthy would respond in a crisis. “Rich people gonna rich people,” she told BuzzFeed News.

(Emphasis mine)

………

“I fully expected the wealthy to do what they always do,” said Delgado. “And it was the Trump era, so ‘Screw you, I got mine’ was just lived out loud.”

………

She’s not alone in seeing wealth impact her friendships. Sheeny Ng, a college student from Los Angeles, said a group of her high school friends started posting videos on Snapchat of their trip to Hawaii to celebrate a 21st birthday party before any of them had been vaccinated. “The wealthier ones are able to travel and not care whether it would impact low-income and marginalized communities that don’t have access to healthcare resources,” she told BuzzFeed News. “Wealth and money are so powerful, yet toxic,” she said.

………

Nikki, a 32-year-old teacher who lost her job because of the pandemic, watched in frustration as her siblings-in-law flew to Hawaii on the same day Los Angeles implemented a stay-at-home order. “They remind me of Daisy and Tom in Gatsby, not caring about the destruction they might leave in their wake,” said Nikki, who lives in San Diego and asked not to be identified by her full name. “I think the pandemic really actually unmasked us all,” she said. Nikki hasn’t allowed them to see her newborn baby due to safety concerns from their reckless travel.

(Emphasis mine)


………

Watching people host parties maskless, eat indoors, and go to clubs while hundreds of thousands of people were dying and receiving little support from their government pushed Holly Bruneau, a 34-year-old from Minneapolis who works in nonprofits, deeper into progressive politics.

“I’ve always been a tree-hugging liberal, now I’m a pissed-off socialist,” she said.

Your mouth to God’s ear, Ms. Bruneau.

The Calvinist conflation of wealth and virtue has permeated the culture of the United States, and it’s an unalloyed evil.

F%$# the Pilgrims and their Plymouth Colony.

Their Tears Will Salt My Soup

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When I see a headline like this:

Richest Americans Face Biden’s Tax Hike With Anger, Denial, Grief

I smile.

It seems that many of these folks, who were born on 3rd base and thought that they had hit a triple, are so personally offended to be made pay their fair share.

They are losing their sh%$ over the lower tax rate for capital gains going away.

They keep saying things like, “Over-taxing success is un-American.”

Oh, you poor delicate snowflake.  Your subsidy is going away, and your feelings are hurt.

F%$# you with Cheney’s dick.

I Am Amused

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Washington State, which is known, and notorious for, its regressive tax policies, has passed one of the higher levies on capital gains taxes in the nation.  (If passed, the 7% tax would take the state from 50th to 13th in the nation)

Given the enormous amount of wealth subject to the tax, and the fact that Bezos set up Amazon in Washington State specifically to avoid taxes, I am find this situation intensely amusing.

As a state that has some extreme wealth inequality, it’s also good policy:

The home of the two richest men in America is on the brink of implementing a new tax on capital gains that would raise billions of dollars for early childhood education and child care programs — while setting off a years-long legal fight that could end a nearly century-long resistance to an income tax.

Washington state legislators are finalizing language on a bill that would tax capital gains over $250,000 at a 7 percent rate, in what may prove to be one of the most substantial tax increases approved by any state legislature in 2021.

Supporters of the measure say it would fall on just a few thousand of the wealthiest families in a state full of major technology companies and budding startups, from Amazon and Microsoft — companies founded by Washington residents Jeff Bezos and Bill Gates, numbers one and two on the list of the world’s richest people — to IMDb and Redfin.

In a state where the tax code remains one of the most regressive in America, the new tax would help even out the growing disparities between the wealthy and a shrinking middle class that has been pushed to the brink.

………

The capital gains tax has passed both the state House and Senate, though the two chambers have appointed members of a conference committee to hammer out several disagreements between the two versions. The legislators on the committee have until Sunday, the end of this year’s legislative session, to reach a deal.

Tara Lee, a spokeswoman for Gov. Jay Inslee (D), said Inslee would sign the bill if it makes it to his desk in time.

Legislative analysts estimate the new tax would pull in $550 million a year beginning in 2023, when it would take effect. Some estimates suggest it would impact about 8,000 tax filers, while others say it could hit up to 60,000 people — in either case, just a fraction of the 2.9 million households in the state.

………

But the proposed bill, Washington Republicans say, comes with a twist: Opponents see a longer-term legal play aimed at overturning an 85-year-old policy that has made Washington one of the few remaining states without an income tax.

Washington’s Supreme Court ruled in a landmark 1936 case that the state constitution required all property to be taxed at the same rate. The court ruled that income counted as property, striking down a graduated income tax rate that voters had approved a few years earlier.

Since then, Washington has been one of just a handful of states without an income tax. Voters have defeated six subsequent attempts to implement an income tax at the ballot box.

If the new tax on capital gains passes, Republicans see it as a path to open a new legal challenge to the validity of a graduated tax, one that might find a more receptive audience before a more liberal state Supreme Court.

………

Washington is one of just nine states that does not levy a tax on capital gains. A 7 percent rate would put Washington on par with states like South Carolina, Connecticut and Maine, which tax capital gains at about the same rate.

I rather imagine that Jeff Bezos is going to throw a sh%$-fit over this, because not paying his fair share is something that he thinks is his due.

Also, the idea that it is a camel’s nose under the door regarding an income tax is something that recommends the tax even more.

Soak the rich.  The alternative is to eat the rich, and that is not kosher.

Must Get This Book

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I just read a review of Virtue Hoarders: The Case against the Professional Managerial Class, and the book sounds like a real barn-burner:

Who are the members of the professional managerial class? Neither capitalists nor workers, one strains to define them in purely economic terms. If you have ever dealt with members of the PMC, the first word that comes to mind is annoying. It might be part of a slightly larger summation of annoying and pretentious. But annoying is always going to make the cut because members of the PMC are not just managers by vocation, but also by personality. They love to regulate and micromanage: their subordinates, their children, and even themselves.

Is it due to nature or nature? Occupational hazard or innate insufferableness? No one really knows for sure. What is known is that these are the most annoying people on the planet. People who get positively aroused at the idea of telling you what to do, correcting you, and telling you that they just read an article in The New York Times about just that issue and now have something old to say in a new way. A day without them giving out a did you know factoid is like a day without sunshine. The type of people who can only have an orgasm if they see someone getting a parking ticket.

Catherine Liu lives among these people and seems rather fed up. Her new book Virtue Hoarders: The Case against the Professional Managerial Class makes it crystal clear that she is having a lot of passive-aggressive lunch meetings with other members of the University of California, Irvine faculty.

(emphasis mine)

That line made me laugh.

………

However, Liu focuses on another way the PMC mask their will to power: moral preening. She claims the professional managerial class hoards virtue for itself as part of its war against the working class. Which is to say, Liu recognizes that the PMC and the working class are, in fact, class enemies.

Building on the work of Barbara Ehrenreich, she accepts that the PMC at one time played a positive role in society by challenging the barbarity of earlier iterations of capitalism; specifically when members of the PMC were advocates for creating professional standards in fields like medicine and social research, and were advocating for welfare state economic reforms. But as the post-World War 2 capitalist settlement soured and neoliberalism became ascendant, Liu claims “the PMC preferred to fight culture wars against the classes below while currying favor with the capitalists it once despised.”

This was not a moral awakening, but an awokening. A power play by the PMC to secure their class position within the capitalist system using the lofty language of social justice to defend basic material interest.

I also call them Hillary Clinton voters.

………

The main argument of the book, or so it seems to me, is that the professional managerial class of present is actively working against building socialism in the United States. That the PMC could really be considered the prime obstacle to unifying the working class as they continually divide working people along the rigid lines of identity to serve their own class interests:

[The PMC] prefers obscurantism, balkanization, and management of interest groups to a transformative reimagining of the social order. It wants to play the virtuous social hero, but as a class, it is hopelessly reactionary. The interests of the PMC are now tied more than ever to its corporate overlords than to the struggles of the majority of Americans whose suffering is merely background decor for the PMC’s elite volunteerism. Members of the PMC soften the sharpness of their guilt about collective suffering by stroking their credentials and telling themselves that they are better and more qualified to lead and guide than other people.

Looks like someone just got herself uninvited to an 80s party.

What the review, and probably the book, do not address is how so much of this is driven by what the late Dave Graeber called Bullsh%$ Jobs.

I would argue that much of the dysfunction described in this review is an artifact of what Graeber described as the, “profound psychological violence,” of having a career that one knows on some level has no value.

Once Again Stating the Obvious

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Is anyone surprised to find that philanthropy by the very rich is largely self-serving?

I am not surprised one bit.  This has been the way of the hyper rich since before Crassus had his last drink of molten gold.*

Relying on private philanthropy serves only to increase their power, because the goal of the hyper-rich is not to help, but to reinforce their own position of power:

Philanthropy among the elite class in the United States and the United Kingdom does more to create goodwill for the super-wealthy than to alleviate social ills for the poor, according to a new meta-analysis. 

A group of U.K. researchers reviewed 263 journal articles, books and studies on elite philanthropy to better understand the role it plays in this new age of inequality. In the United States, the wealth gap between richest and poorer families has more than doubled since the 1980s, and in the United Kingdom, the incomes of the richest fifth are 12 times as much as the incomes of the poorest fifth. 

The researchers’ paper, published in a special issue of the International Journal of Management Reviews, lays out how on the whole, the elite class mainly donates to causes that provide themselves with some type of benefit. The researchers defined “elite philanthropy” as “the preserve of wealthy individuals and close family members” who became rich through entrepreneurship, either by starting a new business or expanding an inherited one. These individuals generally have extensive local, national and international business networks, the researchers said, and occupy positions with the “field of power,” a social space at the top of society that allows them to impact policy and practice.

………

Many people mistakenly view elite philanthropy as a benign force for good rather than an avenue for the super-wealthy to translate economic capital into social and cultural capital, according to the researchers. Elite philanthropy, the study argues, is transactional, as there are also material benefits in addition to the cultural capital. In 2017, the United States increased the proportion of income that can be deducted from 50% to 60%, which directly benefits the elite; and in the United Kingdom, efforts to reduce philanthropic tax relief fell through in 2012 after pushback from wealthy philanthropists.

In study after study, the rich are shown to be relatively less generous, and more inclined to engage in antisocial and immoral behavior.  Why should their so-called “charity” be any different?

*Yes, I know, Marcus Licinius Crassus actually died in battle, and not as a result of having molten gold poured down his throat. It’s a metaphor.

Not Enough Bullets

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Did you know that if the minimum rose as fast as Wall Street bonuses, it would be $44 an hour now?

I don’t know about you, but it makes me want to find a way claw to it all back, because, to quote Billie Ray Valentine, “Billy Ray Valentine principle, “The best way you hurt rich people is by turning them into poor people.” 

The chaos that the coronavirus pandemic unleashed on America’s economy turned out to be a major boon for Wall Street traders, according to new data from the New York state comptroller’s office.

Wall Street firms paid their New York City-based traders an average bonus of $184,000 last year, a 10% increase from 2019, New York’s comptroller, Thomas DiNapoli, said in a press release Friday.

But those paydays have been skyrocketing for decades. Since 1985, Wall Street traders’ bonuses have grown 1,217% — and that’s just part of their overall pay, which was more than $406,000 on average in 2019, according to data from DiNapoli’s office.

By comparison, the federal minimum wage has flatlined at $7.25 an hour — or $15,080 annually — for 12 consecutive years. When adjusted for inflation, it has actually decreased by 11% since 1985.

If the minimum wage had instead grown at the same rate as Wall Street bonuses, it would be $44.12 an hour today.

We really need to levy a tax on financial transactions, and place a limit on fees for tax advantaged accounts (IRAs, 401(K)s, etc) of less than 10 basis points.  (.1%)

These parasites have been doing nothing but extracting wealth from the rest of us for decades.

Politics Tweet of the Day

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A 15 dollar min wage won 60% of vote in Florida in 2020. A political reporter thinking this some kind of risky vote is equivalent of doctor recommending you balance your humors. https://t.co/eqtuFPX6ib

— Alex Hazanov. (@alexhazanov) February 26, 2021

It really is remarkable just how dedicated the socalled “moderates” in the Democratic Party establishment (There is no Democratic Party establishment) are to opposing policies that would get them massive support.

Some Chart Pr0n that Explains Why So the Voters are Pissed Off

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This table shows it all. (click on the picture for a larger popup)

Basically, it shows that the wealthy and powerful have become even more wealthy and powerful by stealing from the rest of us.

Even if people don’t know the actual numbers, they know that our society has descended into a morass of, “Crony capitalism, pay-to-play politics, [and] special interests,” that have further enriched the rich and their pet politicians.

It’s why populism on both sides of the political has been so popular lately.

Mme. la Guillotine is looking increasingly attractive to a lot of people for this reason.

H/t naked capitalism.

What is Wrong with the Clinton Wing of the Democratic Party Succinctly Stated

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I am not at all surprised that it is a Brit who notes that aggressive identity politics has pushed economic justice out of the political spotlight.

I would argue that some political factions, most notably the Clinton political machine, have done so deliberately, because it allows them to check the “right” boxes while still aligning themselves with what Theodore Roosevelt called the “Malefactors of Wealth”.

People like Wal-Mart (Hillary was a member of its board for years) and Goldman Sachs (Hillary’s speeches, and they funded her son-in-law’s hedge fund) are Hillary’s peeps, because they all agree that focusing on identity politics, as opposed to the the increasingly ferocious war on the average American worker or the financialization of our economy, is a good thing:

The rise of identity politics means that the personal is commonly understood to be political. Being a radical today relates as much to who you are as to what you think. Class struggle, at one time the raison d’être of the socialist movement, has been usurped on the left by the personal grievances of women, gays and ethnic minorities.

 Identity politics was an understandable response to some of the injustices of the twentieth century. Despite the loftiness of much left-wing rhetoric, sexism, racism and homophobia have never successfully been eliminated from socialist politics for the simple reason that these movements reflect the societies in which they were conceived. It was often made apparent to women in particular that the priorities for leftists lay strictly within the class framework.

 It would be wrong to imply that today this dynamic has been turned on its head. One can still find sexism, racism and homophobia on the left as easily as one can find it in wider society. In an article for Slate about the US Democratic primaries, Michelle Goldberg wrote in late 2015 about a cultural phenomenon of so-called ‘Bernie Bros’ – male supporters of US presidential candidate Bernie Sanders who ‘seem to believe that their class politics exempt them from taking sexism seriously’.

 ………

 Ultimately, though, the left should seek to move beyond identity politics for the simple reason that it is compatible with neo-liberal economics. Identity politics can co-exist with the corporate boss who makes more money in a week than his cleaner takes home in a year – as long as the chances of being the boss are assigned proportionally among different ethnic groups, sexualities and genders. Individual winners and losers remain as remote from each other as ever; they are simply sorted in direct proportion to their numbers in society. The ultimate aim of identity politics is to ‘tune up’ the elite rather than to abolish it.

 ………

 Class politics must certainly evolve with the times – at the very least it should take account of the legitimate grievances of people who feel marginalised for reasons other than their class. However, liberal identity politics is increasingly a zero-sum game in which white men must invariably lose out so that women, ethnic minorities and LGBT individuals can prosper. With no account for the impact of class, this will simply give rise to another injustice, or at the very least, compound an existing one.

(emphasis mine)

I think that the author, James Bloodworth, undersells the deliberate nature of this transformation.

When one looks at the professional class, doctors, lawyers, and (most significantly) college professors, the top 2-5%, this focus on identity politics benefits them.

While they have not benefited to the degree of the top 1% of 1%, they have benefited, and now it’s easier to for them to find inexpensive domestic help.

Not Enough Bullets

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The pay of hedge fund managers, who have underperformed the market forever, and lost money last year, is simply obscene:

The world’s top 25 hedge fund managers earned $13bn last year – more than the entire economies of Namibia, the Bahamas or Nicaragua.

Kenneth Griffin, founder and chief executive of Citadel, and James Simons, founder and chairman of Renaissance Technologies, shared the top spot, taking home $1.7bn each – equivalent to the annual salaries of 112,000 people taking home the US federal minimum wage of $15,080.

The earnings of the best-performing hedge fund managers, published by Institutional Investor’s Alpha magazine on Tuesday, dwarfs the pay of top Wall Street executives who have been under fire for their multimillion-dollar pay deals. The best paid banker last year was JPMorgan Chase CEO Jamie Dimon, who collected $27m.

The huge pay at the top comes despite a tumultuous year on Wall Street that has led many well-known hedge funds to lose billions of dollars and others to close down. Daniel Loeb, CEO of Third Point, a hedge fund that manages $17.5bn, has described market conditions as a “hedge fund killing field”.

The, “Heads I win, tails you lose,” system of remuneration in Wall Street is wrong, and creates a lot of evil in our society.

Not Enough Bullets

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A Russian Oligarch just spent $1 Billion on his son’s wedding:

Russian energy tycoon Mikhail Gutseriev’s son Said married his girlfriend Khadija Uzhakhovs during the weekend in a lavish ceremony that reportedly cost $1bn (£700m). The wedding, at Moscow’s upscale Safisa restaurant, was attended by around 600 guests and saw Sting, Jennifer Lopez and Enrique Iglesias among others perform.

The bride reportedly wore a $374,000 gown, which was bedecked with precious stones, imported from Paris and weighed in at 25kg. Her pricey wedding gown was matched with a handbag, diamond tiara and pendant.

Gutseriev, who was ranked the 38th richest person in Russia by Forbes in 2015, flew in the who’s who of the music world to perform at his son’s wedding. Gutseriev is estimated to be worth $6.2bn, and his assets include oil company Russneft besides K Neftisa, OAO Russian Coal and others.

This is simply obscene.

Stupid IP Tricks

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European tax authorities going after Starbucks for “Recipe” payments in order to artificially lower its tax payments in Europe:

If there are two edicts I try to follow whenever I’m writing, they are, first, write what is true and, second, avoid cliche at all costs. I bring that up only as a preface before saying the following: the UK is walking down an Orwellian path. It’s nearly the cliche of cliches to say something like this, and yet it happens that the cliche is true. While there is most certainly a real thing known as a threat from Islamic terrorism, there is also such a thing as overreaction. What started as the British government’s attempt to ban extremist thought from social media and television (under the notion that some thoughts are too dangerous to enjoy the freedom that other thoughts deserve) then devolved into the conscripting of teachers that were to be on the lookout for children that might become radicalized. To assist them with this, the government helpfully provided spy-software to use against students. Spy-software which itself was found to be exploitable in the most laughably easy of ways. This employed two of the most horrifying aspects of Orwell’s Oceania: the concept of thought-crime and the employ of citizens to fearfully surveil one another.

 And now it seems the UK is going even further, adopting Oceania’s reputation for the swallowing up of citizens should they be found suspect of thought-crime by those watchful citizens. Specifically, the Family Division of the Judiciary has put out a memo declaring exactly how it will remove children from the homes of anyone it suspects might radicalize those children. Here’s a snippet.

 Recent months have seen increasing numbers of children cases coming before the Family Division and the Family Court where there are allegations or suspicions: that children, with their parents or on their own, are planning or attempting or being groomed with a view to travel to parts of Syria controlled by the so-called Islamic State; that children have been or are at risk of being radicalised; or that children have been or at are at risk of being involved in terrorist activities either in this country or abroad.

 Only a local authority can start care proceedings (see section 31(1) of the Children Act 1989 – the police powers are set out in section 46). However, any person with a proper interest in the welfare of a child can start proceedings under the inherent jurisdiction or apply to make a child a ward of court.2 Usually, in cases falling within the description in paragraph 1 above, it will be the local authority which starts proceedings under the inherent jurisdiction or applies to make a child a ward of court, and the court would not expect the police (who have other priorities and responsibilities) to do so. There is, however, no reason why in a case where it seems to the police to be necessary to do so, the police should not start such proceedings for the purposes, for example, of making a child a ward of court, obtaining an injunction to prevent the child travelling abroad, obtaining a passport order, or obtaining a Tipstaff location or collection order. Given the complexities of these cases, I have decided that, for the time being at least, all cases falling within the description in paragraph 1 above are to be heard by High Court Judges of the Family Division.

In other words, the High Court Judges within the Family Division are now tasked with determining whether children will be made wards of the state based solely on suspicions of possible radicalization. Children torn from mothers and fathers in Muslim homes will be subject to the whims and inherently flawed watch of the larger citizenry. A citizenry, mind you, that has had its vigilance unduly ramped up by the government’s past actions and requests. It’s hard to imagine a better recipe for the unfair targeting of Muslim families than this. Unfortunately for all concerned, this same memo imagined just such a recipe, making things even worse.

………

 Tax avoidance [Note: Tax avoidance uses legal, though frequently unethical, techniques to lower the tax burden. Tax evasion is a crime.] is a sore point in the United States, where the largest companies, including Apple, Amazon and many others, routinely try to minimize their bills. In Europe, the cases have hit a raw nerve in countries where citizens have been squeezed by years of austerity, and stoked friction among member states that are jockeying with one another for jobs and investment.

 ………

 After asking Dutch tax authorities and Starbucks to provide details of their tax deals last year, the commission determined the company’s tax setup with the Netherlands had no realistic economic justification. The case zeroed in on Alki, the British-based entity at the center of Starbucks’ efforts to reduce its Dutch and European tax bills.

 In 2001, Starbucks installed its European corporate headquarters and a massive new coffee roasting plant in Amsterdam after conferring with Dutch tax authorities. The setup proved beneficial: Starbucks created several Dutch partnerships that were not subject to the country’s corporate tax, including one named Emerald City, a nickname for Seattle.

 Emerald City owned Alki, which was set up in London to house Starbucks’ intellectual property. The intellectual property included logos and the recipe for roasting coffee beans, which Starbucks subsidiaries pay Alki a royalty to license. Because of its structure, Alki was not subject to corporate tax in the Netherlands or Britain.

 ………

 The recipe was basically the temperature for roasting beans, and appeared to be more like instructions than intellectual property. Yet counting it as such allowed Starbucks’ roasting unit to reallocate most of its profit to Alki in the form of royalties, the commission said, nearly wiping out the Dutch tax bill. No other Starbucks companies or roasters paid royalties for the same information, the commission said.

Crap like this happens, because we as a society have made a conscious decision to encourage rent of this sort behavior.

IP protections are there to incentivize creativity, and when we extend those incentives far beyond what is necessary for this, we create a cesspool of corruption and self-dealing.

It also one of the things that contributes to a less equal society, because the unearned proceeds create resources to lobby for even more rentier behavior.

Today’s Lesson from Sesame Street

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Silly poor kids, educational TV is for rich kids:

For more than four decades, the television show Sesame Street has existed to teach children lessons. Today’s lesson is that people without disposable household income are in an inferior position and should be happy to receive secondhand goods.

The original purpose of Sesame Street was to provide uplifting educational programming to the widest possible audience of young children. Yesterday, the Sesame Workshop, the nonprofit that produces the program, announced that for the next five years, new episodes will not run on the nonprofit, over-the-air Public Broadcasting Service, but will be distributed through HBO, a premium cable channel owned by the for-profit Time Warner media megacorporation.

In the press release, Sesame Workshop CEO Jeffrey Dunn described the arrangement as “a true winning public-private partnership model.” What does this winning model entail? It entails removing public goods and services from the commons, to repackage them as luxury products for affluent consumers.

………

Now Sesame Street will be restricted to a network that reaches less than one-third of American households. According to the announcement, with the money it gets from HBO, Sesame Street “will be able to produce almost twice as much new content as previous seasons.” And poor kids won’t be able to see any of it. 

………

Or, more precisely, they will be able to see it after the expiration of a nine-month HBO window of exclusivity—at which point the no-longer-new episodes will be passed on to PBS, while the children whose parents can afford to pay for premium cable are watching new-new episodes. The old Sesame Street block has been gentrified, so that HBO can build a sleek high-rise with a separate poor door. 

We have become an ugly society.

Today’s Episode of Not Surprised at All: CEO Pay Edition

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It turns out that there is No relationship whatsoever between a CEO pay and performance:

With all the public chatter about exorbitant executive compensation and income inequality, it’s useful to look at the relationship between chief executive officer pay and corporate performance. Typically, when the subject of their big pay packages arises, CEOs—usually through their spokespeople—say they are paid for performance. Does data back that up?

An analysis of compensation data publicly released by Equilar shows little correlation between CEO pay and company performance. Equilar ranked the salaries of 200 highly paid CEOs. When compared to metrics such as revenue, profitability, and stock return, the scattering of data looks pretty random, as though performance doesn’t matter. The comparison makes it look as if there is zero relationship between pay and performance.

Actually, it’s on the order of 1%, and certainly not worth it. (Click on the image for a better view of the trend line)

The cult of the overpaid CEO has no basis in reality.

It’s  all a game where one hand washes the other.

Hoocoodanode?

Nothing is the Matter With Kansas

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Thomas Frank in his book, What’s the Matter with Kansas? he is flummoxed about why the so-called American heartland vote against their economic interests when they vote “God, Guns, and Gays” social issues.

Well, over at MoJo, Kevin Drum notes that any serious analysis, “Democrats have done virtually nothing for the middle class in 30 years.”

He’s right.  The  Democrat Party’s record on economic for the middle class, and the poor is amazingly weak tea when compared to anyone but the Republicans:

There are two problems with the Democratic approach. First, it’s too abstract to appeal to anyone. Second, it’s not true anyway. Democrats simply don’t consistently support concrete policies that help the broad working and middle classes. Half of them voted for the bankruptcy bill of 2005. They’ve done virtually nothing to stem the growth of monopolies and next to nothing to improve consumer protection in visible ways. They don’t do anything for labor. They’re soft on protecting Social Security. They bailed out the banks but refused to bail out underwater homeowners. Hell, they can’t even agree to kill the carried interest loophole, a populist favorite if ever there was one.

Sure, Democrats do plenty for the poor. They support increases in the EITC and the minimum wage. They support Medicaid expansion. They passed Obamacare. They support pre-K for vulnerable populations. They expanded CHIP. But virtually none of this really benefits the working or middle classes except at the margins.

Democrats have been unwilling to do any more than nibble around the edges for years.

It’s all about extracting large donations from rich people, which requires that you support policies that make them richer and richer, and this money is extracted from the rest of us.

Occupy Wall Street Might Have Actually Won

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And the evidence comes from that Mecca of Capitalism, Davos, Switzerland:

Agree or disagree with the aims and means of Occupy Wall Street, but the movement changed the way we think about our world forever.

 For proof, look no further than the upcoming World Economic Forum in Davos. Each year, the organization puts out a report indicating what it believes are the world’s biggest risks.

 For the past three years, income inequality has been the #1 global risk.

 But prior to 2012, inequality wasn’t even on the list. Those protests in 2011 clearly had a profound on global thinking, right up tot he elite level.

The corrupt capitalists at Davos appear to have learned fear.

Good.

On Tax Day, Read Joseph Stiglitz

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He makes the obvious point that the tax code since the Reagan tax cuts has skewed increasingly toward the richest people in our society:

………

Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.

About 6 in 10 of us believe that the tax system is unfair — and they’re right: put simply, the very rich don’t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes — far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners — almost a third — paid less than 15 percent of their income in taxes.

Conservatives like to point out that the richest Americans’ tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive — that is, a system that taxes the affluent at higher rates than those of modest means. It’s also true that as the wealthiest Americans’ incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.

What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan “revolution” of the 1980s.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 — about the same as the share of income they took home, an outcome that is not progressive at all.

With such low effective tax rates — and, importantly, the low tax rate of 20 percent on income from capital gains — it’s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation’s wealth, and the picture becomes even more disturbing.

LEONA HELMSLEY, the hotel chain executive who was convicted of federal tax evasion in 1989, was notorious for, among other things, reportedly having said that “only the little people pay taxes.”

As a statement of principle, the quotation may well have earned Mrs. Helmsley, who died in 2007, the title Queen of Mean. But as a prediction about the fairness of American tax policy, Mrs. Helmsley’s remark might actually have been prescient.

Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.

About 6 in 10 of us believe that the tax system is unfair — and they’re right: put simply, the very rich don’t pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes — far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners — almost a third — paid less than 15 percent of their income in taxes.

Conservatives like to point out that the richest Americans’ tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive — that is, a system that taxes the affluent at higher rates than those of modest means. It’s also true that as the wealthiest Americans’ incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.

What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan “revolution” of the 1980s.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 — about the same as the share of income they took home, an outcome that is not progressive at all.

With such low effective tax rates — and, importantly, the low tax rate of 20 percent on income from capital gains — it’s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation’s wealth, and the picture becomes even more disturbing.

He also notes that the increasingly unfair tax will hamstring voluntary compliance, which is at the core of our tax system.

If Republicans want to call this belief socialism, then we need a f%$#load more socialism.