Regions from Catalonia to Kurdistan are Clamoring for Their Own States

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(Photo: Joan Campderrós-i-Canas / Flickr)

Democracy can be messy. In the northeast corner of Spain this week, democracy was downright chaotic.

Catalans went to the polls on Sunday to vote in a referendum on whether to stay in Spain or go their separate way. The Spanish authorities, however, declared the vote illegitimate and sent in the national police to disrupt the referendum.

In many locales, as the police swept into the polling station to seize the ballots, the Catalans merely hid all the voting paraphernalia. When the police left, the Catalans set up again to register voter preferences, and lines reformed outside.

Such Keystone Kops scenarios would have been amusing if not for the outright violence of the Spanish police, which beat voters with batons and fired rubber bullets into crowds. In The Independent, Hannah Strange and James Badcock write:

Video footage showed officers from Spain’s national police — 4,000 of whom had been brought in by the government to help quash the ballot — fighting with elderly voters, some of whom were left bleeding, and dragging young women away from polling stations by their hair.

The Spanish government has been monumentally stupid. Its case for unity is much stronger than Catalan leader Carles Puigdemont’s case for independence. The Spanish constitution of 1978 speaks of the country’s “indissoluble unity,” while also according Catalonia considerable autonomy. “The Catalan government claims the right to self-determination,” The Economistpoints out. “But international law recognizes this only in cases of colonialism, foreign invasion, or gross discrimination and abuse of human rights.” None of those conditions applies to Catalonia.

Sure, the relatively wealthy Catalans are aggrieved that a portion of their economic success is redistributed elsewhere in Spain. But that’s a fundamental element of the modern state. New Yorkers subsidize New Mexicans, London subsidizes Leeds, Germans subsidize Greeks. Catalans can certainly challenge the terms of the economic arrangement — after all, the poorer Basque region doesn’t share much of its tax revenues with Madrid — but neither Spanish law nor international law allows them to gather up all their marbles and go home.

Meanwhile, the very process by which Puigdemont rammed through the referendum doesn’t reflect well on his democratic credentials. Writes Yascha Mounk in Slate:

The government rushed the necessary legislation for the referendum through the Catalan Parliament without giving deputies adequate time to discuss it. It passed the legislation in a late-night session even though the opposition was absent. It vowed to secede from Spain even if a majority of the population stayed away from the polls. And, taking a page from Trump’s playbook, it has been smearing everybody from opponents of secession to judges doing their jobs as enemies of the people.

With only a 42 percent turnout for the referendum, the Catalan authorities have no authoritative mandate for a declaration of independence. Many people who opposed secession simply refused to vote. On the other hand, the Spanish government’s reaction may well have pushed more people into the independence camp. On Monday, thousands of protesters poured into the streets of Barcelona to protest the Spanish government’s actions and assert their popular sovereignty. On Tuesday, unions called a general strike for the same purpose.

Ultimately the Catalan crisis boils down to consent — whether the Catalans continue to agree to be part of the larger Spanish nation. In an 1882 essay on nations and nationalism, the French philologist Ernest Renan famously wrote that the nation is a “daily referendum.” He meant that the nation is a matter not of inviolate borders or ancient history. Renan continued:

A nation is therefore a great solidarity constituted by the feeling of sacrifices made and those that one is still disposed to make. It presupposes a past but is reiterated in the present by a tangible fact: consent, the clearly expressed desire to continue a common life.

If a majority of Catalans no longer consent to be part of the larger Spanish nation, then the specifics of the Spanish constitution are largely irrelevant. The people will force a change. Given that the younger generation favors independence, demography is on the side of the secessionists. The more polarized the situation becomes in Spain, the less room there will be for the sensible middle option of greater autonomy for Catalonia.

In the past, secessionist movements represented not a challenge to the nation-state system, but its ultimate expression. After all, rebellious provinces or peoples want nothing more than to become nation-states themselves. If every nation deserves a state, then how can the international community deny the Slovaks, the Slovenes, and the East Timorese? Secessionist movements were simply the continuation of a process interrupted by historical anomalies like the Soviet, Yugoslav, or Czechoslovak federations, or the often arbitrary border delineations of colonial administrators.

But the Catalan case suggests a different kind of future. In this future, economics, geopolitics, and technology all point toward what I’ve called in my latest book: the splinterlands.

Catalonia and the EU

The architects of the European Union imagined that their new entity would solve the challenge of endless division on the continent.

Europe has always been a patchwork of different peoples, all striving for sovereignty over their own territory. People of varying histories, cultures, languages, and religions have been mixed together in a way that has defied any easy drawing of borders. Order has usually come over the centuries by force of arms. In the last century, two world wars were fought to upend those orders, and a third war beckoned.

The EU was supposed to change all that by pointing toward something beyond the nation-state.

Not only did the EU weaken the powers of the state by appealing to the benefits of something larger — economies of scale, a unified foreign policy voice, greater individual freedoms to travel and work — it also appealed to a “Europe of regions.” According to this project, regions could deal directly with Brussels, bypassing their national governments, and also cooperate horizontally with one another: Provence with Basque country, Bavaria with Lombardy, and so on. Secession would be rendered moot, for Catalans could get what they wanted if not from Spain then from Brussels or other European entities.

Alas, it was not to be. Writes Anwen Elias back in 2008, “Regionalist or autonomist parties who saw in the EU an opportunity for organizing political authority on a post-sovereigntist basis were also forced to recognize that, in practice, Europe was still dominated by sovereign states and sovereignty-based understandings of politics.” Even in Europe, the nation-state held onto its privileged position. Attempts to revive the “Europe of regions” to accommodate pressures from below, particularly after the last Catalan referendum in 2014, came up hard against the growing Euroskeptical movements, the continued problems in the Eurozone, and ultimately Brexit.

The problem of consent, in other words, has infected the EU as well. Many citizens of wealthier European countries don’t want to subsidize the citizens of less-well-off countries. Europe-firsters have been unenthusiastic about the influx of immigrants that the EU as a whole embraced. Though others threatened to do so, the British have been the first to withdraw their consent entirely.

If the Catalans withdraw from Spain, they are also withdrawing from the EU, which would amount to a second defection in so many years. The decision could prove even more costly for Catalonia than Brexit is proving for the UK, since it doesn’t have an economy the size of England’s, hasn’t preserved a separate financial system (and currency), and doesn’t have the same international profile (for instance, Catalonia is not a member of the World Trade Organization).

Of course, would-be countries are often prepared to take an economic hit for the sake of independence.

But the Catalans have perhaps not factored in just how big a hit they’re going to take, naively thinking that the small bump up in revenues not turned over to Madrid will make the difference. They’re also disgusted, and rightly so, with the economic austerity measures that the EU has imposed on Spain. But little Catalonia will have even less power to resist these forces after independence.

Now that the “Europe of regions” has faded into irrelevance, Europe faces more fracture points. As a result of the Brexit vote, Scotland is once again reconsidering its commitment to the United Kingdom, though public opinion polls suggest that a second referendum on independence would fail by a narrow margin just like the first. In Belgium, the largest political force is a nationalist party, the New Flemish Alliance (N-VA), which supports Flemish independence. Of course, the Flemish are the majority in Belgium, and Flanders is doing much better economically these days than Wallonia, but Belgian unity remains a fragile thing. Other regions of Europe are also restive — Basque country, northern Italy, Corsica.

Although the Catalan vote isn’t likely to unravel the tapestry of Europe quite yet, other forces are at work in Europe — and not just Europe.

Kurdistan, Finally?

Kurds have wanted their own states for centuries. They’ve attempted to carve out autonomous regions in Turkey, Iran, and Syria. Last week, the Kurdish territory in Iraq held a non-binding referendum on independence, which garnered overwhelming support.

Surrounding states all took measures against the would-be new state of Kurdistan. Iran declared a fuel embargo, as did Turkey. Both countries moved troops to their borders for joint military exercises with Iraq. Secretary of State Rex Tillerson called the referendum “illegitimate.”

Baghdad, too, rejected the non-binding vote. But unlike Madrid, the Iraqi authorities did not attempt to stop the vote from happening. Iraq banned flights to Kurdistan airports and imposed sanctions on Kurdish banks. But it didn’t send in troops. The Kurdish government has announced new elections for November 1, and Baghdad seems to be waiting to see what the Kurds’ next move will be. Neither side wants war.

As in Catalonia, the referendum wasn’t simply a transparent bid for independence. Kurdish leader Massoud Barzani used the vote as a way to boost his own popularity and that of his party, as well as to make a stronger bid for Kirkuk, a disputed oil-rich area that Baghdad also claims. Regardless of Barzani’s motives, however, independence is clearly popular in Kurdistan.

Indeed, it’s hard to imagine the Kurds dialing back their ambitions in Iraq. They’ve been running a de facto state of sorts for years. They thought, not unreasonably, that they could trade their extraordinary efforts against the Islamic State for a shot at real, de jure sovereignty. They’ve even embraced a rather ruthless realpolitik to their ethnic brethren across the borders. Kurdistan has maintained strong ties toward Turkey — despite President Recep Tayyip Erdogan’s crackdown on Turkey’s own Kurdish population — and have been cool toward the de facto Kurdish state of Rojava in northern Syria.

But there’s still a huge difference between de facto and de jure. Just as Catalonia can be the string that unravels the European tapestry, Kurdistan can be the string that unravels the Middle East tapestry. Turkey, Iran, Syria, and Iraq all fiercely defend the unitary nature of their states, and the Kurds represent a strong threat to that structure.

Moreover, the region is as much of a patchwork as Europe. Yemen and Libya have already effectively fallen apart. Palestinians have been thwarted for decades from having their own state. Turkmen, Shia (in Saudi Arabia and Bahrain), and others might lobby as well for a piece of their own pie.

But what if they get their slice just when the pie has become stale and inedible?

Slouching toward Splinterlands

What’s happening in Europe and the Middle East is part of a larger pattern.

The global market has been eroding the power of the nation-state for several decades, as transnational corporations flit around the world to get the best tax deals and the cheapest labor, international trade deals remove key points of leverage that national governments once had over various economic actors, and global financial authorities impose conditions on all but the largest economies that governments must meet or face default.

The global market has delegitimized states. No wonder, then, that subnational units are taking advantage of this weakness.

Technology has amplified this trend. Communications advances make this global market possible, and the transfer in microseconds of huge amounts of capital in and out of nation-states renders national economic policy increasingly illusory. The Internet and social media have broken the monopoly on national media, providing civic movements (along with global disrupters like the United States and Russia) the means to challenge the once authoritative narratives of the nation-state. What happened in the Arab Spring to authoritarian governments is now happening to democratic governments as well (witness the Brexit vote and Donald Trump’s victory).

Finally, in the world of geopolitics, the overarching reasons for ideological unity are gone. The West no longer faces a “Communist threat,” while the East no longer huddles together against the “Yankee threat.” Sure, there’s the Islamic State and its ilk to worry about. But all nation-states see these non-state actors as a threat. The “war on terrorism” hasn’t forced states to give up a portion of their sovereignty for the cause — only citizens to give up a portion of their civil liberties.

In the 1950s and 1960s, utopians dreamed of a world government even as dystopians feared a global Big Brother. Today, when the international community can’t even come together to stop climate change, the prospect of world federalism seems impossibly quaint. A much grimmer reality presents itself in places like Libya and Somalia and Yemen: failed states and the war of all against all.

Today the world faces a crisis of the intermediate structure. The EU is under siege. The power of nation-states is eroding. If this trend continues, with the world continuing to splinter, the only entities left with any global power will be corporations and religious organizations, a world where frightened people pray to Facebook and the gods of Google that the fierce winds of nationalism and the rising waters of climate change and the random fire of lone gunmen will stay away for one more day.

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Can Anti-Racist Businesses Put Their Money Where Their Mouth Is?

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(Photo: Stuart Monk / Shutterstock)

Donald Trump’s failure to condemn White supremacists after the violent neo-Nazi rally in Charlottesville several weeks back had an unexpected casualty: the president’s business advisory councils.

My partner works for a Fortune 500 company whose CEO sat on one those councils. Along with many other employees, my partner had been pressuring the CEO through an internal petition for some time.

Eventually, the dam broke: CEO after CEO decided they could no longer associate themselves with the White House after the incident, forcing Trump to dissolve two high-level panels.

I’m glad my partner’s efforts, along with bigger ones like a campaign to target “Corporate Backers of Hate,” rattled these major corporations’ top decision makers.

Corporate execs know that it’s bad for business to be affiliated with racists — and good for business to look like heroes. While rejecting racism is good, it’s a low bar — especially when many still profit off it.

Jamie Dimon, CEO of JP Morgan Chase, jumped into action after Charlottesville. He not only issued a statement, but also announced that JP Morgan Chase would donate $ 500,000 to the Southern Poverty Law Center, an organization that’s fought racism since the 1970s.

It was a smart business move. The last time JP Morgan was on the wrong side of racism, it cost them $ 55 million in settlements for charging Black and brown people higher rates for their mortgages. Looking at that number, a $ 500,000 donation is a drop in the bucket.

The company can’t take back the discrimination lawsuits or its part in the housing crisis, which slashed Black wealth in this country in half. That’s a huge percentage. Black families had already been denied centuries of wealth accumulation due to slavery and racist policies like redlining, and this crisis was a double whammy.

$ 500,000 also isn’t enough to make up for the bank’s financing of mass incarceration.

JP Morgan Chase lent hundreds of millions of dollars to Geo Group and CoreCivic, two major operators of private prisons and immigrant detention centers, despite investor concerns .

All that dirty money makes Dimon’s comments in support of DACA after Trump’s decision to repeal it also ring a little hollow.

DACA, or Deferred Action for Childhood Arrivals, is a program created by the Obama administration that protects some young undocumented immigrants from deportation.

It’s hard to believe that Dimon truly thinks that “when people come here to learn, work hard, and give back to their communities, we should allow them to stay in the United States” when his company supports corporations that profit from warehousing immigrants in detention.

White supremacy doesn’t just look like KKK hoods and swastikas — it can also wear a business suit on Wall Street. Of the top five Wall Street firms, the highest level decision makers are 86 percent white. That’s no coincidence.

Corporations have huge power they can use to fight structural racism. But it’s got to be more than just words.

JP Morgan and Goldman Sachs could publicly commit to pull contracts that contribute to mass incarceration. IBM could refuse contracts that contribute to violent immigration enforcement activities. Wells Fargo could halt its financing of the Dakota Access Pipeline on Native lands. At a minimum, that’s what the Corporate Backers of Hate campaign recommends.

And, by looking inward at their hiring policies, promotion policies, and pay scales, these businesses can begin building towards long term equality.

Don’t get me wrong, it is a good thing that they denounced hatred. I just hope they’ll put their money with their mouth is.

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The Moms Fighting for Their Kids Behind Bars

Originally in Newsweek.

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(Photo: Flickr / Backbone Campaign)

Burnt toast, strawberry jam, a half-eaten stick of bacon — all carefully arranged on a tray and plunked by loving hands onto the bellies that once carried them. That’s how many children and mothers start the first Sunday of May each year. Mother’s Day is among most precious days for many moms around the country.

It’s also among the most heart-breaking for others.

It’s hard for many of us who haven’t experienced the cruel absence of a child to fully understand it. But for the mothers of the 54,000 children incarcerated in this country — the most of any in the world — Mother’s Day rings in a pain so acute it can be hard to describe.

For instance, Jeannette Bocanegra and her son JahPower were separated for six Mother’s Days, starting when the boy was only 14 years old. Throughout his years in lockup — including an especially brutal time at Rikers Island — the teenager was moved repeatedly, farther away from home each time. Authorities often didn’t even bother to tell Bocanegra where her son had been sent.

After one move, she remembers him calling to say, “Mommy, they moved me again and I don’t think you can come this far.” Indeed it was a struggle for Bocanegra, a hard-working mother of five from the Bronx, and her cancer-stricken husband to afford to travel such long distances. Yet she assured her child, “No matter where they send you, I’m going to find you.”

Read the full article on Newsweek.

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CEOs Now Make 300 Times More Than Their Workers. This City Is Putting a Stop to That.

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(Photo: Flickr/ Democracy Chronicles)

With national policy likely to compound the income and wealth gap in the coming years, states and localities are fighting back.

Across the country, local jurisdictions aren’t waiting for federal action or corporate governance reforms to close the wage gap. In December, for example, the city of Portland, Oregon, passed an ordinance to raise the business tax on companies with CEOs who earn more than 100 times the median pay of their workers. Portland officials said the ordinance is the first of its kind in the country. And now, more cities and states are poised to follow suit.

“The huge divide in income and wealth has real-world implications,” Steve Novick wrote last October in Inequality.org. Novick sponsored the ordinance when he was on the Portland City Council. “Too many Americans cannot get a leg up,” he wrote. “Income inequality undermines the American dream.”

Portland city government projects the tax will raise $ 2.5 million to $ 3.5 million a year, which city officials have said will likely help pay for the city’s homeless programs.

Inspired by the living wage movement, Portland’s ordinance comes on the heels of decades of grassroots activism around the issue of wage inequality.

Starting in the 1990s, the failure of Congress to adequately raise the federal minimum wage gave rise to a prairie-fire movement of local activists pressing for local and state living wage ordinances. Living wage ordinances typically cover a segment of workers, such as employees of government contractors, while minimum wage laws cover all workers. By 2010, over 120 jurisdictions had passed local living wage laws, and at present, 41 jurisdictions have passed minimum wage laws.

“I expect this pay gap reform movement to spread like wildfire, just as the living wage movement did,” said Sarah Anderson from the Institute for Policy Studies. “I’ve gotten inquiries from over two dozen states and cities about how to establish a pay gap ordinance.”

Anderson lobbied the Portland City Council in support of the policy and testified at a public hearing. She has since compiled resources for communities interested in instituting a CEO-worker pay gap penalty.

Read the full article on YES! Magazine’s website. 

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Americans Want To Know What Their CEO Makes

(Photo: Canadian Pacific / Flickr)

The chairmen of the Securities and Exchange Commission, the federal watchdog agency over Wall Street and the corporations that trade on it, have been a varied lot down through the years. Some have been public-spirited champions of average investors. Others have put their priority on keeping Corporate America’s high and mighty happy. The current SEC chair — on an acting basis — most definitely falls in the latter category.

President Donald Trump named Michael Piwowar to the acting chair slot shortly after his inauguration. Piwowar, one of the SEC’s five commissioners since 2013, quickly flexed his acting chair muscles — on one of the agency’s most high-profile recent decisions.

Back in August 2015, an SEC commissioner majority had approved a long-awaited set of regulations for enforcing an innovative 2010 Dodd-Frank Act provision on corporate pay disparities. The provision requires corporations to annually disclose the ratio between their CEO and median worker compensation.

Piwowar fiercely opposed the new disclosure rule, but found himself outvoted, and the disclosure mandate officially went into effect January 1. Corporations are now preparing to calculate their first required ratio disclosures. These first required ratios will go public early in 2018.

Or so everyone expected until early last month when acting chair Piwowar threw a monkey-wrench into the works. Corporations the nation over, the acting chair pronounced, “have begun to encounter unanticipated compliance difficulties.” These “unexpected challenges,” Piwowar continued, justified still another public comment period on the ratio rule, and he proceeded to invite stakeholders to share their beefs about their new burden.

That invitation, Piwowar no doubt expected, would bring forth incredibly moving corporate testimonies that would vindicate his opposition to disclosing pay ratios. A nation suitably impressed by these tales of corporate woe would surely then understand why the SEC must never allow CEO-worker pay ratios to see the light of day.

The deadline for Piwowar’s invitation to submit new comments on pay-ratio disclosure came earlier this week. The tsunami of corporate tales of woe that Piwowar expected? That didn’t come. What did: a deep torrent of responses — from experts and grassroots business circles alike — supporting pay-ratio disclosure and demanding that Piwowar end his silly stalling stunt and start enforcing the law.

Count Lynne Dallas, a law professor at the University of San Diego, is one of those experts. She pointed out in her detailed response to Piwowar’s request for comments that almost seven years have passed since the Dodd-Frank Act wrote the pay-ratio disclosure mandate into law. Firms now complaining that they’ve “begun to encounter” difficulties had plenty of time to get their ducks in order.

Another expert, Iowa State University professor of accounting Sue Ravenscroft, noted in her analysis that corporations have claimed repeatedly that the cost of calculating pay ratios would be “extraordinarily onerous.” That claim, she observed, rates as “downright laughable.”

All companies, Ravenscroft explained, give employees individual tax forms and report on individual employees whenever remitting withholding taxes to the government. No corporations should have any problem compiling this “readily available information” on worker pay.

“Perhaps they need,” Ravenscroft concluded, “some undergraduate interns to teach them about Excel spreadsheet capabilities.”

Comments from the business grassroots shared this expert displeasure over Piwowar’s maneuvering to ditch pay-ratio disclosure.

“I am disappointed that you are reconsidering this rule,” wrote Gina Webber, a small business owner. “I believe the rule should be kept and ENFORCED. Trump, in his campaign, denounced outrageous CEO pay, so it would be quite hypocritical if this Administration undermined CEO pay transparency.”

Another local businessperson, general contractor Mark Urban, stressed in his response the vital importance of encouraging narrower pay gaps between executives and employees.

“As a business owner,” he told the SEC, “having a low disparity between CEO and workers pay is critical to success of a company.”

Other Americans with business experience dismissed the standard corporate rationalizations for opposing the SEC pay-ratio disclosure rule.

“I have read some of the comments submitted by corporate officers who, not at all surprisingly, oppose the rule, largely on the stated grounds of compliance burden and expense,” observed Robert Conklin. “Based on my 45 years experience in two careers, first as a securities lawyer and later as CEO of a small privately held corporation, I believe that such burdens and costs are being greatly exaggerated.”

Piwowar’s move to reopen the ratio-disclosure debate also brought feedback — and push back — from public interest and investor groups. In a joint March 22 letter, over 100 unions, pension funds, state treasurers, and consumer advocacy organizations called the new SEC disclosure regulations a “thoughtful, balanced, and carefully crafted” rule that “will provide material information to investors.”

Lawmakers have chimed in, too. In one letter to Piwowar, eight U.S. senators describe themselves as “extremely troubled” by his latest attempt to “discredit” the new ratio rule and “generate momentum to repeal” it.

Piwowar’s stab at creating that “momentum,” adds Sarah Anderson of the Institute for Policy Studies, has clearly blown up in his face. As of March 22, only four companies had bothered to “share their problems” with pay-ratio disclosure on the SEC’s online comments page.

The momentum globally, Anderson adds, is clearly running toward requirements that corporations reveal their executive-worker pay ratios. India is already enforcing pay-ratio disclosure, and in the UK even the current conservative prime minister, Theresa May, supports the idea.

Back in the United States, meanwhile, the city of Portland has enacted an ordinance that ties corporate tax rates to corporate pay ratios, and a number of other localities — and states — are considering similar measures, all inspired by the Dodd-Frank ratio disclosure mandate.

Acting SEC chairman Piwowar could continue to delay that mandate’s enforcement. But he has absolutely no mandate from the American people, everyone can now see clearly, to keep stalling.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.

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Immigrants Pay More Than Their Fair Share

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(Image: Lightspring / Shutterstock)

It’s hip these days to pick on immigrants. From Pennsylvania Avenue to Phoenix, we’ve seen public displays of hostility toward undocumented workers over and over.

Hostile politicians especially like to say that migrants are a drain on society. During Donald Trump’s recent speech to Congress, for instance, the president implied that immigrants cost “America’s taxpayers many billions of dollars a year.”

But among their many other contributions to American society, it turns out that undocumented immigrants pay an enormous amount of taxes — in fact, $ 11.7 billion in state and local taxes alone.

That’s according to a just-released study from the non-partisan Institute on Taxes and Economic Policy. That figure includes $ 7 billion in sales and excise taxes, $ 3.6 billion in property taxes, and $ 1.1 billion in income taxes.

This total is spread among states and municipalities ranging in scale. The largest is California, where an estimated 3 million immigrants contribute more than $ 3 billion in tax revenue. For comparison, that pretty well covers what the state spends on special education for all Californians.

All told, undocumented workers pay about 8 percent of their income in state and local taxes. Compare that to the wealthiest 1 percent, who pay just 5.4 percent.

Read the full article on InsideSources.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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Should We Assign the Super-Rich Their Own Tax Collectors?

(Photo: Pollar SD/Shutterstock)

(Photo: Pollar SD/Shutterstock)

We don’t know exactly how much Donald Trump paid in taxes last year. He hasn’t released his 2015 federal income tax return yet. He most likely never will.

But let’s keep in mind that we don’t actually know how much any individual American billionaire paid in taxes last year, with just one exception. Investor Warren Buffett last month released his own basic tax info as a protest of sorts against candidate Trump.

No other billionaires followed Buffett’s lead, and, under U.S. law, none of these ultra rich have an obligation to share any personal tax data at all. So we have no clue how much tax avoiding our individual billionaires are doing.

We do, on the other hand, have a sense of just how much our billionaires as a group are shelling out at tax time. Give credit for that to statisticians at the IRS. Over recent years, they’ve been publishing annual reports on America’s 400 highest-income tax returns.

In 2013, the most recent of these reports reveals, our top 400 averaged an amazing $ 265 million in income — and paid, on average, just under 23 percent of that in federal income tax.

Some of the top 400 billionaires fared far better than that average. Forty-three of them paid less than 15 percent of their reported incomes in federal tax. On paper, remember, rich couples in 2015 faced a 39.6 percent tax rate on ordinary income over $ 464,850.

What explains the gap between that 39.6 percent and the much lower actual tax rate on rich people’s incomes? In a word, loopholes. The rich play all sorts of games — some just a little shady, some a lot — to get their effective tax rate down as low as possible.

If the next President of the United States really wanted to undo this “rigged” tax status quo and narrow the gap between what the law says rich elites should pay in taxes and what they do pay, what steps could that President take?

That next President, suggests a new report out of the UK, could start by assigning America’s super rich their own personal tax collectors. That’s just what they’re doing in Britain right now, in a special tax compliance project that UK tax officials launched in 2009.

Her Majesty’s Revenue & Customs, the British counterpart to America’s IRS, has identified 6,500 UK taxpayers worth over £20 million — the equivalent of about $ 25 million in the United States — and matched each of these “high net worth individuals” with an HMRC “customer relationship manager.”

These personal tax collectors operate as half tax cop and half concierge. Wearing the concierge cap, the customer relationship managers try to be helpful as possible to wealthy taxpayers. They’ll readily answer, for instance, any question a wealthy taxpayer may have about a legally questionable tax-related move the taxpayer might be thinking of making.

As tax cops, customer relationship managers are constantly looking the shoulder of the individual wealthy taxpayers they’re monitoring, watching out for fraud and any attempt to fudge income and tax-due figures.

HMRC has wisely built into this intense monitoring effort a series of safeguards to prevent what good-government analysts in the United States call “regulatory capture,” the situations that develop when regulators get too close to the regulated and start ignoring the public interest.

Among these safeguards: HMRC regularly rotates the customer relationship managers assigned to each super wealthy taxpayer. And individual relationship managers don’t get to make the final call on whether to pursue tax fraud investigations or not.

What sort of impact is this new British crackdown on wealthy taxpayers having? In 2015, the UK’s 6,500 richest taxpayers voluntarily declared tax liabilities of £4.3 billion, about $ 5.3 billion. The compliance work of the HMRC special tax monitors assigned to the wealthy has already recovered another £416 million from these same super rich.

British tax officials have also identified — and are going after — another £1.9 billion that the super rich should have paid in taxes over recent years but haven’t.

In other words, the dust could settle with the British super rich paying 35 percent more of their income in taxes than they initially expected to pay.

In the United States, collecting 35 percent more in taxes from the nation’s richest would in 2013 have brought in an impressive $ 8.5 billion in new revenue from just 400 taxpayers.

Only one other nation — the Netherlands — now has a system in place that mirrors what British tax officials are doing, and this Dutch effort has only just begun.

America’s IRS does, to be sure, have a unit that concentrates on taxpayers of high net worth. But the United States hasn’t yet given these high-end taxpayers anything near the level of across-the-board scrutiny that Britain’s HMRC has.

Could that situation change? Our top tax officials should take a look at the new report on the UK approach released earlier this month by Britain’s National Audit Office. The report offers powerful evidence that placing the tax affairs of all a nation’s ultra-rich taxpayers under the microscope can yield significant benefits.

How significant? UK auditors have calculated the British tax authorities gain £29 for every £1 they spend on staffers who do their agency’s microscoping.

That sounds like a great deal, for both the national treasury and average taxpayers. Just by coincidence, we do have an expert deal maker about to take up occupancy in the White House. Will he try cutting a tax deal like Britain’s? He would if he asked his voters.

The post Should We Assign the Super-Rich Their Own Tax Collectors? appeared first on Institute for Policy Studies.

Sam Pizzigati an associate fellow for the Institute for Policy Studies.

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When States Dream, Is Syria Their Nightmare?

National Catholic Reporter Interviews Phyllis Bennis

Photo by Goran Tomasevic.

The war in Syria is a nightmare. It’s a nightmare for all the civilians who suffer from constant aerial bombardment, who are trapped without food and medical assistance inside crumbling cities, who experience the retribution of either the Islamic State or the regime in Damascus. It’s a nightmare for those who try to escape and face the prospect of death in transit or limbo in refugee camps.

Syria is a nightmare for individuals, millions of them. But it’s not just that. If states could dream, then Syria would be their nightmare as well.

Syria was once a sovereign state like any other. It had a central government and fixed boundaries. The Syrian state enjoyed a monopoly on violence and, on several occasions, deployed that violence against its citizenry to devastating effect. The economy functioned, more or less, with considerable revenue coming from the oil sector. In 2009, tourism accounted for 12 percent of the economy. Not that long ago and despite its many problems, Syria attracted a large number of eager travelers.

In perhaps the most ironic twist, the Syrian state once had delusions of grandeur. It wanted to abolish the old colonial boundaries and unify the entire Arab world. Under Hafez al-Assad, its authoritarian ruler from 1970 until 2000, Syria attempted to absorb Lebanon, unite with Egypt and Libya in a short-lived Federation of Arab Republics, displace Iraq as the undisputed ideological leader in the region, and even take charge of the Palestinian cause.

How quickly dreams can segue into nightmares. Syria has fallen in upon itself, fracturing into four distinct pieces. The government in Damascus controls a gerrymandered slice of territory around the capital and the coast. The Kurds have carved out an autonomous region along the Turkish border in the northeast. The Islamic State still claims a large expanse in the heart of the country. And various rebel factions have secured a patchwork of land in all four corners of what had once been a unified Syria.

The government in Damascus, needless to say, no longer enjoys its monopoly on violence. It can’t control the borders of the country. The economy shrank by 19 percent in 2015 and will probably contract another 8 percent this year. Hundreds of thousands of Syrians have died in the current conflict. Out of a pre-war population of 23 million, nearly half have fled their homes 4.8 million leaving the country and 6.6 million displaced internally. The war, according to one estimate, has cost over $ 250 billion.

Much like the Balkans before it, Syria is emerging as a metaphor for the fragmentation and chaos that the modern world barely contains. Many states are held together by little more than surface tension, like the meniscus of liquid that rises above the sides of a glass. Nationalism has reached a boiling point in many places, as has religious extremism. Armaments are everywhere, militias are proliferating, and violence has become pervasive. After scoring a number of impressive victories  in Northern Ireland, in East Timor, most recently in Colombia international diplomats are stymied by the breakdown of order in places like Syria, Libya, Sudan, and Somalia.

The countries jockeying for influence in Syria today face many of the same divisive forces that have torn apart that benighted country. The dream of these intervening powers: to turn the current war to their advantage. Their nightmare: that whatever is tearing apart Syria is contagious.

The Illusion of Totalitarianism

There is no such thing as a totalitarian state.

Some dictators, of course, imagine that they can create just such a state, in which the government is a mere extension of the leader’s will and no significant opposition challenges this central authority. Such a society is a pyramid with one person at the top, every block serving to support that uppermost platform. Mere authoritarian societies tolerate potential rival sources of power, such as an intelligentsia or a business sector. In the ideal totalitarian system, all is for one and one is for all.

Even North Korea under the Kim dynasty Kim Il Sung, Kim Jong Il, Kim Jong Eun fails to achieve this kind of totalitarian control. True, the government has managed to suppress virtually every sign of political dissent, indigenous NGOs are practically non-existent, and all culture is subordinate to the state. However, private markets have sprung up beyond the state’s compete control (though, as a sign of grudging acceptance, the state taxes the sellers). Citizens watch contraband movies and listen to taboo music thanks to flash drives smuggled in from China. There have even been signs of disagreement at the highest levels of governance (or so the execution of Kim Jong Eun’s uncle Jang Song Thaek suggests).

Once upon a time, the leader of Syria also hoped to create a totalitarian dynasty in the heart of the Middle East. Hafez al-Assad embraced a version of Baathism, the anti-colonial, nationalist, pan-Arabist, and nominally socialist hybrid that emerged from the ideological tumult of the 1940s. As in North Korea, Assad created a one-party state with an extensive secret police, the Mukhabarat. He ruthlessly eliminated opposition, as in 1982 when the state brutally suppressed an uprising by the Muslim Brotherhood. After a brief excursion into reform, the designated successor, Assad’s son Bashar, followed in his father’s footsteps. He attempted to extinguish the Arab Spring uprising just as his father had dealt with the Islamists. The current war is the result of Bashar al-Assad’s failure to perceive the declining power of his unitary state.

As much as the younger Assad would have liked to maintain a firm grip on power, Syria 2012 was a much different place from Syria 1982. During those 30 years, the bonds that had kept the country together had weakened. Popular organizations had begun to demand democracy. Groups defined by their ethnicity saw the potential for greater autonomy. Religious organizations sensed an opportunity to dislodge what had once been a distinctly secular regime. Other centers of power had appeared in Syrian society, and the Baathist regime was ill equipped to deal with this kind of pluralism.

This scenario might seem unique. It isn’t. Disharmonious pluralism has become the new global standard. Other countries Turkey, Iran, Russia, Saudi Arabia, the EU, even the United States gaze upon the Syrian example and tremble.

It Can Happen Here

Stripped of its magic sovereignty, Syria has been turned into a piñata whose hidden treasures are now available for all to see and seize. Even as they continue to wield their bats, the intervening powers can’t help but perceive how quickly sovereignty can disappear and how little prevents them from becoming piñatas in turn.

Turkish leaders, for instance, must be quite aware of the structural features their country shares with Syria. The glue that has traditionally held together modern Turkey Kemalism, named for the father of Turkey, Kemal Ataturk has a somewhat Baathist flavor. It, too, is anti-colonial, nationalist, and secular. Kemalism, like Baathism, has unified an extraordinarily diverse country. Where ideology has proven insufficient, the central government, as in Syria, has used considerable firepower to suppress any movement but particularly the Kurds in the Kurdistan Workers’ Party (PKK) – that challenges the territorial integrity of the country.

Turkey’s current leader, Recep Tayyip Erdogan, wants to consolidate power internally and project Turkish influence throughout the Middle East (and beyond). Syria has long been integral to this dual project. The two countries mended fences in the early 2000s when Syria figured prominently in Turkey’s “zero problems with neighbors” policy. Once Assad’s position became tenuous during the Arab Spring, however, Erdogan saw an opportunity to switch horses. As the conflict deepened, and no horse emerged as a clear winner, Erdogan decided to use the cover of war to bomb the PKK and their supporters over the border. He hoped to identify a “responsible” Kurdish faction with which to do business – as Ankara has done with Kurdistan in Iraq. More recently, by creating a “safe zone” in northern Syria, Turkey plans to resettle Syrian refugees now in Turkish camps and use that as a base of operations for promoting Turkish business in post-war reconstruction.

That’s the dream, anyway. The nightmare is not far away. The failed coup in July was a rather inept demonstration of the latent anxiety in certain sectors about Erdogan’s consolidation of domestic power. The rekindled war with the Kurds in the southeast reveals the continued ethnic divide in the country. So far, Erdogan has cleverly combined the secularist Kemalism and the soft-pedaled Islamism of his Justice and Development Party into a Turkey-first nationalism. But blowback from Syria from Kurds, from Islamic State supporters, from a disgruntled Turkish army could open up a rift in Erdogan’s coalition, and Turkey would then be on the verge of turning into a Syria.

Even though it follows a very different operating system, Iran, too, looks on Syria as a cautionary example. The government in Tehran is currently split between reformers under President Hassan Rouhani and the religious hardliners who constantly fret over theological deviations. The Green Movement that emerged around the 2009 elections revealed strong opposition to the theocrats within the urban middle class. If Rouhani and his cohort are not able to take full advantage of the nuclear deal and Iran’s reentry into the global economy, Iran could slide backward economically and then, after the next elections, politically to the days of Mahmoud Ahmadinejad. Disenchanted with formal politics, the next iteration of the Green Movement might give up on peaceful demonstrations and plunge Iran into its own civil war.

Saudi Arabia seems like a solid enough entity at the moment. But it too faces a religious challenge from its Wahhabist fringes and a potential territorial challenge from minority Shia in the Eastern Province. The House of Saud rules with an iron fist, and its Committee for the Protection of Virtue and Prevention of Vice intrudes into the private lives of the citizens. The collapse of oil prices has put a squeeze on the kingdom’s finances, which will inevitably open up cleavages within Saudi society. In the absence of a strong national identity, Saudi Arabia could fracture along tribal lines, much like Somalia.

These challenges are not limited to the Middle East. The European Union faces multiple centrifugal forces Brexit, defaulting economies, a restive Russia. Euroskeptics decry the undemocratic power wielded by political institutions in Brussels. The crisis in Syria is by no means abstract for European countries. The influx of Syrian refugees has driven a huge wedge between countries that want nothing to do with them (particularly Eastern Europe) and countries that want to share the burden equally. The disintegration of Syria is now integrally linked to the disintegration of Europe, which might seem fitting to those who believe in the vengeful ghosts of colonialism.

The United States is far away from the Syrian conflict, and so far the Obama administration has limited the number of incoming refugees to 10,000 (compared to more than a million that Europe has accepted). The issue of immigrants has certainly divided the two major presidential candidates, and there is no consensus at the top on Syria policy the recent ceasefire agreement exposed a serious fault line between the State Department (let’s work with the Russians) and the Pentagon (really, the Russians?!). But Syria won’t set Americans against Americans as it has pitted Europeans against themselves. Moreover, despite considerable disagreement in the highest reaches of American power on a range of other issues between Congress and the president, within the Supreme Court, between states and the federal authority these conflicts have been paralyzing rather than fissiparous.

The more serious concern is the sheer number of guns in the United States over 300 million and their greater public visibility. You can now carry around your gun openly in 45 states, and more than 14 million people have permits to do so. The number of anti-government militia groups has been rising steadily since the election of Barack Obama in 2008. Trust in the federal government has fallen to record lows. Approximately one in four Americans want their states to secede from the union. Divisions between rich and poor, white and black, native born and immigrants, have widened.

Ordinarily, all this roiling discontent could be contained by a well-functioning economy or by a set of foreign enemies to focus American enmity. But the election of a much-disliked president next year take your pick may well prove to be a tipping point. It doesn’t take much to turn a well-armed population into a mob.

And that, of course, is the ultimate nightmare for Turkey and Iran and Saudi Arabia and the United States when Syria ceases to be a gloomy metaphor for what is happening outside its borders and becomes instead a grim reality.

The post When States Dream, Is Syria Their Nightmare? appeared first on Institute for Policy Studies.

John Feffer directs Foreign Policy in Focus, a project at the Institute for Policy Studies.

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Poorer Than Their Parents

father-son-poor-generation

(Photo: Shutterstock)

The promise of market economics is supposed to be that as an economy grows, the paychecks of wage earners grow with it. But according to a new study, this is no longer the case.

Who’s hit hardest by the new unequal reality? Young people.

During the last economic expansion, the period dating from 1993 to 2005, a full 98 percent of workers saw their wages rise in the 25 major advanced economies around the world. Granted, the rise wasn’t evenly distributed, but the proverbial rising tide did lift most boats, at least slightly.

But from 2005 to 2014, the subsequent period encapsulating the Great Recession and so-called recovery, just a third of wage earners saw their incomes rise. The vast majority of earners – around 65 to 70 percent – saw their paychecks decline or stagnate. In the United States, the proportion with stagnant wages was a full 81 percent.

The new report, entitled “Poorer Than Their Parents? Flat Or Falling Incomes In Advanced Economies,” comes from the McKinsey Global Institute. As the title suggests, the study examined the prospects for over 800 million workers in the 25 wealthiest countries and found that the rising generation is at serious risk of ending up poorer than their parents.

The post Poorer Than Their Parents appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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These States are Taking Tax Reform into Their Own Hands

raise-up-ma-tax-fairness

(Photo: SEIU Local 509)

States across the country are taking on the issue of tax fairness with vigor, looking to raise significant revenue and put a halt to the growing economic divide. Revenue raising campaigns in California, Massachusetts, and Oregon want to increase taxes on millionaires and the most profitable corporations at the ballot.

In light of growing inequality, other states should take notice.

The income of the top one percent is over 25 times higher than what the bottom 99 percent is paid across the country. In certain states, according to a new report from the Economic Policy Institute, that figure is more than 40 times higher.

Perhaps more troubling, in 15 states the top one percent took all of the income gains in the wake of the Great Recession. Not most of it, all of it.

While there is no panacea for dramatically reducing this level of inequality, one part of the solution comes from the tax code: raise taxes on the very wealthy and invest the revenue on programs of social uplift.

Three states have stepped up to begin to address this rising inequality through changes in their tax codes, providing a model other states should consider emulating.

Massachusetts

A ballot initiative campaign is underway in Massachusetts to pass a millionaires tax in the Commonwealth. The Raise Up Massachusetts coalition supporting the campaign claims the initiative received a 70 percent approval rating and will raise about $ 2 billion per year in revenue for education and transportation infrastructure in the Bay State. The campaign recently received support from 135 of the 200 representatives in the state legislature and will appear on ballots in the 2018 election.

California

In 2012, the Golden State temporarily raised state level income taxes on millionaires to the highest in the country with a rate of 13.3 percent on incomes over $ 1 million. In the years following, the California economy has seen significant growth, disproving conservative economists‘ predictions that calamity would ensue. Voters will decide in November whether to make the tax increase, and the $ 5 billion in annual revenue that comes with it, permanent.

Oregon

Corporate taxes on large and profitable corporations in Oregon are the lowest in the country. Voters will weigh in on whether to change that this November thanks to a ballot initiative campaign from A Better Oregon. The initiative raises rates on corporations with over $ 25 million in sales in the state with revenue earmarked to fund early education, K-12 education, health care, and senior services.

These states are not alone. Efforts to raise taxes on the wealthy are also underway in Minnesota, Maine, and Colorado according to Bloomberg News.

With Congressional inaction guaranteed at least until after the election, and likely long after that, it’ll be up to the states to take the fight against inequality in their own hands. Activists and legislators in states not currently taking action should draw inspiration from these states and consider launching campaigns of their own.

The post These States are Taking Tax Reform into Their Own Hands appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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