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How the Rich Get Richer

Seeing Trump tax returns is just first step

By Charlotte Rampell/ Washington Post/ October 8, 2018

 

Everyone is shocked, shocked to learn that President Trump amassed his fortune not by the sweat of his brow, but rather the old-fashioned way: choosing the right parents and dodging the Internal Revenue Service. That’s certainly the lesson of The New York Times expose this week reporting that Trump received more than $400 million in today’s dollars from his father’s business empire, some of it through what the Times characterized as criminal tax fraud.

What to do with this information? Beyond all the Trump-specific takeaways — such as, duh, we need to see his tax returns — two much broader policy conclusions shouldn’t get lost here: 1. We need to adequately fund the IRS.

2. What’s scandalous here isn’t just what’s illegal. It’s also what is legal.

If you’re wondering how Trump was able to duck the tax authorities for so long, given the brazen acts documented by the Times, note that we have basically stopped prosecuting tax crimes and other white-collar offenses.

taxes

There are lots of reasons tax cheats are sleeping easier than they used to. One is that Congress has repeatedly stripped the IRS of money and staff, though the IRS brings in much more money than it spends.

Consequently, audit rates have plummeted, especially for corporations and the ultrawealthy. Since fiscal 2011, the audit rate for big corporations (those with at least $10 million in assets) has fallen by half; for households making at least $1 million in income, it’s down by two-thirds.

To some extent, corporations and the rich have always managed to outgun the IRS — including during the 1990s, when the Trump family engaged in its dodgiest tax dodging. But these days, the agency is bringing a knife to a bazooka fight. Which brings me to the second issue.

There’s a bunch of stuff the Trumps reportedly did that may not be illegal, but should be. When itcomes to taxes — like lots of other policy arenas,such as campaign finance— we need to work harder not only to enforce the laws on the books, but also to make those laws fairer, clearer and less susceptible to exploitation.

Real estate, in particular, has lots and lots of loopholes and other opportunities for (legal) tax avoidance. Relative to other taxpayers, for instance, real estate investors can more easily use losses to reduce or completely wipe out future tax bills — something Trump is also believed to have done, based on a leaked 1995 return declaring a $916 million loss.

There have been periodic attempts to plug real-estatespecific tax loopholes. In fact, Trump personally testified before Congress in 1991 about his disgust for the removal of tax shelters for real estate, complaining that tax shelter is “a very bad-sounding word, even though it isn’t necessarily a bad thing.”

The Times reported that the Trumps used (and likely abused) an estate-planning technique known as a “grantorretained annuity trust” to help them duck hundreds of millions of dollars in gift taxes during the 1990s. This is, in fact, a tool that many rich people employ to pass on more wealth to their heirs tax-free, costing Uncle Sam tons of money for no justifiable economic reason. The Barack Obama administration issued regulations to curb this popular tax-dodging tool. But almost a year ago, the Trump administration quietly withdrew those regulations.

And, of course, two months later, Trump signed an enormous tax overhaul that will save dynastic families such as his even more money by cutting income tax rates, doubling the exemption for the estate tax and, at the last minute, even adding a special new tax break for (you guessed it!) real estate investors.

Ours is a tax code that largely operates on the honor system. If high-profile people don’t behave honorably — by cheating, by axing the cops who could catch the cheating and by rigging the tax code further in their favor so that cheating becomes a little less necessary — that entire honor system will deteriorate. No one, not even Leona Helmsley’s “little people,” wants to be the only sucker left still paying their tax bills honestly.

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Trump, The Koch Brothers and Their War on Climate Science

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Who Can Blame Them?

WASHINGTON (The Borowitz Report)—In the latest controversy to envelop the Supreme Court nominee, criminals across the United States are demanding that their cases receive the kind of F.B.I. investigation that Brett Kavanaugh just got.

From coast to coast, perpetrators of crimes ranging from arson to bank robbery are arguing that, if the F.B.I. investigates them at all, such investigations should be extremely limited in scope.

Harland Dorrinson, a criminal lawyer in Cleveland, said that his clients have followed the Kavanaugh probe “with great interest” and see it as “tailor-made” for the crimes for which they stand accused.

“My clients are asking that the F.B.I. investigate them for no more than five days and only talk to the witnesses I designate,” Dorrinson said. “We think this could be a huge time saver for everybody.”

One of his clients, Denton Faldo, currently faces twenty criminal counts of cooking and selling meth, but wants the F.B.I. to investigate only an unrelated speeding violation.

“It’s important that the F.B.I. wrap up this investigation by Friday and release me from jail in time for the weekend,” Faldo said. “A man’s life is in tatters.”

  • Andy Borowitz is the New York Times best-selling author of “The 50 Funniest American Writers,” and a comedian who has written for The New Yorker since 1998. He writes the Borowitz Report, a satirical column on the news, for newyorker.com

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Speaking Truth to Power

 

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The Slaves Rebel

By Chris Hedges/ Truthdig/ September 3, 2018

slave

Cartoon by Mr. Fish

The only way to end slavery is to stop being a slave. Hundreds of men and women in prisons in some 17 states are refusing to carry out prison labor, conducting hunger strikes or boycotting for-profit commissaries in an effort to abolish the last redoubt of legalized slavery in America. The strikers are demanding to be paid the minimum wage, the right to vote, decent living conditions, educational and vocational training and an end to the death penalty and life imprisonment.

These men and women know that the courts will not help them. They know the politicians, bought by the corporations that make billions in profits from the prison system, will not help them. And they know that the mainstream press, unwilling to offend major advertisers, will ignore them.

But they also know that no prison can function without the forced labor of many among America’s 2.3 million prisoners. Prisoners do nearly all the jobs in the prisons, including laundry, maintenance, cleaning and food preparation. Some prisoners earn as little as a dollar for a full day of work; in states such as Alabama, Arkansas, Georgia, South Carolina and Texas, the figure drops to zero.

Corporations, at the same time, exploit a million prisoners who work in prison sweatshops where they staff call centers or make office furniture, shoes or clothing or who run slaughterhouses or fish farms.

If prisoners earned the minimum wage set by federal, state or local laws, the costs of the world’s largest prison system would be unsustainable. The prison population would have to be dramatically reduced. Work stoppages are the only prison reform method that has any chance of success. Demonstrations of public support, especially near prisons where strikes are underway, along with supporting the prisoners who have formed Jailhouse Lawyers Speak, which began the nationwide protest, are vital. Prison authorities seek to mute the voices of these incarcerated protesters. They seek to hide the horrific conditions inside prisons from public view. We must amplify these voices and build a popular movement to end mass incarceration.

The strike began Aug. 21, the 47th anniversary of the 1971 killing of the Black Panther prison writer and organizer George Jackson in California’s San Quentin. It will end Sept. 9, the 47th anniversary of the 1971 Attica prison uprising. It is an immensely courageous act of civil disobedience. Prison authorities have innumerable ways to exact retribution, including placing strikers in solitary confinement and severing communication with the outside world. They can take away the few privileges and freedoms, including the limited freedom of movement, yard time, phone privileges and educational programs, that prisoners have. This makes the defiance all the more heroic. These men and women cannot go elsewhere. They cannot remain anonymous. Retribution is certain. Yet they have risen up anyway.

In addition to making demands about wages, the prisoners are calling for an end to the endemic violence that plagues many prisons. During a riot in April at Lee Correctional Institution, a maximum-security prison in South Carolina, seven prisoners were killed and 17 were injured as prison guards waited four hours to intervene.

Prisons in America are a huge and lucrative business. The private prison contractors Corrections Corporation of America and The GEO Group have annual revenues of $1.6 billion and more than $2 billion, respectively. They spent a combined $8.7 million on lobbying from 2010 through 2015, according to OpenSecrets.org. Global Tel Link, which runs the privatized phone services in many prisons, is valued at $1.2 billion. The food service corporation Aramark, a $8.65 billion company, has contracts in 500 prisons across the country although it has been accused of serving contaminated and spoiled food that has led to food poisoning. The money transfer corporation JPay Inc. is a subsidiary of the telecommunications firm Securus Technologies, which is owned by the private equity firm Abry Partners. JPay made $53 million in 2014 on transfers of $525 million, through an average charge of 10 percent to those sending money to prisoners. Corizon Health has a contract to provide health care to more than 300,000 prisoners nationwide. It earns about $1.4 billion a year. And there are many other corporations with equally large revenues and profit margins within the prisons.

Private corporations exploit prison labor in at least 40 states. In some cases these workers are paid next to nothing. They have no benefits, including Social Security participation, and cannot form unions or organize. They are not paid for sick days. And if they complain or are seen as troublesome they are placed in solitary confinement, often for months.

Some of the country’s biggest corporations have moved into prisons to take advantage of this bonded labor force. They include Abbott Laboratories, AT&T, AutoZone, Bank of America, Bayer, Berkshire Hathaway, Cargill, Caterpillar, Chevron, the former Chrysler Group, Costco Wholesale, John Deere, Eddie Bauer, Eli Lilly, ExxonMobil, Fruit of the Loom, GEICO, GlaxoSmithKline, Glaxo Wellcome, Hoffmann-La Roche, International Paper, JanSport, Johnson & Johnson, Kmart, Koch Industries, Mary Kay, McDonald’s, Merck, Microsoft, Motorola, Nintendo, Pfizer, Procter & Gamble, Quaker Oats, Sarah Lee, Sears, Shell, Sprint, Starbucks, State Farm Insurance, United Airlines, UPS, Verizon, Victoria’s Secret, Walmart and Wendy’s.

Fyodor Dostoevsky wrote that “the degree of civilization in a society can be judged by entering its prisons.” Prisons expose how far a state will go to exploit and abuse its most vulnerable. Life in the American prison system is a window into the corporate tyranny that will be inflicted on all of us once we are stripped of the power to resist. The poorest families in the country are forced to pay an array of predatory fees to sustain incarcerated relatives. This is especially cruel to those children whose only contact with an incarcerated parent is through phone service that costs four or five times what it does on the outside. Prison life is one of daily humiliation and abuse. It entails beatings, torture, rape—especially for female prisoners who are preyed upon by prison staff—prolonged isolation, rancid food, inadequate heating and ventilation, substandard or nonexistent health care and being locked in a cage for days at a time, especially in supermax prisons.

Slavery within the prison system is permitted by the 13th Amendment of the U.S. Constitution, passed in 1865 at the end of the Civil War

to create a new form of slave labor. It reads: “Neither slavery nor involuntary servitude, except as punishment for crime whereof the party shall have been duly convicted, shall exist within the United States. …” Plantations in the South and industries such as Florida’s vast turpentine farm operations, which survived into the early 20th century, used the 13th Amendment to force black convicts to do the same uncompensated work that many had done as slaves.

“Imprisoned in stockades or cells, chained together at night or held under armed guards on horseback, the turpentine farms were bleak outposts miles from any chance of comfort or contact with the outside world,” Douglas A. Blackmon writes in “Slavery by Another Name,” a description of convict life for tens of thousands of African-Americans that is eerily similar to today’s prison conditions. “Workers were forced to buy their own food and clothes from a camp commissary and charged usurious interest rates on the salary advances used to pay for the goods—typically at least 100 percent.”

 

Prisons

Prisons, which contain mostly poor people of color, over half of whom have never physically harmed anyone, are part of the continuum of slavery, Black Codes, Jim and Jane Crow, convict leasing, lynching and the lethal, indiscriminate force used by police on city streets. Prisons are not primarily about crime. They are about social control. They are about profiting off black and brown bodies, bodies that in blighted, deindustrialized neighborhoods do not produce money for corporations but once locked away generate some $60,000 a year per prisoner for prison contractors, police, parole agencies, corrections officers, phone companies, private prisons, money transfer companies, medical companies, food venders, commissaries and the industries that manufacture body armor, pepper spray and the gruesome array of restraints and implements—four- and five-point restraints, restraint hoods, restraint belts, restraint beds, stun grenades, stun guns, stun belts, spit hoods, body orifice security scanners (BOSS chairs), tethers, and waist and leg chains—that look like a collection amassed by the Marquis de Sade. Prisons are also where we warehouse the poor who are mentally ill. It is estimated that 25 percent of the prison population has severe mental illness. Those with crippling mental disorders are given not therapy but cocktails of powerful psychotropic drugs that turn them into zombies sleeping 20 hours a day.

Once corporations moved manufacturing overseas and denied those in poor communities the possibility of a job that could sustain them and their families, they began to extract billions in profit by putting bodies in cages. Since 1970 our prison population has grown by about 700 percent. We have invested $300 billion in prisons since 1980. The prison-industrial complex mirrors the military-industrial complex. The money is public; the profits are private. Those who enrich themselves off the incarcerated are morally no different from those who enriched themselves from the slave trade.

Prisoners, once released, often after decades, commonly suffer from severe mental and physical trauma and other health problems including diabetes (which is an epidemic in prisons because of the poor diet), hepatitis C, tuberculosis, heart disease and HIV. They do not have money or insurance to get treatment for their illnesses when they are released. They have often become alienated from their families and are homeless. Stripped of the right to public assistance, unable to vote, banned from living in public housing, without skills or education and stigmatized by employers, they become members of the vast criminal caste system. Many are burdened with debts because of monetary charges in the criminal justice structure and a predatory system of prison loans. Over 60 percent end up back in prison within five years. This is by design. The lobbyists for the prison-industrial complex make sure the laws and legislation keep the prisons full and recidivism high. This is good for profit. And it is profit, not justice, that is the primary force behind mass incarceration. This system will end only when those profits are wrested from the hands of our modern slaveholders. The only people who can do that are the slaves and the abolitionists who fight alongside them.

The full list of national demands from “the men and women in federal, immigration, and state prisons” reads:
1. Immediate improvements to the conditions of prisons and prison policies that recognize the humanity of imprisoned men and women.

2. An immediate end to prison slavery. All persons imprisoned in any place of detention under United States jurisdiction must be paid the prevailing wage in their state or territory for their labor.

3. The Prison Litigation Reform Act must be rescinded, allowing imprisoned humans a proper channel to address grievances and violations of their rights.

4. The Truth in Sentencing Act and the Sentencing Reform Act must be rescinded so that imprisoned humans have a possibility of rehabilitation and parole. No human shall be sentenced to death by incarceration or serve any sentence without the possibility of parole.

5. An immediate end to the racial overcharging, over-sentencing, and parole denials of black and brown humans. Black humans shall no longer be denied parole because the victim of the crime was white, which is a particular problem in southern states.

6. An immediate end to racist gang enhancement laws targeting black and brown humans.

7. No imprisoned human shall be denied access to rehabilitation programs at their place of detention because of their label as a violent offender.

8. State prisons must be funded specifically to offer more rehabilitation services. 9. Pell grants must be reinstated in all U.S. states and territories.

10. The voting rights of all confined citizens serving prison sentences, pretrial detainees, and so-called “ex-felons” must be counted. Representation is demanded. All voices count!

Article Link: https://www.truthdig.com/articles/the-slaves-rebel/

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Marx Warned Us

Capitalism Is Beyond Saving, and America Is Living Proof

By Jacob Bacharach/ Truthdig/ August 31, 2018

 

bull

 

Policies that fail in the same way over and over are not failing. Someone is lying about their intent. The drug war didn’t fail to stem the flow of banned narcotics and to stop epidemic abuse and addiction; it succeeded at building a vast carceral and surveillance apparatus targeted at people of color as a successor to Jim Crow.

The war in Iraq didn’t fail to bring democracy to the Middle East; it smashed an intransigent sometimes-ally in the region, and deliberately weakened and destabilized a group of countries whose control of, and access to, immense oil reserves was of strategic American interest.

The “end of welfare as we know it” didn’t fail to instill in the nation’s poor a middle-class sense of responsibility; it entrenched a draconian regime of means-testing and a Kafkaesque bureaucracy for access to even meager social benefits for a rapidly shrinking middle class.

It’s not that “Capitalism isn’t working,” as Noah Smith recently argued in Bloomberg. It’s that it’s working all too well.

Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.

This is not how the economists told us it was supposed to work. Productivity is at record highs; profits are good; the unemployment rate is nearing a meager 4 percent. There are widely reported labor shortages in key industries. Recent tax cuts infused even more cash into corporate coffers. Individually and collectively, these factors are supposed to exert upward pressure on wages. It should be a workers’ market.

But wages remain flat, and companies have used their latest bounty for stock buybacks, a transparent form of market manipulation that was illegal until the Reagan-era SEC began to chip away at the edifice of New Deal market reforms. The power of labor continues to wane; the Supreme Court’s Janus v. AFSCME decision, while ostensibly limited to public sector unions, signaled in certain terms the willingness of the court’s conservative majority—five guys who have never held a real job—to effectively overturn the entire National Labor Relations Act if given the opportunity. The justices, who imagine working at Wendy’s is like getting hired as an associate at Hogan & Hartson after a couple of federal clerkships, reason that every employee can simply negotiate for the best possible deal with every employer.

To those for whom capitalism cannot fail but can only be failed, the answers lie at the margins. Neoliberal doctrine forecloses any hope of large-scale change; present circumstances always prevent future possibilities. Instead, as Smith writes, “there are some simpler, humbler changes that state governments can begin taking right away, without waiting for labor-friendly politicians to take control of the White House and Congress.”

These changes involve banning noncompete agreements, through which companies forbid employees from going to work for competitors, and more assiduously policing industry wage-fixing.

Both would be fine reforms, but neither would have much effect on the labor share of gross domestic product. They are minor symptoms of the capitalist disease. Capitalism isn’t broken; it’s working precisely as it’s supposed to: generating surpluses and giving all of them to a small ownership class. The New Deal and postwar prosperity, which barely lasted until 1980, represent historic outliers—the one significant period in which growth at the top was somewhat constrained and a relatively large share of wealth went to the middle. It was possible only through massive government intervention and redistribution, combined with a powerful labor sector backed by that same federal government. It took the collective power of entire societies to briefly restrain capitalism, which, left to its own devices, will do what it has always done: make the already very rich infinitely richer. Capitalism is “working” just fine.

What we are seeing, I suspect, is an acceleration of a broader social transformation that’s been occurring for some time. Rome, the saying goes, wasn’t built in a day, but neither did it fall in one, either. Changes to societies as large and complex as theirs or ours occur subtly and over years—if not decades. Those workers who do remain in the workforce increasingly depend on work and work alone for all their benefits. The companies for which most people work are like the Roman villas that gradually became central nodes of a manorial society as the imperial metropole retreated through a series of self-inflicted wars and crises of governance.

One moment you’re working for some kind of money wage in a fully monetized economy; the next you’re living in a company town, buying your groceries with scrip, and you can’t leave without your boss’ permission.

In America today, supposedly the most prosperous society ever to exist on earth, nearly a third of families report experiencing economic hardship. Sixty percent—60 percent!—say they could not cover an unexpected expense of $1,000, and nearly 40 percent have less than $500 in savings. People with good insurance get billed $100,000 for having a heart attack. People commute four hours a day because they can’t afford to live in the cities where they work.

The barbarians aren’t at the gates. They’re already here in the boardrooms; they’ve been here all along.

Jacob Bacharach is the author of the novels “The Doorposts of Your House and on Your Gates” and “The Bend of the World.” His most recent book is “A Cool Customer: Joan Didion’s The Year of Magical Thinking.”…
capitalism
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Digging a Hole

Worth a click….

http://www.usdebtclock.org

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Unbalanced

published in Monterey Herald, Letters to the Editor, September 1, 2018

Is it right that Donald Trump’s bizarre tweets are considered news and reported on extensively in the corporate news media, yet are never followed by an opposing (Democratic Party) response? Chuck Schumer doesn’t have a quote? Nancy Pelosi never has an answer? Whatever happened to the concepts of balance, fairness and/or equal time? No wonder Trump’s approval numbers never dip: he controls the message (with the assistance of the news media).

–Arlen Grossman

tweets

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Follow the Money

chart

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