If there are any limits to a president’s power, it wasn’t evident from Donald Trump’s speech before a joint session of Congress on March 4, 2025.

In that speech, the first before lawmakers of Trump’s second term, the president declared vast accomplishments during the brief six weeks of his presidency. He claimed to have “brought back free speech” to the country. He declared that there were only two sexes, “male and female.” He reminded the audience that he had unilaterally renamed an international body of water as well as the country’s tallest mountain.

“Our country is on the verge of a comeback the likes of which the world has never witnessed, and perhaps will never witness again,” Trump asserted.

The extravagant claims appear to match Trump’s view of the presidency – one virtually kinglike in its unilateral power.

It’s true that the U.S. Constitution’s crucial section about the executive branch, Article 2, does not grant the president unlimited power. But it does make this figure the sole “Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States.”

This monopoly on the use of force is one way Trump could support his 2019 claim that he can do “whatever I want as President.”

Before Trump’s speech, protesters outside had taken issue with Trump’s wielding of such unchecked power. One protester’s sign said, “We the People don’t want false kings in our house.”

With those words, she echoed a concern about presidential power that originated more than 200 years ago.

Remnants of the monarchy

When the Constitution was written, many people – from those who drafted the document to those who read it – believed that endowing the president with such powers was dangerous.

Ratified after a lot of huffing and puffing, on May 29, 1790, by rather nervous citizens, the text of the Constitution had stirred many controversies.

It wasn’t just the oftentimes vague language, which includes head-scratchers such as the very preamble, “We the People of the United States.” Nor was the discomfort due solely to the document’s jarring brevity – at 4,543 words, the U.S. Constitution is the shortest written Constitution of any major nation in the world.

No, what made that document especially problematic, to borrow from John Adams, was that it provided for “a monarchical Republick, or if you will a limited Monarchy.”

Adams would eventually become the nation’s second president in 1797. Even though he was a staunch supporter of the Constitution, he was honest enough to take a hard look over the political layout of the new nation. And what he found were remnants of the British monarchy and traces of a king whose unchecked abuses had led the Colonists to demand their independence in the first place.

“The Name of President,” Adams couldn’t help concluding in a letter to prominent Massachusetts lawyer William Tudor, “does not alter the Nature of his office nor diminish the Regal Authorities and Powers which appear clearly in the Writing.”

While Adams was only somewhat uncomfortable, as a historian of the early republic I can stress that other observers at the time were downright appalled.

In a 1787 article published in the Philadelphia Independent Gazetteer, “An Old Whig” – identity unknown – wrote, “The office of President of the United States appears to me to be clothed with such powers as are dangerous.”

As the commander in chief of the Army, the American president “is in reality to be a king as much a King as the King of Great Britain, and a King too of the worst kind – an elective King.”

Consequently, as the author of this article resolved, “I shall despair of any happiness in the United States” until this office is “reduced to a lower pitch of power.”

‘Subjects of a military king’

Concern over a commander in chief declaring martial law, no matter the legality of the measure, was similarly on the minds of the Americans who had read the Constitution.

In 1788, a patriot who went under the pseudonym of “Philadelphiensis” – real name, Benjamin Workman – issued a sweeping warning. Should the president decide to impose martial law, “your character of free citizens” would be “changed to that of the subjects of a military king.”

A president turned military king could “wantonly inflict the most disgraceful punishment on a peaceable citizen,” the piece continued, “under pretence of disobedience, or the smallest neglect of militia duty.”

Another power given to the president was also universally considered extremely dangerous: that of granting pardons to individuals guilty of treason.

Maryland Attorney General Luther Martin reasoned that the treason most likely to take place was “that in which the president himself might be engaged.” What the president would do, Martin wrote, would be “to secure from punishment the creatures of his ambition, the associates and abettors of his treasonable practices, by granting them pardons.”

George Mason, who participated in the Constitutional Convention and also drafted Virginia’s state Constitution, foresaw a gloomy scenario. He shivered at the idea of a president who would “screen from punishment those whom he had secretly instigated to commit the crime, and thereby prevent a discovery of his own guilt.”

Choosing ‘villains or fools’

The framers did limit executive power in one significant way: The president of the United States is subject to impeachment and, upon conviction of treason or other high crimes, removal from office.

But in the meantime, the president may enact irreparable damage.

The Constitution was finally ratified – but only begrudgingly by the American citizens, who feared a president’s abuse of power. More persuasive than the legal restraints placed on the office, the belief that the people would choose their leader wisely tipped the scale toward approval.

Delegate John Dickinson asked a rhetorical question: “Will a virtuous and sensible people chuse villains or fools for their officers?”

Also, 18th-century common sense deemed it improbable that a person without virtue and magnanimity would run for the nation’s highest office. Americans’ faith in their first president, the upstanding George Washington, helped convince them that all would end well and their Constitution would be sufficient to protect the republic.

The Federalist Papers, the 85 essays written to persuade voters to support ratification, were suffused with this optimism.

People “of the character marked out for that of the President of the United States” were widely available, said the Federalist #67.

“It will not be too strong to say,” reads Federalist #68, “that there will be a constant probability of seeing the station filled by characters pre-eminent for ability and virtue.”

Government of laws?

Adams wasn’t so optimistic. He wavered. And then he flipped the issue on its head.

“There must be a positive Passion for the public good … established in the Minds of the People,” he had written in a 1776 letter, “or there can be no Republican Government, nor any real liberty.”

After almost 250 years of uninterrupted republican life, Americans are used to thinking that their nation is secured by checks and balances. As Adams kept repeating, America aims at becoming “a government of laws, and not of men.”

Americans, in other words, have long believed it is their institutions that make the nation. But the opposite is true: The people are the soul and the conscience of the republic.

Everything, in the end, boils down to the character of these people and the control they assert over who becomes their most important leader.

Maurizio Valsania, Professor of American History, Università di Torino

This article is republished from The Conversation under a Creative Commons license. Read the original article.

IMAGE: President Donald Trump addresses a joint session of Congress at the U.S. Capitol on March 4, 2025. Chip Somodevilla/Getty Images

The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.

Consider the billionaire.

I’m not talking about people who were born into wealth; they have their own issues. Let us specifically consider the so-called “self-made” wealthy person, the driven CEO or investor. He (and it is almost always a “he” in our society) is likely to share some characteristics with other billionaires and members of his cohort. Social science and simple observation tell us that these powerful figures are more likely than other people to be:

●greedy

●addicted to making money (which is psychologically distinct from greed)

●obsessed with making money, which leads to bad behavior

●surprisingly worried about the money they have

●less empathetic and more self-interested than other people

●breakers of certain laws and social norms

●less charitable on a percentage basis

●very politically influential

●and, determined to cut Social Security.

About that last item: While there may be exceptions here and there, the billionaire class overall is overwhelmingly opposed to Social Security. Most wealthy people would, in fact, like to see its benefits slashed. A 2013 study compared the political opinions of the wealthy with those of voters as a whole and found “major disagreement” between the two groups regarding Social Security. Among all voters, there was a 46 percent gap in favor of expanding its benefits rather than cutting them. The wealthy had the opposite take; they favored cuts, rather than expansion, by a gap of 33 percent.

The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.

Strikingly, the richer someone was, the likelier they were to want Social Security cuts. Each additional $10 million in personal wealth added measurably to the desire for Social Security cuts. The authors note that “this finding may help explain why cutting these popular programs has remained on the political agenda.”

Ya thinks?

Billionaires pay for think tanks and news outlets which fill the airways with lurid talk about the program’s costs. Billionaires and corporate CEOS have more political influence than any other part of society. That’s why, despite the outcome of the recent ‘debt ceiling’ crisis, they still represent an existential threat to Social Security.

Distraction

The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.

We are supposed to be horrified, for example, by the gap between Social Security’s income ($1.244 trillion for this year) and its cash outlays ($1.237 trillion). We are not supposed to notice that Michael Bloomberg’s wealth gain since September of last year ($17.7 billion*) would cover almost the entire 2023 shortfall of $22 billion all by itself, or that the entire amount could be recouped by throwing in Bill Gates’ gains during the same period.

That’s right: the nine-month income of two billionaires alone would erase Social Security’s entire actuarial imbalance for a full year. (And 2022 was a bad year for billionaires; “bad,” of course, being a very relative term.)

A trillion-plus dollars sounds like a lot of money, and it is. But the personal wealth of just ten Americans would cover Social Security’s entire budget for an entire year. Not that it would, at least under current law. The law dictates that Social Security’s costs be covered by a payroll tax levied for that purpose alone. But a wealth tax, or something like it, could be a popular option if the program faces a real funding crisis.

There are already sound proposals to “scrap the cap” on income that is taxed for Social Security, and to include investment and other sources of income in that tax. Billionaires would face a tax hike under these proposals, although their total taxes would still be well below mid-20^thcentury norms.

The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.

What They Say

The billionaires’ vituperation toward Social Security can be seen in Elon Musk’s ill-informed tweet about it (which The Intercept’s Jon Schwarzably dissected). It can be found in CEO conclaves like “Fix the Debt,” where the heads of corporations like JetBlue, Bridgestone, and Microsoft, as well as government largesse recipients like Honeywell, GE, Boeing, Bank of America, and Goldman Sachs assembled to attack programs “entitlements.”

It oozes through op-eds like this one from predatory billionaire Steve Schwarzman, who magnanimously promised to “share the pain” of financial sacrifice with elderly Social Security recipients living on a few hundred dollars a month. (5.5 million seniors reportedly faced food insecurity in 2021; Schwarzman “took home a record $1.27 billion for 2022”.)

The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.

It’s reflected in Mitt Romney’s bitter words at a 2012 fundraiser, when he told a roomful of fellow rich people that “they”—it’s always “they,” not “us”—”they believe the government has a responsibility to care for them, that they are entitled: to health care, to food, to housing, you name it.”

Added Romney, “That’s an entitlement.”

Most of all, it can be seen in works of the late billionaire Peter G. Peterson, a conservative hedge funder and former Nixon cabinet member who lavished money on politicians from both parties in pursuit of his curious obsession: to reduce government spending, with a special focus on cuts to Social Security and Medicare. The foundation, astroturf groups, and think tanks Peterson created have worked for decades to elevate the national debt above all other policymaking concerns, regardless of the effect on working Americans, with a special focus on cuts to Social Security and Medicare.

The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.

Why They Hate

But why? Why do the ultra-wealthy hate Social Security so much? It’s not just self-interest, although there is certainly that. The answer lies in the anthropology, as well as the accountancy, of the billionaire class. Social Security represents everything the typical billionaire loathes, including community, solidarity, and the empowerment of the working class.

Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits.

Billionaire CEOs belong to a group whose membership is earned through obsession, greed, competitiveness, and lack of empathy. It is a population self-selected for sociopathy and work-life imbalance. It’s hard to make a billion dollars without cheating people, and it’s hard to cheat people when you see them – really see them, through the eyes of understanding and emotion. That’s why someone like Schwarzman can equate his own “sacrifice” (of what, a fifth or sixth yacht?) with the suffering of an ailing grandmother trying to get by on $75 per week.

It’s impossible to bargain with them by telling them they already have enough money to live like an emperor. At that level, money works the way social media likes work for some other people: it doesn’t affect their lives in any material way, but it boosts their sense of worth and validation. That’s why they’ll never quit. That’s why they’ll never say, “I have enough.” There is always someone else who is gaining on them every time they stop to eat, sleep, make love, express an emotion …

Sure, they’ll write a check to charity from time to time. That’s good for the ego. It brings applause, praise, black-tie dinners, and fawning requests for more money. But Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits. Pay a tax, with no effusive speeches or stroking of the ego for America’s 0.001 percent? The idea offends their sense of self-importance.

This is why they love to hear politicians like Alan Simpson insult Social Security recipients by calling them “greedy geezers.” They think they’ve won life’s race. People who have lived other kinds of lives – filled, perhaps, with love and kindness rather than competition and exploitation – are losers to them. In their minds, people like that are nothing. For them to ask anything of the wealthy is, well, impudence.

Controlling the Discourse

Unfortunately, the billionaire class increasingly controls US news outlets. Their obsession has warped the national discourse for decades. It has wormed its way into the media ecosystem, as billionaire-funded think tanks, lobbying groups, and politicians flood the airwaves and newspapers with false talking points about the “unaffordability” of such programs. “Both Medicare and Social Security are going broke and taking a larger share of the budget in the process,” ABC’s Martha Raddatz once told the national audience for a vice presidential debate. (Neither half of that statement is true.)

Their obsession is reflected in a news industry that has been increasingly centralized under billionaire control. Media elites sometimes sounded like jilted lovers when they reported that neither party pushed for Social Security or Medicare cuts in the debt ceiling deal.

The Washington Post, which often channels billionaire views on Social Security, ran a must-read article under the headline, “How a billionaires boys’ club came to dominate the public square.” As Michael Scherer and Sarah Ellison note,

“Technological change and the fortunes it created have given a vanishingly small club of massively wealthy individuals the ability to play arbiter, moderator and bankroller of not only the information that feeds the nation’s discourse but also the architecture that undergirds it.”

The billionaires’ obsession is also reflected at non-profit outlets like NPR—which, despite the word “public” in its name, relies heavily on corporate and billionaire donors for survival.

Dialing for Dollars

What the billionaires say, usually goes. “… (E)conomic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” a 2014 study found, “while average citizens and mass-based interest groups have little or no independent influence.”

Things have only gotten worse since then. Billionaires poured nearly $1 billion ($881,000,000) into the last round of congressional elections. How does this affect policy? Politicians who carry out the wishes of billionaires, corporate CEOs, and lobbyists raise more money, of course. But there is also a process of acculturation, where elected officials become so steeped in the world of elite consensus that they come to believe in it themselves.

Consider, for example, the infamous slide deck which advised incoming Congressional Democrats to spend four hours a day on “call time” and one hour per day on “strategic outreach,” both of which involve raising money for their next campaign. Imagine spending four to five hours a day calling people who despise Social Security, and it soon becomes clear that only a miracle has protected Social Security so far—and miracles don’t last forever.

It would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe.

Unless you’re a candidate with mass support like Bernie Sanders, campaign fundraising requires constant immersion in the anti-Social Security mindset of the ultra-wealthy—which, when combined with the GOP’s longstanding hostility to the program, means that the people who make our laws are steeped in a worldview that considers “entitlement programs” expensive and superfluous.

That’s why it would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe. Neither party wanted to take the unpopular step of calling for benefit cuts in this round of negotiations. But the billionaires and corporations who drive our political system won’t stop trying. That’s how they got where they are; by persisting until they win.

Previous attempts to cut Social Security have come in the form of ‘bipartisan commissions’ whose role was to obscure the process and shield both parties from blame. (Mitt Romney’s TRUST Act would follow the same playbook, as would other billionaire-backed proposals.) The White House has correctly called these commissions “death panels,” which may be one reason why billionaires primarily contributed to Republican candidates in the last election cycle. But public opinion must be mobilized to prevent any further softening of President Biden’s position on Social Security, before the billionaires let their money do the talking in the 2024 race.

Because, when it comes to money in politics, Bob Dylan’s words hold true: money doesn’t talk, it swears.

Richard (RJ) Eskow is a freelance writer. Much of his work can be found on eskow.substack.com. His weekly program, The Zero Hour, can be found on cable television, radio, Spotify, and podcast media. He is a senior advisor with Social Security Works.

This article was licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

In our book – REGENERATION: The Future of Community in a Permacrisis World, we point out that in the US today, we see that our politicians can’t even stand up to the NRA, let alone address climate collapse.  Instead, they distract us with culture wars and fake controversy – banning books, and literally canceling democracy via gerrymandering and voter suppression.

Shouldn’t our governments be promoting the Common Good?  Isn’t that the definition of regenerative governance?  Here’s a citizen’s checklist we compiled – does your government check the boxes?

If you were to grade your elected government officials against their support  for the Common Good, you might get a better idea if they really care about you and your children’s children.

Christian Sarkar, Philip Kotler, and Enrico Foglia are the co-founders of The Regenerative Marketing Institute, and the joint authors of REGENERATION: The Future of Community in a Permacrisis World.

Many of the world’s richest and most powerful people are in the spotlight for the wrong reasons – again. The Pandora papers is the third and largest leak of documents in which the secret financial practices of the wealthy are exposed in the media. They highlight mass tax avoidance and evasion, as well as potential money laundering.

As with the Panama and Paradise papers, the UK is heavily referenced as either the origin or destination for funds that are moved through offshore financial centres to obscure the ultimate recipients. The papers also highlight the still prominent role of British overseas territories such as the British Virgin Islands and Cayman Islands in such schemes.

But what is missing from this story is that this UK involvement could have been avoided. The UK has long known it could do more to prevent individuals from moving money in and out of the country through offshore jurisdictions. The National Crime Agency identified the practice as an issue in its 2014 report. And in 2016, after the leak of the Panama papers, then prime minister, David Cameron, pushed for a beneficial ownership register that would force UK companies to reveal the person who ultimately enjoys the benefits of owning an asset, even if they are not the named owner. Five years later, we are no further forward.

Registration of overseas entities

In 2018, Theresa May’s government publishing a draft Registration of Overseas Entities Bill. This focused on setting up a register in which any “overseas entities” seeking to buy property in the UK would have to disclose their beneficial owners.

The register, which was originally due to come into operation in 2021, would have reduced the likelihood of the UK being embroiled in future scandals by making ownership of UK property transparent. But the legislation was not passed while May was in office and, since Boris Johnson took over in 2019, it appears to have been pushed to one side.

The UK also made it clear, by publishing a draft Order in Council under the Sanctions and Anti-Money Laundering Act 2018, that following consultation with British overseas territories they would be required to establish a public register of companies’ beneficial owners by 2021. However, it has since been reported this will now not be required until 2023.

The UK government does have a commitment to reform Companies House, giving it investigatory powers to verify the identities of proposed company directors before they can be appointed. But no timeline has been set for implementing this. So once again, for all the rhetoric around making the UK more resilient to financial crime, the government’s lack of action speaks louder than words.

This lack of political will is also evidenced by Johnson’s decision not to implement the EU’s 6th Anti-Money Laundering Directive. While the UK is no longer a member of the EU, it was still in the transition stage at the date when the directive was due to be implemented by member states (December 3 2020). However, the UK had a special concession under the Lisbon Treaty whereby it had the freedom to opt in to policing and criminal justice measures in the national interest. In this case, it simply chose not to opt in.

The UK government’s justification for this was that the UK is largely compliant with the directive. But this is not the case in relation to beneficial owners: had the UK implemented the directive, it would have introduced similar requirements to the Registration of Overseas Entities Bill. This therefore represents a further decision not to implement a register of overseas entities and their beneficial owners.

What it means

The frustration is that the mechanisms to combat offshore secrecy are there, but they are not being advanced – or certainly not with any urgency. If the political will existed, a bill could probably go from draft to assent in months.

My worry is that this inaction amounts to tacit acceptance by the UK government of the wealthy avoiding tax and of illicit finance circulating in the country. Years of leaks and negative attention have done little to spur on the government. And as other countries launch inquiries into the Pandora papers, the UK remains largely silent.

Why is this so? There have been suggestions that some Conservative Party donors are the beneficiaries of the currently flawed system. There is also the fact that the proceeds from such transactions ultimately benefit London’s financial district, and that the elites that benefit under this system are the kind of individuals that keep governments in power.

Whatever the case, misplaced media anger at the wealthy who exploit this system, rather than at Johnson and his government for failing to reform the law, perpetuates this inaction. It enables the prime minister to rest easy and make conference speeches about helping voters by levelling up the country, while the same voters are forced to pay more taxes to make up for the amounts that the ultra-wealthy have been able to avoid paying through offshore secrecy.

Matthew Shillito, Lecturer in Law, University of Liverpool

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Comparisons between the United States under Trump and Germany during the Hitler era are once again being made following the storming of the U.S. Capitol on Jan. 6.

Even in the eyes of German history scholars like myself, who had earlier warned of the troubling nature of such analogies, Trump’s strategy to remain in power has undeniably proved that he has fascist traits. True to the fascist playbook, which includes hypernationalism, the glorification of violence and a fealty to anti-democratic leaders that is cultlike, Trump launched a conspiracy theory that the recent election was rigged and incited violence against democratically elected representatives of the American people.

This is not to say that Trump has suddenly emerged as a new Hitler. The German dictator’s lust for power was inextricably linked to his racist ideology, which unleashed a global, genocidal war. For Trump, the need to satisfy his own ego seems to be the major motivation of his politics.

But that doesn’t change the fact that Trump is just as much of a mortal danger to American democracy as Hitler was to the Weimar Republic. The first democracy on German soil did not survive the onslaught of the Nazis.

If America is to survive the attacks of Trump and his supporters, its citizens would do well to look to the fate of Germany and the lessons it offers Americans looking to save, heal and unite their republic.

From Nazi ideology to democracy

The Weimar Republic, the first democracy on German soil, was a short-lived one. Founded in 1918, it managed to survive the political turmoil of the early 1920s, but succumbed to the crisis brought about by the Great Depression. It is therefore not the history of the failed Weimar Republic but rather that of the Federal Republic, founded in 1949, that provides important clues.

Just like Weimar, the West German Federal Republic was founded in the aftermath of a devastating war, World War II. And, just like Weimar, the new German state found itself confronted with large numbers of citizens who were deeply anti-democratic. Even worse, many of them had been involved in the Holocaust and other heinous crimes against humanity.

During the first postwar decade, a majority of Germans still believed that Nazism had been a good idea, only badly put into practice. This was a sobering starting point, but Germany’s second democracy managed not just to survive but even to flourish, and it ultimately developed into one of the most stable democracies worldwide.

How?

Denazification: ‘Painful and amoral process’

For one, there was a legal reckoning with the past, beginning with the trial and prosecution of some Nazi elites and war criminals. That happened first at the Nuremberg Trials, organized by the Allies in 1945 and 1946, in which leading Nazis were tried for genocide and crimes against humanity. A further significant reckoning happened during the Frankfurt Auschwitz trials of the mid-1960s, in which 22 officials of the SS, the elite paramilitary organization of the Nazi Party, were tried for the roles they played at the Auschwitz-Birkenau death camp.

To protect the new German democracy from the political divisions that had plagued parliamentary government during the Weimar period, an electoral law was introduced that aimed to prevent the proliferation of small extremist parties. This was the “5 percent” clause, which stipulated that a party must win a minimum of 5% of the national vote to receive any representation in parliament.

In a similar vein, Article 130 of the German Criminal Code made “incitement of the masses” a criminal offense to stop the spread of extremist thought, hate speech and calls for political violence.

Yet as important and admirable as these efforts were in exorcising Germany’s Nazi demons, they alone are not what kept Germans on a democratic footing after 1945. So, too, did the successful integration of anti-democratic forces into the new state.

This was a painful and amoral process. In January 1945, the Nazi Party had some 8.5 million members – that is, significantly more than 10% of the entire population. After the unconditional surrender of Nazi Germany, many of them claimed that they had been only nominal members.

Such attempts to get off scot-free did not work for the Nazi luminaries tried at Nuremberg, but it certainly did work for many lower-level Nazis involved in countless crimes. And with the advent of the Cold War, even people outside of Germany were willing to look past these offenses.

Denazification, the Allies’ attempt to purge German society, culture and politics, as well as the press, economy and judiciary, of Nazism, petered out quickly and was officially abandoned in 1951. As a result, many Nazis were absorbed into an emerging new society that officially committed itself to democracy and human rights.

Konrad Adenauer, the first West German chancellor, said in 1952 that it was time “to finish with this sniffing out of Nazis.” He did not say this lightheartedly; after all, he had been an opponent of the Nazis. To him, this “communicative silencing” of the Nazi past – a term coined by the German philosopher Hermann Lübbe – was necessary during these early years to integrate former Nazis into the democratic state.

Where one was going, advocates of this approach argued, was more important than where one had been.

A dignified life

For many, this failure to achieve justice was too heavy of a price to pay for democratic stability. But the strategy ultimately bore fruit. Despite the recent growth of the far right and nationalist “Alternative for Germany” party, Germany has remained democratic and has not yet become a threat to world peace.

At the same time, there were increasing efforts to confront the Nazi past, especially after the upheaval of 1968, when a new generation of young Germans challenged the older generation about their behavior during the Third Reich.

Another crucial factor helped make Germany’s democratic transition a success: an extraordinary period of economic growth in the postwar period. Most ordinary Germans benefited from this prosperity, and the new state even created a generous welfare system to cushion them against the harsh forces of the free market.

In short, more and more Germans embraced democracy because it offered them a dignified life. As a result, philosopher Jürgen Habermas’ concept of “constitutional patriotism” – as one interpreter put it, that citizens’ political attachment to their country “ought to center on the norms, the values and, more indirectly, the procedures of a liberal democratic constitution” – eventually came to replace older, more rabid forms of nationalism.

In the coming weeks and months, Americans will debate the most effective ways to punish those who instigated the recent political violence. They will also consider how to restore the trust in democracy of the many millions who have given their support to Donald Trump and still believe the lies of this demagogue.

Defenders of American democracy would do well to study carefully the painful but ultimately successful approach of the Federal Republic of Germany to move beyond fascism.

The United States finds itself in a different place and time than postwar Germany, but the challenge is similar: how to reject, punish and delegitimize the powerful enemies of democracy, pursue an honest reckoning with the violent racism of the past, and enact political and socioeconomic policies that will allow all to lead a dignified life.

Sylvia Taschka, Senior Lecturer of History, Wayne State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The cover of the May 20, 2020 issue of Forbes magazine carries a picture of Larry Ellison, billionaire founder of Oracle Corporation. On page 114, there’s a Billionaires Index that runs six more pages in very small print.  The following becomes clear:

1. Almost every country has billionaires. Even Venezuela and Zimbabwe each has one billionaire.
2. The U.S. has the largest number of billionaires, around 624.
3. China has the second largest number of billionaires, 390. Not bad for a country professing communism. In fact, the number of Chinese billionaires is even higher, because Hong Kong is listed separately with 66 billionaires, and independent Taiwan adds additional 40 Chinese billionaires.
4. Germany has 110 billionaires, Russia has 102 billionaires, followed by India with 94 billionaires.
5. Each of the remaining countries has fewer than 100 billionaires, with many in Australia, Canada, France, Switzerland.
6. I would guess that there are more billionaires who were not known by Forbes or not counted because their wealth couldn’t be estimated. This would include royals, dictators, and criminals. I would venture that the world has somewhere between 2,000 to 2,200 billionaires. The estimated total net wealth of the world’s billionaires is over $8 trillion.

Our thesis is that billionaires could become a force for good – especially if their resources were used for the Common Good. There are three way this can happen:

1. The billionaires suddenly realize that the Common Good of the planet is an important goal for them, so they join forces to save humanity and Nature,
2. Our governments make billionaires pay their “fair share” of taxes, or
3. Society decides that billionaires shouldn’t exist, and our governments simply tax them out of existence.

Will the billionaires agree to higher taxes? In the recent US elections, we recall that Bernie Sanders suggested billionaires should be taxed out of existence, while Joe Biden warned us against demonizing the wealthy.

There’s a common myth that there will always be billionaires. And the media worships billionaires like Bill Gates and Warren Buffett who illustrate that some billionaires can work for causes that are beyond their own selfish interests.

Where do Billionaires Come From?

We should start by asking where do billionaires come from?  Do they just spring out of the fertile digital soil of Silicon Valley?  Can anyone – with enough hard work – become a billionaire?

So how do you become a billionaire?  Robert Reich, former U.S. Secretary of Labor, explains four sources of wealth:

• Inherited Wealth: around 60 percent of wealth in the US is inherited. The best chance you have of becoming a billionaire is to marry or be born into intergenerational riches.
• Monopolies: Jeff Bezos’ Amazon accounts for nearly 50 percent of all e-commerce retail sales in America. Our patent and trademark systems, which have been extended in duration, create billionaire like George Lucas and Oprah Winfrey.
• Insider Information: Hedge fund billionaire Steven A. Cohen made “hundreds of millions of dollars of illegal profits” – through his expertise in insider trading. This is not an isolated incident.
• Politics: You can invest in politicians – or even bet on them, like racehorses – through your timely campaign contributions. Americans for Tax Fairness estimates that Charles Koch and David Koch and/or Koch Industries could save between $1 billion and $1.4 billion combined in income taxes each year from the Trump tax law―and that doesn’t include how much the Koch Industries save in taxes on offshore profits or how much their heirs will benefit from weakening the estate tax.

Good luck with these four strategies.

Without them, the average US worker would have to work for 25 thousand years to become a billionaire.

How has the number of billionaires grown over the past few decades? In 1996 there were 423 billionaires spotted in the wild.  In 2019, that number rose to 2,153. Billionaires constitute just 0.00003 percent of the world population, but they currently own the equivalent of 12 percent of the GWP (gross world product) and a much larger percentage of the total wealth of the world.

Interestingly, even as COVID destroyed the economy, billionaires got richer – to the tune of $10.2 trillion.

The Billionaire’s Defense

Arguments used to defend billionaires are often based on the story that without billionaires, society would not progress – innovation and philanthropy would diminish – making life even worse.  Facebook CEO Mark Zuckerberg, worth $70bn, explains this in an appearance on Fox News. Billionaires should not exist in a “cosmic sense,” but in reality most of them are simply “people who do really good things and kind of help a lot of other people. And you get well compensated for that.” He warned about the dangers of ceding too much control over their wealth to the government, allegedly bound to stifle innovation and competition and “deprive the market” of his fellow billionaires’ funding for philanthropy and scientific research.

“Some people think that, okay, well the issue or the way to deal with this sort of accumulation of wealth is, ‘Let’s just have the government take it all,” Zuckerberg said. “And now the government can basically decide, you know, all of the medical research that gets done.”

So who decides what research gets done?  The drug companies?  The billionaires themselves?  There is a serious argument to be made that allowing billionaires to decide societal priorities is profoundly undemocratic.  Should mega-rich donors like Bill Gates drive philanthropy, usurping the role of democratic governments to decide what social ills to tackle and how?

Even in terms of innovation, Zuckerberg is wrong.  The Information Technology and Innovation Foundation (ITIF) reports that while in the 1970s almost all innovation winners came from corporations acting on their own, more recently over two-thirds of the winners have come from partnerships involving business and government, including federal labs and federally-funded university research. Moreover, in 2006, 77 of the 88 U.S. entities that produced award-winning innovations were beneficiaries of federal funding.

Facebook, for all Zuckerberg’s talk about innovation, makes the bulk of its profits from selling access to customer data via advertising.  It’s certainly not a fountain of societal innovation.

Unfortunately, the record of billionaire activism is not always a stellar example upholding human values or even democracy, for that matter.  The John Birch society, for example, was principally backed by Fred Koch, the father of the infamous Koch brothers. The society famously attacked Martin Luther King and the Civil Rights movement, as well as JFK – with a campaign to spread hate just two weeks before his assassination in Dallas. This thread of regressive billionaire activism continues to this day. The John Birch society’s tired slogan – “this is a republic, not a democracy” is now being amplified by the Trumpists.

These are billionaires who are not interested in the Common Good.  In fact, it is their actions that have driven our society to a level of public insecurity and mistrust, not seen since the 60s, or the Civil War, as some have argued. Clearly, not all billionaires are interested in saving the world.

Will Billionaires Solve the World’s Biggest Problems?

Our world is plagued with wicked problems.  Recently, we started a project studying what we can do to mitigate the 7 most Wicked Problems in the world. COVID-19, for example,would be classified under “health and livelihood” and hopefully the new vaccines will get the coronavirus problem under control within a few years.

Note that one of the Wicked7 problems is inequality.  As a problem, it also contributes to other problems such as war and health and livelihood.  Inequality is an insidious and growing problem and it is intrinsically related to the growing number of billionaires in the world.  As the number of billionaires increase, and average incomes remain the same, income inequality grows as a problem.

Given that these wicked problems are an existential threat to our future as a civilization, why is it that the smartest minds in the world are still busy working on algorithms to maximize advertising efficiency or building financial instruments for hedge-fund profits?

What would happen if the world drafted Bill Gates, Elon Musk, Tim Cook, Jamie Dimon, and Jeff Bezos – gave them a mission to find solutions to “save the planet in the interest of the common good” and then presented their “solutions” to the governments of the world – put them to a global vote? The Big 5 CEOs could afford to be paid nothing for this challenge. Well, isn’t that what they should be working on?  Paul Polman, former CEO of Unilever, could also be drafted as the project manager of this Manhattan Project to save humanity. Let’s lock them in a “zoom-room” for the next six months and see what they come up with – we’re pretty sure their businesses will continue doing well without batting an eyelid.

Narrowing the Distance between the Rich and the Poor?

We also must ask: what would happen if our governments started working for the Common Good?

What would it mean to the world if we (1) got rid of monopolies, (2) stopped the use of insider information, (3) prevented billionaires from buying off politicians, and (4) made it harder for the billionaires and their corporations to avoid paying taxes?

You can’t – as the late Paul Polak used to say – “donate your way out of poverty.” Billionaires know that just giving money to the poor is not a lasting solution.  The statement is often made “don’t give fish to the hungry, just teach them how to fish.” The task is how to create a better education and better skills in people so that they can create value for others and get paid for the value they create.

A quick review of the history of taxation in the US shows us what’s been going on: for too long, too many wealthy persons have paid taxes on their wealth at a lower rate than their secretaries!  Today’s top U.S. marginal income tax rate is 37%.  This is the rate paid on the last bracket of income, not on the whole income.  The rich person pays substantially less that 37% on his or her total income. The 37% bracket only affects persons earning an annual income of $518,400 or more.

Look at how high the top bracket income tax has been historically.  The rate was almost 80% in World War 1, over 90% in World War II, and pushed down over time by Republicans to a low of 37%.

This 37% top tax rate seems ridiculously lower compared to Scandinavian countries that pay a top income tax rate of 70%. What do Scandinavians get back for this very high marginal tax rate. They get back “freedom from insecurity.”  Scandinavians don’t have to pay for medicines, surgeries, college education, maternity leave, longer vacations, and so on.  The evidence is clear that many Americans might prefer to live in a country with higher taxes on the rich, than in today’s America where at least 15-20% of U.S. citizens can’t meet their basic needs without help.  Yes, most of us have plenty to eat but the important things we need like health care and a college education are priced as luxury goods.

Isn’t it interesting that US citizens have to pay US taxes no matter where in the world they earn their money, but our US corporations don’t have to do the same.  And we thought corporations were people too!

Americans for Tax Fairness points out the  loopholes:

• Tax avoidance through offshore tax loopholes is a significant reason why corporations, which paid one-third of federal revenues 60 years ago, now pay one-tenth of federal revenues.
• U.S. corporations dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than a post office box — in tax havens.
• U.S. corporations hold $2.1 trillion in profits offshore — much in tax havens — that have not been taxed in the U.S.
• General Electric, which uses a loophole for offshore financial profits, earned $27.5 billion in profits from 2008 to 2012 but claimed tax refunds of $3.1 billion.
• Apple made $74 billion from 2009-2012 on worldwide sales (excluding the Americas) and paid almost nothing in taxes to any country.
• 26 profitable Fortune 500 firms paid no federal income taxes from 2008-2012. 111 large, profitable corporations paid zero federal income taxes in at least one of those five years.

The simplest solution is to end tax “deferral.”  Corporations would pay taxes on offshore income the year it is earned, rather than indefinitely avoid paying U.S. income taxes. This would also remove incentives to shift U.S. profits to tax havens, and it would raise $600 billion over 10 years.

Why isn’t this happening?  Ask your local Senator or Congressperson.  Chances are they are too busy raising campaign funds for their re-election.

Passing a higher tax on the rich only slows down the growth of their wealth.   Senators Elizabeth Warren and Bernie Sanders have called for a wealth tax. Elizabeth Warren proposed that households should pay an annual 2% tax on their net worth above $50 million, and a 3% tax on every dollar of net worth above $1 billion.  She recently added possibly raising the billionaire wealth tax rate to 6 percent instead of 3 percent to help pay for “Medicare for All.”  Note that the working poor and the middle class do not pay higher taxes. The wealth tax is only paid by very rich.

Another solution is to raise the estate tax.  Wealthy persons need a plan describing how their wealth should be divided upon their death.  They cannot be allowed to avoid paying estate taxes on their wealth. Married couples won’t pay any inheritance tax on the first $22.36 million in exemptions. The tax on the remaining wealth after exemption is 40 percent.

The estate tax could yield more if two changes occurred:

1. lower the tax-exempt amount to a much lower number, and
2. increase the tax rate on the remaining amount from 40% to a much higher number – say 70%.

The government should increase the estate tax rate in a further effort to reduce the growing concentration of wealth in the U.S.  Yet Republicans argue that higher estate taxes will lead to more avoidance and also lead talented people to work less hard or threaten to leave the country.  I would counter-argue that there are a great many civic-minded talented people waiting to move up the wealth ladder and take their place.  The tough issue is what the government will do with the higher estate taxes? Will it be used by government to increase wages and jobs?  Or will it go into more defense spending and more bureaucracies? Why don’t we ask citizens to decide?

Convincing Billionaires to Consider the Future of the Planet

Let’s return to how to encourage the super-rich to give back more of their wealth to society.  Bill and Melinda Gates and Warren Buffett carried out an excellent approach to this problem, with their giving pledge. They recruited billionaires to make a commitment to distribute half of their wealth to philanthropic causes within the next 10 years.  Today 211 billionaires have made this pledge. Furthermore, each billionaire describes the cause(s) that might get his or her “give-back.” There is an argument to be made that if the rich have to “give back” to society, they took too much from society to begin with.

The recruiting effort is continuing.  Imagine how many low income persons would benefit if 2,000 billionaires, not just 211 would implement a giving pledge.

Billionaires face the problem of identifying which giving causes would do the most good.  This problem faces all the billionaires, including the largest ones: Jeff Bezos ($200B), Bill Gates ($98B), Bernard Arnault and family ($76B), Warren Buffett ($67.5B), Larry Ellison ($59B), Amancio Ortega ($55.1B), Mark Zuckerberg ($54.7B), Jim Wolcott ($54.6B), Alice Wolcott ($54.4B), and S. Robson Walton ($54B).

Billionaires prefer giving away their money to their favorite causes rather than giving their money as taxes to the U.S. Treasury.  They want to control who gets the money. They might not want to see the money go to make or buy more weapons of war.

This problem has been dubbed “gilded giving” by the Institute for Policy Studies. Here is their description of the problem:

The charitable sector is currently experiencing a transition from broad-based support across a wide range of donors to top-heavy philanthropy increasingly dominated by a small number of very wealthy individuals and foundations. This has significant implications for the practice of fundraising, the role of the independent nonprofit sector, and the health of our larger democratic civil society.

• Risks to charitable independent sector organizations include increased volatility and unpredictability in funding, making it more difficult to budget and forecast income into the future; an increased need to shift toward major donor cultivation; and an increased bias toward funding heavily major-donor-directed boutique organizations and projects. The increasing power of a small number of donors also greatly increases the potential for mission distortion.
• Risks to the public include an increasingly unaccountable and undemocratic philanthropic sector; the rise of tax avoidance philanthropy; the warehousing of wealth in the face of urgent needs; self-dealing philanthropy; and the increasing use of philanthropy as an extension of power and privilege protection.

This privatization of charity and the job of government does not bode well for democracy or the common good.  Yet there are exceptions.  When Andrew Carnegie, the richest man at the time, decided to start giving back money to good causes, he landed on a brilliant idea.  He wanted to raise the educational level of average Americans. Instead of giving money to colleges, he decided to build public libraries, first in America and later around the world. With public libraries, persons would have access to books and be able to build their knowledge in whatever field of interest. Young students could sit quietly in a library, do their homework and chance on seeing a book that might change their life.

Lessons from the Gilded Age

The U.S. simply needs to look back at history, to our Gilded Age, to see what can be done to curb wealth growth.

President Theodore Roosevelt, elected in 1901, moved to break up the monopolies. John D Rockefeller’s Standard Oil was split into 34 separate companies, including the predecessors of Exxon, BP and Chevron.

What’s stopping us from doing this today?

We need to convince billionaires that contributing to an equitable and harmonious society is as pleasurable as earning a lot of money.

The Danger to Democracy

Finally, are billionaires a threat to democracy? 

Both Trump and Biden raised a substantial part of their campaign contributions from billionaires.  Apparently the total cost of the 2020 election was close to $14 billion, making it the most expensive election in history and twice as expensive as the previous presidential election cycle! The Institute for Political Innovation points out: although people tend to think of the American political system as a public institution based on high-minded principles, it’s not. Politics behaves according to the same kinds of incentives and forces that shape competition in any private industry.  Katherine Gehl and Michael Porter sound the alarm, and make suggestions on what can be done to unrig our political system.

Rebecca Henderson points out that in the U.S. and the UK, only around 30% of the youngest voters feel that it is “essential” to live in a democracy, compared with upwards of three-quarters of voters born before WWII.

She explains:

If government is the counterweight to the free market, democracy is the force that ensures that governments do not devolve into tyranny, seizing control of the markets in the process. I believe that strengthening democracy is the only way to ensure the widespread survival of free-market capitalism, and with it the prosperity and opportunity that has changed the lives of billions of people. It’s also the only way to tackle the world’s biggest threats, from global warming to inequality. Business has the resources, political power, incentives, and responsibility to make significant progress in this endeavor. Indeed, it has widespread support. People today report trusting their employer more than the government or the media, and a recent global survey finds that 71% of respondents believe that “it is critically important for my CEO to respond to these challenging times.”

So, the final outcome of this debate is political.  And that is not always, as history has taught us, a pleasant outcome.

Studies show that as income inequality grows, so does social unrest and populism.  The threat of fascism increases exponentially.

It’s time to come to our senses as a society, and put a stop to this unbalanced economic system.  Times of crises call out for public leadership in service of the Common Good.  Absent that leadership, businesses have a responsibility to not be silent, and more importantly, to act.

In a Democracy, that means all of us, billionaires, businesses, and citizens, must act in a transparent way to:

1. ensure the public is given access to the truth, and protected from misinformation and “alternative facts.”
2. ensure elections will be fair and free (without the imposition of poll taxes, and other suppression techniques)
3. promote policies for the Common Good, instead of tax-breaks that serve narrow, special interests.

In short, businesses should support Democracy, and protect society from corruption.  Without this basic understanding, we will see a government, institutions, and markets that are no longer trusted by the consumer or the citizen.  We will be unable to react to other, more difficult, challenges, and the government of the people, by the people, and for the people will perish from this Earth.

If you’re a billionaire, ask yourself: what kind of world do I want to leave to my children?

The rest of us should ask ourselves this question as well. Our time as humans on this planet is almost up. Who will lead us?

In our work on cultural narratives, we’ve proposed that cultural narratives create meaning for our place in the world, and provide a map for the journey ahead. The structure of a cultural narrative can be diagrammed as follows:

In politics, the structure of a cultural narrative becomes an ideological framework for living and thinking about the world.

With the case of Trump and Biden, we see a struggle between two narratives: “MAGA” vs the “American Dream.”

Trump’s MAGA narrative can be diagrammed as follows:

The press, of course, cannot bring itself to see this, because to do so would require acknowledgement of their complicity with the existing system.  So they condemn specific incidents of hate or fear, but never connect the dots.

Biden’s American Dream narrative was the original myth of the USA. It is the old story we learned in our textbooks – of the Statue of Liberty and the immigrants who came to this country to create a better life for themselves and their progeny:

Here’s the problem.  While it is still a view that many hold dear, the American Dream lies in tatters because of staggering inequality and the lack of opportunities of upward mobility.  The middle class is shrinking, and everywhere citizens feel the threat of rising unemployment and poverty. COVID has accelerated the crises.

Trump can fool some of the people all of the time.  White supremacists are infiltrating protest groups to incite and cause violence. Trump yells “Law and Order” even while he incites violence. It’s time for our citizens to demand better.

Will Biden be able to bring back the American Dream?  He must acknowledge the mistakes of neoliberalism and globalization and renew the American Dream.

The challenge: get government to work for its citizens again.

Is that a third narrative?

Trump will do anything to be re-elected. His opponents are limited because they believe in democracy. Trump has no limits because he doesn’t.

Here’s Trump’s re-election playbook, in 25 simple steps:

1. Declare yourself above the law.

2. Use racist fearmongering. Demand “law and order” and describe protesters as “thugs”, “lowlife” and “rioters and looters”. Describe Covid-19 as “Kung-Flu”. Retweet posts from white supremacists. In your campaign ads, use a symbol associated with Nazis.

3. Appoint an attorney general more loyal to you than to America, and politicize the Department of Justice so it’s lenient on your loyalists and comes down hard on your enemies. Have it lighten the sentence of a crony convicted of lying under oath. Order investigations of industries you dislike.

4. Fire US attorneys who are investigating you.

5. Fire independent inspectors general who are looking into what you’ve done. Crush any whistleblowers you find.

6. Demean and ignore the intelligence community. Appoint a director of national intelligence more loyal to you than to America. Demand that the head of the FBI pledge loyalty to you.

7. Pack the federal courts with judges and justices more loyal to you than to the constitution.

8. Politicize the Department of Defense so generals will back whatever you order. Refer to them as “my generals”. Have them help clear out protesters. Order the military to surveil protesters. Tell governors you’ll bring in the military to stop protesters.

9. Purge your party of anyone disloyal to you and turn it into a mindless, brainless, spineless cult.

10. Get rid of accumulated experience and expertise in government. Demean career public servants. Hollow out the state department, the Department of Justice, Health and Human Services, and public health.

11. Reward donors and cronies with bailouts, tax breaks, subsidies, government contracts, regulatory rollbacks and plum jobs. Put their lobbyists in charge of your agencies. Distribute $500bn in pandemic assistance to corporations in secret, without any oversight.

12. Coddle dictators. Don’t criticize their human rights abuses. Refuse to work with the leaders of other democracies. Withdraw from international treaties.

13. Create scapegoats. Demonize migrants and lock up asylum-seekers at the border even if they’re children. Put a white nationalist in charge of immigration policy. Blame Muslims, Mexicans and Chinese.

14. Denigrate and ridicule all critics. Describe opponents as “human scum”. Attack the mainstream media as purveyors of “fake news” and “enemies of the people”.

15. Conjure up conspiracies against yourself supposedly led by your predecessor and your opponent in the last election. Without any evidence, accuse your predecessor of “treason”. Fabricate a “Deep State” out to get you.

16. Downplay real threats to the nation, such as a rapidly spreading pandemic. Lieabout your utter failure to contain it. Muzzle public health experts. Urge people to go back to work even as the pandemic worsens in parts of the country.

17. Encourage armed supporters to “liberate” states from elected officials who disagree with you.

18. Bribe other nations to investigate your electoral opponent and flood social media with lies about him.

19. Use rightwing propaganda machines like Fox News and conspiracy theory peddling One America News to inundate the country with your lies. Ensure that the morally bankrupt chief executive of Facebook allows you to spread your lies on the biggest media machine in the world.

20. Suppress the votes of people likely to vote against you. Intimidate voters of color. Encourage Republican governors to purge voter rolls, demand voter ID and close polling places.

21. Seek to prevent mail-in ballots during the pandemic. Claim they will cause voter fraud, without evidence. Threaten to close the US postal service.

22. Get Vladimir Putin to hack into US election machines, as he did in 2016 but can now do with more experience and deftness. Promise him that in return you’ll further destabilize America as well as Nato. Allow him to put a bounty on killing U.S. troops in Afghanistan.

23. If it still looks like you’ll be voted out, try to postpone the election.

24. If you’re voted out of office notwithstanding all this, refuse to leave. Contest the election, claim massive fraud, say it’s a conspiracy, get your cult of a political party to support your lies, get your propaganda machine to repeat them, get your justice department to back you, get your judges and justices to affirm you, get your generals to suppress any subsequent rebellion.

25. Declare victory. Memo to America: Beware Trump’s playbook. Spread the truth. Stay vigilant. Fight for our democracy.

Robert Reich, is the Chancellor’s Professor of Public Policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, for which Time magazine named him one of the 10 most effective cabinet secretaries of the the twentieth century. The author of many books, including the best-sellers Aftershock, The Work of Nations, Beyond Outrage and, Saving Capitalism. He is also a founding editor of The American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, “Inequality For All.” Reich’s newest book is “The Common Good.” He’s co-creator of the Netflix original documentary “Saving Capitalism,” which is streaming now.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License. (via CommonDreams.org)

Amazon, Apple, Facebook, Google, Microsoft, and Netflix have collectively dodged over $100 billion in global taxes so far this decade, according to an analysis released Monday by a U.K.-based tax transparency campaign group.

Later this week, the Fair Tax Mark plans to publish its full report on the tax conduct of the companies, entitled The Silicon Six and Their $100 Billion Global Tax Gap. The report’s key findings were detailed on the group’s website Monday.

“Our analysis of the long-run effective tax rate of the Silicon Valley Six over the decade to date has found that there is a significant difference between the cash taxes paid and both the headline rate of tax and, more significantly, the reported current tax provisions,” said the Fair Tax Mark chief executive Paul Monaghan. “We conclude that the corporation tax paid has been much lower than is commonly understood.”

The Fair Tax Mark studied each company’s annual filings in the United States—where the tech giants are incorporated—as well as some quarterly filings and accounts of subsidiaries over the period of 2010–2019. The group found that the collective global tax gap between the expected headline rates and the cash taxes paid was $155.3 billion. The gap between the current tax provisions and cash taxes was $100.2 billion.

Analysis we have released today finds a significant difference between the cash taxes paid by the Silicon Six and both the expected headline rate of tax ($155.3bn) and, more significantly, the reported current tax provisions ($100.2bn). https://t.co/2bEp1vuwmH pic.twitter.com/DrhKjStxl4

— Fair Tax Mark (@FairTaxMark) December 2, 2019

“The report suggests that the bulk of the shortfall almost certainly arose outside the United States, given that the foreign current tax charge was just 8.4% of identified foreign profits,” the group explained. “Profits continue to be shifted to tax havens, especially Bermuda, Ireland, Luxembourg, and the Netherlands.”

The Fair Tax Mark determined that Amazon, whose CEO Jeff Bezos is the richestindividual in the world, “stands out as the business with the poorest tax conduct” among the Silicon Six. The headline corporate tax rate in the U.S. was 35% for most of the years studied, but the group found that Amazon paid only $3.4 billion in income taxes—just 12.7% of profit—during the analyzed period.

“The company is growing its market domination across the globe on the back of revenues that are largely untaxed, and can unfairly undercut local businesses that take a more responsible approach,” the group said, warning that “the situation is unlikely to reverse soon.”

The Guardian reported that Amazon pushed back against the findings, saying that the report’s “suggestions are wrong” and the company had “a 24% effective tax rate on profits from 2010–2018.”

Facebook ranked as the second-worst offender, having paid just 10.2% of its profit. Google, whose cash tax paid as a percentage of profit was 15.8%, came in third. Netflix, in the fourth spot, “proved to be the most difficult to rank,” and had the same cash tax percentage as Google.

Facebook told The Guardian that “we take our tax obligations seriously and pay what we owe in every market we operate. In 2018 we paid $3.8bn in corporation tax globally and our effective tax rate over the last five years is more than 20%.”

Apple ranked fifth. The Fair Tax Mark pointed out that although Apple “presents itself as ‘the world’s largest taxpayer’ and it certainly makes the largest tax contribution of the Silicon Six,” the company’s cash tax paid as a percentage of profit was still just 17.1%.

“Microsoft, by a slim margin, has the least aggressive approach to tax avoidance of the six,” the tax group concluded. Microsoft was co-founded by the world’s second-richest individual, Bill Gates, and “makes the second largest tax contribution of the Silicon Six,” according to the analysis. The company’s cash tax paid as a percentage of profit was 16.8%.

The Fair Tax Mark’s Monaghan said Monday that “the international tide is turning on the acceptability of corporate tax avoidance. The idea of countering the profit-shifting of Big Tech multinationals via the introduction of digital sales taxes has taken root in many countries.”

Monaghan noted that the Organization for Economic Cooperation and Development (OECD) “is now leading multilateral efforts to address the tax challenges from digitalization of the economy, and is looking to ensure that profitable multinationals pay tax wherever they have significant consumer-facing activities and generate their profits.”

Alex Cobham, chief executive of the London-based advocacy group Tax Justice Network, said that the group’s new report “demonstrates why we need a fundamental reprogramming of the world’s approach to tax, based on a unitary taxation.”

Under a unitary taxation system, the global profits of multinational corporations would be allocated across the countries where the companies actually conduct business, which advocates argue would effectively make tax havens useless.

“When multinational corporations abuse their tax responsibilities to society, they weaken the supports that our economies need to work well and create wealth,” said Cobham. “A unitary approach to tax means we can finally make sure multinational corporations contribute tax based on where they employ workers and do business, not where they rent mailboxes and hide ledgers.”

“By ensuring multinational corporations pay their fair share locally for the wealth created locally by people’s work—based on an agreed formula and supplemented by a minimum effective tax rate—governments can strengthen their economies to run smoothly and make a good life possible for everyone,” he added.

Licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Originally published by Common Dreams.