| THIS WEEK |
Last year’s Inflation Reduction Act remains a massive deal. By providing new opportunities for federal contractors to snag lucrative contracts, explained our co-editor Sarah Anderson in today’s “Public Money for the Public Good” webinar, the legislation also invites the Biden administration to incentivize fairer wages.
The 2022 bill also took a giant step to finally hold wealthy tax cheats accountable — it set aside $80 billion over 10 years to help the IRS beef up the staff the agency needs to decode the intentionally opaque and voluminous returns of our nation’s super-rich.
But now Republicans in Congress are working to claw back much of that support for tougher audits of high-income returns, falsely claiming that the IRS would use the new dollars to hire 87,000 new agents who’d go after everyday taxpayers. The reality: Our current inadequate tax enforcement is letting our richest 1 percent avoid paying $160 billion a year in taxes due.
GOP lawmakers are also openly plotting to slash Medicare and Social Security benefits and raise the retirement age, all in the name of lowering the national debt. Meanwhile, the 2017 Trump-era tax cuts that have enabled our 400 wealthiest taxpayers to pay taxes at historically low levels remain in place.
In this week’s issue, much more on the tax challenges we all face — and how we can meet them.
Chuck Collins and Rebekah Entralgo,
for the Institute for Policy Studies Inequality.org team |
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| INEQUALITY BY THE NUMBERS |
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| FACES ON THE FRONTLINES |
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| Social Security: Our Sacred Contract With Workers |
With their new majority in the House of Representatives, Republicans are eyeing cuts to Social Security and Medicare to address the U.S. debt limit. Says GOP Rep. Kevin Hern of Oklahoma: “We have no choice but to make hard decisions.”
But those “hard decisions” will have a profound impact not on politicians like Rep. Hern, but on everyday working people like Mike Budd, a Marine Corps veteran and member of United Steelworkers Local 12775. Budd credits Social Security with enabling his grandmother, a former bank teller, to maintain her independence and high quality of life for decades.
“No millionaires deployed with me,” says Budd, only “a lot of working-class people” who loved their country and believed in the American dream. That American dream has Budd and other union members speaking up in support of keeping Social Security intact. United Steelworkers President Tom Conway has more.
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| WORDS OF WISDOM |
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PETULANT PLUTOCRAT
OF THE WEEK |
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| An Exec So Sorry He Simply Has To Lay You Off |
| Ten days ago, Google/Alphabet CEO Sundar Pichai emailed his workforce some “difficult news.” Google, Pichai announced, would be laying off 12,000 workers, a move that left him “deeply sorry.” Last Monday, in a company-wide town hall, the CEO explained that Google had increased hires last year, mistakenly assuming Google’s strong 2021 would continue. But if that explains the layoffs, workers at the town hall wondered, why had 15-year employees lost their jobs? Pichai, in response, had his “chief talent” exec note “we all know that no one is immune to change in our careers.” And anyway, Pichai added, he would be suffering too, via bonus cuts. But Pichai’s big bucks come via stock awards, not annual bonuses. Last month the CEO pocketed a new three-year stock “incentive” deal worth $210 million if Google shares do as well as the shares of the S&P 100’s top 45 companies. And how much, a Fortune reporter asked, will Pichai actually lose in bonus? Google, reports Fortune, had no comment. |
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| BOLD SOLUTIONS |
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| Support IRS Funding — and Battle Disinformation |
The New York Times recently published a bombshell investigation detailing how nonprofit hospitals put profits over patients. These hospitals, the report notes, enjoy lucrative tax exemptions in exchange for providing free care for the poor. But many of these hospitals, straying far from their charitable mission, are dropping big bills on low-income patients while still pocketing the tax breaks.
Providence, one of the largest nonprofit hospital chains, is now dodging more than $1 billion a year in taxes, just one of many reasons why better funding for the Internal Revenue Service has become so necessary. Last year, the Inflation Reduction Act delivered on this necessary funding, but now those added dollars have come under fierce attack. Join Americans for Tax Fairness and Prosperity Now tomorrow, January 31, for a day of action in support of funding the IRS and fighting disinformation. |
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| GREED AT A GLANCE |
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| TOO MUCH |
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| Amid Deep Inequality, the Thieving Always Thrive |
| What makes for a larcenous culture? An overabundance of pickpockets? Tsunamis of burglary and shoplifting? To really gauge a society’s larcenous leanings, many of us would posit, we need to look beyond the nimble-fingered and focus more on the smooth-talkers, the power-suited flimflammers like crypto king Sam Bankman-Fried who thrive in any society where significant numbers of people feel a driving need to get rich quick. But our thieving culture rests on more than the outright larceny of our indicted corporate crooks. Our most accomplished corporate thieves, in fact, never fear indictment. They steal in broad daylight. Inequality.org’s Sam Pizzigati has more. |
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| MUST READS |
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What's on Inequality.org
Kalena Thomhave, Whither the Wealth Squad? As U.S. billionaires get ever richer, their wealth defense tactics proliferate and audit rates decline. Funding the IRS wealth squad would help ensure the nation's richest pay their fair share of taxes.
Inequality.org staff, Inequality and Health. We have lawmakers advocating to raise the retirement age for Social Security benefits at the same time life expectancies of low-income Americans — those who depend most on Social Security — have fallen significantly.
Elsewhere on the Web
Martin Sandbu, Norway’s exodus of billionaires, Public News Time. Some billionaires are exiting Norway, home to a new and improved wealth tax. Does this exodus mean wealth taxes don't work? Hardly.
Rana Foroohar, Luxury boom shows the staying power of the ultra-rich, Financial Times. The notion of the rich as workaholics, says the CEO of the Luxury Institute, amounts to a myth. Ultras, he estimates, regularly work about six hours a day.
Julie Zauzmer Weil, Billionaires in blue states face coordinated wealth-tax bills, Washington Post. In lieu of a federal wealth tax, lawmakers in seven states are moving to raise taxes on billionaires where they live.
Nesrine Malik, Look at how the 1% are doing right now, and tell me the system isn’t rigged, Guardian. We are all witnessing a bonanza of plunder with no sheriff in town.
David Sirota, How Billionaires Shape The News They Own, The Lever. Citizen Bezos’ latest visit to the Washington Post newsroom explains why independent media is so necessary.
Nadia Daar and Nabil Ahmed, Checking in with Joseph Stiglitz on the state of inequality, Oxfam. Most of our wealthiest, notes the Nobel Prize-winning economist, have collected at least a fraction of their wealth out of sheer exploitation.
Tracy Alloway, A New Fed Working Paper Argues That Higher Interest Rates Are Actually Increasing the Wealth Gap, Bloomberg. Making mortgages more expensive cuts off a big avenue for building wealth.
Freddie deBoer, Why is Everyone Suddenly Obsessed with ‘Generational Wealth’? FdB. People who have never wanted for anything find themselves in some sense spiritually deprived.
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| A FINAL FIGURE |
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| BE THE 1% (NO, NOT THAT 1%) |
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Our goal for 2023: that 1% of our Inequality.org subscribers become monthly sustainers and help grow our newsletter and research efforts. Be the 1%, for as little as $3 a month! |
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