Last week the investing world lost a giant. John “Jack” Bogle, founder of the Vanguard Group, passed away at the age of 89. He left behind a legacy that changed the way Main Street Americans invest and was never shy about speaking out against excessive Wall Street greed and reckless corporate management.
In 2016, Bloomberg estimated that Bogle had saved investors more than $500 trillion in fees and trading costs since he founded Vanguard. In addition to re-inventing the way Americans save for retirement with his index fund, Bogle was always outspoken about shareholder rights, putting investors first, and out- of- control Wall Street greed. He railed against corporate CEO’s who make excessively more than their employees and managers who won’t disclose basic things like how the company is planning for climate change or spending its shareholders’ money to influence politics. Bogle went so far as to submit a public comment to the Securities and Exchange Commission (SEC) on the petition for a rulemaking asking the SEC to require corporations to disclose their political spending. He graciously shared his time with the Corporate Reform Coalition to talk about his belief that shareholders should be served first and that if they want disclosure, they should get it.
Now, coalition partners share their thoughts and reflections on the father of the index fund:
Jack Bogle’s wisdom, grit, and boldness will be greatly missed. You can read more about his life and work in the Philadelphia Enquirer and watch the interview he did with this coalition on corporate responsibility below. Our thoughts are with his family and friends at this time.
Newly in the majority, U.S. House Democrats have made their stance abundantly clear — fighting corruption and protecting democracy is priority number one. Their inaugural bill is far-reaching, tackling reforms aimed at our elections, the campaign finance system, as well as ethics and lobbying all in the same piece of legislation. H.R. 1, dubbed the “For the People Act,” is the most sweeping and comprehensive anti-corruption bill of the last 50 years. It is a legislative antidote to many of the problems associated with the disastrous U.S. Supreme Court Citizens United decision and increased attempts at voter suppression
Passing this bill in the House is an important and necessary first step to set the stage for its implementation in the future and for building the public demand for anti-corruption legislation as a whole. It is truly remarkable to see so many transformative policies in one bill, and to see the overwhelming support for that bill inside and outside of DC.
The bill would:
- Restructure campaign finance by creating small-donor funding for our elections, instituting a public financing system where federal funds will match small donations at a rate of 6 to 1, and ending secret political contributions—“dark money”– by forcing disclosure of all major election-related funders such as 501(c)(4) organizations. It would also require tech companies to disclose large campaign advertisement purchases and block ad buys by foreign entities.
- Expand and protect voting rights by enacting automatic voter registration, making Election Day a federal holiday, and ending certain felons’ voting disenfranchisement upon release. Provisions of H.R.1 would also bring an end to congressional district gerrymandering by instituting nonpartisan state-level redistricting commissions for House elections.
- Restore ethics and transparency in government by requiring presidential candidates to release 10 years of tax returns, prohibiting House members from serving on corporate boards, creating a code of ethics for the U.S. Supreme Court, and expanding foreign and domestic lobbyist registration and reporting laws.
Strengthening our democracy and fighting corruption have long been priorities of Public Citizen and for that reason we are proud to endorse the “For the People Act.” But we need YOUR help to pass this bill! H.R. 1 currently has the endorsement of 225 House members and the number is growing every day In order to win these democracy reforms in the long run, we need to make sure your U.S. Representative is on the list. Please call your member of Congress and ask her or him to support H.R. 1 now!
Never at a loss for spinning its corporate-friendly agenda as somehow benefiting working Americans, yesterday’s “2019 State of American Business Address” by the U.S. Chamber of Commerce’s CEO, Thomas J. Donohue, was a textbook example of using syrupy public relations-friendly language to mask the Chamber’s true intent. The speech laid out the Chamber’s policy priorities for 2019 and for the newly sworn-in 116th Congress in characteristically rosy terms.
A closer look at what was officially called the “#AmericanDreams” speech, though, paints a starkly different picture from how it sounded on its surface. The vision Donohue laid out—of maintaining private, for-profit healthcare; of an unregulated pharmaceutical industry free to price gouge consumers; of unrestrained use of fossil fuels that would pollute our environment and further contribute to climate change; of policies preventing consumers and workers from suing corporations that have harmed or discriminated against them; and of a total lack of transparency in corporate political spending—would be more like an American Nightmare for the average citizen.
When Donohue claims that the state of the economy is extremely strong, what he really means is that it’s great if you’re a CEO or wealthy stockholder raking in record corporate profits and increased share values due to record stock buybacks. However, the average American has been facing years of wage stagnation, job insecurity, underemployment, and a dangerous lack of worker protections. And, when he says “prudent regulation,” he means fewer safeguards for workers, consumers, and the public at large.
The Chamber’s well-funded and heavily-staffed lobby machine can be very savvy. So, when it says it will “take bipartisanship into account” we know that means that with a Democratic-controlled U.S. House of Representatives in the 116th Congress, the Chamber cannot simply rely on congressional Republicans to pass its corporate agenda alone, as it’s done for years. And though the Chamber has added bipartisanship as a criterion in its 2019 legislative scorecard (at 10% of total score, making it roughly the weighted equivalent of the “participation” grade in an average college class), these feints toward moderation are merely PR. Its policy advocacy is no less extreme in its tilt toward corporations and the extremely wealthy folks who make up its donor base and against the average consumer, worker or family.
To wit: Donohue promises to “use all of our resources to combat” a single-payer healthcare system. Although such a system would overwhelmingly benefit the average American and is tremendously popular with the public, it would endanger the Chamber’s corporate buddies in the health industry, so the Chamber is now threatening to oppose it with all of its considerable lobbying might. Elsewhere in the speech, Donohue claims that protests of natural gas pipelines and the push to keep fossil fuels in the ground are causing undue strain on American traditional energy producers. In reality, this decline is because those entities are themselves fossils, tied to a business model that is no longer profitable (let alone prudent given the clear evidence of climate change). This willfully misleading stance proves the Chamber is just as beholden to the fossil fuel industry as ever.
Later in the speech, Donohue claims that Americans’ right to file civil and class action suits “undermines justice” when really it protects vulnerable populations from powerful wealthy interests. And, when the Chamber says that the U.S. should restrict shareholder rights to “reform” publicly-owned corporations’ policies on matters such as disclosure of political spending, it really means it wants average investors to have less of a say and intends to do all it can to ensure secret money continues to be dumped into political campaigns.
In all of these cases, the Chamber’s policy goal amounts to letting corporations do whatever they want with zero accountability and zero protection for the public interest. The Chamber may be attempting to put on a fresh new face to deal with a new Congress, but rest assured, its agenda is as pro-corporate and anti-Main Street as ever. Perhaps instead of promising to stand for “every child, every family, every worker, and every entrepreneur,” a more honest promise would be that the Chamber stands for “every corporation, every billionaire, every Big Bank, and every CEO.”
This post originally appeared on chamberofcommercewatch.org.
As Shutdown Drags on, Agencies Devoted to Consumer and Worker Health and Safety Unfunded and Deprioritized
In Washington, D.C., and across the nation, furloughs forced by the partial government shutdown have hit agencies with a mission to protect consumers and workers particularly hard.
The shutdown, which is in its 19th day and currently the second-longest in US history, was triggered by President Donald Trump’s insistence that the budget include $5.7 billion for a wall across the U.S. southern border. The shutdown is already impeding vital consumer and worker protection priorities.
If the shutdown is allowed to persist, the cessation of these essential consumer and worker protections threatens significant public harms, as corporate violators go unpunished and food and product safety inspections are delayed and decreased.
The importance of these functions makes even slight capacity reductions a serious cause for concern, and it is noteworthy that the majority of federal workers at unfunded agencies whose responsibilities are considered essential are required to keep working without pay.
Table: Eleven federal consumer and worker protection agencies affected by the shutdown:
|Agency||Total Staff||Furloughed Staff||% Furloughed|
|Consumer Product Safety Commission||550||530||96%|
|Equal Employment Opportunity Commission||2,078||1,975||95%|
|Environmental Protection Agency||13,972||13,160||94%|
|Securities and Exchange Commission||4,436||4,151||94%|
|Commodity Futures Trading Commission||673||591||88%|
|Federal Communications Commission||1,442||1,197||83%|
|Federal Trade Commission||1,124||862||77%|
|National Highway Traffic Safety Administration||584||331||57%|
|Pipeline and Hazardous Materials Safety Administration||563||285||51%|
|Food and Drug Administration||17,937||8,830||49%|
|Federal Aviation Administration||44,929||17,791||40%|
Source: Agency shutdown memos submitted to the White House Office of Management and Budget.
For information about the specific impacts due to furloughs brought on by the shutdown at 11 federal consumer and worker protection agencies, read on. More
Donald Trump’s allies have put together a sprawling political operation that continually collects money from major donors, many of whom have interests before the Trump administration.
Six groups funded by dozens of ultra-wealthy donors have raised more than $50 million to support President Donald Trump and his agenda since his inauguration, a sharp reversal from his three-year-old pledge to be independent from moneyed interests, a Public Citizen analysis (PDF) has found.
It’s a sharp contrast with Trump’s first run for office, which was famously dysfunctional. Our analysis of Federal Election Commission data found that since the start of 2017, the six pro-Trump groups had raised $54.4 million from 136 megacontributors who donated at least $100,000 each, with an average contribution of nearly $400,000.
The money has been used to promote Trump’s agenda through ads and support Republican candidates.
These six groups, including America First Action and Trump Victory, are fueled with contributions from corporate CEOs, largely from the gambling, finance, real estate and energy sectors, as well as from dark money groups that do not disclose their donors.
We analyzed contributions by the six largest groups used by big-money donors to support Trump and Vice President Mike Pence from January 2017 to mid-October 2018. The analysis excludes Trump’s official campaign committee, which is subject to the federal $2,700 cap on individual donations.
As the 2020 election season gets underway, the report highlights the growing influence of Trump’s fundraising operation and provides further evidence that moneyed interests, rather than the working class, are the true beneficiaries of Trump’s presidency.
With significant contributions from the gambling, finance, real estate and energy sectors, Trump’s bogus claim to be a populist president looking after the common man rings ever hollower.
Here’s a look at where the big Trump money is coming from:
Sheldon & Miriam Adelson: $10 million to America First Action
Sheldon Adelson, CEO of Las Vegas Sands Corp., and his wife, Miriam, are the largest donors to pro-Trump groups to date. The Adelsons have also been major donors to Republicans and to Israeli Prime Minister Benjamin Netanyahu. Adelson pushed hard to relocate the U.S. embassy in Israel to Jerusalem and also for the U.S. to quit the 2015 Iran nuclear deal. The Trump administration granted Adelson’s wishes on both issues. Adelson has also pushed to build a casino in Japan – an issue that Trump himself brought up with Japanese Prime Minister Shinzo Abe, according to a report by ProPublica. Preposterously, Trump awarded the Presidential Medal of Freedom to Miriam Adelson. The couple’s main achievement: They have given nearly $300 million to Republican causes since 2012, according to the Center for Responsive Politics.
Cherna Moskowitz: $2 million to America First Action
The president of the Hawaiian Gardens Casino in Long Beach, Calif., Moskowitz was married to Irving Moskowitz, a controversial physician, hospital owner, bingo parlor owner and philanthropist who died in 2016. The couple have been major supporters of the right-wing Israeli settler movement, funding some of the most controversial Jewish settlements in the West Bank and East Jerusalem.
Lorenzo and Frank Fertitta: $2 million to America First Action
The Fertittas are billionaire Las Vegas brothers, whose father was a casino developer. They profited massivelyfrom the 2016 sale of their stake in Ultimate Fighting Championship, which promotes mixed martial arts fights. They are the top executives at Red Rock Resorts, a publicly traded company and the parent company of Station Casinos LLC, which owners 20 Las Vegas area casinos and manages a tribal casino in Northern California. Along with several casino magnates, the Fertittas, who know Trump from his Atlantic City casino days, when Trump hosted mixed martial arts fights at his casinos. The Fertittas have been enthusiastic supporters of President Trump and other Republicans.
Craig Estey and Patricia Estey: $600,000 to Trump Victory
Craig Estey and his wife Patricia are major conservative donors. Craig Estey is founder of Nevada Restaurant Services, which owns more than 200 tavern-casinos that operate in several Western states. The company’s Dotty’s slot parlors feature delis and salad bars in addition to slot machines.
Steve Wynn: $500,000 to America First Action
Wynn, the casino magnate, is a former Trump business rival who evolved into a Trump friend and donor. Wynn resigned as the Republican National Committee’s finance chair amid sexual assault allegations. Trump, however, did not sever ties with the casino mogul and former CEO of Wynn Resorts. The Trump super PAC America First Action said it would not return a $500,000 donation from Wynn after the sexual abuse scandal broke. Wynn stepped down from his company, but denied the allegations.
Joe Ricketts: $2.1 million, mostly to Future45
Ricketts, founder of investment firm TD Ameritrade, and his wife Marlene, spent millions to oppose Trump in the primary, backing a PAC running ads attacking his candidacy. Two months before the 2016 election, the Ricketts family, which controls the Chicago Cubs, decided to back Trump. Ricketts’ son, Todd Ricketts, was initially nominated to serve as the second-ranking official in the U.S. Commerce Department, but withdrew his name. Todd Ricketts was named finance chairman of the Republican National Committee, replacing Steve Wynn.
Charles Schwab: $2 million to Future45
Schwab, the founder of the stock brokerage firm that bears his name, and his wife Helen have been big supporters of Trump, donating $1 million to Trump’s inaugural committee and his legal defense fund. Their 21-year-old granddaughter, Samantha, was hired to work in the White House. Meanwhile, lobbyists for the Charles Schwab brokerage firm have been pushing the Securities and Exchange Commission to weaken a proposal for investor-protection standards.
Paul Singer: $1 million to Future45
Singer is the billionaire founder and CEO of hedge fund Elliott Management Group, is a longtime Republican donor who opposed Trump during the primary season. The conservative Washington Free Beacon, a news organization funded by Singer, paid for the opposition research firm Fusion GPS to dig up damaging information on Trump, a project that was taken over by a law firm tied to the Democratic Party and Clinton campaign, leading to the production of a dossier that first outlined allegations of Trump’s connections to Russia. Former White House chief strategist Steve Bannon vowed to declare war on Singer after news broke that the Free Beacon had paid for anti-Trump research.
Matthew T. Mellon II: $1 million to America First Action
Warren A. Stephens: $500,000 to America First Action
Stephens, president of Little Rock, Ark.-based investment bank Stephens Inc., was an ardent opponent of Trump, spending millions to oppose his nomination. Since Trump’s election, Stephens has been somewhat critical of Trump but has been supportive of cutting taxes on investment gains and dialing back the Affordable Care Act.
John W. Childs: $355,000, primarily to America First Action and Trump Victory
The chairman of Massachusetts-based private equity firm J.W. Childs Associates, has long supportedRepublican candidates and super PACs. Childs is considered one of the pioneers in leveraged buyouts – corporate takeovers fueled by high levels of debt.
Stephen A. Schwarzman: $344,400 to Trump Victory
Schwarzman, the CEO of private equity firm Blackstone Group LP, is a frequent informal adviser to the president who has used his connections to the president to bridge tensions with China that could roil financial markets. In a 2015 interview with CNN, Schwarzman said “I’ve known Donald for 40 years, and he is the P.T. Barnum of America.” Schwarzman’s firm received a $20 billion investment from Saudi Arabia at the time Trump made his first presidential trip abroad, to Saudi Arabia. Schwarzman ran a White House CEO advisory group that was shut down after Trump equated white supremacists in Charlottesville with peaceful protesters. Schwarzman has continued to stand by Trump despite numerous controversies engulfing the administration.
Robert Gillam: $300,000 to Trump Victory
One of the richest men in Alaska, Gillam died of a stroke in September 2018. The founder of McKinley Capital Management, Gillam was a college classmate of Trump. Gillam was a fierce opponent of a copper and gold mine proposed for Alaska’s Bristol Bay, where Gillam owned a fishing lodge. Gilliam, who unsuccessfully tried to become Trump’s Interior Secretary, met with Trump in March 2017. He made a $250,000 contribution to the Trump Victory Fund after Trump’s EPA reversed course and blocked the Pebble mine from moving forward.
Bruce Berkowitz: $100,000 to Trump Victory
A mutual fund manager known for his contrarian stock market bets, Berkowitz has made a huge wager that the Trump administration will release Fannie Mae and Freddie Mac, the government-controlled mortgage finance giants, from government control. The two companies, which buy up mortgages and package them as securities, were placed under close government supervision during the financial crisis a decade ago. Berkowitz’s fund has reduced its holdings but still calls them an “excellent investment.”
Geoff Palmer: $4.1 million, primarily to America First Action
A Los Angeles real estate developer, Palmer has been one of Trump’s most enthusiastic supporters. Palmer is known in Los Angeles for building “garish” luxury buildings with skywalks that allow residents to avoid encountering homeless people on the city’s streets. Palmer has fought affordable housing requirements and has been criticized for building a “series of fortress-like faux-Italian apartment blocks.
Sherry Xue Li and Li Lianbo Wang: $600,000 to Trump Victory
Li and Wang are New York developers who proposed in 2013 to build a “China City” in rural New York State, which is now being billed as a Chinese education center. Little is known about the pair, who have become major Republican donors since Trump’s election. They are now working on a new project at the same location in the Catskill mountains. Known as the Thompson Education Center, the project is designed to attract Chinese investors under the controversial federal EB-5 program, through which overseas investors can receive green cards.
Stanley Chera: $439,000 to Trump Victory
Ronald Weiser: $200,000 to America First Action
Weiser is founder of Michigan real estate investment firm McKinley Associates. He was ambassador to Slovakia under President George W. Bush and is currently chairman of the Michigan Republican Party. Weiser was a reluctant Trump supporter
Andrew Beal: Nearly $2.7 million, mostly to America First Action and Trump Victory
A billionaire banker and distressed asset investor, Beal is a longtime Trump friend and business partner who loaned nearly $500 million to Trump’s failed casino business. Beal purchased a failing natural gas power plant out of bankruptcy and sought to alter electricity market rules to keep the plant running profitably. However, federal electricity regulators unanimously rejected this proposal. Beal has also taken control of a major natural gas power plant in Arizona that is subject to federal regulation.
Murray Energy Corp.: $1 million to America First Action
Murray Energy, the largest U.S. private coal company, is run by a close Trump ally, CEO Robert Murray. A climate change denier, Murray developed six deregulatory executive orders and submitted them to the Trump administration offering ways to prop up the coal industry. The company cited its flagging finances in pushing for coal and nuclear subsidies, including the potential impact on union worker retirement plans. Days after Murray made a written request for bailout assistance, the company donated $1 million to America First Action.
Harold Hamm/Continental Resources Inc.: More than $1 million, largely to America First Action
The Oklahoma oil billionaire Harold Hamm, CEO of the shale oil drilling company Continental Resources Inc. is a key Trump ally on energy, who got a top seat at Trump’s inauguration. He was an energy adviser to 2012 Republican presidential nominee Mitt Romney and developed a relationship with Trump starting in late 2012. A board member of America First Policies, Hamm has aggressively promoted fossil fuel exploration on federal lands and was a supporter of former Trump EPA Administrator Scott Pruitt, a fellow Oklahoman.
Karen Buchwald Wright and Thomas Rastin: $865,000, largely to America First Action and Trump Victory
Wright and Rastin, an Ohio couple, are major Republican donors. Wright is CEO of Ariel Corp., which makes natural gas compressors, while Rastin is an executive at the company. The company supports legislationrequiring the government giving natural gas vehicles the same regulatory treatment as electric vehicles.
Hushang Ansary and Shala Ansary: About $700,000, primarily to Trump Victory
A Houston billionaire and former diplomat, Hushang Ansary was formerly Iran’s ambassador to the U.S. A Republican donor and backer of Jeb Bush’s presidential campaign, Hushang Ansary was formerly chairman of oil and gas equipment firm Stewart & Stevenson LLC, which he sold for $710 million in 2017. He is also chairman of Parman Capital Group LLC.
Global Energy Producers LLC: $325,000 to America First Action
A firm tied to Igor Fruman, Russian-speaking Ukrainian businessman and Lev Parnas, a Russian-born businessman. Subject of a complaint from the Campaign Legal Center alleging that Global Energy Producers may be a shell donor created to funnel undisclosed donations to the super PAC. The firm told the Daily Beast that the donation “was a 100% legal contribution made by American citizens who immigrated to this country to flee Eastern European oppression and chase their American dream.” The company says it is working on a plan to export liquefied natural gas from the U.S.
Ira Greenstein: $100,000 to America First Action
An executive and a lawyer in New Jersey, Greenstein quit his job as chairman of telecommunications company IDT Corp. to work as a White House official from February 2017 to March 2018. Greenstein was described by Politico as a longtime family friend of Jared Kushner, Trump’s son-in-law. Greenstein formerly was president of Genie Energy, an energy firm with operations in the U.S. and Israel. The firm’s Israeli operation is headed by a far-right Israeli politician who has met with former Interior Secretary Ryan Zinke.
Douglas Kimmelman: $100,000 to Trump Victory
Kimmelman, a former Goldman Sachs partner, is founder of Energy Capital Partners, a private equity firm that has become one of the largest owners of fossil fuel power plants and also owns a nuclear waste managementcompany. In 2014, Public Citizen alleged that Energy Capital Partners manipulated electricity prices by purchasing a major coal-fired power plant in Massachusetts and announcing its closure shortly before an electricity market auction, pushing up the market rate charged by its other plants in the region. Kimmelman peronally donated $50,000 to Florida Gov. Rick Scott, after the state made pension investments in Energy Capital Partners, according to a report by Maplight and Capital & Main.
Randal Perkins: $500,000 to America First Action
Perkins is CEO of AshBritt Inc., a Florida debris-hauling company that has often been hired by the U.S. Army Corps of Engineers to respond to hurricanes, floods and wildfires. Perkins is a former Democratic candidate for Congress, whose company has faced a long string of price-gouging allegations in Florida and California. Officials in California have been concerned about the high costs of a $1.3 billion fire cleanup involving AshBritt, in which one worker was killed. Florida Attorney General Pam Bondi, a Trump ally, in 2017 issued a subpoena to AshBritt over “delays and potential price increases” involving hurricane cleanup. The Campaign Legal Center filed a complaint against Ashbritt, alleging that it violated a ban on active federal contractors making political contributions. The contribution was later updated to list Perkins as the donor. Perkins told Roll Call that the donation was mistakenly reported as a corporate donation rather than a personal one.
Dan Snyder: $100,000 to Trump Victory
Snyder, the controversial owner of the Washington Redskins, is one of several NFL team owners who have donated to Trump. In addition to his donation to Trump Victory, Snyder also donated $1 million to Trump’s inaugural festivities. The Redskins, who want to build a new football stadium, recently advocated to extend the District of Columbia’s lease on the federally owned site of the Redskins’ former home, RFK Stadium, opening up land to residential and commercial development, including a new stadium. Maryland Gov. Larry Hogan has also pitched a land swap with the Interior Department in an effort to keep the team in Maryland.
Michael Lindell: $100,000 to Trump Victory
Lindell, the TV pitchman and inventor famous for selling foam pillows on television, is also a big Trump supporter. Lindell has called Trump the “best president this country has ever had.” He faced a boycott after declining to pull advertising from Fox News’ Laura Ingraham’s show when she mocked a survivor of the Parkland High school shooting.
One year ago, as many Americans were in the midst of holiday celebrations and preparations, Congress and President Donald Trump stuffed the stockings of corporations and the super-rich with tax giveaway goodies. Despite the hard-fought efforts of Public Citizen and our allies, the “Tax Cuts and Jobs Act”, signed into law one year ago today, contains innumerable items from the 1%’s wish list. Here we catalogue the top five undeserved presents gifted to corporations and the wealthy.
1. Sweets for lobbyists
Our “Swamped” report showed how much corporate America was investing in making sure their holiday wishes came to fruition: more than 60 percent of the registered lobbyist in D.C. lobbied on the bill. That’s 7,088 lobbyists in total. Industries like Big Pharma and financial firms topped the list of lobbyists by number and ended up as some of the tax bill’s most handsomely-rewarded sectors.
2. Globetrotting profits
Certainly getting a round-the-world vacation for a holiday present would probably be the best gift most of us could imagine. That’s just what corporate profits got when last year’s tax giveaway plan included a provision that worsened the problem of multinational corporations stashing their profits on the books of their foreign subsidiaries incorporated in tax haven nations. Now, the taxes multinational companies pay on the profits made in other countries is at most half of what corporations pay on profits made in the U.S. And, the more physical operations corporations have overseas, the less they pay. Some workers are already feeling the hurt- like the GM workers who got a pink slip for their holiday “present.”
3. An economy further rigged without care
Billionaires and other who’s who of Whoville made out like the Grinch in last year’s tax bill and sucked up even more wealth into their overstuffed moneybags. Not only did the bill lower the top tax rate that the richest folks have to pay, multimillionaires and their heirs now have more money to grab. The value of gifts and inheritances that won’t be subject to tax were doubled — up to $11 million and $22 million for couples.
4. Heaping helping of self-dealing
Politicians, especially those that like the Trump make a lot of their money through LLCs and other entities known as “pass-throughs,” gave themselves a great gift when they included a huge deduction for those types of companies in last year’s tax bill. Until Trump’s tax returns are disclosed, we cannot know the extent to which he and his family personally benefitted from the tax changes—but it’s clear the Trumps saved a huge amount. Luckily, the incoming House leadership have pledged to address disclosures the President’s tax returns as one of the first items on their agenda for the new Congress and the Ways & Means committee plans to request his tax return information as well.
5. The “gift” that keeps on “giving”
It is clear workers didn’t get the actual gift they were promised from the tax bill—a magical $4,000 check. Instead, corporations self-gifted stock buybacks to boost investors’ stock values and CEOs’ resulting bonuses. Unfortunately, like a phantom from A Christmas Carol, the harmful outcomes of the bill will likely haunt working Americans for Christmases yet to come. The Affordable Care Act’s requirement for insurance is gone because of the bill, meaning an estimated 13 million Americans will end up being pushed out of insurance while premiums will increase for the rest of us. And, the tax giveaways tied a huge red bow on the top of the federal deficit by increasing it by $2 trillion. And, the naughty boys and girls in Congress want to use these budget shortfalls to enact miserly cuts to critical government services like Medicare, public education, and nutrition assistance. Moreover, come Tax Day 2019, a large number of us might be receiving a tax bill instead of a return because of under withholding.
So, here’s to ringing in the New Year with a new tax plan that discloses Trump’s tax returns, repeals the giveaways to corporations and the wealthy, and that prioritizes growing new revenues (for example, by taxing Wall Street trades) in order to invest in American communities to create a just country for all of us.
One year into the “Tax Cuts and Jobs Act”, the bill’s name remains only half accurate. Certainly taxes have been cut for the wealthiest and corporate executives have lined their pockets, however wages have remained stagnant. Shareholders have made a killing since the tax cuts, while economic gains for working class Americans have been marginal at best. (In fact, corporations are spending 128 times as much on stock buy backs as they are on worker bonuses and raises.) As for the latter part of the bill’s title, the New York Times reports that that the nation’s largest companies have actually cut more jobs than they have created since the bill’s inception.
The problem with last year’s tax giveaway package is that it was fundamentally based on several flawed assumptions. Supporters assumed the bill would incentivize corporations to hire more workers. They haven’t. They argued the cuts would lead to increased wages. They haven’t. What these tax cuts have produced is unsustainable short term economic growth that looks good on paper, but has disproportionately benefitted the wealthy. Instead of stimulating economic growth in Middle America, the tax cuts have contributed to increased economic consolidation around urban centers.
Like past attempts at “trickle-down” supply side economic policy, the Tax Cuts and Jobs Act has failed because of its inability to alter corporate incentive structures and in fact exacerbated the problem since CEOs pad their paychecks through bonus schemes supercharged by stock buybacks. And, while being marketed as a cure for Main Street’s modern woes, when it has actually exacerbated problems associated with a changing global economy like outsourcing of jobs and investment.
Across the board, corporations have focused their investments on stock buybacks rather than human capital. And, because of backward incentives in the law that give a sharply discounted rate for profits made by foreign subsidiaries, a fair amount of the investment has happened overseas by companies that simultaneously decreased U.S. manufacturing. This idea is perhaps best exemplified by the recent workforce cuts made by General Motors. After GM was bailed out by taxpayers in 2008 and saw their taxes cut in 2018, they are still closing plants across the Midwest, most notably in Michigan and Ohio and moving more production to Mexico. The company has framed these cuts as proactive cost saving measures as they prepare to shift towards electric and autonomous vehicle production, yet that hasn’t stopped workers from feeling any less betrayed by the false promises they were fed.
The harmful outcomes of the bill on working families will only get worse, as millions of Americans will be pushed out of health care coverage as healthcare premiums ultimately increase in addition to substantially ballooning the federal deficit, which has led conservatives to call for cuts to important government programs like Medicare, Social Security disability benefits, education, nutrition assistance and more.
It’s time for Congress to throw this scam of a tax giveaway package on the trash heap where it belongs and go to the table in a bipartisan way to discuss which loopholes in our tax code to close and which new revenue sources to put in place so that we can truly protect hardworking families and invest in American communities.
Dozens of megadonors have contributed $54.4 million to six groups backing President Donald Trump’s agenda, his reelection and Republican candidates for office, an analysis by Public Citizen has found.
Public Citizen analyzed [PDF here] contributions by large donors to six groups supporting Trump and Vice President Mike Pence. The analysis reveals a large political operation backing Trump as well as Republican candidates. These six groups are fueled with contributions from corporate CEOs and other large donors as well as from dark money groups that do not disclose their donors.
The gusher of contributions to pro-Trump groups is a sharp contrast with the early days of Trump’s political career three years ago. Trump, who famously ran his primary campaign with a tiny staff, initially claimed to be self-funding his candidacy and avoiding big-money donors. This assertion, while not entirely accurate, was part of his appeal to voters.
Public Citizen’s analysis of Federal Election Commission data found that since the start of 2017 through mid-October 2018, the six pro-Trump groups have:
- Raised $54.4 million from contributors who donated at least $100,000, with an average contribution of nearly $400,000.
- Received contributions of at least $100,000 from 136 people and organizations.
- Relied upon donations from the gambling, finance, real estate and energy sectors, largely from CEOs, senior executives, retired CEOs and spouses of CEOs.
Under federal law, political groups may participate in U.S. elections as long as they don’t coordinate their efforts with a candidate’s campaign. These groups have proliferated in recent years after the Supreme Court allowed unlimited contributions from corporations and wealthy individuals. Separately, another Supreme Court decision has led to the expansion of “joint fundraising committees” that allow donors to write six-figure checks, which then can be parceled out to other campaigns. Trump and his allies have made use of all of these strategies.
For the report, Public Citizen analyzed contributions by the six largest groups used by big-money donors to support Trump and Vice President Mike Pence. The analysis excludes Trump’s official campaign committee, which is subject to the federal $2,700 cap on individual donations.
The six groups studied by Public Citizen have raised more than $153 million to date, according to data from the Center for Responsive Politics. Most of that money has already been spent, with roughly $145 million in expenditures so far.
Pro-Trump groups are on track to far exceed what major donors spent to reelect President Barack Obama in 2012. That year, Priorities USA Action, the super PAC endorsed by Obama, raised $79.1 million. Of that money, $73 million came from 125 donors contributing at least $100,000. Since then, super PACs and other forms of big-money politics have mushroomed.
The Public Citizen analysis illustrates how giant fundraising committees, many of which have been able to accept unlimited contributions since the 2010 Citizens United decision, are become an essential piece of Trump’s round-the-clock political fundraising operation. Several Trump organizations have parallel “dark money” operations, which are structured as nonprofit “social welfare” organizations under the tax code and are not required to disclose their donors. These dark money groups often turn around and make contributions to super PACs.
|Group||Total contributions over $100K||Total Contributions||Spent||Description|
|AMERICA FIRST ACTION INC.||$31,537,911||$38,801,172||$35,994,963||Pro-Trump super PAC, led by Republican operative Brian Walsh|
|TRUMP VICTORY||$14,512,652||$30,450,763||$27,274,789||Joint Fundraising Committee between Trump campaign, RNC, several state parties|
|FUTURE45||$5,242,555||$6,269,614||$6,233,204||Republican super PAC supported by Charles Schwab, Joe Ricketts and Paul Singer. Associated with the 45Committee, a dark money group.|
|GREAT AMERICA COMMITTEE||$2,142,278||$4,052,421||$3,795,185||Leadership PAC set up by Vice President Mike Pence.|
|GREAT AMERICA PAC||$650,000||$8,082,744||$8,582,778||Pro-Trump hybrid PAC/super PAC led by GOP Strategist Ed Rollins. Affiliated with dark money group Great America Alliance.|
|TRUMP MAKE AMERICA GREAT AGAIN COMMITTEE||$310,553||$65,466,544||$63,162,636||Joint Fundraising Committee between Trump campaign and RNC.|
Source: Federal Election Commission, Center for Responsive Politics
The main super PAC backing Trump, America First Action, has been the leading vehicle for contributions from ultra-wealthy donors, raising a total of nearly $39 million to date, according to the Center for Responsive Politics. America First Action can take unlimited contributions, and has raised about $31.5 million from donors contributing at least $100,000, Public Citizen’s analysis found.
Trump’s latest proposal to pay for a border wall very likely is illegal – a violation of the Anti-Deficiency Act.
Backing down from his pledge to shut down the government if Congress doesn’t allocate $5 billion to build the wall, Trump is now proposing that various agencies throughout the administration find surpluses in their budgets and allocate those surpluses toward building his wall.
The problem is – even if such surpluses exist in agency budgets – that money has been specifically authorized by Congress for other purposes, not for building a wall at the Mexican border. The Anti-Deficiency Act appears to prohibit using these funds for any purpose not authorized by Congress.
Normally the Anti-Deficiency Act is easily sidestepped because of Attorney General opinions that have narrowed its scope, such as not applying the Act to the White House since the White House is not an agency, and exempting volunteerism as long as the volunteer agrees not to seek compensation.
But in this instance, the second clause of the Anti-Deficiency Act seems to apply. 31 USC 1341(a)(1)(B) prohibits federal employees of agencies from involving the “government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law.”
Trump may ask for the funds without violating the Anti-Deficiency Act since the law does not apply to the White House, but officials of the various agencies are not permitted to make any obligation for expenditures that have not yet been appropriated by Congress. Congress would have to appropriate these expenditures to make them permissible.
Again, this law is rarely invoked because of so many loopholes. The White House could try to argue that 31 USC 1341(a)(1)(B) merely prohibits an agency from making obligations for an expenditure before Congress has appropriated the money. Since the funds at the agencies have already been appropriated, Trump could argue that the law does not apply.
But I would read the Anti-Deficiency Act to be spot-on in this circumstance, since the appropriation language for these funds never authorized an expenditure for the wall. This constitutes spending money for a purpose never authorized by law or by the appropriations language.
Just to be clear, though, the Anti-Deficiency Act was designed to prevent agencies from spending money prior to authorization or in excess of authorization. In other words, it is intended to prevent agencies from spending money they do not have.
However, the Act’s emphasis that expenditures must be authorized by Congress strongly indicates that funds not authorized for the wall cannot be spent for that purpose. Allocating an agency’s surplus funds for the wall prior to any authorization by Congress would constitute a violation of 31 USC 1341(a)(1)(B) of the Anti-Deficiency Act.
In the rubbish heap of legislation officially known as the Tax Cuts and Jobs Act of 2017 hid one tiny gem: Elimination of the deduction for the pay of the five most senior executives that exceeds $1 million. CEO and senior executive pay has skyrocketed in the last three decades even as wages for average Americans have stagnated. Where CEOs in the 1970s had pay packages no more than 20 times what their average workers took home, that ratio now exceeds 300:1 at most of the Fortune 500 companies.
It’s not that today’s CEOs are brighter or better stewards than their 1970s counterparts. After all, those earlier CEOs helped pioneer development of important pharmaceuticals, computers, and efficient automobiles. And many studies demonstrate there’s no connection between pay and performance. What’s worse is that corporations can deduct the pay from their tax bills in some instances.
Why should taxpayers subsidize these exorbitant multimillion dollar pay deals? They shouldn’t. And Congress, in theory, agrees. In fact, Congress has opposed these subsidies for nearly three decades since in 1993, Congress approved a section in the tax code (Sec. 162(m)) that eliminated the deduction for pay above $1 million for the five most senior executives. At that time, very few executives beyond the most senior received more than $1 million. The rationale was straightforward– expenses that aren’t necessary for running a business– such as martinis at lunch, can’t be deducted. Firms that pay less taxes because of such deductions are simply asking other taxpayers to fill the gap in funding important government services.
However, the 1993 law included a loophole: If the pay exceeding $1 million for each employee is subject to a “performance test” approved by shareholders, then it could still be deducted. In the law passed a year ago, Congress closed this loophole– but only as it applies to the five most senior executives. Just that tiny improvement to the tax will generate $10 billion in new tax revenue during the next ten years, according to congressional estimates. That could buy about 5,000 miles of new roads, or free tuition for 200,000 college students, or 30 new hospitals for veterans.
True elimination of the bonus loophole would mean the prohibition on deduction of multimillion dollar bonuses would apply to all, not just the top five, employees at a firm—which would be achieved by legislation supported most notably by Sen. Jack Reed (D-R.I), Sen. Richard Blumenthal (D-Ct.) and Rep. Lloyd Doggett (D-Texas).
Since President Trump signed the law on December 22, 2017, it’s too early to determine whether this small pay reform hidden in what is otherwise a wreck of a law will bridle rising CEO pay; corporations would not have reflected the impact in pay for that year. However, a Fortune analysis showed that the CEOs of the largest 350 companies received an average of 18 percent more in 2017 than in 2016, or about $18 million.
But politically, this small change buried in the 2017 law puts Republicans on the record in support of ending deductions for multimillion dollar performance-based pay. That better positions the ability to pass legislation to fully close the loophole and eliminate the deduction for high pay for all employees paid more than $1 million. While only a few employees outside the C-suite took home such packages in the 1990s, thousands of people at a single companies do today. In 2007, in New York City alone, 4,793 bankers made more than $1 million in bonus payments. This information was only available because of one of the reports looking into the financial crash of 2008, and the pool of uber-million packages undoubtedly has grown the last decade. Congress estimates closing the entire loophole would generate $50 billion over ten years. That’s 50,000 miles of roads, tuition for a million students, or 150 new veterans’ hospitals.
We look forward to a genuine discussion about needed changes to the tax code. This should include fully eliminating the bonus loophole, and other tax-related pay reforms. As Americans rightly reflect on the injustices of Trump’s corporate tax cut bill one year after enactment, we can find at least some comfort that lawmakers of all political stripes agree that escalating senior management pay deserves reform.