News Release Archive - Capitalism

“Pandora Papers” Experts: U.S. Now a Billionaire Tax Haven

“Pandora Papers” experts, Chuck Collins, author of The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions (Polity Books), and tax attorney Bob Lord, are available for comment on the Pandora Papers revelations.

Over the last three months, Collins has briefed members of the International Consortium of Investigative Journalists (ICIJ), on the “wealth hiding” systems in the USA. Articles interviewing Collins are now appearing in the British Guardian, El Pais (Spain) Infobae in Argentina, El Pais (Brasil), Univision (Mexico), and dozens of others.

On Sunday, the ICIJ released “The Pandora Papers,” based on 11.9 million leaked files. It exposes billionaires involved in aggressive wealth hiding and tax avoidance. It reveals, for instance, that “South Dakota now rivals opaque jurisdictions in Europe and the Caribbean in financial secrecy,” notes Collins.

“It is time for U.S. lawmakers to shut down the hidden wealth system that allows for such aggressive tax avoidance and the sequestering of wealth,” said Collins, who just wrote the piece “Why billionaires love to park their wealth in places like South Dakota” for Salon and is co-editor of Inequality.org at the Institute for Policy Studies. He added: “The U.S. has become the weak link in stopping global crime and wealth hiding. States like South Dakota and Delaware have morphed their laws to attract billions, sometimes illicitly obtained, from around the world. We in the U.S. should be embarrassed that we’ve become a magnet for kleptocratic funds.”

Collins’ book, The Wealth Hoarders, points to the role of enablers, what scholars call “the wealth defense industry,” in facilitating the use of dynasty trusts, off-shore tax havens, and anonymous shell companies. These wealth defenders include accountants, tax attorneys, wealth managers, and family office staff, that aid the super-rich in putting vast amounts of wealth beyond the reach of tax authorities. Collins also puts forward a comprehensive plan for shutting down the hidden wealth system.

Bob Lord is a Phoenix tax attorney, associate fellow at the Institute for Policy Studies, and legal expert on trusts, estate tax law, and explaining the complicated tax dodges deployed by the superwealthy.

Collins and Lord are available to comment on the latest revelations from the ICIJ Pandora Papers. Email: Contact Olivia Alperstein Olivia@ips-dc.org or Chuck Collins: chuck@ips-dc.org

Additional background resources:

Interview with Chuck Collins by International Consortium of Investigative Journalists:

How the world’s richest defend their wealth with help from a dedicated industry.”

By Bob Lord: “Beyond Lucrative: Jeffrey Epstein’s Billionaire Tax Avoidance Business” and “Taxing 7 Billionaires Could Pay For Third of Biden’s $3.5 Trillion Spending Package.”

IPS Policy Brief: “Dynasty Trusts: How the Wealthy Shield Trillions from Taxation Onshore,” by Kalena Thomhave and Chuck Collins.

Report: $21 Trillion Financial Cost of Militarization Since 9/11

LINDSAY KOSHGARIAN, lkoshgarian@nationalpriorities.org@lindsaykosh
    Program director of the National Priorities Project, Koshgarian is co-author of the just released report: “State of Insecurity: The Cost of Militarization Since 9/11,” which states: “Over the 20 years since 9/11, the U.S. has spent $21 trillion on foreign and domestic militarization.

    “Of that total, $16 trillion went to the military — including at least $7.2 trillion for military contracts.

    “Another $3 trillion went to veterans’ programs, $949 billion went to Homeland Security, and $732 billion went to federal law enforcement. …

    “Spending on the DoD totaled $14 trillion over the last 20 years, including $1.9 trillion in funds appropriated specifically for wars through the Overseas Contingency Operations fund. Even though in recent years the fund was increasingly used for routine military expenses (or ‘base requirements’), this total falls short of estimating the true costs of the War on Terror. More than 70 percent of the Pentagon’s $14 trillion in spending over the last 20 years was for operations, purchasing and research and development. Operations and maintenance ($5.7 trillion) includes costs for operating, deploying, and maintaining weapons systems, including the military’s nearly 300 ships and more than 13,000 aircraft, and facilities, as well as training and other costs. Procurement ($2.8 trillion) includes the purchases and upgrades of major weapons systems such as ships and aircraft, as well as land vehicles, missiles, and ammunition.”

Global Billionaires See $5.5 Trillion Pandemic Wealth Surge

A one-off 99 percent levy on billionaires’ wealth gains during the pandemic “could pay for everyone on Earth to be vaccinated against COVID-19 and provide a $20,000 cash grant to all unemployed workers,” according to new analysis released today by Oxfam, the Fight Inequality Alliance, the Institute for Policy Studies and the Patriotic Millionaires. The organizations are calling on governments to tax the ultra wealthy who profited from the pandemic crisis to help offset its costs.

CHUCK COLLINS, NJOKI NJEHU, MORRIS PEARL, via Olivia Alperstein, olivia@ips-dc.org
Pearl, a former managing director at Blackrock and chair of the Patriotic Millionaires, said: “The surge in global billionaire wealth as millions of people have lost their lives and livelihoods is a sickness that countries can no longer bear.”

Njehu, Pan Africa Coordinator of the Fight Inequality Alliance, said: “We need to tax the rich for us to stand any chance of reversing the inequality crisis we’re in.”

Collins is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits Inequality.org.

He just wrote the piece “Global Billionaires See $5.5 Trillion Pandemic Wealth Surge,” which states: “The world’s billionaires have seen their wealth surge by over $5.5 trillion since the beginning of the pandemic in March 2020, a gain of over 68 percent. The world’s 2,690 global billionaires saw their combined wealth rise from $8 trillion on March 18, 2020 to $13.5 trillion as of July 31, 2021, drawing on data from Forbes. …

“The COVID-19 pandemic has pushed over 200 million people into poverty, according to estimates by World Bank researchers.

“United Nations Secretary-General Antonio Guterres urged governments to ‘consider a solidarity or wealth tax on those who have profited during the pandemic, to reduce extreme inequalities.’ The IMF and the World Bank have also called for wealth taxes to help cover the costs of COVID-19.

“Argentina has collected 223 billion pesos (around $2.4 billion) from its one-off pandemic wealth tax.”

Will Wall Street Eat Away at Biden Infrastructure Spending?

RICARDO VALADEZ, CARTER DOUGHERTY, carter@ourfinancialsecurity.org@RealBankReform
    Valadez is private equity campaign manager at Americans for Financial Reform and Dougherty is communications director for the organization.

    The group just put out a statement: “Wall Street private equity is sometimes called the ‘billionaire factory,’ but that doesn’t stop these already-rich folks from trying to get their hands on taxpayer money. When the COVID-19 pandemic began, private equity lined up to get money from CARES Act — and succeeded. Then, only strong public pressure kept it out of the Biden rescue legislation. More recently, only fighting by Democrats and progressives kept them out of the bipartisan infrastructure bill.

    “Now private equity is going to try to feed at the public trough again in the coming infrastructure legislation that Democrats want to pass via reconciliation. That will be yet another fight with Wall Street in the fall, even as progressive lawmakers prepare for a broad reform of private equity known as the Stop Wall Street Looting Act.

    “Private equity (they used to be called leveraged buyouts) is a nasty Wall Street invention whose influence has exploded in the last decade. They buy profitable companies, mostly with debt that the company has to pay back. They sell off valuable assets, lay off workers, create business disasters, and too often, bankruptcies. Payless Shoes and Toys ‘R’ Us both went belly up at the hands of private equity. Solarwinds, the firm behind the massive hack of U.S. government agencies, was also private equity’s work. Take a look at this two-minute video from AFR to learn more.”

First Sign of Normalcy: Ramp up Evictions

MALIKA CONNER, malika@righttocounselnyc.org@RTCNYC
Director of organizing for Right to Counsel NYC Coalition, Conner said today: “The CDC eviction moratorium set to expire July 31 doesn’t go far enough to protect tenants: It stops landlords from evicting only some tenants and doesn’t prevent landlords from suing. It also prioritizes landlords’ profits over tenants’ needs by requiring tenants to pay what little money they have towards rent.

“The current eviction protections in New York State, enacted through the COVID-19 Emergency Eviction and Foreclosure Prevention Act (CEEFPA), protects most tenants from eviction, but only if they submit a hardship declaration form. These state protections are set to expire on August 31 and must absolutely be extended to prevent a health and homelessness crisis.

“Neither of these so-called moratoriums stop landlords from suing tenants wholesale, which is a serious cause of anxiety and stress for tenants and puts hundreds of thousands of families in immediate risk of eviction when they expire.

“Right now, despite these protections, there are more than 236,000 households across New York State with eviction cases in Housing Court. During the pandemic alone, landlords sued more than 65,000 tenants for eviction. That’s a nearly 40 percent increase in eviction cases since March 2020 and tens of thousands of families at risk of losing their homes.

“We cannot let these protections expire while New Yorkers are still reeling from the pandemic. Many tenants are without work, are struggling to pay for necessities like food and healthcare, and continue to endure poor living conditions in apartments neglected by landlords throughout, and even before, the pandemic. A recent study by UCLA also found that the number of coronavirus cases and deaths ‘increased dramatically’ in states where eviction moratoriums had been lifted.

“Governor Cuomo and the State Legislature must act now to stop mass evictions. The CEEFPA must be strengthened and extended beyond August 31st so all tenants are protected. Along with its many horrors, the COVID-19 pandemic taught us some important lessons. One of those lessons is that we can never again accept the routine inhumanity of the housing court eviction machine. Allowing the eviction protections to expire is simply not an option and will quickly reel us back to overcrowded, superspreader housing courts and families facing homelessness.”

Public Banking Gaining Traction in California

MICHAEL BRENNAN, mryanbrennan@gmail.com@mrbrnn
Brennan is a research fellow for The Democracy Collaborative and just published the report “Constructing the Democratic Public Bank: A Governance Proposal for the Los Angeles Public Bank.” They also published a Public Banks policy kit for the Democracy Policy Network. Last year, Brennan had an op-ed in the Washington Post on the need for public banks in response to the pandemic.

Brennan explains: “In 2019, California passed AB-857, allowing the state to charter ten local public banks. The grassroots group Public Bank Los Angeles has been organizing since 2017 to advance public banking, and legislation to create a business plan for the public bank in Los Angeles is currently pending before the City Council. In June, San Francisco’s Board of Supervisors passed an ordinance mandating a task force create the business and governance plans for a public bank, and the California State Assembly passed AB-1177, which would create a free retailing banking public option. Ten cities and counties in central California have recently passed resolutions to begin the process of creating a joint regional public bank.

“The emerging California public banks have the potential to address a host of economic, social, and ecological crises, and public banking efforts across the country are looking to California’s cities and regions to lead the way. State and local governments need public financial infrastructure to recapture the public’s money being extracted by private banks and bond investors. The economic recovery from COVID-19 must be equitable. The ongoing housing crisis demands better tools to keep tenants and the public in control of housing and real estate development. To address the climate crisis, the financial sector must embed social values beyond profit. Economic development needs a paradigm shift toward community wealth building, especially as part of strategies for reparations for Black and Indigenous peoples.

“But with public banks moving now to a question of ‘how,’ rather than ‘if,’ movements have to begin critically considering the governance design of these banks. Because banking, finance, and policymaking are intentionally obscure and technocratic terrains, ensuring the new public banks are designed to address these crises requires ongoing popular education and engagement.”

Is Big Pharma’s Dominance Through Bayh-Dole Act Finally Getting Scrutiny from Biden?

STAT News in “Biden’s executive order would pause a Trump rule forbidding march-in rights to lower drug costs” reports: “In a little-noticed move, the Biden administration has hit the pause button on a rule that would prevent the federal government from using a controversial legal provision for combating the high prices of products developed with taxpayer dollars.”

(Last week, STAT News reported: “Major pharmaceutical companies and trade groups helped fund the campaigns of more than 2,400 state legislators nationwide in the 2020 election.” STAT News focuses on health issues and is produced by Boston Globe Media.)

JAMES LOVE, james.love@keionline.org, @jamie_love
    Love is director Knowledge Ecology International, a not-for-profit non-governmental organization that “searches for better outcomes, including new solutions, to the management of knowledge resources.” KEI is focused on “social justice, particularly for the most vulnerable populations, including low-income persons and marginalized groups.”

    He said today: “The Bayh-Dole Act, passed in 1980, created a uniform policy for the management of patents on federally funded R&D. Among the provisions are some that can be used to increase competition and address abuses, such as excessive pricing. In the early 1990s, Congress pressed the federal government to curb high prices on federally funded drugs for HIV, cancer and rare diseases. In 1995, President Clinton announced he would no longer enforce reasonable pricing conditions in contracts. Since then, the NIH has rejected a number of petitions to use its rights to ‘march-in’ on patent rights, and grant licenses to generic manufacturers, when prices are excessive.

    “Universities and drug companies have lobbied aggressively and successfully for more than 20 years to prevent this from happening. There is a petition outstanding today by three prostate cancer patients for the government to grant a march-in request on Xtandi, a drug that costs $150k+ per year in the United States, and far less everywhere else. On Jan 5, 2021, NIST [National Institute of Standards and Technology] proposed a regulation to eliminate pricing as a grounds for a march-in request. The executive order put a hold on that provision, and now the Biden administration will have to rule on the Xtandi petition, which is before DoD. The precedent will be important for many other products.”

“The Terrible Origins of July 4th”

MARGARET KIMBERLEY, margaret.kimberley@blackagendareport.com@freedomrideblog
Kimberley is author of Prejudential: Black America and the Presidents which was published last year.

She just wrote the piece “The Terrible Origins of July 4th,” which notes that among the grievances toward the British monarch outlined in the Declaration of Independence were: “He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.”

Kimberley explains the context: “The men who every school child is taught to think of as ‘patriots’ had two concerns which pushed them to declare independence. First, in 1763 the British emerged victorious after the end of a conflict against France. It was known in Europe as the Seven Years War and in America as the French and Indian War. The American moniker existed precisely because the French allied themselves with indigenous nations against the British. British victory brought them French held territory west of the Appalachians in the region now comprising midwestern states, but they knew they could not easily end indigenous wars if settlers along the eastern seaboard were allowed to go further west.

“Because of continued resistance from leaders such as Pontiac of the Ottawa nation, King George III issued the Proclamation of 1763, which forbade settlement west of the Appalachian mountains. One of the speculators poised to become a wealthier man if settlements were permitted to move westward was George Washington.

“He was not alone in his wish to conquer the entire continent and to get rich doing it. Property claims had already been made in these regions, and neither he nor the rest of his cohort were going to let British treaties with indigenous people stand in their way. They largely ignored the edict and went wherever they wanted to go.

“Their second concern was whether the British were committed to continuing the previously unfettered right to slave holding. In 1769 an enslaved man named James Somerset was purchased in Virginia and brought to England. He eventually escaped but was recaptured and was in the process of being sold to Jamaica. But Somerset had friends who went to court on his behalf. In 1772 a judge ruled that enslaved people could not be forcibly removed from England.

“The ruling didn’t end slavery in British territories and in fact it lasted in those regions for 50 more years. But even this narrow decision was too much for white Americans who feared that the crown might undermine or even end their right to slaveholding.”

Kimberley blogs at Freedom Rider and is editor and senior columnist at Black Agenda Report.

The Case for a National Infrastructure Bank

ALPHECCA MUTTARDY, via Angela Vullo, avullo@nibcoalition.com
Muttardy is with the Coalition for the National Infrastructure Bank and recently released a statement: “In the final weeks of June, 2021, the Biden administration has negotiated with a bipartisan group of Senators on the terms of a package to provide $973 billion for infrastructure projects over five years ($579 billion in new spending, plus $394 in re-authorization of existing spending). Finalizing the Bi-Partisan Plan (BPP) will still depend on reaching agreement on how to pay for it, as well as on the terms of a second, companion package — The American Family Plan — moving through Congress under reconciliation rules.

“Even if approved, the BPP will not be enough to cover the full infrastructure financing gap identified by the American Society of Civil Engineers. ASCE estimates that $2.6 trillion is needed over 10 years, far greater than the $579 billion of new money over five years suggested under the BPP.” The group states that currently, “nothing is allocated under the BPP to cover high speed rail, schools, dams and levees, public parks, affordable housing, or new water delivery projects for drought stricken areas in the U.S. And the amount assigned to water infrastructure is a fraction of what is needed, according to ASCE.

“A fully funded, public, National Infrastructure Bank (NIB), as set out in HR 3339, would finance up to $5 trillion to cover all of the infrastructure projects listed above, in every single jurisdiction in the country. Passage of the Bill would guarantee complete funding over a ten-year period, without the need to re-negotiate again in five years or beyond. Moreover, the NIB would pay its own way, offer low-cost loans, mobilize for economic growth and development, all without adding to federal taxes or deficits.”

Muttardy is a macroeconomist and was with the International Monetary Fund for 25 years, now retired. She has also been involved with Our Revolution, as chair of economic policy for the group in northern Virginia.

Can We Really Build Infrastructure When Wall Street Games the System?

Can We Really Build Infrastructure When Wall Street Games the System?

WILLIAM LAZONICK, william.lazonick@gmail.com
Lazonick is professor emeritus of economics at the University of Massachusetts and president of the Academic-Industry Research Network and has written several papers for the Institute for New Economic Thinking.

He is co-author of Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored (Oxford University Press, 2020).

He argues that Wall Street machinations like stock buybacks are effectively “distributions to shareholders that manifest the legalized looting of the U.S. business corporations, rendering employment unstable and incomes inequitable.”

He adds that without regulations on stock buybacks the Biden infrastructure plan will simply send large sums of money to companies that will go right out the door into stock buybacks, just as happened with the Trump taxcuts. To ‘build back better’ the companies need to invest the money in their products and workers, not send it to Wall Street.

He said today: “The Biden administration’s plans to ‘build back better’ must address the transformation in corporate resource allocation that has underpinned the increase in income equality in the United States since the 1980s. The key characteristic of the rise in income inequality has been the concentration of income among the richest households, driven in large part by distributions of corporate cash to shareholders. Over the decade 2010-2019, companies included in the S&P 500 Index spent a total of $5.3 trillion on buybacks, equal to 54 percent of net income, and another $3.8 trillion on dividends, equal to 39 percent of net income.”

See also from the Institute for New Economic Thinking: “Stock Buybacks Stand in the Way of Biden’s Infrastructure Plan” by Lynn Parramore.