Bill Gates, I Implore You to Connect Some Dots

Bloomberg, Dimon and Gates call liberal tax ideas unfair. But excessive wealth is the real threat.


Credit…CJ Gunther/EPA, via Shutterstock

The billionaire class has begun unloading on Elizabeth Warren. A few days ago, Jamie Dimon of J.P. Morgan Chase — at just $1.6 billion in net worth, a comparative piker — said Senator Warren “vilifies successful people.” Then Bill Gates ($107 billion), in an onstage interview with The Times’s Andrew Ross Sorkin, mused about what his tax bill might be in a Warren presidency and left the door open to voting for Donald Trump should Democrats nominate Ms. Warren. And then Michael Bloomberg ($52 billion), who had previously criticized Ms. Warren as anti-corporate, signaled his intention to jump into the race, obviously out of concern at her rise.

I’m not expert enough to judge the wisdom of Senator Warren’s proposed wealth tax. I know that there are questions about its constitutionality and that several European nations tried a similar approach and found it unworkable (though four countries still have it). I don’t get why the candidates aren’t simply proposing to increase marginal income tax rates on dollars earned above some very high figure. That seems a lot more straightforward to me.

So this column is not a brief for Ms. Warren’s wealth tax or for her candidacy — I don’t have a preferred candidate. Instead, I want to make a simple plea to the country’s billionaires: Multibillion-dollar fortunes are often called excessive and decadent. But here’s something they’re rarely called but ought to be: anti-democratic. These fortunes will destroy our democracy.

Why “anti-democratic”? Why would it matter to our democracy whether Jeff Bezos is worth $113 billion (his current figure) or $13 billion?

This is carnage, plain and simple. No democratic society can let that keep happening and expect to stay a democracy. It will produce a middle and working classes with no sense of security, and when people have no sense that the system is providing them with basic security, they’ll make some odd and desperate choices.

This is obviously not hypothetical. It’s happening. It’s what gave us Mr. Trump (well, that plus the campaign lies). It’s what made Britons vote Leave (well, that plus the campaign lies). It’s what has sparked protests from France to Chile to Lebanon, and it’s what is making the Chinese model — no democracy, but plenty of security — more attractive to a number of developing countries around the world than the American model. Our billionaires ought to ponder this.

I imagine that Mr. Gates is repulsed by Mr. Trump on some level, and at the end of the day probably couldn’t vote for him. But if I could meet Mr. Gates, I’d ask him: Sir, do you not see the link between your vast fortune and the ascendance of Donald Trump? If not, I implore you to connect some dots. Wealth has shifted to the top. It has been taken away from the middle class. That makes people anxious. Anxiety opens the door to demagogues. It’s not complicated.

We need changes in our laws and institutional structures that will alter what economists call pretax distribution. This is a point made by the economist Dean Baker — that income inequality is less a result of tax policy than laws and regulations that have made the rich richer before taxes are even imposed. These changes have to do with

And yes, we do need to tax rich people more. In my lifetime, the top marginal tax rate has gone (roughly speaking) from 91 percent to 77 percent to 50 percent to 35 percent to today’s 37 percent. That’s too low. I’m not with Bernie Sanders, who says there should be no billionaires. That’s too punitive. But I do think Mr. Bezos could get by on $15 billion or so.

Billionaires will protest that they’d rather give it away than trust the government with it. I applaud their generosity. But even someone as rich as Michael Dell, who went on a rather infamous riff along these lines at Davos, could not build a nationwide high-speed rail system, clean the country’s air and water (and keep them clean), create a network of free opioid clinics across the country or give towns that have been hollowed out by the global economy a second chance. Only government can do those things. MORE

The Billionaires Are Getting Nervous

Bill Gates and others warn that higher taxes would lead to lower growth. They have their facts backward.

By 

The editorial board is a group of opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom.

Bill Gates in New York on Wednesday.
Credit…Calla Kessler/The New York Times

When Bill Gates founded Microsoft in 1975, the top marginal tax rate on personal income was 70 percent, tax rates on capital gains and corporate income were significantly higher than at present, and the estate tax was a much more formidable levy. None of that dissuaded Mr. Gates from pouring himself into his business, nor discouraged his investors from pouring in their money.

Yet he is now the latest affluent American to warn that Senator Elizabeth Warren’s plan for much higher taxes on the rich would be bad not just for the wealthy but for the rest of America, too.

Mr. Gates, the co-founder of Microsoft, suggested on Wednesday that a big tax increase would result in less economic growth. “I do think if you tax too much you do risk the capital formation, innovation, U.S. as the desirable place to do innovative companies — I do think you risk that,” he said.

Other perturbed plutocrats have made the same point with less finesse. The billionaire investor Leon Cooperman was downright crude when he declared that Ms. Warren was wrecking the American dream. Jamie Dimon, the chief executive of JPMorgan Chase, complained on CNBC that Ms. Warren “uses some pretty harsh words” about the rich. He added, “Some would say vilifies successful people.”

Let’s get a few things straight.

The wealthiest Americans are paying a much smaller share of income in taxes than they did a half-century ago. In 1961, Americans with the highest incomes paid an average of 51.5 percent of that income in federal, state and local taxes. In 2011, Americans with the highest incomes paid just 33.2 percent of their income in taxes, according to a study by Thomas Piketty, Emmanuel Saez and Gabriel Zucman published last year. Data for the last few years is not yet available but would most likely show a relatively similar tax burden.

The federal government needs a lot more money. Decades of episodic tax cuts have left the government deeply in debt: The Treasury is on pace to borrow more than $1 trillion during the current fiscal year to meet its obligations. The government will need still more money for critical investments in infrastructure, education and the social safety net.

This is not an endorsement of the particulars of Ms. Warren’s tax plan. There is plenty of room to debate how much money the government needs, and how best to raise that money. The specific proposals by Ms. Warren and one of her rivals, Senator Bernie Sanders, to impose a new federal tax on wealth are innovations that require careful consideration.

But a necessary part of the solution is to collect more from those Americans who have the most.

And there is little evidence to justify Mr. Gates’s concern that tax increases of the magnitude proposed by Ms. Warren and other candidates for the Democratic presidential nomination would meaningfully discourage innovation, investment or economic growth.

The available evidence strongly suggests that taxation exerts a minor influence on innovation. Experts have an imperfect understanding of what drives innovation, but taxation isn’t in the same weight class as factors including education, research and a consistent legal system.

Congress has slashed taxation three times in the past four decades, each time for the stated purpose of spurring innovation, investment and growth. Each time, the purported benefits failed to materialize. President Trump initiated the most recent experiment in 2017. The International Monetary Fund concluded this year that it had not worked.

Moreover, while higher tax rates may weigh modestly against innovation and investment, that calculus is incomplete. It ignores the question of what the government does with the additional money. It also ignores the possibility that higher taxes could result in more innovation.

A study of American patent holders found that innovators tend to come from wealthy families, to grow up in communities of innovators and to receive high-quality educations in math and science. Mr. Gates, one of the most successful entrepreneurs in American history, fits the profile: He grew up in an affluent family and received the best education money could buy.

The implication of that study, and related research, is that public investment, funded by taxation, could give more kids the kinds of advantages enjoyed by the young Mr. Gates.

There is no doubt that it is theoretically possible to raise taxes to prohibitive heights: If people had to pay a tax of 100 percent of the next dollar they earned, they would be likely to call it a day.

But the alarm bells are out of all proportion with Ms. Warren’s plan. Describing his concerns on Wednesday, Mr. Gates at one point suggested he might be asked to pay $100 billion.

The Warren campaign calculates that under Ms. Warren’s plan, Mr. Gates would owe $6.379 billion in taxes next year. Notably, that is less than Mr. Gates earned from his investments last year. Even under Ms. Warren’s plan, there’s a good chance Mr. Gates would get richer.

To his credit, Mr. Gates has said that he thinks the wealthy should pay higher taxes. But that’s not how he behaved on Wednesday. He can demonstrate that he’s serious about tax increases by setting aside the hyperbole and engaging in principled and factual debate about the details. SOURCE

 

This new calculator tells billionaires how much tax Elizabeth Warren would make them pay


[Photo: The New York Public Library]

For the billionaires out there who are confused about how much they’d pay in taxes under Elizabeth Warren’s Ultra-Millionaire tax plan, the Warren campaign has a new calculator to help. “Are you a billionaire?” it asks, and then prompts users to enter their net worth.

If you’re Bill Gates, for example, who criticized Warren’s plan yesterday—prompting Warren to reach out on Twitter and clarify how much he would actually pay—the calculator explains that you’d owe $6.379 billion next year:

WOW — YOU’VE GOT A LOT OF MONEY!
Your wealth puts you in the top 0.0002% of Americans.

Now you have the opportunity to invest some of it back into our society so everyone has a chance to succeed.

You’d pay $6.379 billion next year under Elizabeth’s wealth tax. This amount, which you likely won’t even feel, will help us invest in education from birth through college and help finance health care for everyone.

Good news – you’ll still be extraordinarily rich! And if history is any guide, if you do nothing other than invest your wealth in the stock market, it’s likely that your wealth will continue to grow.

For those of us who aren’t billionaires, the calculator offers links to examples of others, including Jeff Bezos (who would owe $6.697 billion next year under the plan, but who has a net worth of  $112,300,000,000) and Mark Zuckerberg (who would owe $4.249 billion but has a net worth of $71,500,000,000). SOURCE

 

Should billionaires continue to exist?

How taxing wealth could tackle both wealth concentration and the climate crisis

 

Wealth taxation is back on the progressive political agenda. It is both a refreshing new idea and a return to vogue of a policy established decade ago in Europe. Some remember it as part of François Mitterrand’s 110 propositions pour France, a joint electoral platform in 1981 with the Communist Party that carried him into the Élysée Palace. The solidarity tax on wealth survived multiple right-wing presidents, only to fall recently to President Macron.

Even so, it is an idea whose time has come in North America. It continues to exist in three OECD countries, and both Bernie Sanders and Elizabeth Warren, two of the leading three Democratic contenders for U.S. president, have a plan to tax wealth in their platforms. The NDP also included a proposal for a wealth tax in its 2019 election platform, which was met with backlash and bad-faith critiques from the usual suspects.

Matthew Lau, who has written for the right-wing Fraser Institute and Atlantic Institute for Market Studies, called it “class warfare” and “confiscatory” in a Financial Post column. This was followed by another piece in the same publication by the Montreal Economic Institute’s Gael Campman, who claimed taxing wealth would be a “tragic mistake,” seemingly oblivious to the existence of property taxes in Canada. Calling it a “demagogic ploy that ends up being counterproductive,” Campman brings up the prospect of the widely discredited “Laffer effect” of falling tax revenues from increasing taxation.

In a slightly more serious challenge, Robin Broadway and Pierre Pestieau call the wealth tax “Over the Top” in their recent C.D. Howe paper of the same name, stating that it isn’t needed, and it would be more efficient to raise taxes on capital gains. Why not do both? Recent studies such as the CCPA’s Born to Win have shown that Canada’s wealthiest 87 families now own the same amount as the lowest-earning 12 million Canadians, which is approximately equivalent to what everyone in Newfoundland and Labrador, Prince Edward Island and New Brunswick collectively owns. In Canada, just two billionaires (David Thompson and Galen Weston) own as much wealth as a third of Canadians.

A bold tax policy package is sorely needed to address this kind of wealth hoarding, which contributes to soaring inequality. Along with a host of other progressive measures, the wealth tax in particular sits in the enviable position of being at the nexus of both good policy and good politics.

According to a recent Ipsos poll, 67% of Canadians believe that “Canada’s economy is rigged to advantage the rich and powerful.” Another poll conducted by Abacus Data found that 67% of Canadians also support the idea of a wealth tax, including 58% of Canadians self-identifying as “right-wing” and 64% of those who say they are in the political “centre.”

***

In his critique of the NDP’s modest wealth tax proposal, Campman alleges it would force poor farmers to sell their land and cause capital flight. Lau asks how the tax could work when wealth in financial assets can vary day by day depending on the stock market. As the OECD has pointed out, there are ways of getting around all these problems.

The best wealth tax systems have a series of exemptions regarding most forms of middle class wealth, such as pensions and primary homes, as well as exemptions for agricultural property. Assessments can occur every 3–5 years with options to apply for reassessment if a significant change in value occurs, and payments can be made in instalments for those taxpayers facing liquidity constraints.

Wealth taxes can apply to both domestic and international assets, be tied to citizenship and be negotiated by international tax treaties—to eliminate the incentive for capital flight. As proposed by Elizabeth Warren, you can introduce an “exit tax” at the same rate as an estate tax to seize assets from those who do choose to renounce their citizenship. With a rigorous enforcement regime, along with legislation to tackle tax havens, taxing wealth isn’t a pie-in-the-sky or unrealistic idea. It just takes political commitment and good policy design.

Casting aside the nitty gritty, the fundamental question we really should be asking ourselves when we design our wealth tax is should we allow billionaires to continue to exist?

Gabriel Zucman and Emmanuel Saez, two economists at the University of California, Berkeley who advised Elizabeth Warren on her wealth tax proposal, write that the “revenue maximizing rate” runs as high as 6.5%—far beyond the NDP proposal of 1%. According to the economists, such a low rate would provide permanent revenues due to its quite limited effect on wealth concentration. Higher rates of wealth taxation, say, up to 10%, would more effectively dismantle entrenched wealth concentration over time with the trade-off being the loss of a permanent and reliable source of tax revenue.

Bernie Sanders’s recently unveiled wealth tax plan would cut in half the wealth of the typical billionaire over 15 years, according to Saez and Zucman. When the New York Times interviewed Sanders about his plan, they asked if he thought billionaires should exist in the United States. “I hope the day comes when they don’t,” he responded, adding, “It’s not going to be tomorrow.”

Sanders’s wealth tax (see box) is much more aggressive and much more steeply progressive than Warren’s plan, which begins at a 2% tax on wealth above US$50 million and adds an additional 1% surtax above the billion-dollar mark. The revenue differences are large: over 10 years, Warren’s plan would raise US$2.75 trillion while Sanders’s would raise US$4.35 trillion. The other significant difference is how the Sanders plan obliterates wealth concentration while Warren’s plan has a much more limited effect due to the fact that the wealth of the richest Americans grows at an average rate of 6.6% a year.

By comparison, the NDP’s plan for a 1% flat tax rate on wealth above $20 million seems quite modest. The Parliamentary Budget Officer estimates the NDP proposal would rake in approximately $70 billion over 10 years, a value that includes the assumption that revenues from the wealth tax will be reduced by about 35% due to tax avoidance.

Rather than being “confiscatory,” as Lau suggests, Saez and Zucman write that “the marginal utility of a billionaire’s wealth is close to zero” and therefore “the revenue consequences of taxing billionaires outweigh the welfare consequences on billionaires.” Imagine for a moment what we could do if Canada plowed $70 billion into reducing poverty, fighting climate change or tackling the housing crisis. Canada’s oil barons can manage with one less yacht.

***

We can see that a wealth tax would be good for redistribution. What of wealth concentration? Should we not also tax inheritances in order to stop the out-of-all-proportion pooling of family wealth through massive intergenerational transfers? The issue here is political. Sometimes inheritance taxes poll poorly, even when the tax only targets the passing down of unearned wealth. Even so, should we continue to allow oligarchs to control so much wealth and power while other Canadians continue to live in poverty?

The proper design of any wealth tax system ought to both balance revenue generation and target wealth concentration. Which is why if we swear off an inheritance tax, we should be jacking up wealth tax rates. And if we shy away from steeply progressive wealth tax rates, we need to at least implement an inheritance tax.

French economist Thomas Piketty, best known for his best-selling book Capital in the 21st Century, has just put out a new book entitled Capital and Ideology. In it he proposes a wealth tax with a rate that goes as high as 90% for those worth over two billion euros (almost $3 billion). He also states that billionaires actually harm economic growth and should be completely taxed out of existence. In a world in the midst of a climate emergency, it may also simply be necessary.

Piketty writes in Le Monde that “it is increasingly clear that the resolution of the climate challenge will not be possible without a strong movement in the direction of the compression of social inequalities at all levels.” This is because, “at world level, the richest 10% are responsible for almost half the emissions and the top 1% alone emit more carbon than the poorest half of the planet. A drastic reduction in purchasing power of the richest would therefore in itself have a substantial impact on the reduction of emissions at global level.”

When designing our wealth taxes, we should perhaps consider not only their redistributive power but also how they can attack the entrenched power of economic elites—and how this might help us save the planet along the way. As Piketty suggests, a wealth tax could be instrumental in shifting carbon intensive and socially useless elite consumption patterns.

Looking forward into the next decade, when large-scale economic decarbonization is on the agenda, we should also ask ourselves if this should mean moving toward a billionaire-free world. In the future we want to build, if we are asked the question, “Should billionaires exist?”, we should be able to confidently and resolutely answer: no.

SOURCE

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The NDP’s Wealth Tax: What the Experts Say

Singh says it will help reduce economic inequality, but new approach is widely debated.

JimmyPattisonWalkOfFame.jpg
The NDP’s tax on the ultra-rich would affect billionaires like Jimmy Pattison. But is such a tax the best way to reduce inequality? Photo by Chris Young, the Canadian Press.

The NDP’s promised wealth tax on the ultra-rich would be a new step to reduce economic inequality in Canada, but quite a modest one compared to proposals being debated south of the border.

And while enthusiasm for a wealth tax is understandable when economic inequality is higher than it’s been since the 1920s, there are better ways to structure the tax system, said David Duff, a University of British Columbia professor who is an expert on tax law.

“I’m not a huge fan of wealth taxes,” Duff said. “Although in principle I would be opposed, I can understand the context for this… We live in a world where we have not taxed, in particular, capital income, certain kinds of income, to the same extent that we tax labour income.”

Policies like taxing capital gains at half the rate of other forms of income or allowing CEOs to be paid in stock options have allowed some people to accumulate large fortunes.

The NDP’s wealth tax would charge one per cent each year on the value of household assets above $20 million. It’s the only party proposing such a tax.

“It’s a wealth tax on those who are very, very, very wealthy,” NDP leader Jagmeet Singh told The Tyee.

The idea is to make sure people at the very top would pay their fair share, he said. The tax would raise about $9 billion a year from fewer than 2,000 people, Singh added.

Reaction to the proposal to tax wealth has been mixed, with progressive commentators more positive than conservative ones.

column by Matthew Lau in the Financial Post called the proposal “class warfare” and said, “The NDP’s plan for a wealth tax, however, breaks a sort of glass ceiling on the worst taxes proposed in Canada.”

Another Financial Post piece by Montreal Economic Institute researcher Gaël Campan said that while the proposal sounds good, it would be a “tragic mistake.” (The institute has been described as “a kind of Fraser Institute in Quebec.”)…

Canadian Centre for Policy Alternatives senior economist David Macdonald, meanwhile, argued that the proposal addresses the rise in economic inequality that he and others have long tracked in Canada.

“The wealthiest families in Canada — representing fewer than 100 families, each with net worth over $1 billion — have accumulated more wealth than the bottom 12 million Canadians combined,” he wrote. Those 100 families would pay half the amount that the NDP’s tax would raise.

Macdonald did sound a warning. “Because this tax applies to a very small group of very well-resourced people, their accountants will be busy looking for ways to avoid or at least mitigate it, as the wealthy in other countries have successfully done,” he wrote.

“For legislation of this sort to be effective it would have to be strong, with loopholes identified and quickly shut down, which can certainly present challenges.”

Erika Beauchesne of the advocacy group Canadians for Tax Fairness wrote that while her organization has been promoting an inheritance tax that would apply at death instead of annually, action on inequality is needed.

“The question and debate should no longer be whether we have increased taxes on wealth and capital, but what form they should take,” she wrote. “We should thank the NDP for getting this debate going in Canada and look forward to seeing what other federal political parties propose.”

The discussion about wealth taxes in Canada echoes the debate in the United States where two of the leading candidates for the Democratic presidential nomination are proposing to tax wealth.

Elizabeth Warren is pitching a two-per-cent annual tax on a household’s net worth over $50 million and three per cent over $1 billion.

And Bernie Sanders is proposing a tax that would start at one per cent on a married couple’s wealth of at least $32 million, then gradually rise in seven steps to a top tax of eight per cent on net worth over $10 billion. MORE

 

 

Bill McKibben: To Confront the Climate Crisis, We Need Human Solidarity, Not Walls & Cages

Image result for bill mckibben amy goodman

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Bill McKibben, the longtime journalist and co-founder of 350.org, talks about climate migration, the 2020 Democratic candidates, the Green New Deal and more. McKibben’s latest piece for The New Yorker is titled “Money Is the Oxygen on Which the Fire of Global Warming Burns,” and his cover piece for Time magazine is headlined “Hello from the Year 2050. We Avoided the Worst of Climate Change — But Everything Is Different.”

BILL McKIBBEN: It was so much fun to get to back up Fridays for the Future and all the youth organizers here who were doing this, just to be able to watch how good they are at doing this and to really try and build a multigenerational climate movement, which is precisely what we need.

AMY GOODMAN: So, we are here, yes, right after the Climate Action Summit, though there are protests around climate that are happening all over in the next weeks, but also in a presidential primary season. Some eyes might glaze over. How is it possible that for more than a year now we’re going to go through this primary season with these candidates? But others might say, and I think you’re among them, who say, “No, no, no. This is an incredible opportunity.” Candidates are often senators or governors, politicians who are very insulated, in fact, in between times when they have to run. And now there’s this window where they have to respond to the public. And you are certainly using this moment. So I’d like to ask you, of the, what, 20 presidential Democratic presidential candidates that are still out there, the kind of work you’re doing, pressing these candidates to formulate their positions on the climate crisis.

BILL McKIBBEN: Sure. So, 350 Action, which is the (c)(4) political part of our operation, has been doing its best to turn them all into climate candidates. We set up the kind of original climate scoreboard for the various presidential candidates. And there have been young people out bird-dogging every event, every rope line, or making sure that these guys understand what the bottom line for the climate movement is.

And the bottom line is not having someone say, “I care about climate change. It represents an existential risk.” The bottom line is: Are you signing on to something that looks like the Green New Deal? Are you signing on because it’s within your power as president to do it to announce that there will be no mining and drilling on public lands? And are you saying we’re going to stop fracking around the country?

It’s been incredibly impressive to watch how far this field has moved. Look, four years ago, Bernie broke down this door, you know? He started talking in really serious terms about climate change. You’ll recall in the 2016 debates, in the primaries, at one point they asked, “What’s the most important issue facing the planet?” And Bernie just looked up and said, “Well, I mean, that’s obvious. It’s climate change.” That was something that no American politician really had enunciated before in quite that way.

As with many things, it’s spread across the field now, and so we’re getting remarkable commitments from everyone, pretty much everyone, down the line. Elizabeth Warren, the week before last, said she would stop fracking across America. That’s big deal. It’s all big deal. And it’s all because people are out there making this demand.

We’re not — I mean, assuming that a Democrat wins this time, an assumption on which my future mental health is entirely predicated, because I cannot — I don’t know about the planet, but I can’t take another four years of Trump, OK? Assuming a Democrat wins, we’re not really going to have an open primary next time, you know. There will be an incumbent and whatever. This is our chance in the political system for the next eight years to get these guys fully on the line and as committed as it’s possible to be.

AMY GOODMAN: So, you said making sure they sign on to the Green New Deal. Explain what that is?

BILL McKIBBEN: Well, it’s not at this point a solid, fully fleshed-out piece of legislation, but everybody knows what it means now. It means a commitment to systemic change in order to cut in half the emissions that we’re producing over the course of the next decade. That requires things like a federal jobs guarantee, to allow anybody who wants to be part of this transition to do it. You know, it requires real commitments to environmental justice and climate justice in the most hard-hit communities. It requires a hell of a lot of work.

And so, the people who are saying, “Yeah, we’ll do it,” are, I think, signing up for that. At least they’re saying it in public, so we can hold them responsible once they’re in office. It’s worth remembering that politics doesn’t end on Election Day. In fact, that’s just the beginning. After that, it’s the job of — and you’ll recall, I mean, I worked hard for Barack Obama to get elected, and then we organized the largest demonstrations outside the White House during the whole Obama administration in order to make him live up to his words around things like the Keystone pipeline. MORE

In this Climate Crisis Election, Who Dares Name Big Oil the Enemy?

CanadaOilSands.jpg
No party’s platform explicitly names the oil industry as the main barrier to lowering emissions. ‘Even saying that in Canada is impolite,’ says Keith Stewart of Greenpeace Canada. Photo of Alberta’s oil sands by Kris Krug, Creative Commons licensed.

What would a climate platform that actually rises to the emergency declared earlier this year by Canada look like? Perhaps something like the plans being put forward by Bernie Sanders, Elizabeth Warren, Kamala Harris and other frontrunners for the U.S. Democratic Party nomination.

It’s not just massive spending commitments that potentially qualifies these plans as emergency-worthy — although the numbers are formidable. Sanders for example promises $16.3 trillion to help shift the U.S. economy away from fossil fuels and create 20 million jobs in the low-carbon economy that comes next.

Nor is it the mind-warping scale and ambition. Warren intends to eliminate carbon emissions from all new buildings by 2028, do the same for new vehicles by 2030 and completely shift America’s power grid to zero-emissions energy by 2035.

The thing that truly sets these plans apart from anything proposed before by a serious contender for U.S. president is their willingness to take on the entrenched political power of the fossil fuel industry. During CNN’s recent town hall on climate change, Harris, a former prosecutor, vowed to take legal action against oil and gas companies for their role in sowing doubt and uncertainty about climate science.

“This is what we did to the tobacco companies. We sued them, we took them to court,” she said. Harris dedicates an entire pillar of her five-pillar climate plan to “hold accountable those responsible for environmental degradation, the misinformation campaign against climate science, and creating harm to the health and wellbeing of current and future generations.”

Sanders similarly promises to go after “fossil fuel billionaires whose greed lies at the very heart of the climate crisis” while raising $3 trillion in funding for his plan by making companies “pay for their pollution, through litigation, fees, and taxes, and eliminating federal fossil fuel subsidies.”

Warren would ban leases for fossil fuel extraction on public lands. At the CNN town hall she accused fossil fuel companies and other industrial giants of “making the big bucks off polluting our Earth.”

Even former vice-president Joe Biden, not exactly the image of an anti-corporate radical, vows to “take action against fossil fuel companies.”

Canada is not even close to having that conversation politically. It may be edging there. On Saturday, the NDP’s Jagmeet Singh pledged to end fossil fuel subsidies.

“Our problem is upstream oil and gas is the single largest source of greenhouse gas emissions in the country and the fastest rising source, so until we’re willing to tackle the oil industry, then we are not acting like this is an emergency or even a serious problem” — Keith Stewart, Greenpeace Canada

And last month the Greens’ May, noting full-page ads in newspapers urging citizens vote in support of the oil sands, tweeted, “This is what we’re up against,” declaring, “If humanity doesn’t transition off fossil fuels” by the 2023 election, “the earth will heat to unsafe levels and there will be climate catastrophe.” MORE

Top Progressive Group Endorses Elizabeth Warren For President

The Working Families Party endorsed Sen. Bernie Sanders (I-Vt.) in the 2016 election cycle.

Sen. Elizabeth Warren of Massachusetts, a Democratic presidential hopeful, nabbed the big endorsement...
Sen. Elizabeth Warren of Massachusetts, a Democratic presidential hopeful, nabbed the big endorsement ahead of a campaign rally in New York City on Monday. PRESTON EHRLER/SOPA IMAGES/LIGHTROCKET/GETTY IMAGES

The Working Families Party, a leading progressive organization with roots in organized labor, announced Monday that it is endorsing the presidential bid of Sen. Elizabeth Warren of Massachusetts.

The group’s backing provides a boost to Warren as she seeks to solidify her climb in the polls and replace Sen. Bernie Sanders, a Vermont independent, as the leading alternative on the left to former Vice President Joe Biden.

“Senator Warren strikes fear into the hearts of the robber barons who rigged the system, and offers hope to millions of working people who have been shut out of our democracy and economy,” Maurice Mitchell, Working Families Party national director, said in a statement. “Our job now is to help Senator Warren build the mass movement that will make her transformational plans a reality.”

As part of the group’s endorsement process, Mitchell grilled five presidential candidates ― Warren, Sanders, Sen. Cory Booker of New Jersey, former Housing Secretary Julián Castro and New York Mayor Bill de Blasio ― on live broadcasts that gave members the opportunity to submit questions or ask them live.

Warren distinguished herself in her interview by, among other things, promising to repeal the 1994 crime bill authored by Biden.  MORE

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Billionaires hurt economic growth and should be taxed out of existence, says bestselling French economist

KEY POINTS
  • A popular French economist says billionaires are harmful to economic growth and would be effectively abolished under his tax plan,
  • In an interview with the French magazine L’Obs, Thomas Piketty calls for a graduated wealth tax of 5% on those worth 2 million euros or more and up to 90% on those worth more than 2 billion euros.
  • Piketty says the notion that billionaires create jobs and boost growth is false.

GP: Thomas PikettyFrench economist Thomas Piketty poses during a photo session in Paris on September 10, 2019. Joel Sagat | AFP | Getty Images

A popular French economist says billionaires are harmful to economic growth and would be effectively abolished under his tax plan, according to an interview.

Thomas Piketty, whose 2013 book on inequality, “Capital in the 21st Century,” became a global bestseller and bible for tax-the-rich progressives, just published a 1,200-page follow-up book called “Capital and Ideology.” It won’t be published in English until March. But in an interview with the French magazine L’Obs, Piketty called for a graduated wealth tax of 5% on those worth 2 million euros or more and up to 90% on those worth more than 2 billion euros.

“Entrepreneurs will have millions or tens of millions,” he said. “But beyond that, those who have hundreds of millions or billions will have to share with shareholders, who could be employees. So no, there won’t be billionaires anymore. How can we justify that their existence is necessary for the common good? Contrary to what is often said, their enrichment was obtained thanks to these collective goods, which are the public knowledge, the infrastructures, the laboratories of research.”

Piketty added that the notion that billionaires create jobs and boost growth is false.

He said per capita income growth was 2.2% a year in the U.S. between 1950 and 1990. But when the number of billionaires exploded in the 1990s and 2000s — growing from about 100 in 1990 to around 600 today — per capita income growth fell to 1.1%.

“We cannot spend our time denouncing ‘populism,’ while relying on fake news, as rude,” Piketty said.

While Piketty’s plans have been popular in academia and the far left, none of his plans has been implemented by politicians. Even France abolished its wealth tax in 2017, saying it discouraged investment.

Piketty said he has gained hope from the presidential campaigns of Bernie Sanders and Elizabeth Warren. Warren has proposed a 2% wealth tax on those worth $50 million or more, while Sanders has proposed boosting estate taxes.

“Things are starting to move,” Piketty told the magazine. “Bernie Sanders and Elizabeth Warren and the young elected Democrats are resuming the theme of redistribution.”

While avoiding the label “socialist,” Piketty said that the type of free-market capitalism that has dominated the U.S. since Ronald Reagan needs to be reformed.

“Reaganism has begun to justify any concentration of wealth, as if the billionaires were our saviors,” he said. “Reaganism has shown its limits: Growth has been halved, inequalities have doubled. It is time to break out of this phase of sacredness of property. To overcome capitalism.”

SOURCE

Bernie Sanders proposes a big hike in the estate tax, including a 77% rate for over $1 billion

 

Bernie Sanders Unveils $16 Trillion ‘Green New Deal’ Plan

Senator Bernie Sanders’s “Green New Deal” climate policy plan calls for the United States to eliminate fossil fuel use by 2050.

Credit: Dustin Chambers for The New York Times

WASHINGTON — Senator Bernie Sanders on Thursday will release a $16.3 trillion blueprint to fight climate change, the latest and most expensive proposal from the field of Democratic presidential candidates aimed at reining in planet-warming greenhouse gases.

Mr. Sanders’s proposal comes one day after Gov. Jay Inslee of Washington, who made climate change the central focus of his campaign, announced he was dropping out of the 2020 race. Mr. Inslee’s absence could create an opening for another presidential aspirant to seize the mantle of “climate candidate.”

Mr. Sanders was an early supporter of the Green New Deal, an ambitious but nonbinding congressional plan for tackling global warming and economic inequality. He is bestowing that same name upon his new plan, which calls for the United States to eliminate fossil fuel use by 2050.

It declares climate change a national emergency; envisions building new solar, wind and geothermal power sources across the country; and commits $200 billion to help poor nations cope with climate change.

Mr. Sanders said in an interview Wednesday night that his proposal would “pay for itself” over 15 years and create 20 million jobs in the process.

There is no broadly agreed-upon figure of how much needs to be spent to decarbonize the United States economy, but one study estimated that as much as $4.5 trillion could be needed just to modernize the nation’s power grid.

Still, the Sanders plan’s eye-popping price tag is several times bigger than those of his leading opponents. Former Vice President Joseph R. Biden Jr. has called for spending $1.7 trillion over 10 years. Senator Elizabeth Warren of Massachusetts has a $2 trillion green manufacturing plan. Other candidates, including former Representative Beto O’Rourke of Texas, have also put forth ambitious proposals. MORE

 

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