Too Much: A Commentary on Excess and Inequality

Guess Who Gives More of Their Money to Charity: People Who Make More or Less Than $200k a Year?

Billionaire CEO Nicholas Woodman, news reports trumpeted earlier this month, has set aside $450 million worth of his GoPro software stock to set up a brand-new charitable foundation.

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America’s 400 Ridiculously Richest People: 2014 Edition

Imagine yourself part of the typical American family. Your household would have, the Federal Reserve reported last month, a net worth of $81,200.

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10 Greediest People in America

Butchers, bakers, and candlestick makers. You won’t find any of them in this latest annual list of America’s most avaricious. You will find wheelers and dealers and even a candy store heiress.

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Are Heartless People Simply Born That Way?

People who cut food stamps - and gut child labor laws - most all had empathy when they came into the world. So what squeezed the empathy out? Analysts are pointing to inequality.

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The Latest Census of Global Fortunes: Mo' Money for the 1%

For the global economy, notes the just-released 17th annual World Wealth Report from the Capgemini wealth consultancy and the Royal Bank of Canada, 2012 turned out to be one real downer.

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Meet the CEO Who Cut Worker Pay in Half While Pulling in $21 Million Last Year

This article orignially appeared in Too Much, the inequality weekly. Sign up to receive free via email.

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The American Housing Market is Set to Screw People Far into the Future

Our political vocabulary is changing all the time. Words that loom large in one generation’s national public discourse can almost totally disappear in the next.

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5 Ways to Beat the Plutocrats

Our contemporary billionaires, most Americans would likely agree, are exploiting our labor and polluting our politics. Can we shrink our super rich down to a much less powerful — and more democratic — size? Of course we can. We Americans, after all, have already done that shrinking once before.

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Something's Very Wrong When Only the Rich get Richer

We’ve all heard plenty of chatter over recent years about the widening gap “between rich and poor.” But what about the gap between rich and middle? This divide seldom ever gets much media play, an inattention that makes no sense. The gap between America’s high-income and middle-income households, after all, has been growing almost as fast as the gap between rich and poor.

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2012 Campaign Marked By Blitz of Empty Populist Rhetoric Against Wall Street

All those political ads flooding our media are smacking dozens of different targets. One particularly: Wall Street. From mid-April to mid-September, Ad Age reports, $1 of every $10 spent on campaign ads has blasted bankers.

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Why Sneering at Public Servants Comes So Naturally to Many of America's Richest Citizens

Last year state lawmakers in Illinois did their best to make a Chicago teacher strike impossible. They passed a new law that required at least 75 percent of the city’s teachers to okay any walkout in advance.

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Conservatives Say Breaking the Law is Normal for Rich People at Tax Time

Any tax system that subjects rich people to high taxes is asking for trouble. Or so the politicians who cater to people of means incessantly argue. The higher the tax rate on high incomes, the argument goes, the greater the incentive the rich have to waste time and energy figuring out ways to evade paying taxes.

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Presenting the Ten Greediest Americans of 2011

The greediest among us in 2011 probably haven’t been any greedier, as a gang, than any greedy of the recent past. They just seem that way.

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Meet the Plutocrats Behind the Attacks on Public Education

Not all plutocrats scheme in the shadows like the rabidly right-wing Koch brothers. We need to learn how to recognize plutocracy's more subtle putches. The best primer? The battle over education's future. 

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The Tax That Turned Reagan From a Labor-Loving FDR Dem to the Father of Backlash Conservatism

Did Ronald Reagan change history? Well, we all change history in our own way. The more interesting question: What changed Ronald Reagan?

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Democratic Governors in California and New York Looking to Put Final Squeeze on Middle Class

A bit over a half century ago, in the years right after World War II, the United States delivered up onto the global stage something the world had never before seen: a mass middle class.

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New Tally of Global Wealth Illuminates Staggering Disparities

Who owns, right now, the wealth of the world? Until just over a week ago, we really didn’t have much in the way of specifics for an answer.

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Modest Tax on Billionaires Could Erase Budget Shortfalls of Every Single US State

David Rockefeller, Sr., the only surviving grandchild of America’s first billionaire, has achieved still another distinction. At age 95, he currently rates as the oldest billionaire on the new Forbes magazine annual list of America’s 400 richest.

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10 Greediest People of 2009

Has picking a year’s greediest "top ten" ever been easier? We don't think so. We could, this year, fill an entire top ten just with bankers from Goldman Sachs -- or JPMorgan Chase or any of a number of other Wall Street giants. All sport executive suites packed with power suits who fanned the flames that melted down the global economy, then helped themselves, after gobbling down billions in bailouts, to paydays worth mega millions -- at a time when, in over half our states, over a quarter of America’s kids are living off food stamps.

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What Happened to That Prosperity Tax-Cutters Promised Us?

You don’t have to dig particularly deep, in the United States today, to find some striking similarities between today’s virulently anti-Obama "Tea Party" crowd and the media darlings who birthed the "Tax Revolt" phenomenon back in the late 1970s.

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New Study Exposes 2007 as the Year of the Super-Rich

Emmanuel Saez, the Berkeley economist who many now consider the world’s top authority on the incomes of the super rich, has never been one for sweeping statements. He tends to let his data do the talking. But his latest data — from the crunching of just-released IRS tax records for 2007 — have wowed even Saez.

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Apologists for the Rich Are Scraping the Bottom of the Barrel

In tough economic times, work for some people can suddenly become significantly more difficult. Take, for instance, the analysts and academics who have decided, for whatever reason, to devote their careers to justifying the wealth of the wealthy. In normal times, these flacks for grand fortune can waltz through their workdays with the greatest of ease. They merely invoke the prospect of catastrophic economic collapse whenever anyone dares propose anything that might leave the wealthy even just a little less wealthier.

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A Serial Job-Killer Is Stalking America

A new crime has burst out onto America’s political blotter. Move over drug pushing and car stealing, meet the new menace. Job killing. But fear not. We now have in Congress a dedicated army of self-selected saviors who have loudly vowed to keep us protected.

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Is Taxing the Super Rich a Waste of Time?

Last fall, in the Presidential campaign, candidate Barack Obama promised to raise taxes on the rich and "spread the wealth." Candidate John McCain, figuring that Obama had committed a major political gaffe, spent the next month ridiculing Obama for that promise.

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The Audacity of Hope Tackles the Enormity of Inequality

Last Thursday, the day after President Obama announced a $500,000 cap on executive pay at bailed-out banking giants, the banking industry's trade journal celebrated. The President's cap, the American Banker exulted, would be "unlikely to have much impact" on banking executive compensation.

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Financial Meltdown Provides Final Verdict on Reaganomics

Two days before Christmas, with hardly anyone at all paying much attention, the nonpartisan Congressional Budget Office delivered up a final report card on the Reagan era. The highest grades? They went, almost exclusively, to the super rich.

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The 10 Greediest People of 2008

This time of year always seems to bring a never-ending barrage of "top ten" lists. The year's top ten movies, the top ten books, the top ten news stories, and on and on. Here at Too Much we've decided to join in on the action -- with our very own list of America's top ten greediest.

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Setting Sights at the Top is the Key to Governing from the Middle

The new Obama administration, House Speaker Nancy Pelosi pronounced last week, "must govern from the middle." What exactly did she mean by that? Governing from the middle, Pelosi explained, demands a focus on priorities like "growing the economy" and "expanding health care."

For Pelosi, in other words, governing from the middle means governing for the middle.

In a nation as deeply divided economically as the United States, that's not easy. In America today, an administration can govern effectively for the middle -- but only if that administration stands willing to take on power and greed at the top.

Barack Obama seems to understand this reality more clearly than any Democratic candidate for the White House since Harry Truman in 1948. "I think when you spread the wealth around," as Obama famously said to Joe the Plumber, "it's good for everybody."

Historically, in the United States, the most effective spreading has come via the progressive income tax, and Obama has pledged to make the tax system more progressive -- by raising the tax rate on top-bracket income from 35 percent to the 39.6 percent rate of the Clinton years.

This increase, if enacted, would subject America's richest to a tax rate still far below the 70 percent top rate in place when Ronald Reagan entered the White House back in 1980. Would an Obama administration eventually be willing to move closer to that pre-Reagan rate? That remains to be seen.

But the incoming Obama administration has another powerful tool, besides income tax rates, for restraining the concentration of wealth at America's economic summit. That tool: the billions of taxpayer dollars that are going into bailing out the nation's financial and corporate giants.

By insisting on meaningful limits on executive pay at bailed-out companies, the Obama administration could change Corporate America's entire executive compensation culture -- and, in the process, put the brakes on American inequality's single most powerful engine.

For the new Obama administration, one outspoken business leader said last week, jamming on these brakes needs to be job one from day one. In a Business Week column, that leader -- Leo Hindery, the former CEO of AT &T Broadband and a current private equity fund managing partner -- called "excessive executive compensation" a "cancer" that sits "at the core of many of our nation's economic ills."

Top executives, Hindery points out, now make around 400 times what their average workers take home. In 1971, his first year out of business school, top execs rarely made over 20 times worker pay.

"With the ills of our broken executive compensation system rippling through so many" of the critical issues that face the new President and Congress, Hindery contends, lawmakers should early in 2009 start "fixing the system and reestablishing its fairness."

The bailout could be an ideal vehicle for that fix-it -- because the bailout now appears likely to involve not just banks and insurance companies, but America's most dominant manufacturing corporations as well. Without bailout help, news reports last week indicated, General Motors may actually run out of cash in three months.

Candidate Barack Obama campaigned on a promise to make sure CEOs don't make out like bandits in the course of the bailout. So far they are. The executive pay limits in the original bailout legislation do little to end the windfalls cascading into America's executive suites.

The financial giants now getting bailout dollars, Wall Street Journal research last week revealed, "owed their executives more than $40 billion for past years' pay and pensions," as of the end of last year, and the current bailout rules "won't affect" these sums that banks "already owe their executives."

Changing all this -- taking steps to end the bailout's status as an executive pay protection program -- may emerge as the first big battle royale of the Obama administration. Middle class Americans know where they stand in this battle. If Congress and the new White House truly want to govern from the middle, they'll stand with them.

Cheating Uncle Sam

Back in 2005, IRS officials released a major new report on the "tax gap," the difference between what Americans owe in federal income tax and what they actually pay. The next year, an IRS update to the data in the original analysis put that gap at a stunning $345 billion a year.

But left unclear in this IRS data dump: Who exactly is cheating at tax time?

Now we know.

America's tax cheats, says an analysis of IRS data that surfaced last week, come disproportionately and overwhelmingly from the ranks of America's rich.

Americans who make between $500,000 and $1 million a year underreport their incomes by a whopping 21 percent. That's triple the 7 percent "misreport" rate of taxpayers who make between $30,000 and $50,000 and well over double the 8 percent cheating rate by taxpayers between $50,000 and $100,000.

The raw data behind all these stats originated in the IRS tax gap research, an undertaking that examined 45,000 randomly selected returns from 2001. In the paper that went public last week, two analysts -- IRS economist Andrew Johns and the University of Michigan's Joel Slemrod -- have broken the data from this massive audit effort down by income level.

The IRS original reports on the 2001 "tax gap" data included no income-level analysis. The IRS did release data, in these reports, on the categories of income that go underreported, data that help explain the new finding that the wealthy do most of the nation's tax cheating.

Average Americans get most of their income from wages, salaries, and tips. Only 1 percent of this income goes unreported, IRS investigators found in their original research.

Rich Americans, by contrast, collect huge chunks of their annual income from capital gains and business ownership. Business income went unreported by 43 percent in 2001, capital gains by 12 percent.

The newly published income-level analysis from Joel Slemrod and Andrew Johns does offer up one head-scratcher of a stat: America's very richest -- those who make over $1 million a year -- show lower cheating rates than taxpayers in the $500,000 to $1 million range. But Slemrod told Forbes last week that he's not particularly "comfortable" with that finding.

The super rich, the Michigan economist went on to explain, were likely exploiting tax shelters in 2001 that the later IRS audits simply did not detect.

Indeed, Forbes points out, the federal government is now suing the Swiss banking giant UBS "for the names of 18,000 wealthy Americans it believes may have had unreported Swiss bank accounts."

So what do the new tax cheating numbers, in the end, tell us about the contemporary United States? The United States has become even more top-heavy than the best of the official inequality statistics would have us believe. The best stats use income data from tax returns. These returns, last week's revelations help us understand, don't tell the full story.

The rich, in other words, are grabbing off substantially more of the nation's wealth than we ever imagined.

Should Uncle Sam Be Helping CEOs Get Richer?

The just-released latest edition of the annual CEO pay report from the Institute for Policy Studies and United for a Fair Economy tells two stories. The first will likely remind most Americans why they get so angry about CEO pay. The second will get them even angrier.

The first of these two stories doesn’t take long to tell. Last year, the new Executive Excess 2008 report notes, top CEOs in the United States continued to pocket outlandishly large paychecks, $10.5 million on average. That’s 344 times the pay of an average U.S. worker -- and ten times the pay gap that existed 30 years ago.


The second story takes a bit more explaining: Our tax dollars are actually subsidizing this incredible excess. The federal government, through the tax code, is directly rewarding companies that overpay their top executives.

Executive Excess 2008 details five of these direct subsidies. Two involve rather arcane accounting conventions that corporations exploit to both cheat Uncle Sam at tax time and pump up their quarterly earnings. But the other three don’t require a CPA to decipher.

Many Americans, for instance, already have experience with the concept of “deferred pay” — through 401(k) plans. If you have a 401(k), you can have part of your income deferred from taxes. But you can only defer a limited amount -- usually just $15,500 a year -- and if the investments where you put that money go sour, you’re out of luck.


Top executives, by contrast, can have deferred pay plans with no limits whatsoever. They can defer millions every year -- and they quite often get a guaranteed, above-market rate return on all the dollars they stuff in these no-limit stashes. Last January, Target CEO Robert Ulrich retired with over $140 million in his deferred pay account.

America’s highest-paid power suits -- the managers of hedge and private equity fund partnerships -- have even a sweeter deal. The top 50 of these fund managers last year averaged $588 million each in earnings. These incomes don’t up show in the annual CEO pay rankings because fund managers aren’t technically CEOs. They don’t get paid like CEOs either.

Fund managers take their compensation in the form of fees they assess on the investments they manage. They typically cream off, as a “carried interest” fee, 20 percent of the profits they make buying and selling companies and other assets. On these windfalls, fund managers pay taxes at just a 15 percent rate -- not the 35 percent top rate on ordinary income -- because the tax code lets them claim their “carried interest” as a capital gain.


On every $1 million pocketed in carried interest, in other words, an investment fund manager saves about $200,000 in taxes. This subsidy costs taxpayers $2.6 billion a year.

Corporations save twice that much every year from an even more outrageous loophole, what Executive Excess 2008 dubs the “unlimited tax deductibility of executive pay.” Top companies can essentially deduct whatever they pay their executives off their corporate income taxes, so long as they define that pay as a performance-based incentive.

The more corporations pay their top execs, in effect, the less they pay in taxes.

Direct subsidies for America’s most powerful, Executive Excess 2008 estimates, add up to $20 billion a year. To place this $20 billion in context, the report also notes what the federal government is currently spending to educate America’s most vulnerable, children with disabilities and other special needs: only $10.8 billion a year.


Billions more in CEO pay subsidies, Executive Excess adds, flow indirectly, through government bailouts and procurement. Federal officials regularly let out contracts to corporations that pay their executives hundreds of times more than their workers.

One example: Lockheed Martin is currently getting about 80 percent of its revenue from the federal contracts. Lockheed Martin CEO Robert Stevens made $24 million last year, 787 times the pay of a typical U.S. worker.

Legislation that would end this indirect subsidy for lush CEO compensation, Executive Excess 2008 makes clear, is already before Congress. The pending Patriot Corporations Act would give preference in federal contract bidding to companies that pay their executives no more than 100 times the pay of their lowest-paid employee.

Bills that would end all the subsidies that encourage lavish CEO pay, Executive Excess 2008 takes pains to emphasize, are already pending before Congress. But this legislation is going nowhere, and neither Senators Obama or McCain have yet staked out a position of most of these needed legislative fixes.


Still, the tide may be shifting.

“Historically, troubled economic times in the United States have helped generate long overdue public policy reforms,” sums up the new Executive Excess. “We have now entered troubled economic times, likely our worst since executive pay started ballooning in the 1980s. Ballooning executive pay has helped create our current economic woes. Deflating that excess can help end them.”

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