By Responsible Wealth Intern, Adriana Hernandez
Since last fall, Responsible Wealth (RW) members and our allies have been working on a shareholder resolution and strategies to shed light on how banks and mortgage servicing institutions are handling foreclosures.
Through this work, RW developed partnerships with, among others, New York’s Neighborhood Economic Development Advocacy Project (NEDAP) and the PICO National Network. Together, we drafted resolutions on foreclosure mitigation practices, and consolidated our resolutions into one that targeted the use of robo-signing throughout the foreclosure process.
Thanks to the support of RW members, this resolution was filed at Bank of America, JP Morgan Chase and Wells Fargo in November. Unfortunately, our resolution was beat out by less than 48 hours by similar resolutions filed by the AFL-CIO and the Comptroller of the City of New York. As a result, our resolutions were not on the ballots (as those that preceded were substantially similar), but that didn’t mean our fight was over.
When the annual meetings rolled around, RW members were enlisted to provide access to twenty-six people for the meetings at JP Morgan Chase and Wells Fargo.
Despite fortress-like security at the JP Morgan Chase meeting, our allies were able to traverse the castle moat (literally!) to join the meeting. The proxies provided by RW members allowed advocates a platform to directly address CEO Jamie Dimon, asking him if he would stop foreclosures. They also demanded to know what Dimon planned to do to help those whose homes had been wrongly foreclosed—including families with a parent serving in the military overseas.
Ultimately, though not to our surprise, the resolution with JP Morgan Chase did not pass. Although, Dimon's response, "Maybe," was quoted in several news accounts of the meeting.
At the Wells Fargo shareholder meeting, our allies brought with them a group of protesters so large that their chants from the ground floor were delivered loud and clear to the enclosed meeting room on the 15th floor!
In the meeting, our members and allies called on Wells Fargo CEO John Stumpf to impose a moratorium on foreclosures until more comprehensive and ethical foreclosure policies could be developed to provide families the opportunity to save their homes.
For several minutes, our allies' voices dominated the meeting. As expected, Stumpf would not relent, and, as our allies persisted, Wells Fargo resorted to having some arrested.
While neither resolution made it through the corporate gauntlet, they were effective in raising both shareholders' and the media's awareness of the questionable foreclosure practices of these financial giants. And it is on that enhanced awareness that we can build stronger cross-class relationships and a louder collective voice for corporate accountability.
The 400 wealthiest families in the U.S. aren't just filthy rich, they are downright dirty. Collectively, these households own $1.37 trillion dollars; a number so high that it's nearly impossible to comprehend. Here are 11 shocking things $1.37 trillion can buy that you can't.
In the U.S., accumulating this kind of wealth is the "American Dream." Getting rich is the result of hard work; padding your bank account is applauded and encouraged. But at what cost? Have we created economic policies that cater to the wealthy, in hopes that we will someday be among them?
Perhaps in today's economy, we have allowed the wealthy to get too far ahead financially.
Case in point: today, the wealthiest families in the U.S. are sickeningly, obscenely rich, to the tune of $1.37 trillion dollars. And unlike the rest of us, they don’t have outstanding medical bills or student loans, trouble paying credit card debt, or live paycheck to paycheck.
So how much is $1.37 trillion dollars? To demonstrate just how much money this is, here are 11 things that the richest 400 households in the U.S. can buy with their "hard-earned" cash:
- The richest 400 households can pay off every student loan for every single student in the entire United States. No more paying for an education, so that you can get a good job so that you can... well, pay off your education.
- The richest 400 could pay your rent, and the rent of every single renter in the entire United States for three years.
- The richest 400 could pay the mortgages of every house in the whole country for 14 full months.
- The richest 400 households can buy every single house that was foreclosed on in 2007 and 2008.
- The richest 400 households could pay the annual salaries of 19 million families for one year. So go ahead, take that year-long, family vacation around the world you’ve always dreamed of.
- The richest 400 can pay off all credit card debt for every single person in the entire United States. Imagine that! No more credit card debt looming over your shoulders!
- The richest 400 households can afford to give a $10,000 bonus to every single worker in the entire country. What would a hardworking person like you do with that extra money?
- The richest 400 can afford to buy a new car for every family in the United States. Meanwhile, many of us must ignore the flashing check engine light.
- The richest 400 can pay for 3 ½ years worth of gas for every driver in the country.
- The richest 400 households can afford to triple the number of teachers in the United States, then give every single one a $30,000 raise. Teachers are being laid off everywhere, their salaries are being cut, and they are suffering. Teacher-to-student ratios in schools are abysmal. But what can we do about it when so much wealth is in the pockets of so few families?
- The richest 400 families alone could replace 70% of all money lost in the Great Recession, for everyone! How much money did you, your parents, or grandparents lose in the Great Recession of 2008? 30%, 50% of your portfolio? Not only do the rich still have enough money to fund their wildest dreams, but they can also fund your retirements.
As you can see, the wealthiest families in the U.S. are doing just fine. And with this money has come a great deal of political influence, often in the form of tax breaks and tax loopholes. Their influence on policy has made it easy for the rich to stay rich [and get richer].
And until this winner-take-all economy changes, it will remain nearly impossible for us regular folks to get ahead, no matter how hard we work.
Ten years ago, the great con known as the Bush tax cuts was signed into law.
We were told that the budget surplus left by the Clinton administration would be better off in the hands of the taxpayers. Those tax breaks were to stimulate the economy, create jobs and lead us all to the American Dream.
Of course, the story of the past decade has been much different:
The lion's share of the tax breaks were stuffed into the pockets of a small percentage of taxpayers. The top 10 percent of earners received 55 percent of the tax benefits; the top 1 percent alone grabbed 38 percent. And, at the tip top of the income scale, the top .01 percent of households snatched an average cut of $520,000, or 450 times the average break for a middle-income family.
The current unemployment rate of 9.1 percent is more than double the rate in the same month a decade ago. In more human terms, 13.7 million people are currently looking for work but can't find a job. And those figures are upwards of 76 percent higher if we include the under-employed and folks discouraged by a still-thin job market.
As for the American dream of white picket fences and a home to call your own, overall home foreclosures were two-and-a-half times above the 2001 rate by the end of 2010. Today, roughly 3.7 million homes are in danger of foreclosure.
Policy-makers should be addressing the dire unemployment and foreclosure epidemics that plague our economy instead of focusing on the long run deficit. But it is worth mentioning that, for all the hubbub about the size of government and federal spending, the Bush tax cuts increased the deficit by $1.7 trillion between 2001 and 2008. And they remain the policy change responsible for the biggest share of our projected deficits for the next ten years.
It couldn't be more obvious; if you care about the deficit, end the Bush tax cuts. If you care about the economy, end the Bush tax cuts. If you care about suffering families who can't find a job getting forced out of their homes, end the Bush tax cuts. It's past time to begin getting our economy back on track. Ending a policy that lines the pockets of millionaires is the right place to start.
The results are in. The Bush tax cuts are a massive failure. Ten years is ten years too long. End the Bush tax cuts now.
Do you think it’s time to raise taxes on millionaires and corporate tax dodgers?
June 7, 2011 marks the tenth anniversary of the disastrous 2001 Bush tax cuts. Those irresponsible tax cuts added $2.6 trillion to our national debt and went primarily to the wealthiest households in the country.
But a nationwide tax justice revolution is gaining steam. All over the country, people are demanding to know: If we can pay our taxes, why can't America's wealthy individuals and richest corporations pay their fair share?
Join United for a Fair Economy, Responsible Wealth, and our partners during the week of June 7 to demand that millionaires and billionaires pay their fair share. Here's how you can get involved.
PARTICIPATE IN OUR NATIONAL CALL-IN DAY ON JUNE 7:
Make three (3) calls to 888-907-1485, and ask to be connected with your representative and two senators.
- Tell them: It’s time to end the Bush tax cuts for the wealthy and increase tax rates for millionaires. No more budget cuts until millionaires and corporate tax dodgers pay their fair share.
JOIN A NEARBY EVENT OR CREATE YOUR OWN with the True Majority events database. You can also download an activist tool-kit that includes signs, talking points, Town Hall questions, and sample press releases and op-eds.
PROVIDE AN ORGANIZATIONAL ENDORSEMENT:
- Contact Sarah VonEsch at email@example.com and include your organization's name, contact person and his/her email.
SHARE THIS ALERT:
- Use email and social media to encourage your friends, family and colleagues to get involved.
- Blog about the need to end the Bush tax cuts for the wealthy as a way to raise revenue to stop budget cuts at the federal, state and local levels.
Our economy is still in tatters and the middle class is disappearing. But that's not stopping conservatives in Congress from fighting for more of what led to the economic meltdown in the first place. In fact, they want to give even larger tax cuts to the super-rich—all while slashing essential public services, environmental protections and attacking public employees.
We need to shut down these damaging proposals. Your support and participation are crucial to the advancement of economic justice.
Thank you for taking action!
Federal Tax Policy Coordinator
United for a Fair Economy
P.S. For more information on the 10-year anniversary of the Bush tax cuts, see the following analyses:
- Citizens for Tax Justice: The Bush Tax Cuts After Ten Years (includes state-by-state figures)
- Economic Policy Institute: Tenth Anniversary of the Bush-era Tax Cuts
Endorsing organizations of the June 7th Days of Action include:
Business for Shared Prosperity | Every Child Matters | Friends of the Earth
Institute for Policy Studies | MoveOn.org | USAction
Wealth for the Common Good
States are facing their largest decline in revenue on record. The response from elected officials has been downright harmful, shortsighted, and economically unsound. Cutting to get out of a deficit is like digging to get out of a ditch. It puts everything we value at risk. And as we state in our new report—Flip It to Fix It: it doesn’t have to be this way.
By design, our state tax structures are designed to fail. Why? Because every state in the U.S. has a regressive tax structure, meaning it takes a greater share of income from low- and middle-income families than from the wealthy. In tough economic times, trying to raise adequate revenue through a regressive tax structure is like trying to squeeze water from a stone.
A new study, released today by the Tax Fairness Organizing Collaborative at United for a Fair Economy, asks the question: What if there was a solution to state deficits that would raise significant revenue, encourage investment, and create jobs—without cutting vital public services? And what if the revenue required by such a solution could be generated solely by making tax systems as fair as most Americans think they ought to be?
As this study demonstrates, this can be achieved by inverting each state’s tax structure. In other words, taking each state’s current distribution of state and local taxes and flipping it, with a pivot point at dead center (the 50th percentile). In this inverted state and local tax model, the wealthiest 20 percent pay the share of state and local taxes currently imposed on the least wealthy 20 percent, and vice-versa, with the fourth quintile also trading places with the second.
Every single state would benefit tremendously by inverting their existing tax structure. All combined, states would generate an additional $490 billion in revenue—immediately eliminating their deficits with cash to spare for investing in job creation and other stimulants to the economy. The flipped structure would be progressive, which is not only more economically sound, but also consistent with the majority of Americans’ perception of “fair.”
Read the full report in our resources section.
If you’re looking for a great book to deepen your thinking about the causes and consequences of inequality, here are three of my favorite reads of the last few months.
Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class, by Paul Pierson & Jacob Hacker
Many progressives point to the election of Ronald Reagan as the great turning point in our economy, ushering in a new age of inequality, but that misses a much bigger story. In this eye-opening and insightful book, Pierson and Hacker document the dramatic shifts in the political landscape that took place in the decade prior to Reagan’s election. As unions were in decline, corporate America was organizing like never before, hiring armies of lobbyists and filling the coffers of political campaigns. By the late 70s, they were able to stop President Carter’s agenda dead it its tracks, effectively crippling his presidency. Pierson and Hacker’s book goes further by documenting the continuation of this trend through the 80s, 90s, and today. Taken in context, the recent Citizens United ruling and the assault on public sector unions in Wisconsin and elsewhere are the continuation of a long-term pattern that must be turned around. The core take-away from this book is that organizations matter… a lot. If we are to turn the tide back in our favor, we must organize a real movement from the ground up, because being right just isn’t enough.
The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson & Kate Pickett
The negative social consequences of inequality is fairly intuitive, but Wilkinson and Pickett take it to an entirely new level with hard data and great analysis. The book examines the way in which inequality, and the increased social stratification that goes with that, reaches deep down into the human biology, triggering primal fight-or-flight instincts, reducing trust levels, and increasing stress. Using statistical data comparing developed nations around the world and states within the US, they document clear correlations between a wide array of social indicators – including physical and mental health, obesity, crime, bankruptcy, and more – with higher levels of inequality. One clear message from The Spirit Level is that inequality is bad for everyone, including those at the top of the economic ladder.
Aftershock: The Next Economy and America's Future, by Robert Reich
Reich takes on inequality from a different perspective. Instead of arguing the morality or social implications of inequality, he focuses on the economic basics. Without a strong middle class, the economy stalls. Over the past few decades, middle class Americans have used various coping mechanisms to stay ahead despite stagnant wages for the bottom 90%, including shifting to two-income households and taking on debt, but these families have since hit a wall. He proposes numerous policy solutions to reverse the growing inequalities and revive the middle class, including a “reverse income tax” that actually pays out to anyone earning under $50,000, coupled with graduated rates for higher-income households topping out at 55%; taxing capital gains and dividends the same as wage income; and expanding public investments in mass transit, Medicare for all, and more. If you’re looking for a good book that explores the economic trends and growing divide of the last few decades, this may be the book you’re looking for.
The daunting budget deficits facing states across the U.S. are no joke, particularly when the well-being of our communities is on the line. But members of the Tax Fairness Organizing Collaborative are responding with innovative advocacy, using creativity in the face of potentially devastating slash-and-burn proposals.
Here’s how two states—North Carolina and Rhode Island—have taken matters into their own hands, employing creative approaches to their advocacy that engages people in an otherwise contentious process:
North Carolina Goes ‘Back in Time’
In North Carolina, legislators are responding to the state’s revenue shortages with a proposed slash-and-burn budget approach. If passed, the state would lose tens of thousands of state jobs, including teachers, firefighters, and mental health workers.
In response, Together NC organized an innovative street theatre demonstration during the House vote on the budget, complete with a horse and buggy, period costumes, and street theater. Their message? A cuts-only approach will set the state back decades.
You know what they say: when the going gets tough, bring in the horse and buggy.
Together NC organized the protest this week during the House vote on the state budget. Here are the demonstration details from the group’s media release:
A group calling themselves the Back In Tyme Budget Players arrived wearing antiquated dress and traveling in a horse and buggy. While speaking from the steps of the General Assembly, they sent the message that the House budget will push North Carolina backward.
"The props and costumes are fun, but they're meant to convey a very serious message," said Rob Thompson, a coordinator of the Together NC coalition. "If we pass this cuts-only budget, it will set North Carolina back decades in terms of education, public safety and economic prosperity."
The group’s creative action was bold, attention grabbing, and provided a clear visualization of the group’s key advocacy message: North Carolina should take a more modernized approach to balancing the state’s budget.
Rhode Island Calls for Rebalancing
Creating a state budget can be contentious, messy, and downright confusing for those not actively involved in the process. Perhaps this is why Ocean State Action’s smart reframing of the state budget debate captured so much attention.
The group re-stated the state’s complicated budget challenges with a simple question: Would you rather raise taxes on the wealthiest Rhode Islanders or cut critical public services?
Here’s a summary of the group efforts from WBRU:
Ocean State Action wants lawmakers to raise taxes on the wealthiest Rhode Islanders to avoid more cuts to public services. The group pitched the proposal yesterday as an alternative to Gov. Chafee’s sales tax expansion. Executive Director Kate Brock says the state could raise $88 million next year with a 2 percent surtax on incomes over $500,000, and that the revenue could prevent funding cuts to schools, roadwork and public safety.
The group’s smart and simple reframing of the budget debate, combined with a series of rallies and actions in the state capitol, garnered a great deal of media attention in Rhode Island and throughout New England.
With 44 states and the District of Columbia projecting budget shortfalls for fiscal year 2012, the challenges facing state legislators in every corner of the U.S. are daunting. But as these budget battles wage on, it's refreshing to see activists responding with smart and creative advocacy that feels accessible, understandable, and engaging to folks who have the most at stake.
As North Carolina and Rhode Island demonstrate, it’s possible to acknowledge the seriousness of an issue in a way that attracts the public’s attention. Simplicity, common sense, and creativity are never out of order.
The problem with President Obama's commitment to "comprehensive immigration reform" is that, like George W. Bush's, his measures thus far also antagonize immigrants – documented or not. But why antagonize working immigrants during this severe an economic crisis? Even undocumented workers are significant contributors to the U.S. economy, having paid over $11 billion in taxes last year.
The Immigration Policy Center, in partnership with our friends at the Institute on Taxation and Economic Policy, released data that urges a more cooperative approach – versus a punitive one – to dealing with immigration policy.
[H]ouseholds [headed by undocumented immigrants] paid $11.2 billion in state and local taxes. That included $1.2 billion in personal income taxes, $1.6 billion in property taxes, and $8.4 billion in sales taxes. […]
These figures should be kept in mind as politicians and commentators continue with the...debate over what to do with unauthorized immigrants already living in the United States. In spite of the fact that they lack legal status, these immigrants—and their family members—are adding value to the U.S. economy; not only as taxpayers, but as workers, consumers, and entrepreneurs as well.
Undocumented workers are certainly contributing more to the public coffers than many U.S. corporations, including General Electric, which actually claimed billions in tax benefits last year. All without a single 'thank you' to U.S. taxpayers, including the undocumented.
These revelations prompt larger questions about how we relate to one another in this country. Periods of economic strife inevitably lead to the scapegoating of one group or another, be they immigrants, people of color, teachers or union workers.
It's important to recognize that our "immigration" problem is about much more than immigrants. It's about labor. It's about globalization and foreign policy. It's about race, culture and more. It's a complex tangle of issues that will require careful and holistic consideration. Progress will not be made with finger-pointing policies.
One thing's for sure: this country needs revenue. It makes sense that we avoid making things worse by attacking a population that's clearly supporting that need.
Stay tuned: President Obama will address the nation from the U.S.-Mexico border in El Paso, TX, laying out his framework for comprehensive immigration reform on Tuesday, May 10, 2011 at 3:30 p.m. (EST).
In Friday's Wall Street Journal (p. A15 of the print edition), columnist Stephen Moore does his best to marginalize and discredit the growing chorus of high-wealth individuals, including members of UFE's Responsible Wealth project, who support raising taxes on wealthy people like themselves. But his best is little more than a collection of weak arguments and name-calling.
I wish I had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes. That list includes Warren Buffett, George Soros, Bill Gates Sr., Mark Zuckerberg and even Barack Obama, who now says that not only should rich people like him pay more taxes, they want to pay more. "I believe that most wealthy Americans would agree with me," he said of his tax-hike plan. "They want to give back to the country that's done so much for them."
The idea that the nation's primary wealth and job creators—i.e., the people who carry the bulk of the tax load—aren't doing enough for the country is a bit insulting. But the president is right that there is a seemingly endless number of terribly wealthy, guilt-ridden individuals who want Americans to pay more taxes.
Okay, let's get this much straight. It's not about "guilt." It's about "responsibility" and a deeper understanding of what makes wealth possible. Responsible Wealth members understand that their wealth is not in spite of, but because of our tax system and the investments its makes possible. Abigail Disney made this argument in a USA Today column last summer. Without a taxpayer funded interstate highway system, there would be no Disneyland. Without our courts, no copyright protection for Mickey Mouse. Without our publicly funded education system, no creative artists filling Disney Studios.
The simple fact is, the public investments made possible through our tax dollars are not the enemy of prosperity, but the foundation upon which economic prosperity is built. Bill Gates noted the taxpayer funded investments that led to the creation of the internet, without which, Microsoft would be a very different corporation today. Jerry Fiddler, whose Wind River Systems company made the embedded software for NASA's Mars Rovers, readily acknowledges the role taxpayer-funded investments played in his business success. Judy Pigott, whose family wealth comes from the manufacture of Peterbilt and Kenworth trucks, would be telling a very different story without the federally-funded interstate highway system. The list goes on.
Despite the assertions of Moore and others who hold his anti-government views, taxes raised to fund investments in the common good are not taken out of the economy, but rather moved from one part of the economy to anther to better meet our nation's priorities. Government expenditures, whether it is building a school, investing in high-speed rail, or aiding workers displaced by plant relocations, are just as much a part of the economy – stimulating economic growth and jobs – as a wealthy person deciding to buy a fourth home.
Government, as aptly described by President Abraham Lincoln, is simply a vehicle for doing things together that we cannot as easily do as individuals – whether that is pushing at the outer bounds of our shared knowledge through public research and exploration, leading our nation into a sustainable future through green energy and transportation investments, or sowing the seeds of prosperity for the next generation through a publicly-funded education system available to all, not just those who can afford it.
A clearer view of the symbiotic relationship between public investments and economic prosperity helps us understand how public investments yield so much more economic bang-for-the-buck than tax cuts. In a report from Moody's, Mark Zandi notes that each dollar the federal government gives away by making the Bush income tax cuts permanent yields about 29 cents in economic stimulus. By comparison, each dollar the federal government spends on infrastructure investments yields $1.59 in economic stimulus. Even more, each dollar of unemployment benefits yield $1.64 in economic stimulus, but that's another story (about the importance of a strong middle class to keep our economy going).
Moore spends most of his column though trying to make the weak argument that if these wealthy individuals want to pay more, they're nothing stopping them from writing a check to the IRS. Well, we've heard that one before... Just last month in fact from Sen. Orin Hatch. The short answer is that taxes are not charity. As former Supreme Court Justice Oliver Wendell Holmes once stated so eloquently, "Taxes are what we pay for civilized society." For the long answer, check out the post we wrote in response to Sen. Hatch's comment.
Beer socials are a great way to build community with your neighbors. But who knew they could be such an effective forum for economic justice movement building?
This month, I was invited to present UFE's flagship workshop, "The Growing Divide," at a meeting of Drinking Liberally's chapter in Windsor, CT.
Drinking Liberally is a national project that brings together folks with progressive ideals through social events. Their slogan: "Promoting democracy one pint at a time." Local watering holes, they say, are ideal for these meetings because, "Bars are democratic spaces - you talk to strangers, you share booths, you feel the bond of common ground."
Twenty-three locals filed into Windsor's Union Street Tavern to learn and share thoughts about the inequalities of income, wealth and, in turn, political power we're dealing with as a nation.
Then, to focus the discussion closer to home, Amy Thompson from TFOC member group, Better Choices for Connecticut, pulled up a barstool to share details of their state-level tax justice initiatives, and how those present could get involved.
Through this event, bar-goers were offered the opportunity to build solidarity with other members of their community, and were provided with concrete ways to support the economic justice movement.
Visit the Drinking Liberally website to learn how to join or start a chapter in your community. And, as always, please drink responsibly.