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income inequality
UN Climate Chief Warns Inaction on Emissions Will Deliver 'Inflation on Steroids'
"Climate finance is global inflation insurance. Rampant climate costs should be public enemy number one," the U.N. official told world leaders at COP29.
Nov 12, 2024
As he addressed world leaders at the United Nations Climate Change Conference in Baku, Azerbaijan on Tuesday, U.N. climate chief Simon Stiell made the case that action against the planetary emergency can help combat an economic problem plaguing nations around the world: inflation.
Far from a threat reserved for future generations, Stiell told ministers gathered for day one of the conference's World Leaders Climate Action Summit that the climate crisis was "fast becoming an economy killer," already slashing some nations' gross domestic products by up to 5%.
"The climate crisis is a cost-of-living crisis," Still said, "because climate disasters are driving up costs for households and businesses. Worsening climate impacts will put inflation on steroids unless every country can take bolder climate action."
Stiell's remarks come amid growing discussion of the impact of inflation on political stability following the victory of Donald Trump in the U.S. presidential election last week. In the wake of Trump's win, commenters have pointed out that almost every country that voted in 2024 voted to oust the incumbent party, and inflation following the Covid-19 pandemic and Russia's invasion of Ukraine is one prominent explanation.
Stiell told the leaders gathered at COP29 that they should learn from that inflation spike when making decisions about climate.
"Let's learn the lessons from the pandemic—when billions suffered because we didn't take the collective action fast enough when supply chains were smashed," Stiell said. "Let's not make that mistake again."
"Climate finance is global inflation insurance," Stiell continued. "Rampant climate costs should be public enemy number one."
"Unless emissions plummet and adaptation soars, every economy will face far greater fury."
In his remarks to the leaders summit, U.N. Secretary-General António Guterres also emphasized the economic impacts of climate-fueled disasters.
"No country is spared," Guterres said. "In our global economy, supply chain shocks raise costs—everywhere. Decimated harvests push up food prices—everywhere. Destroyed homes increase insurance premiums—everywhere."
Guterres also tied the climate emergency to economic inequality, citing a recent Oxfam study finding that billionaires emit more greenhouse gases in an hour and a half than an ordinary person will during their entire life.
"This is a story of avoidable injustice. The rich cause the problem, the poor pay the highest price," Guterres said, adding that "unless emissions plummet and adaptation soars, every economy will face far greater fury."
However, both U.N. leaders saw hope in a rapid and equitable transition to renewable energy.
"Bolder climate action can drive economic opportunity and abundance everywhere. Cheap, clean energy can be the bedrock of your economies. It means more jobs, more growth, less pollution choking cities, healthier citizens, and stronger businesses," Stiell said.
Guterres argued that "the economic imperative is clearer and more compelling with every renewables roll out, every innovation, and every price drop" and called doubling down on fossil fuels "absurd."
"The clean energy revolution is here," Guterres continued. "No group, no business, and no government can stop it. But you can and must ensure it is fair, and fast enough to limit global temperature rise to 1.5°C."
Currently, national policies put the world on track for 3.1°C of heating, which scientists warn would have devastating consequences for ecosystems and human communities.
Both Stiell and Guterres urged leaders to rapidly reduce their climate pollution and agree to a new finance goal at COP29 to help developing countries fund their green transitions and adapt to increasing climate impacts.
"On climate finance, the world must pay up, or humanity will pay the price," Guterres said.
Stiell warned that "billions of people simply cannot afford for their government to leave COP29 without a global climate finance goal."
"These are not easy times, but despair is no strategy, and it's not warranted," Stiell concluded. "Our process is strong, and it will endure. After all, international cooperation is the only way humanity survives global heating. The time for hand-wringing is over; so let's get on with the job."
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What Progressives Already Know About the 2024 Election Results
A Trump presidency will push progressives back on our heels, in a dire defensive position as we fight to protect rights and programs won during many previous decades. Regardless of who wins, the challenges for progressives will be enormous.
Oct 22, 2024
While the name of the next president is unknown, some outcomes of the election can be foreseen. For instance:
- President Biden’s successor will be a dangerous militarist.
Both Donald Trump and Kamala Harris are supporters of boosting already-huge Pentagon budgets along with continuing U.S. warfare in many forms. Trump likes to pander to voters who don’t want endless wars, but his actual policies as president kept them going. Harris’s glimmers of senatorial interest in scaling back military largesse faded into standard bellicosity. Both candidates beat cold-war drums, with Trump focusing on China rather than Russia.
- If Trump wins, corporate Democrats and mainstream media will blame the Harris campaign for not moving rightward enough.
Progressive ideas, as usual, will be convenient scapegoats for the failures of Democratic Party elites.
- If Harris wins, corporate Democrats and mainstream media will immediately warn that she must steer clear of the left.
The establishment is ever alert to the danger that progressive populism could majorly reduce income inequality and subdue corporate power.
- If Trump wins, progressives will be on the defensive for at least four years -- unable to accomplish anything of substance at the federal level and trying to mitigate the damage under an unhinged and fascistic president.
The disasters with a second Trump administration will include unleashed nativism and official bigotry. As one liberal commentator observed weeks before the election, “More than ever, Trump’s rhetoric is steeped in racism, xenophobia and dehumanization. He routinely calls immigrants ‘vermin’ and says they are ‘poisoning the blood’ of the country. He claims they are ‘stone-cold killers,’ ‘animals’ and ‘the worst people’ who will ‘cut your throat.’ . . . He called migrants from Latin America, Congo and the Middle East ‘the most violent people on Earth.’ . . . He’s even suggested that nonwhite immigrants have ‘bad genes’ that make them genetically inferior.”
- As in the past, the Green Party will again congratulate itself on the tiny percentage of votes for its latest presidential candidate (after the party’s nominee received 0.36 percent in 2012, 1.07 percent in 2016 and 0.26 percent in 2020).
In October, this year’s Green Party presidential candidate Jill Stein campaigned in swing states and declared: “This is a very dire situation that will be continued under both Democrats and Republicans. So we say there is no lesser evil in this race.”
Really?
- If Harris wins despite his best efforts, Benjamin Netanyahu will be disappointed that he was unable to sufficiently help get Trump elected.
“For anyone who doubts Trump will be even worse than Biden is on Gaza,” Mehdi Hasan tweeted a mid-October video clip of Trump saying that Netanyahu “is doing a good job, Biden is trying to hold him back... and probably should be doing the opposite. I'm glad that Bibi decided to do what he had to do.’”
- Whether Trump or Harris wins, the U.S. government will continue to support Israel’s killing of Palestinian civilians under the guise of its “right to defend itself.”
If Trump wins, virtually all Republicans and many Democrats in Congress will support his unequivocal backing for whatever Israel does. If Harris wins, we can expect her policies toward Israel to be dreadful, while she’ll be subject to increasing pressure from much of her party’s base and some Democratic members of Congress for an end to arming Israel.
- In response to the climate emergency, Harris has foreshadowed that her policies would be predictably inadequate, while Trump has repeatedly denied that a climate crisis even exists.
The burden will be on activists to demand actions commensurate with the realities described in The 2024 State of the Climate Report: “We are on the brink of an irreversible climate disaster. This is a global emergency beyond any doubt. Much of the very fabric of life on Earth is imperiled. We are stepping into a critical and unpredictable new phase of the climate crisis.”
- No matter whether Donald Trump or Kamala Harris is inaugurated on Jan. 20, the challenges for progressives will be enormous.
A Trump presidency will push progressives back on our heels, in a dire defensive position as we fight to protect rights and programs won during many previous decades. With a Harris presidency, progressives will have some space to organize, with potential to actually move some U.S. government policies in a positive direction.
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Ron Johnson Is Working Tirelessly to Protect the Super-Rich From Paying Their Fair Share
While purporting to be concerned about income inequality, Johnson advocates for proposals obviously intended to benefit his rich benefactors and, worse yet, himself.
Oct 11, 2024
If you were a rich Wisconsinite striving to get even richer and you had little regard for intellectual honesty or the well-being of your fellow citizens, you would agree with Sen. Ron Johnson’s remarks at last month’s Senate Finance Committee hearing.
Otherwise, you’d find the senator’s views troublesome, to say the least.
I was a witness at that hearing. Johnson asked me to agree with him that having both an income tax and an estate tax is double taxation. As politely as I could, I pointed out that the income tax and the estate tax are two different taxes. The senator’s argument is no different than saying it is double taxation if an average American, after paying tax on her wages, pays federal excise tax at the pump when she purchases gas.
Unless and until Johnson’s face replaces Roosevelt’s at Mt. Rushmore, I’ll go out on a limb and say we should stick with the tax structure Roosevelt advocated.
Johnson undoubtedly knows better. America has had both an estate tax and an income tax for over a century now. They’re two different taxes. One is an income tax; the other is an excise tax on the transfer of substantial wealth. The specific purpose of the estate tax was to limit the size of America’s largest dynastic fortunes, lest we slip into an aristocracy. The lead advocate for the estate tax, President Teddy Roosevelt, recognized the necessity for both taxes: “The really swollen fortune, by the mere fact of its size,” Roosevelt observed, “acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means.” Therefore, Roosevelt, a Republican like Johnson, advocated for both a “graduated income tax on big fortunes,” and “a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”
At the hearing, Johnson was speaking in support of keeping one of the worst loopholes in the tax code, a provision commonly known as stepped-up basis. It allows the untaxed gains on the investment assets of mega-millionaires and billionaires to escape income taxation entirely, as long as they hold those assets until death. Jeff Bezos, for example, would avoid income tax on over $100 billion of gain on his Amazon shares were he to hold those shares until his death. And if ultra-rich Americans ever need cash, they don’t need to sell highly appreciated assets. Instead, they can borrow against the assets. It’s a strategy known as buy-borrow-die.
Johnson’s true goal isn’t really protecting the ultra-rich from double taxation, though. He actually wants to protect them from any taxation. That’s what the Death Tax Repeal Act of 2023, a bill Johnson and 41 other Republican senators have sponsored, would do. If that were to become law, Mr. Bezos, or any other billionaire, could pass his billions to his inheritors free of both estate tax and income tax on all those previously untaxed gains.
Unless and until Johnson’s face replaces Roosevelt’s at Mt. Rushmore, I’ll go out on a limb and say we should stick with the tax structure Roosevelt advocated. And that requires closing the stepped-up basis loophole.
At the hearing, Johnson did not limit his shilling for the ultra-rich to the stepped-up basis issue. While purporting to be concerned about income inequality, Johnson advocated for proposals obviously intended to benefit his rich benefactors and, worse yet, himself. Were it up to him, for example, our tax law would “index out” inflationary gains. Here’s how that would work for Johnson and his fellow real estate moguls: Say Johnson purchased a property for $10 million with $2 million in cash and an $8 million loan, using the property’s rental income to make the loan payments. Now, say inflation ran at 4% for 10 years and Johnson’s property kept pace. Under his plan, he’d be treated as if he paid $14 million for the property. And if he then sold the property for its $14 million value? He’d have no income tax to pay, but after paying off the loan, he’d have a $4 million profit. Yes, $800,000 of that profit would be attributable to inflation, but the other $3.2 million would be real profit, and it would escape tax entirely if Johnson has his way.
Johnson’s efforts to “address inequality”—yes, he really presented it this way at the hearing—aren’t limited to opposing stepped-up basis reform and advocating for indexing for inflation. He also insists that he and his rich patrons not be taxed on their massive investment gains until they sell assets so they have the “wherewithal to pay.” That would allow the country’s ultra-rich to continue to benefit from the tax-free compounding of their investment gains using the buy-borrow-die strategy. When you do the math, even when the ultra-rich sell long-held investments before they die and pay tax on their gains, the effective annual rate of tax on the growth in their wealth can be less than 5%. With Johnson’s plan to “index out” inflation added to his staunch support of buy-borrow die, that effective rate would be even lower.
There’s no need to guess about whether Johnson believes he’s advocating for good tax policy or is simply carrying water for his billionaire backers (and himself). The record is clear. In 2017, Johnson pushed hard for the so-called “pass-through deduction,” which allows owners of limited liability companies and subchapter S corporations to pay a 20% lower rate of tax on their income. He even threatened to withhold his vote for former President Donald Trump’s tax package unless the pass-through deduction was increased. In 2018, according to reporting by ProPublica, the pass-through deduction generated tax deductions of over $117 million for Dick and Liz Uihlein, the owners of Uline, and over $97 million for Diane Hendricks, the owner of ABC Supply Co. In 2022, according to the Milwaukee Journal Sentinel, Hendricks and the Uihleins contributed at least $22.5 million to Wisconsin Truth PAC, a Johnson-supporting super PAC which spent $24 million on ads attacking Johnson’s 2022 opponent, Mandela Barnes.
Those massive contributions were entirely rational, in a depressing way that reeks of corruption. In 2018 alone, Hendricks and the Uihleins saved just under $80 million in tax as a result of Johnson’s handiwork. His efforts to continue the pass-through deduction past its scheduled 2025 expiration date could net them about $1 billion over the next decade. That $22.5 million they spent on Johson’s 2022 senate campaign may be categorized as a campaign contribution. But when $22.5 million has the potential to enrich you to the tune of $1 billion, it smells a lot more like an investment. And a highly profitable one; the kind only billionaires experience.
With Washington filled with politicians like Ron Johnson, we need more patriotic millionaires. A lot more. To paraphrase our Vice Chair, Stephen Prince, we need more wealthy Americans to step up and say that while they like being rich, they recognize that our tax system has been rigged in their favor for far too long. And we need more politicians fighting to unrig our tax system, not rig it further. We’ll never change the mindset of Ron Johnson and his ilk. The only way to fix this mess is to elect politicians who will outvote them.
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