Charlie Simmons: Our tax system makes pollution worse

Schematic drawing, causes and effects of air pollution: (1) greenhouse effect, (2) particulate contamination, (3) increased UV radiation, (4) acid rain, (5) increased ground-level ozone concentration, (6) increased levels of nitrogen oxides.

— From Wikipedia

Via OtherWords.org

Greta Thunberg, the 16-year-old Swedish climate activist who sparked student protests across the globe, had this to tell the U.N .General Assembly in New York: “People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction. And all you can talk about is money and fairytales of eternal economic growth.”

As a retired businessman and engineer, I can’t help but look at Greta with admiration. Yet I shudder to think that my generation has abdicated our duties to such an extent that we are leaving the mess of climate change on the shoulders of high schoolers.

Lawmakers and business leaders in my generation have a responsibility to act today to mend our planet before these young people have to inherit it. Some of the most straightforward, yet least discussed solutions, lie in our tax system.

Unfortunately, the man-made crisis of climate change is made worse by our man-made tax system. In 2018, many of the biggest fossil fuel companies paid zero dollars in taxes — and actually received billions in rebates.

These shocking facts, uncovered by the Institute on Taxation and Economy Policy, flew under the radar of mainstream media.

In total, ITEP found that at least 60 of the biggest American corporations didn’t pay a cent in federal taxes in 2018. Of those, 22 are power utilities and oil and gas corporations, including famous names such as Chevron, Halliburton, and Occidental Petroleum — and that was only in 2018

How is this possible?

In part, it’s because there are a mind-boggling number of tax incentives offered to fossil fuel companies. There are deductions for domestic fossil fuel production, tax credits for vague “intangible drilling costs,” and deferred federal tax payments.

In 2016, The Wall Street Journal estimated that these provisions amounted to $4.76 billion per year given out to fossil fuel companies from the federal government.

That was before GOP corporate tax cuts worsened the problem in 2017 by slashing the industry’s already low tax rate and offering a new deduction for capital expenditures — while simultaneously opening up half a million acres of the Arctic National Wildlife Refuge to new drilling.

Companies like Chevron will tell you they’re committed to preventing climate change, pointing to their $100 million pledge to the Oil and Gas Climate Initiative, an industry-led organization allegedly dedicated to fighting climate change.

This is a paltry amount compared to the $4.5 billion in profit they made in 2018 — or even to the $955 million they avoided in taxes thanks to the Republican tax cuts. Chevron received a $181 million rebate on Tax Day.

Essentially, American taxpayers lost $955 million, funded a $100 million PR stunt, and paid $81 million directly to the corporation to fund more drilling and exploration our planet literally cannot afford. Chevron’s not unique, either — Occidental did the same thing.

While the current administration lets fossil fuel companies raid America’s natural resources and its coffers, the rest of us can’t sit back and wait for change. Greta certainly isn’t, and she’s only 16.

Tax incentives should encourage better behavior from corporations, not pay polluters to profit from environmental degradation.

Forcing our elected officials and 2020 candidates to introduce incentives for fixing climate change — and remove those that accelerate it — should be on the top of the agenda. our economy and the health of our environment ultimately go hand-in-hand, and it’s long past time our tax system reflected that.

Charlie Simmons is a retired tech executive from Silicon Valley and a member of the Patriotic Millionaires.

Chuck Collins: America's crumbling infrastructure and the very rich

Via OtherWords.org

If you find yourself traveling this summer, take a closer look at America’s deteriorating infrastructure — our crumbling roads, sidewalks, public parks and train and bus stations.

Government officials will tell us “there’s no money” to repair or properly maintain our tired infrastructure. Nor do we want to raise taxes, they say.

But what if billions of dollars in tax revenue have gone missing?

New research suggests that the super-rich are hiding their money at alarming rates. A study by economists Annette Alstadsaeter, Niels Johannesen, and Gabriel Zucman reports that households with wealth over $40 million evade 25 to 30 percent of personal income and wealth taxes.

These stunning numbers have two troubling implications.

First, we’re missing billions in taxes each year. That’s partly why our roads and transit systems are falling apart.

Second, wealth inequality may be even worse than we thought. Economic surveys estimate that roughly 85 percent of income and wealth gains in the last decade have gone to the wealthiest one-tenth of the top 1 percent.

That’s bad enough. But what if the concentration is even greater?

Visualize the nation’s wealth as an expansive and deep reservoir of fresh water. A small portion of this water provides sustenance to fields and villages downstream, in the form of tax dollars for public services.

In recent years, the water level has declined to a trickle, and the villages below are suffering from water shortages. Everyone is told to tighten their belts and make sacrifices.

Deep below the water surface, however, is a hidden pipe, siphoning vast amounts of water — as much as a third of the whole reservoir — off to a secret pool in the forest.

The rich are swimming while the villagers go thirsty and the fields dry up.

Yes, there are vast pools of privately owned wealth, mostly held by a small segment of super-rich Americans. The wealthiest 400 billionaires have at least as much wealth as 62 percent of the U.S. population — that’s nearly 200 million of us.

Don’t taxpayers of all incomes under-report their incomes? Maybe here and there.

But these aren’t folks making a few dollars “under the table.” These are billionaires stashing away trillions of the world’s wealth. The latest study underscores that tax evasion by the super-rich is at least 10 times greater — and in some nations 250 times more likely — than by everyone else.

How is that possible? After all, most of us have our taxes taken out of our paychecks and pay sales taxes at the register. Homeowners get their house assessed and pay a property tax.

But the wealthy have the resources to hire the services of what’s called the “wealth defense industry.” These aren’t your “mom and pop” financial advisers that sell life insurance or help folks plan for retirement.

The wealth defenders of the super-rich — including tax lawyers, estate planners, accountants, and other financial professionals — are accomplices in the heist. They drive the getaway cars, by designing complex trusts, shell companies, and offshore accounts to hide money.

These managers help the private jet set avoid paying their fair share of taxes, even as they disproportionately benefit from living in a country with the rule of law, property rights protections, and public infrastructure the rest of us pay for.

Not all wealthy are tax dodgers. A group called the Patriotic Millionaires advocates for eliminating loopholes and building a fair and transparent tax system. They’re pressing Congress to crack down on tax evasion by the superrich.

Their message: Bring the wealth home! Stop hiding the wealth in offshore accounts and complicated trusts. Pay your fair share to the support the public services and protections that we all enjoy.

Chuck Collins is a senior scholar at the Institute for Policy Studies and a co-editor of Inequality.org. He’s the author of the recent book Born on Third Base.