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Tag: tax loopholes

Warren And Whitehouse Demand Probe Of Tax Avoidance By Ultra-Wealthy

Reprinted with permission from ProPublica

Two prominent members of the Senate Finance Committee are calling for an investigation into tax avoidance by the ultrawealthy, citing ProPublica's "Secret IRS Files" series.

In a letter sent today, Elizabeth Warren (D-MA.) and Sheldon Whitehouse (D-RI) wrote to the committee's chairman, Ron Wyden (D-OR), that the "bombshell" and "deeply troubling" report requires an investigation into "how the nation's wealthiest individuals are using a series of legal tax loopholes to avoid paying their fair share of income taxes." The senators also requested that the Senate hold hearings and develop legislation to address the loopholes' "impact on the nation's finances and ability to pay for investments in infrastructure, health care, the economy, and the environment."

Last month ProPublica began publishing a series of stories about tax avoidance among the ultra-wealthy, based on a vast trove of tax data concerning thousands of the wealthiest American taxpayers and covering more than 15 years. ProPublica conducted an unprecedented analysis that compared the ultra-wealthy's taxes to the growth in their fortunes, calculating that the 25 richest Americans pay a "true tax rate" of just 3.4 percent.

The wealthy pay so little in taxes primarily because they keep their incomes low, the article explained, often borrowing against their fortunes to fund their lifestyles. Amazon's Jeff Bezos, Tesla's Elon Musk, Bloomberg L.P.'s Michael Bloomberg and other billionaires have each paid no federal income taxes in one or more recent years. The tax avoidance techniques described in "The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Taxes" are legal, and routine among the ultrawealthy.

In a subsequent article, ProPublica highlighted how some rich people, such as Peter Thiel, have been able to use Roth individual retirement accounts, intended as vehicles to bolster middle-class savings, to create vast untaxed fortunes. A third article showed how billionaires use a provision in the tax code to reduce their taxes after buying sports teams.

Banks and financial institutions are lending more to the rich than ever, according to a story in The Wall Street Journal last week. The senators called for an investigation of banks and wealth management firms to understand the techniques, strategies and products offered to the wealthy that enable them to avoid paying taxes. Morgan Stanley's wealth management clients have $68 billion worth of loans backed by securities and other investments, more than double the amount they had five years ago, and Bank of America has loans worth over $62 billion, the Journal reported.

In March, Warren introduced a bill, co-sponsored by Whitehouse, that would create a tax on the wealth of the richest Americans. Most Republicans and some Democrats oppose such a measure.

Update, July 14, 2021: In a statement, Wyden said that he agreed with the points raised by Warren and Whitehouse. "The country's wealthiest — who profited immensely during the pandemic — have not been paying their fair share," he said. "I've been working on a proposal to fix this broken system since 2019 and continue to work to get the bill ready for release. I'm also going to work with my colleagues on other ways the committee can tackle this issue."

How You — And Congress — Subsidize The Richest Americans

Reprinted with permission from DC Report

ProPublica scored a fantastic scoop when it obtained and meticulously analyzed 15 years of raw income tax data on the wealthiest Americans. This leak of Internal Revenue Service records is by far the biggest and most important tax news in the 55 years that I've reported on taxes.

Thanks to the leaker, we now know beyond any doubt that the endless claims that America has a progressive income tax system are bunk. A progressive system means that the more you make, the greater the share of your income you pay in taxes. Back in 2005, I got the George W. Bush administration to acknowledge that the system stops becoming progressive near the top.

But, unfortunately, ProPublica shows that it's even worse than what I reported back then.

Working people pay a larger share of their income in tax than the wealthiest of the wealthy. The top marginal tax rate on labor income is almost double that of capital gains.

Jeff Bezos, the richest man in America, paid no income tax in 2007 and 2011. He doesn't dispute that.

Bezos was not alone. Multi-billionaires Elon Musk, Michael Bloomberg, Carl Icahn, and George Soros all pulled off the same trick at least once in recent years, ProPublica reported after analyzing the IRS data. Warren Buffet pays less in tax than millions of Americans, something he and Soros have said is wrong.

Bloomberg, the former New York City mayor and owner of the financial data and news business bearing his name, paid over five years an income tax rate lower than that of the poorest half of American taxpayers.

Bloomberg Pays Just Three Percent

On his income tax returns, Bloomberg reported making $10 billion. Yet, he paid just three percent .

The bottom half of income taxpayers averaged $17,200 of income in 2017 and paid four percent.

A system in which people who gross about $330 a week pay a much higher tax rate than someone who makes billions each year is not just regressive; it's an outrage. It violates principles of taxation that date to the Old Testament and ancient Athens.

I couldn't help but notice that my wife, a charity CEO, and I pay a higher income tax rate than Bezos, Bloomberg, and Buffett.

By the grace of Congress, those billionaires get to take unlimited losses when they make losing stock investments while Jennifer and I—and you—can deduct only $3,000 a year. So even if my wife and I live into our 90s, we will die with losses we never got to deduct.

That's just the kind of unfairness Professor Dorothy A. Brown compellingly demonstrates in her insightful and readable new book The Whiteness of Wealth.

Until now, the Wealth Defense Industry—armies of accountants, lawyers and wealth managers who specialize in using trusts, tax loopholes, off-shore corporations and foundations to benefit their 0.05 percent clients—tricked people. They pointed to posted tax rates, not actual rates paid by the super-super-super rich, and asserted with cherry-picked data that the rich pay a lot.

Salaried Workers Pay More

The granular data ProPublica obtained proves that the tax rates Congress puts in the law and the tax rates people pay only match up for working Americans in the bottom 99.5 percent.

Congress taxes workers much more heavily than billionaire capitalists who, ProPublica showed, can live income tax-free.

All of the people ProPublica wrote about are white men. Professor Brown of Emory University shows how our existing tax system favors wealth above income and discriminates against Black Americans. The design of our tax system plays a significant role in the vast wealth disparities between white Americans and people of color.

ProPublica's reporting backs her up. It showed that for most Americans, annual income taxes far exceed yearly increases in wealth.

Good Debt

At the apex of American wealth, you can live tax-free, as I showed many years ago. That is thanks to rules favoring the rich, loopholes Congress refuses to close, and minimal enforcement of our tax laws against the plutocrat class.

One simple technique is borrowing against your assets. Congress doesn't count that borrowed money as income.

For example: Let's say you're a 60-year-old founder-CEO holding $10 billion of stock in your company, which grows in value at a modest rate of five percent, or $500 million, a year. You determine that you can live comfortably on $50 million a year.

You then borrow that money, putting that much of your holdings up as collateral.

Do you see where this is going? You can borrow and live on $50 million a year every year for the rest of your life without paying a cent of federal income tax.

It gets better. The IRS determines interest rates on intra-family loans. The current rates are next to zero, less than even our modest inflation rate. Given that, why would anyone sell stock and pay a 20 percent tax rate to buy a yacht or a new jet when they can borrow against themselves almost interest-free and watch their stocks keep rising in value?

Hunting For The Leaker

The Biden White House announced late Tuesday that law enforcement is hunting for the leaker, who faces up to a decade in prison.

Whoever dared to do this should be hailed as a national hero on a par with Darnella Frazier, the fearless teenage girl with a steady hand who last summer recorded the slow, agonizing murder of George Floyd by Minneapolis police.

We should be building statues to honor this leaker, if he or she is ever identified, just as we should erect one to honor Remy Welling, the IRS corporate auditor whose leak to me 17 years ago proved corruption in the Silicon Valley stock options system.

Thanks to ProPublica and its source, maybe Americans will at long last wake up and realize that our federal income tax, as currently designed, is a massive subsidy system for the super-rich.

And the source of those subsidies for Bezos, Bloomberg, Buffett, Musk, and other multibillionaires? That would be you.

Biden Wants To Raise His Own Taxes, Enraging Republicans

Reprinted with permission from American Independent

A group of more than 150 House Republicans is demanding to know why President Joe Biden, who once used a legal tax loophole, is now pushing to close tax loopholes. And the group's head is threatening to investigate the matter, if the GOP regains a House majority someday.

Indiana Rep. Jim Banks chairs the Republican Study Committee, the main coalition of House conservatives. In a letter on behalf of the group last week, he accused Biden of "hypocrisy" for using "a tax shelter strategy derided by the Left to avoid paying Obamacare taxes." Citing the Bidens' voluntarily released tax returns for 2017, 2018, and 2019, he noted that they received income through two corporations, avoiding self-employment taxes. Banks demanded to know whether the Bidens "intend to undo" this by paying more in taxes.

In a Fox News interview on Monday, Banks threatened to launch an Oversight Committee investigation into the Bidens' taxes if his party wins back the majority in the House next year.

"House Democrats used their oversight power to subpoena Trump for his tax returns, but they've completely ignored Joe Biden's abuse of our tax code," he complained. "When we take back the House in 2022, Oversight Republicans won't forget about Biden's legally dubious tax avoidance schemes."

Banks added: "Joe Biden advocated for expanding Medicare, and is pushing to close tax loopholes and for a $3 trillion tax hike. At the same time, 'Amtrak Joe' made $13 million through speaking fees in just three years, then skimped over $500,000 from Medicare recipients through tax loopholes."

Despite Banks' claims of questionable legality, the Fox News report describes Biden's actions as "entirely legal" and notes that the president has pushed to close these kinds of loopholes in the past.

And unlike his predecessor, Biden made his tax returns public during his 2020 campaign. Based on that information, the Wall Street Journal reported in July 2019 that Biden had used the loophole, while noting that the Obama-Biden administration unsuccessfully pushed in 2016 to eliminate that and other tax loopholes.

A campaign statement at the time defended Biden's actions. "The salaries earned by the Bidens are reasonable and were determined in good faith, considering the nature of the entities and the services they performed," the statement said, calling the use of the corporations a "common method for taxpayers who have outside sources of income to consolidate their earnings and expenses."

The GOP's letter comes after Biden pledged to increase taxes on corporations and on those who — like himself during his time in the private sector — earn more than $400,000 annually.

By closing corporate tax loopholes and restoring some pre-Trump corporate tax rates, Biden hopes to raise funds to help pay for his $2 trillion American Jobs Plan for infrastructure investments over the next decade.

Unlike Biden, Banks has opposed efforts to increase the tax burden of the wealthiest Americans. He signed a pledge never to raise taxes and even pushed to make Donald Trump's massive 2017 tax cuts for the wealthiest Americans permanent.

If Biden's infrastructure plan becomes law, it will provide trillions in investment in roads, bridges, broadband, water, transit, and other priorities — and support more than 15 million jobs over the next decade.

Trump, whom Banks backed, argued in 2016 that his own use of loopholes to avoid taxes was proof of his own brilliance and made him uniquely qualified to fix them. He did not do so.

Published with permission of The American Independent Foundation.

Marshaling Marooned Tax Dollars

Republican lawmakers have largely greeted President Barack Obama’s new spending plan as dead on arrival.

But at least one provision has a chance of becoming law: a plan to tax the profits that large U.S. corporations have parked in offshore tax shelters and use that money to rebuild the nation’s crumbling infrastructure.

A series of heavy snowstorms in my hometown of Boston made the need for that kind of spending boost eminently clear. The record snowfall brought the city’s aging and underfunded transit system to a complete halt. The hundreds of thousands of residents who depend on it have been repeatedly stranded.

So one thing is clear: We desperately need to invest in our infrastructure. But funding it through a corporate tax holiday on offshore profits is a shortsighted mistake.

While some of these profits are stashed abroad because companies actually produced a product overseas and sold it to foreign consumers, a significant share comes from money generated here. It’s parked offshore purely to avoid taxes.

Corporations don’t have to pay taxes on these profits unless they “repatriate,” or bring this money back. A tax holiday, touted as an incentive to encourage investment, would reward the worst tax dodgers who hold a combined $2 trillion offshore.

The last time Congress tried to address this problem was in 2004. That’s when corporations got a one-time, 85 percent discount on their taxes in exchange for voluntarily repatriating their offshore earnings.

This deal was billed as something that would spur growth and create jobs. Unfortunately, as research from the Joint Committee on Taxation and the Center on Budget and Policy Priorities makes clear, that didn’t happen.

Instead, the top 15 companies that benefited from the 2004 tax holiday fired over 20,000 U.S. workers while increasing their dividends to shareholders. In short, they used the tax holiday to line their own pockets.

There’s no reason to expect anything different this time. A recent report from Citizens for Tax Justice shows that 10 corporations would get a combined $82 billion tax break from Obama’s proposal. Apple, Microsoft, and Citigroup would receive the largest benefit.

To Obama’s credit, his proposal is slightly tougher than the 2004 deal. He’s calling for a mandatory tax on the entire $2 trillion and tying it to further corporate tax reforms.

But his proposed tax rate for repatriated profits is only 14 percent — less than half the current regular rate of 35 percent. And since this is just Obama’s opening bid, you can bet that it’ll be even lower after some negotiating.

In a demonstration of bipartisan support for the idea, Senators Barbara Boxer and Rand Paul have introduced legislation that would link a tax holiday to infrastructure spending. Their bill isn’t linked to broader tax reforms, makes compliance voluntary, and proposes a measly 6.5 percent rate.

Worse still, according to a congressional study, the plan would bleed revenue badly over the long run. That would prevent any uptick in dedicated infrastructure funds.

The need for increased infrastructure spending is unequivocal. The American Society for Civil Engineers, for instance, gave the United States a D+ on its most recent infrastructure report card. The group estimates that it would take $1.6 trillion in new spending over the next five years to get it up to code.

Meanwhile, many profitable global corporations like Verizon and GE pay absolutely nothing in federal taxes. Corporate income tax currently makes up just 10 percent of all federal revenue — down from 33 percent in 1952.

A better proposal would close loopholes for both corporations and America’s super-rich and spend some of the extra money collected on infrastructure.

Closing offshore tax shelters is a great idea. Giving a major tax break to the corporations that built them is not.

Josh Hoxie is the director of the Project on Opportunity and Taxation at the Institute for Policy Studies, IPS-dc.org

Cross-posted from Other Words.

Photo: Tobym via Flickr

Congress Should Reinforce The Inheritance Tax, Not Scrap It

Real wages have stagnated for decades. Home ownership rates are down. College debt is weighing down young people entering the workforce. Millions of low-wage workers eke out a living on a minimum wage of $7.25 an hour.

As the American Dream slips away for millions of people in this country, one faction of Congress is doing its best to aid a select group of folks that least needs a helping hand: trust fund babies.

More than 222 House members — nearly all of them Republicans — have co-sponsored legislation to abolish America’s inheritance tax, a levy that only applies to the estates of multi-millionaires and billionaires.

Technically called the estate tax, and derided by its opponents as the “death tax,” this part of the tax code affects only 1 out of every 500 Americans.

If Congress abolishes it, the already wealthy will gain the privilege of passing unlimited inheritances to their children once they die. Scrapping it would rip a $210 billion hole in the federal budget over the next decade, according to the Tax Policy Center.

The lawmakers determined to kill the inheritance tax go out of their way to hide the facts and pose as populists.

Take Representative Kevin Brady, a Texas Republican and lead sponsor of repeal legislation. He circulates advertisements with two young farm kids next to a pickup trick with the caption, “The Death Tax crushes family farms, ranches and businesses.”

And a Kentucky PAC spent $1.8 million airing a TV ad featuring a farmer who bemoans the burden of the inheritance tax and praises Senate Minority Leader Mitch McConnell (the farmer, John Mahan of Lexington, did not complain about the $405,692 in federal farm subsidies he received between 1995 and 2012).

The inheritance tax “continues to be the number-one reason family-owned farms and businesses aren’t passed down to the next generation,” Brady recently (and wrongly) claimed.

It’s hard to fathom how a tax that 99.8 percent of households don’t pay could be a bigger threat to farmers than volatile farm prices and competition from corporate agribusiness. But don’t bank on opponents of the inheritance tax letting the facts muddle their political agenda.

As a strong supporter of the inheritance tax, I’ve seen this playbook before. Between 1996 and 2004, America’s plutocrats, including the Walton and Mars families, invested millions in a propaganda campaign designed to save themselves billions.

They plastered the media with images of farm families, alleging that the inheritance tax would be the “death of the family farm.” The only problem was, when pressed by Pulitzer Prize-winning reporter David Cay Johnston, foes of the estate tax couldn’t produce a single example of an actual farm lost because of the inheritance tax. It was a complete myth.

Congress wound up weakening the tax in 2001, when opponents failed to abolish it. Now this tired debate is back, with those phony farm images and fake populism.

Here’s what really matters: Couples with less than $10.6 million in wealth are exempt from the inheritance tax. So are individuals with wealth under $5.3 million.

The inheritance tax is important because the very richest Americans already benefit from enormous loopholes that enable them to pay taxes at rates lower than average workers. The inheritance tax levels the playing field.

And the huge family fortunes now being passed onto the next generation are creating a new wave of American aristocrats.

Who are the real faces of the inheritance tax? Try the sons and daughters of the billionaires who make the Forbes 400 list, standing next to their family limousines.

There is a real problem with the inheritance tax: Billionaires are paying expensive lawyers to weasel out of paying it. Casino mogul Sheldon Adelson, for example, used a system of trusts to funnel $8 billion in wealth to his heirs. This maneuver let his family dodge about $2.8 billion in estate taxes that would be due after his death.

Instead of abolishing the inheritance tax, lawmakers should focus on closing the loopholes that empower the richest Americans to legally dodge it.

Chuck Collins is a senior scholar at the Institute for Policy Studies and co-editor of www.inequality.org. He is co-author, with Bill Gates Sr., of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes

Cross-posted from Other Words

Photo: Ervins Strauhmanis via Flickr

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CEO Performance Pay Is Bad For Everyone Except CEOs

Executive compensation is soaring while workers and taxpayers feel the squeeze. A new Roosevelt Institute white paper explains why.

Americans hate the fact that CEOs of big corporations keep raking in millions while the incomes of most American households are sinking. Now a new Roosevelt Institute white paper by University of Massachusetts economist William Lazonick adds to the growing case that soaring CEO pay is not just unfair, but harmful. It’s bad for businesses, workers, and taxpayers, and it’s one of the reasons that the economy remains sluggish.

Lazonick details the myriad ways by which CEOs pump up their wages, painting a picture of crony capitalism in the boardroom and at the SEC. CEOs pad their boards of directors with other CEOs, who are all eager to hike each other’s pay. They hire from the same pool of compensation consultants, who then recommend to all of their boards why each of them deserves to be paid more.

Almost all executive pay, which was back to its pre-recession average high of $30 million a year by 2012, is delivered in the form of stock. This exploits a policy loophole that taxes compensation of more than $1 million unless it falls into the category known as “performance pay.” Meanwhile, the CEOs and their teams of lobbyists and lawyers have gotten a compliant SEC to issue a host of rulings that invite stock price manipulation. The resulting higher prices are considered proof of better performance, and also instantly deliver millions to the CEOs through their stock options. Very neat.

Lazonick explains that corporations’ favorite method of boosting stock prices is buying back their own stock. While a firm is required to notify the public of its intention to buy back its stock, it doesn’t have to say when it will do so, which fuels price-boosting speculation and allows the firm to time its repurchases to maximize the CEO’s gains.

The justification given by economists for stock-based performance pay is that corporations should be run to maximize shareholder value, and paying CEOs in stock aligns their performance with the purpose of their firm. But as my business school finance professor told a shocked classroom of my fellow students, the economic purpose of the firm does not have to be maximizing value for shareholders. The firm could just as easily be dedicated to maximizing the value for workers or communities or society at large.

Lazonick’s version of this fundamental critique of corporate capitalism is that it is not only shareholders who have an investment in a corporation. Taxpayers invest in corporations through the public infrastructure and educated workforce corporations depend on. Workers invest through their contributions to corporate innovation. Taxpayers and workers lose if the corporation’s core economic performance – as opposed to the price of its stock – declines. The result is fewer people working, less tax revenue, and diminished community life. But CEO pay just keeps going up regardless.

Lazonick argues that the CEO focus on stock buybacks has distracted them from investing in innovation to sustain their companies over the long run. It may also be true that in the absence of consumer demand, the CEOs see no better use for excess cash than to reward themselves and shareholders. But in fact, the stock market focus of U.S. industrial corporations, which has eroded middle-class wages and employment, is a big reason for lower domestic consumer demand. In contrast, Lazonick points out that Apple, which did minimal buybacks from 1994 through 2011, found no lack of consumer demand for its innovative products.

The alternate economic paradigm laid out by Lazonick is to reward workers and taxpayers for their investments in a firm. That would not only be more just, it would also move the economy forward. If workers got paid more, it would increase consumer demand. The government could use the taxes collected to create jobs that would enhance infrastructure, improve education, and strengthen community services, all of which would add directly to economic progress. And innovative companies would benefit from tax-supported government spending and motivated, experienced workers.

Lazonick lays out steps the SEC could take to reduce the use of buybacks to manipulate stock prices. He would also give workers significant representation on corporate boards. That makes great sense in theory, but would only work if we first dramatically strengthen labor law.

Taxpayers would benefit from legislation proposed in both the House (HR 3970) and Senate (S 1476), which would close the performance pay loophole and cap the deductibility of CEO compensation at $1 million. That would increase federal tax revenue by several billion dollars a year. But even if all that money were invested in job creation, it would not be enough to generate the kind of growth we need to spur significant demand. I think it would be unlikely to decrease compensation much either. It is more likely that corporate boards would consider the taxes part of the cost of doing business rather than reduce pay for their fellow conspirators.

All of which is to say that, as with so many issues related to the core problem facing our economy – the concentration of wealth among a select few – it will take a seismic political shift to enact the kind of policies we need not only to limit CEO pay, but to build an economy driven by broadly shared prosperity.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Advisor to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

Cross-posted from the Roosevelt Institute’s Next New Deal blog.

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Photo: Ervins Strauhmanis via Flickr

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Walmart’s Top-To-Bottom Taxpayer Subsidies

Low-income families weren’t the only ones hurt by cuts to food stamps last fall. Top Walmart executives also took a hit.

The cutbacks ate into the discount giant’s sales because so many of its low-income customers rely on this public assistance program to help pay for their groceries. And that made it tough for the company’s top brass to meet their bonus targets.

But that wave of anxiety didn’t last long. Walmart’s board simply rejiggered bonus criteria so that executives could still reap “performance” payouts, The New York Times reported.

Why are most corporate boards determined to maintain sky-high pay for executives even when they perform poorly? The most common explanation is that board members are often overpaid corporate leaders themselves. The last thing they want to do is provoke scrutiny of their own fat paychecks.

Another, lesser-known, reason is that corporations actually have a perverse incentive for overpaying top-level executives. This is due to a tax loophole that allows corporations to deduct unlimited amounts from their federal income taxes for the cost of so-called “performance pay” for executives. The more corporations pay top officers, the less they pay Uncle Sam.

Guess who makes up the difference? Taxpayers.

new report we co-authored for the Institute for Policy Studies and Americans for Tax Fairness calculates just how much this bonus loophole benefits Walmart. For example, we found that Mike Duke, the big-box retailer’s recently retired CEO, pocketed nearly $116 million in exercised stock options and other “performance pay” between 2009 and 2014. That translates into a taxpayer subsidy for Walmart of more than $40 million.

By lowering the performance bar for Walmart’s executives, the company’s board has kept the bosses happy and secured a nice big tax break. Consider the tradeoff here: This $40 million subsidy could have covered the average cost of food stamps for 4,200 people over that six-year period.

Congress should end this subsidy for bonuses at the top of Walmart and other publicly held U.S. corporations, which costs $50 billion over 10 years, by simply eliminating the “performance pay” loophole.

Meanwhile, the government is continuing to gut food stamp benefits. As part of a Farm Bill compromise this year, lawmakers agreed to reduce the program’s benefits by an average of $90 a month for 850,000 families.

Walmart’s low-wage workers are likely to be among those affected. Near-poverty wages and part-time schedules have forced the company’s own employees to rely on $6.2 billion worth of food stamps and other taxpayer-funded benefits per year, Americans for Tax Fairness estimates.

For a company that hauled in $16 billion in profits last year, this is shameful.

Walmart’s workers are speaking out more than ever before. In the past two years, about 1,000 Walmart stores have faced strikes or rallies for better pay and working conditions. In January 2014, the National Labor Relations Board charged the corporation with illegally disciplining and firing workers who participated in these actions.

Barbara Collins, a single mother from Placerville, California, wrote in Salon about her decision to join strike actions after struggling for years to make ends meet while earning $12.05 an hour as a Walmart stocker. For years, she was never guaranteed a 40-hour workweek. During some weeks she worked as few as eight hours. Following a confrontation with a Walmart board member about the company’s poor pay and working conditions, she got fired.

Despite the intimidation, Walmart workers and their allies are organizing a new round of strikes that began before the corporation’s June 6 annual shareholder meeting

Taxpayers should support these workers by demanding an end to subsidies for Walmart’s inexcusable pay practices — at both the bottom and the top.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies, and Frank Clemente is the executive director of Americans for Tax Fairness. They wroteTaxpayers Subsidize Walmart Execs, a new report.

Cross-posted from Other Words

Photo: Ron Dauphin via Flickr

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WATCH: Elizabeth Warren Says Debt Leads Students To A ‘Life Of Financial Servitude’

Senator Elizabeth Warren (D-MA) rose to the floor of the Senate on Wednesday to call on Congress to confront the escalating crisis resulting in students amassing a lifetime of debt while pursuing higher education.

“Adjusted for inflation, a young person today will pay 300 percent of what her parents paid just 30 years ago,” Warren said, noting that student loan debt held by Americans now totals more than $1.2 trillion.

And as borrowers suffer — with more than a third having been delinquent for more than 90 days — the government makes incredible profits, with $67 billion expected on the loans issued between 2007 and 2013 alone.

“Tying students to a lifetime of financial servitude as a condition of getting an education does not reflect our values,” she said.

In addition to lowering the cost of college, Warren announced that she will be introducing legislation that will offer borrowers relief now by allowing “eligible borrowers with high-interest loans to refinance at interest rates that are at least as low as those currently being offered to new borrowers in the federal student loan program.”

And she said her program could be paid for by closing loopholes designed by and for the rich.

“We can start with the Buffett Rule—a rule that would limit tax loopholes for the wealthy and ensure that billionaires pay at least as much as their secretaries.”

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