Air Date 10/23/2021
[00:00:00] JAY TOMLINSON - HOST, BEST OF THE LEFT: Welcome to this episode of the award-winning Best of the Left podcast in which we shall take a look at a few of the ways that enormous corporate, personal and family wealth is being hidden around the world, most prominently in the United States. Clips today are from On the Media, Fresh Air, Planet Money, The Brian Lehrer Show, This Is Hell, the Thom Hartmann Program and Pitchfork Economics.
The Big Reveal - On the Media - Air Date 10-8-21
[00:00:26] BROOKE GLADSTONE: Five years ago, we spoke about the last huge global reporting project that you directed: the Panama Papers. This week ICIJ launched the Pandora Papers in partnership with – what, around 150 media partners worldwide? And both of these projects involved an unprecedented collaboration among journalists, and both revealed how massive amounts of money are secretly moved through offshore accounts. So, can you compare this project, Pandora to the Panama Papers?
[00:01:01] GERARD RYLE: Well, the Panama Papers was based on one offshore service provider in Panama called Mossack Fonseca. This is much more global. It actually involves 14 different service providers, so 14 different law firms and multiple jurisdictions around the world. And the names are bigger. 35 current and former world leaders, more than 330 politicians or elected officials and we're being very conservative in the numbers that we are publishing. We're pretty confident that you've always got twice as many politicians in there, that we're coming out with.
[00:01:33] BROOKE GLADSTONE: Well, stick with the Panama Papers for a moment longer. Did it affect legal changes that reflected how shady a lot of these financial dealings were? I mean, were you satisfied that the Panama Papers made a big enough impact?
[00:01:53] GERARD RYLE: Well, the impact was massive. I mean, you had the resignation of three world leaders in the end. I think there were 79 different inquiries in 79 different countries. Afterwards, there were multiple changes to the law. Governments around the world recovered $1.4 billion in taxes.
But what's interesting is that five years later, we're now finding that a lot of those changes that we were promised haven't had any real impact in what is really an artificial construct, this offshore world where people can go and play by different rules. The biggest revelation here is the hypocrisy that we're seeing from these world leaders, but you're also seeing the hypocrisy of the US. The US has acted as a sheriff in the world on this. They've required the Swiss bank accounts to be closed. They've required American citizens to declare all of their offshore holdings. It has pushed other countries to implement new laws to stop this happening. But what we're seeing with the Pandora Papers is that the US itself has become one of the biggest, if not the biggest, tax haven in the world. And in particular places like South Dakota, where bad actors, people that have had misconduct charges against them, sometimes politicians in other countries are now using trusts in South Dakota to hide their money.
[00:03:10] BROOKE GLADSTONE: The ICIJ observed in its story on the Pandora Papers that in the popular imagination, we think of the system as a far-flung cluster of palm-shaded islands. But the offshore money machine operates in every corner of the planet, and the key players involve elite institutions, multinational banks, law firms and accounting practices headquartered in the U.S. and Europe.
You mentioned South Dakota. We have places like Delaware where secrecy in finances seems to be its byword. What sort of banks and law firms and accounting firms are key players in this?
[00:03:52] GERARD RYLE: Every household name that you can think of, every bank on the high street, every major accounting firm that comes to mind is involved in this. We have revealed the secrets of 14 of these offshore law firms, but they are really the small players, there are the middlemen because the clients are coming from London, they're coming from Russia, we're looking at the looting of Africa. I mean, it's really very global. You know, one of the biggest findings here is that the people that could be doing something about this and the countries like the US could be doing something about this or actually benefiting from it. So it probably goes some way to explaining why after five years after the Panama Papers happened, we're really just seeing another level of sophistication. We're not actually seeing any real change.
[00:04:38] BROOKE GLADSTONE: You've said that investigative reporting is all about finding patterns, not about finding something once, but over and over again. You were dealing with nearly 12 million confidential files, hundreds of reporters. How did people know what to look for, what to find, what to share?
[00:04:59] GERARD RYLE: We basically have a system that allows us to ingest millions of documents and make those documents available, all of the documents available to all of the reporters who are on the project. So they can go into our system, it's all password protected, and then they can search. Most reporters would start typing in the leaders of their country. We, in fact, did find some leaders like Donald Trump that there were a lot of documents to do with the Trump Corporation because one of the firms that we had was a Panamanian firm and it was the law firm that the Trump Corporation used in Panama. Obviously, we're quite excited about that at the beginning, but there really wasn't anything in there. It was-- it was quite dull material. But again, it's by way of example. You start off looking for what you want to find and then you realized you've got to let their documents talk to you. You've got to follow what the documents have, not what you went in there hoping to find.
[00:05:54] BROOKE GLADSTONE: It's like dropping somebody on a, on a planet and saying, just let the planet show you where to go. I mean, it was planet sized quantities of documents. I can understand throwing spaghetti at the wall. You plug in the world leaders name into the search engine and hope that that person pops up. But how do you let the documents talk to you?
[00:06:16] GERARD RYLE: By collaborating. We have invented almost this new way of working as investigative reporters. And traditionally we are lone wolves, and we don't share information. When you're trying to tackle 12 million documents -- and to give you a sense of that, we only counted one document, whereas in fact, some of the documents ran to thousands of pages. So again, you're talking about nearly 100 million actual or more than 100 million actual pages. You could never possibly read them all and understand them. You had to collaborate with your fellow reporters. And that's what we do at ICIJ. We bring teams of reporters from around the world together.
[00:06:54] BROOKE GLADSTONE: You know, as far as you're concerned, we just don't need offshore accounts. They don't serve any purpose except to provide secrecy and tax evasion.
[00:07:05] GERARD RYLE: There is simply one product for sale here, and that is secrecy. Because we've now been doing these stories for almost a decade, we can see no real reason for any of this world to exist. We're seeing very clearly in the Pandora Papers that the people that could be fixing this are the ones that are benefiting, so there's been no incentive for them to do it.
[00:07:24] BROOKE GLADSTONE: Ah, yes. You've observed that the minute reporters come and question practices, the practices are merely changed, but the corruption that they support remains.
[00:07:39] GERARD RYLE: Look, I learned this a long time ago as a reporter when I was investigating police corruption. And every time you reveal something new, we found basically that the corruption just became more sophisticated. That's what we're observing again in the offshore world. Every time we reveal something like this, the next time we come back to it, they've just got more careful. And in fact, there were some really hilarious moments for the reporters investigating this because we were able to see what these firms were doing after we published the Panama Papers. We saw the clients moving to new firms. We saw the clients asking 'Whatever you do, please, you've got to keep my identity secret. We don't want another Panama Papers to happen.' And of course, you know, to be able to read that was quite amusing.
Pandora Papers, Explained Part 1 - Fresh Air - Air Date 10-14-21
[00:08:23] TERRY GROSS - HOST, FRESH AIR: So, tell us more about the benefits of off-shoring.
[00:08:26] GREG MILLER: Okay. so, the benefits include, uh, hiding wealth or income and moving it to jurisdictions where there is a much lower tax rate. And that's why these places are called "tax havens."
If you're in a country, say, in Europe, that... where there is very high tax rates, 40- 50% of your income, or something, you could set up accounts "off-shore," they call it, and hide some of that wealth, and pay, you know, a fraction of that tax rate in the British Virgin islands, or something.
But there are many other reasons for moving money into offshore accounts: escaping accountability; escaping notice; hiding money from creditors; hiding money from a spouse, or family members you don't want to get their hands on it; there are criminal enterprises that take advantage of off-shore laws, and hide money so that their ill-gotten gains are not discovered; politicians can use offshore accounts-- if they're engaged in corruption and getting kickbacks, they will move that money into places where they hope they don't get caught.
And without a leak, without disclosures, like what we've seen in Pandora papers, that generally works.
[00:09:35] TERRY GROSS - HOST, FRESH AIR: So who are the losers when wealthy people and when world leaders shelter their money off-shore?
[00:09:43] GREG MILLER: When you think about it broadly, Terry, I think the real answer is "Everybody who's not wealthy. Everybody who's not taking advantage of this system."
Um, and I don't think that's an exaggeration. If wealthy individuals are paying less in taxes because they are moving money into off-shore accounts in ways that ordinary people can't, that means the tax burden in the United States, or any other country, is greater on those who are paying their fair share.
It also hurts everyday people in other ways. It makes it harder for law enforcement agencies to track down money, whether it's from ransomware attacks, or from drug trafficking, or other categories of crime.
And it's also makes it really difficult to hold politicians accountable in some cases. If we don't know, and we can't get to, the offshore accounts where politicians can park money, that makes it harder for voters to have confidence in their elected officials.
And, you know, in... in the... the lead story for... for the Washington Post on the Pandora papers, I quoted a former FBI agent who was in part of the Mueller investigation, who said that, "You know, this is really a cancer on... on... on the societies in a very broad way."
[00:11:09] TERRY GROSS - HOST, FRESH AIR: It makes it a gap between the rich and everybody else even bigger, when you take into account that a lot of people who are rich have money we don't even know about, that we're not even calculating in that gap.
[00:11:21] GREG MILLER: Yeah. And, you know, there are, by... almost by definition, there are no completely accurate estimates of how much money is hidden off shore, but the smartest estimates seem to be well into the trillions of dollars.
And you're right. It really contributes to the wealth disparities that are an increasing problem in the United States and other Western countries.
We set up an offshore company in a tax haven - Planet Money - Air Date 10-6-21
[00:11:45] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Anna told me about this one service that is really popular called Nominee Services. And she says, just think, if you don't want an official record of you being the owner of your company, we can help you with that with Nominees Services.
[00:11:59] ANNA VEVADEI - FIDELITY CORPORATE SERVICES: If you choose this service, you can nominate us to be the directors of your company, and also shareholders of your company and you know, public documents where the director's name appears, it will be our name.
[00:12:11] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Wait, you would be the directors and shareholders of our company?
[00:12:17] ANNA VEVADEI - FIDELITY CORPORATE SERVICES: You can choose this service. It's the service that you paid for, it's only a service that we offer. If you don't want your name to appear in any company's documents, you can choose us to be nominee directors or shareholders.
[00:12:31] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: But if I did that, then it looks like the company is run by you guys, by the names on the documents. Nobody knows that I'm involved in the company.
[00:12:42] ANNA VEVADEI - FIDELITY CORPORATE SERVICES: Yeah. That is the idea in absolute confidentiality.
[00:12:46] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: This blew my mind. You can hire a board of directors to be the public face of your company. And it's not just Anna who offers this service.
[00:12:57] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: No, everyone we talked to, this is clearly a nice little moneymaker, although not a huge one. They make like 600 bucks or something to be your board of directors, to be your public facing shareholders. And then they sign with you a totally private, invisible power of attorney. So they are the public face, but you run the company, although no one needs to know that you run the company. And it clearly was a popular feature, which is crazy when you think about like, you know, we saw dozens and dozens, we assume there are thousands of these companies helping people set up companies, which makes you think when you do the math, that the Caribbean islands, the Channel islands, all these offshore havens must be filled with people who are the boards of directors of thousands and thousands of companies out there that they know nothing about have never met the people involved, have no actual activity with that company.
[00:13:51] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Yeah, when I asked --
[00:13:53] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: Now we had our little experiment with a few companies, but we found this guy, Jason Sharman, he's a professor at Griffith University in Australia who sort of did what we did wholesale. He wanted to find. In a statistically significant way, how the rules are being followed. So he applied to have corporations incorporated all over the world. And he had a very similar experience to us, although I have to say, with one shocking difference.
[00:14:21] JASON SHARMAN - GRIFFITH UNIVERSITY: So originally I did about 50 approaches, and in 17 of those cases, the providers were happy to sell me a company without any identity documents at all, which is in clear violation of international rules.
[00:14:35] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: No passport, no ID number, nothing.
[00:14:38] JASON SHARMAN - GRIFFITH UNIVERSITY: No, no, no passport, no ID number, no driver's license. Nothing at all. So really they had no idea who I was at all.
[00:14:44] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: He did say that most countries did require ID to register a company, except he said there was this one country that stood out as the most willing in all the world to allow people to open companies with no documentation whatsoever.
So, what is that most permissive, the most secret loving country in the world?
[00:15:07] JASON SHARMAN - GRIFFITH UNIVERSITY: United States. So in fact that the standards of the US were even lower than those in Somalia.
[00:15:14] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: It's easier to be totally anonymous as a business owner in the United States than anywhere else?
[00:15:21] JASON SHARMAN - GRIFFITH UNIVERSITY: The easiest place in the world to register a business anonymously is definitely the United States. The four sort of most lax states, were particularly Delaware, Nevada, Wyoming and Oregon.
[00:15:32] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: At first, Jason Sharman looked at his data and thought,
[00:15:35] JASON SHARMAN - GRIFFITH UNIVERSITY: Oh, this must be wrong. I must've made some mistake in the way I'm going about this.
[00:15:38] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: But then he tried again, he got students to do it dozens and dozens of times. I think by the end, he's done it over a thousand times, in the US and around the world, asking, Hey, I'd like to set up an offshore company and I don't want to show you any identification.
[00:15:53] JASON SHARMAN - GRIFFITH UNIVERSITY: And again, we found that an found that places like the Cayman Islands and the British Virgin Islands and Jersey and one of the Channel islands, were very, very strict and people would email back and say, look, we'll sell you a company, but you must send us a scanned notarized copy of the picture page of your passport so we can keep it on file, so we know who you are.
But in the United States, the answer was Sure, this should take you about 10 minutes. Just fill in the details of the company you want on the website, transfer the money and we'll send you the company today. I think it would be interesting if you tried to set up a company and compare how many documents they ask for compared to how many the people in Belize ask for.
[00:16:35] UNKNOWN: Thank you for calling General Rent-a-Corp.
[00:16:37] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Hi. I want us to talk to someone about registering a company in Delaware.
[00:16:41] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: So obviously we have to take Jason up on his challenge.
[00:16:44] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Yes. I called a couple places that register companies in the US and I reached one guy who talked to me, but he wouldn't let me record, but our conversation was pretty brief.
So Adam, you and I can basically sum it up right here. It went something like this:
Hello. I'd like to set up a company in the US.
[00:17:00] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: I would recommend a Nevada or a Wyoming company. Nevada is $599. Wyoming is $529. Or you could go with Delaware, that's $519.
[00:17:11] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: Delaware it is. What documents do you need?
[00:17:14] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: We'd need the name of the company, we'd need the name of the manager and the address where you want the documents sent.
[00:17:21] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: What about identification?
[00:17:23] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: We don't need any identification. We just need you to give us the name of the company, give us a name for the manager and where do you want the documents sent.
[00:17:31] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: And that was pretty much it, Adam, we are now the proud owners here at Planet Money of Della Who?
[00:17:37] ADAM DAVIDSON - CONTRIBUTOR, PLANET MONEY: Oh, MASH.
[00:17:39] CHANA JOFFE-WALT - PRODUCER, PLANET MONEY: That one was Katelyn Kenny. And I have to say setting up Della Who? it only took one day; it was three emails and it would have been just one email, except I had some extra questions such as, is this really all you need? Answer: Yes.
Pandora Papers, Explained Part 2 - Fresh Air - Air Date 10-14-21
[00:17:56] TERRY GROSS - HOST, FRESH AIR: So, another part of the Russia story that you investigated was how some oligarchs are hiding their money. And, um, some of those oligarchs, uh, have names that will be familiar to many of our listeners through their relationship to members of Trump's inner circle; oligarchs, like Oleg Deripaska, the aluminum magnate.
Um, and I'm sure some of these names are very familiar to you, because you investigated the connections between Trump and Russia for your book, "The Apprentice." So was this some... some of the, like, oligarch greatest hits for you?
[00:18:30] GREG MILLER: Yeah. I... it was always a question that I really wanted to look at once I... once I knew I was going to be part of this project. I mean, of course, you're going to look to see, uh, what... how many Russian oligarchs are in these documents; we know from prior investigations of this kind that Russian, uh, wealthy Russian individuals use offshore accounts a lot. They turn up a lot in prior leaks, including the Panama papers.
So I think that, you know, at the Post, we weren't the only ones who were looking for.. for these kinds of names in these files.
[00:19:04] TERRY GROSS - HOST, FRESH AIR: The U. S. sanctioned some of the oligarchs, and you were able to see, through the Pandora papers, if the sanctions were effective. What did you learn?
[00:19:13] GREG MILLER: Yeah, I think so. That was like one of the fundamental questions that I thought would be interesting to try to take on in this project. If the oligarchs are in these documents, and we're looking, and we get names of individuals who have been sanctioned by the United States, what happens, what happens in those cases?
Um, because it's... it's becoming increasingly important as a, sort of, public policy tool for the United States, or foreign policy tool. Um, we have sanctioned-- the United States has sanctioned-- Russians, over, and over, and over again, over the past decade for, um, alleged malign behavior by the Kremlin, from the annexation of Crimea and invasion of Ukraine, to assassination plots against Russian dissidents, to interference in American elections.
So, we're trying to use sanctions to punish Russia for this behavior. Is it working? And the answer is, kind of, "Yes and no." Um, the documents show us that these sanctions are hitting their marks, that they are hitting their targets, and you can see the reactions. You can see the losses, the disruption, um, and even sometimes measures of panic that set in once those sanctions kick in.
But when you step back, and you... and you look at the bigger picture, um, it's hard to make the case, I think that sanctions are.. Are having that much impact on Russia behavior. So, here are all these cases where Russian individuals are being penalized financially, but Russia interfered, as accused of interfering, in the 2020 election, just like it did in 2016. Uh, this past year was accused. um, poisoning a prominent dissident, and trying to kill him. Uh, it's not, you know, they're not backing away from the behavior that these sanctions are meant to deter.
[00:21:10] TERRY GROSS - HOST, FRESH AIR: Oh, let's not forget about the major hack of U. S. federal agencies and businesses.
[00:21:16] GREG MILLER: Solar winds. Yes. So the..., the hacks, the ransomware attacks, if anything, are... seem to be occurring even more frequently.
[00:21:25] TERRY GROSS - HOST, FRESH AIR: So why are the oligarchs hiding their money? My impression is, in Russia, if you're an oligarch who's tight with Putin, you can do whatever you want. So, why do they need to hide their money in secret offshore places?
[00:21:40] GREG MILLER: Well, I think that your question almost answers itself, in some ways. So, if you're an oligarch, and you're tight with Putin, and you can do whatever you want, what happens when you're no longer tight with Putin? What happens when Putin is no longer in power?
Um, so, perhaps one of the reasons that Russian oligarchs moved so much money into these offshore systems is to protect it, is to put it in a safe place or they, and they alone, can get to it, and the state can't try to get it back. Um, And it doesn't, they're protected no matter what happens politically in Russia.
Um, and, you know, there are... there's a couple other reasons too. And... and... and Russian business leaders will sometimes even talk about this. I mean, that the interest in moving money into safer jurisdictions, moving money into places, offshore, whatever, whether it's the British Virgin islands, or in Singapore, so that it's not only out of Russia, but perhaps even beyond the reach of Western financial institutions, because if you're a Russian oligarch, one of the other risks of doing business is that you might be sanctioned because of your close ties with the Russian president.
[00:22:54] TERRY GROSS - HOST, FRESH AIR: Paul Manafort, who was Trump's campaign manager for a while, um, was investigated by Robert Mueller and, uh, um, convicted. He was sheltering money off shore. Wasn't he?
[00:23:06] GREG MILLER: Yeah, exactly.
[00:23:07] TERRY GROSS - HOST, FRESH AIR: And he was... he was connected to some of the Russian oligarchs, too.
[00:23:12] GREG MILLER: Including Deripaska, most prominently Deripaska. And, right, exactly. The Manafort investigation and charges against Manafort were largely charges of money laundering and of hiding, uh, illegally gained, um, assets.
What Would a Global Corporate Minimum Tax Mean for the US and Abroad - The Brian Lehrer Show - Air Date 4-12-21
[00:23:28] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: Can we discuss some basics first? Like there's an article, in your G-Zero media site article, it says 55% of America's biggest companies paid no federal corporate income taxes during the last fiscal year.
What are some of those companies, if you're able to name names, and how much money are the current tax laws costing the federal government and potential revenue?
[00:23:51] IAN BREMMER: Yeah, we're talking about hundreds of billions of dollars. And some of these are very large companies indeed. I mean, Apple, Amazon, for example. And you know, on any given year, it's a different number of companies, and some it's because of primary offshoring summits, because they're taking losses in one year or they're taking gains in another, they're pushing it around. I mean, everyone's doing everything they can with a very complicated, both national and international tax code, to reduce what they have to pay. And as you know, there's an enormous, I mean, an unprecedented amount of spending that is coming down the pike this year. Already $2 trillion in relief and stimulus at the beginning of the year, another expected $3 trillion in infrastructure, jobs, and other benefits over 10 years. But at the end of this year, we've never seen anything like that. A big piece of that infrastructure proposal is intended to be paid for by raising taxes on corporations. And that's why this has become such a big issue right now.
[00:24:55] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: And how does this happen?
[00:24:58] IAN BREMMER: How does it happen? Meaning how does it get passed?
[00:25:01] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: No, we'll get to that, and whether it can get passed and whether it can get passed by enough countries to make it meaningful.
But how does it happen that our American companies can locate offshore and pay the taxes of the other country?
[00:25:16] IAN BREMMER: Yeah. Well, I mean, as you said, how does it happen that someone can leave New York City and go to Florida and ended up paying like virtually no local tax or state tax. And New York loses that rate. It's because we don't have global government. And so, as you mentioned, Biden mentioned The Bahamas and the Caymans. He did not mention Ireland because that's actually a significant country, but Ireland is the same thing. The Netherlands as well. You have a number of countries around the world that in wanting to attract capital and wanting to attract the jobs around that -- and these are relatively small places usually, and they're pretty wealthy -- they're willing to bring their tax rates to close to zero, or to have individual negotiations with companies in the case of the Netherlands to get sweetheart deals for them that allow them to avoid paying significant taxes in their home country.
And if you are the CEO and you have the ability to improve profits for your shareholders, you would argue that it is your fiduciary responsibility to pay as little tax as possible. And you'll remember, of course, Brian, that when Donald Trump was running for office back in 2016, he said that he was smart because he paid virtually no taxes. Why? Because he was using the American tax code, as any red blooded capitalists would, to try to ensure that he could legally pay as little as humanly possible. Every corporation out there will do that.
[00:26:41] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: You mentioned the Netherlands. Let's drill down on that example a little more, because I think it's interesting. The article on your site says the Netherlands has attracted the likes of Google, Nike, Ikea, and others by letting them negotiate tax rates. So, what does that actually mean? How does a company negotiate a tax rate? And also, I don't think Nike listed itself as a Dutch sneaker company, does it?
[00:27:06] IAN BREMMER: No, just do it is global, but meant to be seen as American.
But look, you'll remember when Amazon was talking about having their second headquarters in a city in either the United States or even potentially Canada, and they were going around and they were saying, hey, we're a huge company. One of the biggest in the world. We bring a lot of talent. We're going to bring a lot of money. But we don't want to pay any taxes. So what kind of a deal are you going to cut us if you want us to base ourselves there? And New York was very close to a deal and many, including Alexandra Ocasio-Cortez, for example, were pretty agitated that they were getting such massive benefits to come and develop Long Island City.
Well, the same thing is true for the Netherlands on the global stage, that they are looking to work with big corporations that have high levels of skill sets, and they're willing to charge them massively less tax, on the basis of what they're willing to bring to the Netherlands.
So it's, it is very much of a question of what kind of a deal can you strike with this individual government?
[00:28:11] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: I mentioned Janet Yellen is a leader on this as Treasury Secretary. Here's a clip of her the other day, talking about why this might not just be in the interest of the United States.
[00:28:21] JANET YELLEN: We're working with G-20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together we can use a global minimum tax to make sure that the global economy thrives based on a more level playing field in the taxation of multinational corporations and spurs innovation, growth and prosperity.
[00:28:51] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: So Janet Yellen the other day. And let me put a little more of an international cast on it for our listeners, and then Ian, you can help fill this out. It's not like they're just paying those taxes to other countries at lower rates, and the US is the only one that loses. Your article says big European nations have been frustrated with American behemoths like Starbucks, Amazon, and Google that flood their markets yet pay nothing back to their governments. And there are countries, including France, Germany in the UK that have wanted something like a global minimum tax. So explain this and how the US and European interests converge here or don't.
[00:29:36] IAN BREMMER: And they definitely converge. And I think it's a big deal that Janet Yellen and the Biden administration have built enough trust to get the Germans and the French within the EU to specifically support this policy proposal, putting pressure on Ireland and the offshore centers to go along with it. Now, you know, there are a lot of big trade problems between the United States and Europe. And one of the biggest has been this idea of a digital services tax that the Europeans have been hell bent on levying against all digital companies. But as you know, the biggest ones overwhelmingly are in the United States. That would be a big problem if it happened, we would get into an escalatory trade fight with the Europeans and we'd be increasing tariffs on all sorts of European manufactured goods, food stuffs and what have you. Nobody really wants that. They've been trying to find a way around it. This is that mechanism. If we end up with a coordinated global minimum corporate tax driven by the Americans and the European Union, you will end up having that linked with progress on a global framework for digital services tax in the next couple of months.
And this is coming relatively soon. We're talking about right before the upcoming G-20 finance minister meeting in July. And I think that there are a lot of places where Biden has said the United States is back because they're joined things that the Americans left under Trump, like the Paris climate accord or the World Health Organization, and the rest of trying to do the Iranian nuclear deal again. But that that's not moving the ball. This is actually new US-led multilateral coordination that would matter. It would build trust. It would strengthen alliances. And it would ultimately raise more revenue for the major countries in the Alliance. I think it's actually a pretty big deal.
[00:31:32] BRIAN LEHRER - HOST, THE BRIAN LEHRER SHOW: And before we take some phone calls and interestingly, a lot of people are calling in on this, let's look at an exception to that. Because your article cites Ireland as one European country that's resisting the idea of a global corporate minimum tax because they have one of the lowest tax rates in Europe. So tell us about some of how Ireland in particular has used tax rates in their economy and the impact inside and outside that country.
[00:31:59] IAN BREMMER: Of course, it's become a massive financial center. For example, there are a lot of big banks and institutional investors that have been willing to set up in Ireland because their tax revenues are lower. We've seen this with Apple as well. We've seen it with a number of tech companies. Real estate has taken off as a consequence in Ireland. It's a country that's done exceptionally well, and been able to attract an awful lot of talent because the corporate base is so low. And again, you said it at the beginning of the segment, Brian, it's a race to the bottom. And when that happens, it's the opposite of companies and countries coming together to create long-term sustainable public goods when there is no governance and it's every company for itself, every country for itself. You end up with much less revenue that you can provide to workers, to the middle-class for benefits. And it squeezes the big companies.
On dynastic wealth in America w Chuck Collins Part 1 - This is Hell! - Air Date 10-12-21
[00:32:50] CHUCK MERTZ - HOST, THIS IS HELL!: I want to share some of the data that you found, right?
That for the 27 families that were on both the Forbes 400 list in 1983, and the Forbes billion dollar dynasties list in 2020, their combined assets have grown by 1007% over those 37 years. This is a sturdy average annual growth rate of 6.7% per year. This growth has hardly wavered through the years. The combined assets of these 27 families grew 99% over just the most recent 11 years from 2009 to 2020.
This is an average annual growth rate of 6.5%, almost exactly in line with their nearly 40 year average. In contrast, median family wealth, for the typical family in the United States, increased by just 93% in inflation-adjusted dollars between 1989 and 2019, the most recent year for which data is available) for an average growth rate of just 1.8%. Again, compared to the 6.5%, which is nearly the 40 year average for the wealthiest.
So, is this unique, historically, to the past 40 years? Because, that lines up with the beginning of Reaganism, Thatcherism, Neo-liberalism, whatever you want to call the change in tax policy, and deprioritization of social services, that began in the early eighties.
So is this a relatively new situation historically? And if so, what does it real... reveal to you about changes that have happened in the past 40 years?
[00:34:13] CHUCK COLLINS: Well, it is new in the last... if you look over the last century, there was a period of dynastic wealth after the industrial revolution. So let's say, you know, 1880 to 1915 or so, before the First World War, there was a very similar pattern. And that's where the Rockefellers, and the Carnegies, and the Mellons, and some of these, you know, kind of late, um, uh, 19th century dynastic fortunes emerged at that time.
But then, you know, 1915-1916,, we start an income tax. We have an inheritance tax. We have a great depression. We have two world wars. And we have essentially, uh, six or seven decades of relative equality, uh, where you didn't see these growing dynastic fortunes. You didn't see, you know, huge concentrations of wealth emerging.
And so, you're right. The... starting in the late seventies, early eighties, the Reaganomics, but even... even prior to that, we started to see these... this pulling apart.
So, yeah, essentially, what you described as these dynastically wealthy families saw their wealth grow 10 times the rate of ordinary families. And, by the way, those ordinary families still include a lot of wealthy families.
So, you know, compared to income for most people, uh, these... these folks are taking off on a rocket launcher. I mean, there's... the number of households that have zero or negative wealth is almost one out of five households now.
Um, so that... the... these trends are a reflection, Chuck, as you described, of this 40 years of pulling apart, that we've been living through.
[00:35:58] CHUCK MERTZ - HOST, THIS IS HELL!: So, the report states that only four of the top 20 wealth dynasties are new to the list since 1983.
And between 2015 and 2020, the only family to see its rank decline significantly was the opioid pushing Sackler family, which fell from... from number 16, to number 30, thanks, in large part, to a number of high profile legal settlements by their family owned corporation, Purdue Pharma.
So, it's been the same families for 40 years, and it took record-setting litigation, over millions of addictions and deaths, to drop one of those families from number 15 to number 30. What does the Sackler family court decision that fines them-- it fines them, but does not hold them accountable-- what does that say to you about our entrenched dynastic family wealth in the United States?
[00:36:45] CHUCK COLLINS: Well, I would say that it's entrenched. That it's persistent. That it's, uh, it's... it's very hard to, sort of, meaningfully break up those powerful dynasties once they form, because they, you know... this wealth is power, and they deploy that power to protect their wealth. And, uh, you know, at the expense of the rest of us. At the expense of equality of opportunity for the rest of us.
Um, and, yeah, think about that. The Sacklers, whose wealth, you know, uh, and, uh... it has come from the mass suffering of so many. And... and, even still, they don't accept responsibility for that. And they continue to be, uh, multi-billionaires. You know? Their... their children and grandchildren will continue to be incredibly wealthy; wealth that came from the opioid epidemic.
[00:37:44] CHUCK MERTZ - HOST, THIS IS HELL!: And, you know, as you pointed out, there... as we were talking about earlier, uh, people are... billionaires are making a fortune off of the pandemic, as well. So, it seems like they're constantly making fortunes off crises.
We know that we are already living within climate change, but climate change is going to worsen and worsen. So, are billionaires right now set up to make a fortune again, off of yet another crisis?
[00:38:07] CHUCK COLLINS: Well, you know, it's not surprising to see, um, some of the wealthiest dynastically wealthy families in the country buying land, huge amounts of land; buying water, water rights; um, purchasing property in different parts of the world, you know, whether it's a New Zealand or the Rocky mountains, or, uh, Canadian provinces where there's, you know, abundant natural resources.
Uh, you know, dynastic families think multi-generational, they have, they can afford to. Um, and they think they're spotting these... these disruptions, these trends, and they're thinking, not just, "How do we make money off of them?" but, "How do we, uh, survive and flourish while everyone else is literally treading water?"
Um, so it's not surprising to see that some of these families are positioning themselves to take advantage of the next disruption.
Exposed! Who Isn't In The Pandora Papers (w Chuck Collins) - Thom Hartmann Program - Air Date 10-6-21
[00:39:07] THOM HARTMANN - HOST, THOM HARTMANN PROGRAM: So tell me about South Dakota. Why South Dakota?
[00:39:12] CHUCK COLLINS: Well, South Dakota made the decision in the 1980s that it was going to change its laws to attract the trust industry. So wealthy representatives of some super wealthy families went to the governor of South Dakota and said, Hey, if you change this law that makes trusts have to dissolve after a certain period of time, we'll move all our money to South Dakota.
[00:39:35] THOM HARTMANN - HOST, THOM HARTMANN PROGRAM: You want to define a trust real quickly here?
[00:39:40] CHUCK COLLINS: Yeah. Trust is kind of like a ownership entity. It's just a way that wealth and assets can be held.
[00:39:48] THOM HARTMANN - HOST, THOM HARTMANN PROGRAM: So it's kind of like your money bin.
[00:39:50] CHUCK COLLINS: It's your money bin. It's a weird form in that it's not like someone has a trust, they have to register it. Or it's like a contract almost, you and I form a contract.
So there's usually somebody who puts the money in the trust for somebody who's supposed to receive the money. And then there's somebody who's the trustee who oversees it. What these wealth defense industry people have done this, they've kind of distorted and morphed the structure so that it puts them wealth into kind of limbo, like who owns it, can this be taxed? Can, can that person who ripped off their customers, how do we get the money back? Well, these trusts are designed to be impervious. So it's just an ownership system. It's complicated. But actually it's at the heart of one of the things that's broken. We need to change trust law in the United States so these manipulations can't happen.
[00:40:43] THOM HARTMANN - HOST, THOM HARTMANN PROGRAM: But how do you do that, when the Supreme Court has said that if billionaires want to own politicians, that's free speech. That's not corruption or bribery. And the billionaires don't want the trusts to go away.
[00:40:56] CHUCK COLLINS: Yeah, no, I mean, we're obviously, it's a heavy lift as they say.
But first of all, the rest of the world now is going to be kicking the left's rear on this topic. Because we've been going around saying, Hey, Guatemala, end your corruption. Hey, Caribbean island, stop being a tax haven. And now the US is the tax haven. And so other countries are going to be saying to us, Hey, you want to engage in a treaty with us, to get information from us? Well, clean up your house, clean up your act.
The other thing is, this hidden wealth system really harms people. It's the hospital that wasn't built. It's the tax dollars that weren't paid by the super rich. It's the coddling of the criminals and kleptocrats who've stolen money from around the world and bringing it here to the US. So we're like the getaway car drivers. And it's fueling grotesque inequality. So it's harming the rest of society.
So there is a counter, the possibility of really building that countervailing power. A year ago, Congress passed something called the Corporate Transparency Act that requires shell companies to disclose who their real owners are to the Treasury Department.
Well, that's a huge first step. And we can follow that playbook and pass national laws that will shut down this hidden wealth industry.
On dynastic wealth in America w Chuck Collins Part 2 - This is Hell! - Air Date 10-12-21
[00:42:17] CHUCK MERTZ - HOST, THIS IS HELL!: So what does, uh, bipartisan support, seemingly, for all of this dynastic wealth-- what does that say to you about the way political leadership is viewing the unfair and unequal tax system revealed by your report and analysis, as well as that of the Pandora papers? Are these revelations having an impact on the political leadership, who the wealthiest families influence?
[00:42:39] CHUCK COLLINS: Well, I think it just shows how wealth captures our democratic system. Uh, unfortunately the Pandora papers is gonna turn up the heat in a lot of other places in the world. Uh, you know, like Mexico, you and I were talking about, um, and other places where the politicians and the political political class are directly implicated.
Unfortunately, here in the United States, um, you know, there are no politicians named, partly because, you know, that the leaks came from offshore wealth services firms outside the U. S. If we had a couple of good leaks here in the United States, where we saw how our own politicians were, kind of, in the tank, helping protect the system, that might help our reform process.
So, but still we should move ahead, because this system really is harming the quality of life for everyone else in the country.
[00:43:34] CHUCK MERTZ - HOST, THIS IS HELL!: So, what are we missing in our understanding of how decisions are made at the very top of governance when we do not recognize the national impact of these family foundations?
[00:43:44] CHUCK COLLINS: Yeah, I think that's a great question.
And, uh, you know, I think part of it's understanding the different ways in which wealthy families wield power; uh, that philanthropy is part of that; uh, that, uh, direct campaign support and, you know, the ability of wealthy families to run and finance a campaign to get rid of the estate tax. Uh that's... that's, like, as about a selfish interest as you can possibly take.
Um, so yeah, it's just understanding that all the arenas in which the super wealthy, uh, use their power to limit discussion, or, uh... and essentially block opportunities for everybody else.
[00:44:28] CHUCK MERTZ - HOST, THIS IS HELL!: So, the report states that the oversight role of the Internal Revenue Service has been decimated over the last few decades, particularly in its ability to monitor complex trust and tax loopholes.
And this was all discussed on the front page of today's New York Times, about what we are going to do about the IRS because, uh, Joe Biden wants the... President Biden wants IRS to have more access to certain information from banks, and the banking industry is trying to stop it.
How can the image of the tax man be in any way rehabilitated as a means of fighting inequality?
Because, apparently, according to the Times, the banking industry is going to be running out all of these ads in the very near future to make certain that the IRS doesn't have any increased or expanded power.
So how can the image of the tax man, in any way, be rehabilitated?
[00:45:16] CHUCK COLLINS: Well, one is just to realize that, uh, first of all, there should be a very clear function at the IRS, which is to watch the financial shell games of the richest one 10th of 1%. You know, people with $10 million or more. Because that's where a huge amount of the corruption comes from, and that's where the expertise has been lost. So, there's been this whole campaign against the IRS, and frankly, the IRS has, you know... it hasn't helped themselves, because you're more likely to be audited for using the Earned Income Credit than you are if you're using some exotic trust.
And that's partly because the IRS's oversight ability to... to monitor the rich has been decimated. You need a certain expertise to follow the money. Uh, and it doesn't help when... when the Biden ministration proposes things like, "Well, we're going to monitor $600 transactions from banks and require reporting on that."
It's like, "No, we don't really care about that. What we should really care about are $600 million transactions and, you know, $600,000 transactions even.
But, you know, uh, leave the little people alone. That's not where the... the... the true crimes are happening. Uh, and the IRS should be seen as an oversight body that defends society against the power of the wealthy and, uh, and makes sure they pay their fair share
[00:46:39] CHUCK MERTZ - HOST, THIS IS HELL!: Why that low $600 amount? Do you think that was an attempt to get bipartisanism behind it?
[00:46:46] CHUCK COLLINS: I don't see how it could get anybody behind it. Uh, I think it's... I think it's a, whatever... uh, judgment... it's a policy mistake.
You know, just in the same way, President Biden has said, "Look, we're going to pay for all this, you know, pandemic relief and... and infrastructure. And no one with income over $400,000 is going to pay any more taxes."
Well, then we should be talking the same about enforcement, uh, you know. The IRS already enforces existing tax laws on working folks. It's the super rich that are getting away with the heist here. So. I think that it has to be better targeted to win popular support. It would win my support.
Why philanthropy isnt the answer (with q) - Pitchfork Economics with Nick Hanauer - Air Date 10-5-21
[00:47:34] NICK HANAUER - HOST, NICK HANAUER: We're huge fans of your book and are in pretty violent agreement with the thesis, but for our listeners, just lay it out. Give us your perspective.
[00:47:45] ANAND GIRIDHARADAS: I think it's sometimes helpful to tell people in a way what's not in the book, which is why you did a book and how you get to the place of even beginning. And I think for me, it was observing two things that I think anybody listening to this, whether you agree or disagree with where I went with it, I think anybody listening to this would agree with the two observations.
Observation number one is that we're living in this time in which you cannot bump, you cannot walk down the street in certain zip codes of this country without bumping into a plutocrat trying to change the world. They are doing philanthropy maybe. Their kid is in Africa right now starting a social enterprise that turns poop into recycled coffee. They come back from those Africa trips with these plutocrat bracelets that they all wear when they go to Africa. They are involved in making finance more humane by doing impact investing and whatever else.
And so all of these initiatives are really ubiquitous and we all know they're going on. When you go to college campuses, every young person is engaged in some kind of change the world effort. On the one hand we're living in this time in which the very, very rich and powerful seem to be all in on the idea of making the world a better place than aware of inequality and interested in fighting it. On the other hand, we're living in this time in which the same class of people, the same plutocratic class that is doing so much to give and help essentially has secured for itself and continues to benefit from a near monopoly on the fruits of the future, and has essentially rigged the society to function as a casino in which the house, i.e. them, always wins.
The inquiry behind Winners Take All started with the question, "what is the relationship between these two facts, which themselves are not particularly in dispute?" I think where the dispute comes in is what you think the relationship is. And the conventional wisdom out there is, or was, that the relationship was one of a drop in the bucket. That, yes, we do live in this time in which there is this savage inequality, however, rich people are on the case, stepping up, and there's just not enough of them, or they're not giving enough away, or they're not stretching their dollars far enough by not being effective enough. And that if only there were more of them and they gave it away better and they did this and that, then we could solve these problems.
And I started to become intrigued by an opposite possibility, that all of this elite magnanimity and do-gooding activity was actually part of how we sustain the elite monopoly on the fruits of the future. That in other words, the extraordinary helping of our time was how we maintain the extraordinary hoarding. , A.
Another thing is that a lot of these acts of do-gooding, even when thing A is not involved, even when you're not an economic sinner or someone who's made money in a dishonorable way, the act of giving and then following up on the gift by sitting on boards of things and shaping how it's given and funding research, it confers power.
And if you are persuaded by me that the central problem here is actually not a maldistribution of resources, although that's a big problem, but actually a maldistribution of power that has led to a maldistribution of resources, then a good deed that gives further leadership positions, further intellectual sway to the views of that class of people, is problematic.
So for example, if you decide as a Goldman Sachs that you're going to get into the conversation about empowering women, which they did, 10,000 Women program, you're immediately, on day one, one of the biggest players in that field, cause you're Goldman Sachs, and you are going to distort that conversation. When the rich and powerful get involved in social change, they change change.
And so to the extent that there are ways of empowering women that involve a wealth tax, because by the way, a lot of the things that wealth tax would fund if you look at Elizabeth Warren's plans or others would be beneficial to all people and women in particular in many cases, that's not going to be part of your report. That's not going to be the stuff that you're talking about on your panels at the Aspen Institute. But if there's other ideas to empower women, like lean-in feminism, which is, I think, just trying to convince women that thousands of years of patriarchy is a posture problem - they were just leaning at the wrong level of incline - Goldman Sachs may go all in for that because that's a way of promoting change. And my point is that distorts, that intervention, distorts the change markets, the conversation that we have about change. So that's the second thing.
And third, there is, I think, a level of outrage, general outrage, not about specific things specific people did, but about who the society is working for or not, that gets in a way obscured and obfuscated by the generalized feeling that rich people are giving back. And it distracts people in, many cases, from the sheer extent of the rigging and the taking.
[00:53:04] NICK HANAUER - HOST, NICK HANAUER: And homelessness is actually a very interesting example because homelessness by your winners take all crowd is treated as a symptom of poverty, and that's a lie. Homelessness is a consequence of inequality, and it's the very people who are writing the checks for the homeless shelters who's enterprises are driving the inequality that produces the homelessness.
Economic growth is, in many ways, a good thing, but it's not an unalloyed good, and when the rent in a place goes from $500 a month for an apartment to $2,000 a month for an apartment because of that economic growth, which benefits a small minority of people, obviously the consequence of that is a ton of homelessness and a bunch of other sort of social pathologies. And to not be able to connect those two things, the benefits that accrued to some people of growth and the harm that befell other people as a consequence of that growth, is I think the central narrative problem we face is that people will either can't or won't connect these two things.
I would just tell you that in my social world, that is the stickiest and most awkward part of the conversations I have to have with people, because everyone I know is complaining about homelessness and none of them will admit that it's their fucking fault. That homelessness is a by-product of the economic system, which has benefited them so much.
[00:54:41] ANAND GIRIDHARADAS: I want to push on something you're saying, because I think this is at the very intellectual heart of the matter, and in some ways, the basic... There's a kind of litmus test question about where you stand on this and how you see this issue of inequality. Because frankly, president Trump talked about inequality. Joe Biden talks about inequality. Elizabeth Warren talks about inequality. So at some point, if everybody's talking about it, we need to sharpen a little bit, what are the different theories out here? And there is a basic dividing line that I propose in the book, which is whether you have a win-win paradigm or win-lose paradigm.
What you are describing there with homelessness is that some people are homeless because the people on top have made certain choices. I fully agree with you on that, I think that maps onto many issues as a true thing, but that is the fundamental thing that most people in power deny. A relationship between those on the bottom and those on top. No one denies, from Joe Biden to Donald Trump, to Elizabeth Warren, no one denies that there are some people on the bottom and some people on top, no one denies.
I think that there's too many people on the bottom and that life is too hard on the bottom right now in America. No one denies that. The question is are the people down below there in spite of the success of the people in the top or because of the success of the people on the top. And Winners Take All in some ways is an emphatic argument that the people down below are down there because someone's standing on their back. Someone is standing, in fact, on their neck. And the reason this is important when you, then when you start to say, how do I look at these different initiatives that are happening? How do I look at 10,000 Women from Goldman Sachs? How do I look at impact investing? How do I evaluate presidential candidates?
You should ask yourself, is the theory of change being proposed here one in which we can empower those below by, in no way, threatening the wealth and power of those on top - win-win - or is the theory of change at work by this person or this organization that the only way to do right by those in the bottom is to crimp the power and wealth of those on top. That is a fundamental dividing line in how you see America today.
On dynastic wealth in America w Chuck Collins Part 3 - This is Hell! - Air Date 10-12-21
[00:56:54] CHUCK MERTZ - HOST, THIS IS HELL!: The report states that the Cox, Brown, Walton, Marriott, and Simplot families have set up their own corporate political action committees, PACS, which give millions to political candidates and campaigns on both sides of the aisle.
If their project is bipartisan, how insulated is the unfair tax system from reform?
[00:57:16] CHUCK COLLINS: Well, again, these families, when they... when they think about their wealth, and how to influence the political system, they have, uh, a whole range of tools. They can give directly to candidates; they can give to think tanks to shape the conversation; they can give to dark money political action committees where they don't have to disclose their influence; they can give to tax exempt charities, so they can even get tax breaks... give to their own foundations, and have those foundations, whether it's endow a chair at a university that's, uh, you know, must teach their perspective, uh, or think tanks that, you know, advocate a certain worldview; um, they have found ways, essentially, to weaponize all the ways in which they can deploy their wealth.
Um, and that's... that's, you know, partly again, this the way they... they wield power, um.
And, you know, even their... even their charities, which, you know... we know that the Koch brothers, uh, have figured out how to weaponize their tax exempt money-- money that they give to their own charities and take tax breaks. They have figured out how to deploy that to advance their narrow interests.
[00:58:37] CHUCK MERTZ - HOST, THIS IS HELL!: The report states that members of dynastically wealthy families wheeled not only a great deal of direct financial power, but power in the form of philanthropy, as well, as you were just saying. So how successful is philanthropy at obfuscating any... any gain in the power of the wealthiest? Is that why we may not recognize the power of the wealthiest, because of philanthropy? Is that the point of it?
[00:59:01] CHUCK COLLINS: Well, you know, I mean, I think, uh, you know, there are probably very wealthy people who genuinely have a philanthropic impulse, and they're... and they're giving money to things because they think it's... it's, you know, it's the right thing to do and they...
But, um, philanthropy has also become, kind of, a virtue washing. It's a way in which wealthy people can sanitize their relationships... I mean, this goes way back. I mean, think about Andrew Carnegie, uh, and his steelworks, um, and his union bashing. You know, the, he was an S.O.B. in terms of how he made his money, but at the end of his life, you know, he became Mr. Public Library, right? Mr. "Carnegie Endowment for Peace and International Relations." You know, his philanthropic legacy, uh, is also what people remember. And, maybe, they forget just how ruthless he was, uh, when he was building his businesses.
And same with the Sacklers. People speculate that, you know, the Sacklers, uh, gave, you know, billions of dollars to charities, particularly arts institutions all around the world and in the United States. And that, in some ways, It buffered them from the appropriate scrutiny that probably should have started much sooner as to how they were making their money.
Um, so yeah, philanthropy can sometimes distract us from the questions of "How's this money been made?" And, you know, "Is this philanthropy, uh, turning our heads? Is it... is it, uh, funding certain things, but not other things."
I mean, it's very rare to find wealthy philanthropists who fund, uh, things that would, uh, increase tax fairness; that would help worker rights; uh, that would, you know, uh, diminish their own wealth and power. Uh, it tends to be reinforcing the status quo. So philanthropy is not a solution. It's sometimes part of the problem.
[01:01:00] CHUCK MERTZ - HOST, THIS IS HELL!: Is the only way you can have a charitable foundation-- to allow for those foundations that are far less charitable, like the Kochs, that only become a place to warehouse assets-- is... is that the difficulty here? That the only way that we can.. you know, without the rules that allow for the charitable foundations like the Kochs, there wouldn't be charitable foundations?
[01:01:21] CHUCK COLLINS: Yeah. Basically it's the same.. Same system that a truly benevolent foundations, uh, use.
Now, uh, you know, I... at The Institute for Policy studies, we have a whole charity reform initiative, because one of the things we've seen, even during the pandemic, is private foundation... wealthy people, uh, give their money to intermediaries.
Uh, you, and me, and Alex, and other people, if we have any extra money, give it straight to the charity, we give it to the food bank, or to your local public radio station, or whatever. You know, you're giving directly to the charity. But what wealthy people do, is they park the money in their own private foundations and donor-advised funds, and tend to warehouse it. You know.
And they immediately get a tax break when they put their money into the charitable institution. And foundations are only required to pay out 5% a year. And that can include overhead, right? So that can include paying my kid to work at the office, or whatever. I mean, so it... it... it... the money's not really flowing, it's being warehoused.
And we... we... we proposed, especially during the pandemic, you know, that foundations should pay out at a higher rate. And they shouldn't be able to give to, um, closely affiliated organizations. And they probably shouldn't be used for gifts over a certain threshold.
You know, uh, you have these billionaires who are saying, "Oh, I'm creating, you know, my foundation in my image, and I'm putting all my billions into it." And that means that money will never be taxed ever. Uh, and that there's something broken about that.
So I think we do need to change the rules governing philanthropy. Uh, modernize them to protect democracy from narrowly controlled philanthropy.
[01:03:16] CHUCK MERTZ - HOST, THIS IS HELL!: Are the rules that do govern philanthropy now, are they relatively new, or is it just that the billionaires today have far better, better legal services, and accounting services, and they can find the loopholes?
[01:03:31] CHUCK COLLINS: No, you know, the framework for the current structure of private foundations, donor advised funds, what qualifies as a charity, was created in 1969, which, relative in U. S. history, was probably one of the most relatively equal times in U. S. History. So, uh, those folks could not have anticipated this incredible growth of concentrated wealth and power.
And that's been a steady trend that, uh, that we've certainly studied, is, uh, charitable giving by low and middle income people has gone down. In part because people are feeling more economically insecure, almost all the growth in philanthropic giving is by the rich. And so the rich are starting to use their... flex their power muscles through charity.
Uh, but we would argue, you know, increased payout; uh, require donor advised funds to have a payout (they don't even have a payout); uh, require that money move within a certain period of time; and cap the amount you can deduct. Maybe it's a half a billion dollars, you know? Uh, so Mark Zuckerberg wants to give $10 billion to charity, he's only going to get a tax break for half a billion of that.
That... that... that... some of that's going to go to the Treasury to pay for public infrastructure. Because philanthropy is not a substitute for a fair tax system and public investment.
[01:04:59] CHUCK MERTZ - HOST, THIS IS HELL!: The report says that the Waltons, the Marshals, and Melons, have used their foundations to fund nonprofit public policy organizations advocating for reducing taxes on the wealthy, as well as rolling back the corporate taxes, and environmental regulations, that constrain the profits of their family businesses.
Some, such as the Kochs and Melons, use their foundation to funnel millions to donor advised funds, charitable giving vehicles with no payout requirement and little transparency, which can be used to fund anonymous, unlimited political advocacy.
Why do... why do these donations... why does this funding of political movements... Why is this so secret? And is that a protection, that is a... protection that's good for all of democracy for everybody, not just for the rich.
[01:05:44] CHUCK COLLINS: Well, it shouldn't be secret. Um, but... but some wealthy people find ways to do that.
For instance, uh, there's a... there's a donor advised fund consortium called Donor's Trust, which is a huge funder of right wing organizing, funding groups, you know, White Supremacist groups, uh, funding Amicus briefs to defend, you know, uh, Supreme Court Justices who are, you know, conservatives.
So, and... and donors can, kind of, launder the money, if you will, through these anonymous donor advised funds.
But... but most typically it's a transparent system. You should, you know... if a foundation files an annual report, and it says where the money goes, but here they're... they're layering it up with these other, um, giving intermediaries. Um, so that... that's... that's... that is something that should also be fixed. There should be greater transparency.
I mean, again... Chuck, think about this. We are subsidizing, through our tax system, these donors, and in fact, the richer you are, the bigger the tax breaks. Uh, we... we estimate for every dollar that a billionaire gives to a private... to their own charity, say, we, as taxpayers, are chipping in 74 cents in lost tax revenue.
So, there's a genuine public interest in knowing where the money's going, and putting some guardrails up to protect our democracy, protect our society from yet another form of power that the wealthy wield.
Final comments giving a mental health update
[01:07:20] JAY TOMLINSON - HOST, BEST OF THE LEFT: We've just heard clips today, starting with On the Media explaining the reporting behind the Pandora Papers. Fresh Air, in two parts, described the winners and losers of offshore tax havens. Planet Money went through the process of establishing a shell corporation in the US just to show how easy it is. The Brian Lehrer Show discussed the prospects for a global minimum tax agreement. This is Hell, in two parts, explained dynastic wealth accumulation in the US and the bipartisan support for the corruption that allows that system just continue to roll along. And the Thom Hartmann Program looked at South Dakota, the capital of immortal financial trusts.
That's what everyone heard, but members also heard bonus clips discussing one of my favorite financial topics philanthropy with Pitchfork Economics highlighting that plutocrats have all seemingly gotten on board with making the world a better place, but just don't seem to be able to understand that their role in causing so many of our problems. And This is Hell explained how the structures of philanthropy are being used to influence politics and avoid taxation indefinitely.
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And now, we would normally be hearing from you, but I'm skipping voicemails and messages today to talk about something completely unrelated and different. If you would like to leave a message to be played on a future show, please do. You can always call and record a message at (202) 999-3991 or simply write me a message to [email protected]
Today I just wanted to talk a little bit about mental health, because I think that it's approximately two years, almost exactly, since I talked on the show about my seasonal depression, but the reason I did that a couple of years ago is because at the time I could not think of anything else to talk about. I was in the middle of a particularly strong wave of numbness and depression and crying over nothing in particular when I was trying to sit down and record some final comments, just like these, and I thought, "I cannot possibly muster the energy to think of anything to say other than how I'm feeling right now."
And people responded very nicely to that, not just with positive thoughts and feelings being sent my way, but also mirroring or echoing those feelings that they also experience, either generally or during different seasons when it gets dark and gray, or even the reverse, some people said that they start to feel down in the summertime, which I hadn't even been aware of until people told me.
So, that was a couple of years ago, and I don't know that I've talked about it much if at all, since then, so I thought maybe I'd give a little bit of an update because the last couple of years have actually been going okay. I haven't been experiencing those same sort of fall depression feelings, even in 2020, when I think that I had all the right in the world to be feeling down about the state of the world, or the grayness outside my window, or whatever else. And so I can just speak from my own experience, but tied in with a little bit of what I have heard from others and the experience that others have, is I think I have a pretty good sense of the changes that were made that actually made a difference in how I felt.
So, the first is that it was in 2020 when a bunch of new people joined the show, and I don't mean listeners. I mean, I think initially we started doing transcripts, and so we ended up with three volunteer transcriptionists - Ben, Ken, and Scott. Well, it wasn't Scott at the time, he joined later, but in addition to them helping with transcripts, we also have a little chat room, a little text thread that we chat on behind the scenes. And then very shortly after they started the two producers whose names you know, Erin and Deon, started on the show to help with research and those back end production elements of the show. But again, they joined on the, behind the scenes chat, and I chat with them at least once a week to check up on our research for coming episodes. And I gotta be honest, I don't know, is it half, is it two thirds of the time that I spend this talking with them on the phone that is just sort of having fun and joking around and bullshitting with each other? Probably. It is probably somewhere in that range.
And so those additional social interactions beyond your normal friend group, like I got friends who I've had for years, but as with so many people, you know, I chat with them, well, let's just say way less than I wish I did, but the benefits of having a group that's tied to the show means that we sort of chat all the time and we talk about politics on the text thread and all of that. And so those extra social interactions I think have been really helpful for us.
And then the second major element, and I really do think that this is a major element, is projects. Side projects, be it hobby, be it productive or unproductive something you'd just like to do or whatever, I think that makes a huge difference. And I have had what I think is a wrong impression of my relationship to side projects for years now. For a really long time I thought that I did extra projects when I had the extra energy, and now I believe that I have the extra energy when I do the side projects. I think the side projects are literally a source of energy for me. The fact of having a side project gives motivation that would not have been there otherwise, and that motivation is a source of energy for me.
And I think particularly last year, in 2020, when, as I said, I think I had all the right in the world to feel down and glum about the state of the world and the grayness outside my window, I had side projects that I was working on that kept me motivated and energized, or maybe just distracted enough that my mood never really dipped. I never felt those telltale signs of Seasonal Effective Disorder, the feelings of being down, the feelings of being sort of numb to the world that I have gotten so used to year after year after year. Maybe not every year, but most years, those feelings come around at about this time of year. Last year they did not show up at all. This year so far, so good. We'll see how things go.
But I can only speak for myself, as I said, and your mileage may vary, but those changes to the state of my world, I think, are a big part of it. So to the degree that you think that's good enough advice to try on your own, give it a shot. More social interactions, side projects, give a try.
That is my mental health update. I'm very glad to be able to say that things have been better recently, and I certainly hope that everyone else is doing at least okay. I hope you've been doing better or taking whatever steps that you can think to take to make the world feel okay and to get through the seasons, if the seasons do have a particular impact on you, or to get whatever help you need to help you through it.
As always, I would love to hear your comments on this or anything else. You can always leave us a message at (202) 999-3991 or by emailing me to [email protected] Thanks to everyone for listening. Thanks to Deon Clark and Erin Clayton for their research work for the show and participation in our bonus episodes. Thanks to the Monosyllabic Transcriptionist Trio, Ben, Ken, and Scott for their volunteer work, helping put our transcripts together. Thanks to that entire group of people for being an enjoyable bunch of folks to hang out with, even if just digitally. And thanks as always to Amanda Hoffman for all of her work on our social media outlets, activism segments, graphic designing, web mastering, and occasional bonus show co-hosting. And thanks to those who support the show by becoming a member or purchasing gift memberships at bestoftheleft.com/supportsupport or from right inside the Apple Podcast app.
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So coming to you from far outside, the conventional wisdom of Washington, DC. My name is Jay!, and this has been the Best of the Left Podcast coming to you twice weekly, thanks entirely to the members and donors to the show from bestoftheleft.com.