Trump’s for-profit presidency

The many ways that Donald Trump could use the presidency for personal gain — again.

by Nicole Narea

Dec 17, 2024

VOX

President Donald Trump and Mohammed bin Salman, crown prince of Saudi Arabia, at the start of the 2019 G20 summit in Osaka, Japan. 

Bernd von Jutrczenka/picture alliance via Getty Images

“Victory” cologne and perfume. “Crypto President” watches. Limited-edition “American Eagle” guitars. T-branded golf shoes and “Fight Fight Fight” high-top sneakers.


These are just a sample of the many products licensed to bear President-elect Donald Trump’s brand, including some that he has promoted on his social media site Truth Social just weeks before his inauguration. If he continues to hawk his merchandise after returning to the White House, that could raise ethical concerns.

Consumer goods may be the least of Trump’s issues, however. He has a number of business ventures — including his social media platform, a nascent crypto firm, and the Trump Organization’s partnerships in the Middle East — that could present conflicts of interest, make the presidency vulnerable to foreign influence, and violate federal law.

Related:Trump has set up a perfect avenue for potential corruption

That includes the Constitution’s foreign emoluments clause, which prevents the president from receiving gifts from foreign governments. Enforcement of the clause against a sitting president has been rare, in part because previous presidents upheld a norm of divesting from holdings that could present a conflict of interest while in office. Trump, however, broke with that tradition during his first term.


While President Jimmy Carter famously put his peanut farm in a blind trust, Trump had his sons take over the Trump Organization when he became president in 2016. His global business empire reaped $2.4 billion in revenue, including from foreign governments, in the four years that followed. Government ethics organizations consequently sued him, claiming that he had violated the foreign emoluments clause, but the litigation was never resolved before he left office.

Now, that litigation may be reprised, potentially providing harder limits on presidents’ ability to benefit financially from their time in office. A representative for the Trump transition team did not respond to a request for comment.

“We saw rampant conflicts of interest, abuses of power, profiting from serving in government during his first administration,” said Aaron Scherb, senior director of legislative affairs at Common Cause, a left-leaning watchdog group focused on ethics in government. “This next administration, we expect to see more of the same, and unfortunately, it seems like a fairly complicit Congress.”

Trump’s conflicts of interest in his first term, explained

At the start of his first term, Trump suggested that he would take steps to separate himself from his properties.


However, he never divested from his properties, remaining in close contact with his sons about Trump Organization dealings. As president, he made a total of at least 500 visits to his own hotel and golf properties, calling his Florida club Mar-a-Lago the “Winter White House.” This brought an influx of taxpayer money to those properties.

It also sent a message that patronizing his properties might win lobbyists, foreign actors, and others influence in the Trump administration.


For instance, diplomats from Bahrain, Azerbaijan, Kuwait, Malaysia, Georgia, and other countries either hosted events at Trump properties or stayed at Trump hotels, including his now-sold Trump International Hotel in Washington, DC. Overall, the government oversight group Citizens for Responsibility and Ethics in Washington (CREW) estimated that Trump benefited from about $13.6 million in payments from foreign governments during his first term as a result.


CREW has argued that Trump’s actions were not just slimy but illegal. In a lawsuit filed shortly after his inauguration in 2017, the organization argued that he had violated the foreign emoluments clause. Attorneys general from Washington, DC, and Maryland made a similar argument in a separate case.


Two appeals courts — the Second Circuit and the Fourth Circuit — allowed those cases to move forward over Trump’s objections. The president appealed to the US Supreme Court just before the 2020 election. When he lost the election to Joe Biden, his lawyers argued that the justices should just wait to rule in the cases until after the inauguration, which would make them moot and allow them to be dismissed without creating a precedent.



That’s exactly what the justices eventually did. As a result, any future litigation would essentially have to start from scratch in challenging any emoluments clause violations by Trump.


Having never suffered adverse legal consequences for his conflicts of interest, Trump upended ethical expectations of the president, as well as those of officials around him, said Lisa Gilbert, co-president of Public Citizen, a left-leaning consumer rights advocacy group. Former Trump adviser Kellyanne Conway, for instance, promoted products marketed by Trump’s daughter, Ivanka Trump, potentially violating federal ethics rules preventing executive branch employees from boosting products on behalf of their friends or associates.


“The fish rots from the head,” Gilbert said. “Seeing that he was very limited in the constraints he placed on himself absolutely emboldened those around him.”

How Trump could profit off the presidency this time around


Trump made an ethics pledge for a second term, but it doesn’t make any commitments in terms of how he might resolve his persistent conflicts of interest stemming from his now even more sprawling businesses. This time, there are many more ways that he could use the presidency for his own personal gain — and potentially be vulnerable to the influence of foreign actors.


“He’s essentially flouting ethics rules and conflicts of interest laws much more blatantly, much more obviously than last time,” Scherb said. “He’s not even trying to hide what he’s doing at all this time.”


Chief among these conflicts of interest is his stake in the publicly traded parent company of Truth Social, the president-elect’s social media platform. Just after he won the election, that stake was worth $3.5 billion. The value of the company’s stock has oscillated in the month since, but Trump’s stake still makes up a large portion of his estimated $6.8 billion net worth.



Never before has a president had such a significant stake in a publicly traded company, and for good reason: Foreign actors could easily and entirely legally buy up its stock, inflating its value and Trump’s net worth. Not only that, they could also “threaten to just dump all their shares at once, which would crater his net worth,” giving them potentially a “huge amount of leverage over the president,” said Jordan Libowitz, a spokesperson for CREW.


The Trump Organization has also recently struck a series of deals worth hundreds of millions of dollars to construct luxury hotels and properties in Saudi Arabia, Oman, and the United Arab Emirates, as well as established a partnership with the Saudi-funded LIV Golf. That has drawn Trump into an even closer relationship with the Saudis, which dates back to 2017 when he made the country stop number one on his first overseas trip as president.


“That’s an easy way for the Saudis to pump money into the Trump org,” Libowitz said.


In September, Trump also launched a crypto venture, World Liberty Financial, alongside his sons and his new Middle East envoy, billionaire real estate tycoon Steve Witkoff.


Libowitz raised concerns about a $30 million investment in the company from Chinese crypto entrepreneur Justin Sun, who is currently fighting fraud charges from the Securities and Exchange Commission. Trump and his family are expected to net roughly $20 million thanks to that deal, according to the BBC. Notably, Trump has recently nominated crypto advocate Paul Atkins to head the SEC.


Scherb said he isn’t expecting robust oversight of these conflicts of interest from the incoming Republican-controlled Congress. But if Trump again faces lawsuits challenging his conflicts of interest, he may employ a familiar legal strategy: delay, delay, delay. That’s what allowed him to run out the clock at the Supreme Court during the first round of emoluments cases.


“Team Trump is expert at delaying litigation, as has been shown through his criminal cases over the last four years,” Gilbert said. “That said, there are going to be a plethora of violations and ways for us to act, so I wouldn’t assume they can avoid them all.”

Nicole Narea covers politics and society for Vox. She first joined Vox in 2019, and her work has also appeared in Politico, Washington Monthly, and the New Republic.

A new US Supreme Court case about religion has a hidden trap for workers

Catholic Charities v. Wisconsin has a sympathetic plaintiff, and alarmingly high stakes for workers.


by Ian Millhiser

Dec 17, 2024

VOX

People carrying Christian religious symbols in front of the Supreme Court building. Chip Somodevilla/Getty Images

One of the Supreme Court’s very first actions after Republicans gained a 6-3 supermajority on its bench was a revolutionary decision expanding religious institutions’ right to seek exemptions from state laws. Since then, the Court has fairly consistently favored Christian litigants who seek such exemptions, or who raise other religious liberty-related claims (though it has not always shown the same sympathy to Muslims with similar claims).

That history means it’s hard to think of a litigant that’s more likely to win the sympathy of most of the justices than Catholic Charities, the party at the center of Catholic Charities Bureau v. Wisconsin Labor & Industry Review Commission. Catholic Charities seeks an exemption from Wisconsin’s law requiring employers to pay taxes that fund unemployment benefits. The Court announced Friday it will hear Catholic Charities.

It is likely that the Court will side with Catholic Charities. The more important question is how the Court might write an opinion ruling in Catholic Charities’ favor, as a too broad opinion could potentially have dire consequences — giving at least some companies legal grounds to mistreat workers, and to pick and choose which laws apply to them, and which don’t.

What’s the legal issue in Catholic Charities?

Like every other state, Wisconsin taxes employers to fund unemployment benefits for workers who lose their jobs. Wisconsin, however, exempts employers that are controlled by a church, and that are “operated primarily for religious purposes,” from these taxes.

Wisconsin’s state supreme court recently ruled that this “religious purposes” exemption applies only to employers that primarily engage in religious activities, such as holding worship services or providing religious education. The court found it does not apply to organizations, like Catholic Charities, that provide secular services like job training or feeding the poor — even if the organization is motivated by religion to provide these secular services.

And can the buildings be fixed?

Notably, Catholic Charities has paid these unemployment taxes since 1972.

Catholic Charities’ lawyers claim that this distinction between religious and secular services violates the First Amendment’s religious liberties protections in various ways. Among other things, they claim that Wisconsin discriminates against religions, like the Catholic Church, that believe in an obligation to “serv[e] those in need without proselytizing,” and that Wisconsin’s law interferes with the church’s right to manage its own affairs.

Are these good arguments? Not really. Wisconsin isn’t discriminating against the Catholic Church. Wisconsin will allow any religious institution, be it Catholic, Protestant, Jewish, Muslim, Buddhist, Hindu, or Satanic, to be exempt from unemployment tax if it hosts worship services or if it teaches lessons about a holy text. It similarly will not give this exemption to one, regardless of its faith, that performs secular charity work.

Nor is Wisconsin interfering with the church’s religious freedoms. The state is not trying to influence the church’s internal affairs in any significant way. The Supreme Court has held that the government should stay out of “strictly ecclesiastical” matters, such as a fight over which of two religious leaders was properly appointed as an archbishop. But Catholic Charities does not involve such a matter of internal church governance, it involves the state’s decision to tax both secular and many religious employers, in order to pay unemployment benefits.

Related:Religious conservatives have won a revolutionary victory in the Supreme Court

And, again, it’s notable that Catholic Charities has complied with Wisconsin’s tax law since 1972. The fact that it now seeks an exemption after decades of compliance suggests that preexisting law does not favor the church’s position — and that the church’s lawyers now think they can win cases that would have lost before less sympathetic panels of justices.

Two ways that the Supreme Court can rule in favor of Catholic Charities

In the likely event that the Supreme Court does rule in Catholic Charities’ favor, there are two ways it can get there. One would be a narrow decision that applies to a small subset of employers. The other could potentially overrule a pair of decades-old precedents, and risks severely disrupting the balance of power between workers and employers.

If the Court wants to issue a narrow opinion favoring Catholic Charities, it could rule that its decision applies only to organizations engaged in charitable work, and make it clear the ruling does not apply to any group engaged in commercial activity. Failing to do so could create a situation like the one the Court tried to avoid in Tony and Susan Alamo Foundation v. Secretary of Labor (1985).

In that case, a religious foundation operated a long list of commercial businesses, including “service stations, retail clothing and grocery outlets, hog farms, roofing and electrical construction companies, a recordkeeping company, a motel, and companies engaged in the production and distribution of candy.” These businesses were staffed with “associates” who were not paid cash wages or a salary, but instead were only provided with in-kind benefits like food, clothing, and shelter. The federal government sued this foundation, alleging that it was in violation of federal minimum wage, overtime, and workplace recordkeeping laws.

A unanimous Supreme Court rejected the foundation’s claim that it was exempt from these laws because it objected to them on religious grounds. Among other things, the Court warned that the foundation’s business competed with other, secular businesses in the marketplace, and that permitting the foundation to pay “substandard wages would undoubtedly give [the foundation] and similar organizations an advantage over their competitors.”

In United States v. Lee (1982), the Supreme Court expressed similar concerns about a religious employer who sought an exemption from paying Social Security taxes. Indeed, Lee announced a blanket rule establishing that “when followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity.”

The Catholic Charities case is distinguishable from both Alamo Foundation and Lee because it does not involve a religious organization engaged in commercial activity. Catholic Charities is a legitimate charity which does a great deal of beneficial work for the needy. It is not a business that operates hog farms or sells candy.

So a win for Catholic Charities could just be a win for religious organizations without commercial interests that want to avoid unemployment taxation. To get to that result, the Court just needs to follow the line these older cases draw between institutions engaged in “commercial activity,” which could not claim religious exemptions from laws governing that activity, and institutions engaged in more traditional charitable work.

However, there is a chance the Court ignores this line in favor of the legal reasoning that drove a more recent decision: In 2014, the Supreme Court held that private, for-profit businesses may, in some instances, seek religious exemptions from federal business regulations.

Related:The Supreme Court is leading a Christian conservative revolution

That case was Burwell v. Hobby Lobby (2014), in which the Court decided that private businesses, whose owners object to some forms of birth control on religious grounds, are exempt from federal rules requiring employers to cover contraception in their employees’ health plans. The Court has only grown more conservative, and more friendly to Christian litigants seeking religious exemptions, since Hobby Lobby. So it is far from clear that this Court will hew to the rule against permitting business to seek exemptions that can distort the market that was announced in Lee.

It is possible to distinguish Hobby Lobby from Catholic Charities, because Hobby Lobby arose under a federal statute that gives particularly strong religious liberty protections to people impacted by a federal law. Catholic Charities, by contrast, asks whether the Constitution allows a religious employer to seek an exemption from a state law.

In any event, if the Court winds up handing down a narrow decision holding that legitimate charities like Catholic Charities, which are directly affiliated with a church, are entitled to certain religious exemptions, then that’s hardly the end of the world. Such a decision would likely only impact a relatively small number of workers, and it would only impact workers who voluntarily chose to do charitable work.

Still, the shadow of Hobby Lobby looms large over this case. And this Supreme Court often hands down haphazardly reasoned opinions that cause needless disruption to settled areas of law. So there’s at least some risk that the Court will hand down a decision that fundamentally undermines much of American labor and employment law by allowing commercial businesses to exempt themselves from a wide range of laws intended to protect their workers.

Trump FTC Pick Casts Lone No Vote on Rule Banning Deceptive Junk Fees

Andrew Ferguson has opposed several major initiatives championed by Lina Khan, including FTC rules banning anti-worker noncompete agreements and making it easier for consumers to cancel subscriptions.

Andrew Ferguson, a Republican member of the Federal Trade Commission, was selected by President-elect Donald Trump to lead the agency on December 11, 2024.
(Photo: Federal Trade Commission)

Jake Johnson
Dec 18, 2024
COMMON DREAMS

President-elect Donald Trump's pick to lead the Federal Trade Commission cast the lone no vote Tuesday against a newly finalized rule banning deceptive junk fees in live-event ticketing and short-term lodging.

The rule, according to an FTC release, "targets specific and widespread unfair and deceptive pricing practices in the sale of live-event tickets and short-term lodging, while preserving flexibility for businesses."

"It does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies," the agency said. "Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees."

FTC Commissioner Andrew Ferguson, Trump's choice to head the bipartisan agency, was the only member to vote against the junk fees rule. In his dissenting statement, Ferguson wrote that his opposition had "nothing to do with the merits" of the finalized rule but was rather a vote against any additional rulemaking by the Biden administration.

"It is particularly inappropriate for the Biden-Harris FTC to adopt a major new rule that it will never enforce, as the final rule will not take effect until many months after President Trump takes his oath of office," Ferguson wrote.

Ferguson has been a consistent opponent of causes championed by FTC Chair Lina Khan, including the agency's rules banning anti-worker noncompete agreements and making it easier for consumers to cancel subscriptions.

Nidhi Hegde, interim executive director of the American Economic Liberties Project, said in response to the newly finalized rule that "banning junk fees is broadly popular across the country because Americans are tired of being tricked by hidden costs that inflate prices and distort competition."

"Finalizing this rule with bipartisan support demonstrates Chair Khan and the commission's commitment to delivering real results for consumers, saving Americans both time and money," said Hegde. "We're pleased to see the FTC work to get this done, and encourage federal and state policymakers to build on this effort to put an end to junk fees once and for all."

With his dissent on Tuesday, Ferguson offered a glimpse of "how he plans to lead the FTC—and how the Trump administration plans to run the independent agencies put in the crosshairs by the Project 2025 plan," political reporter Matt Sledge wrote for The Intercept on Wednesday.

"While calling on the FTC to stop issuing rules until Trump takes office might win favor with the incoming president, it is sharply at odds with positions on the agency's independence that Republicans were putting out just weeks ago," Sledge noted. "As recently as October, the House Oversight Committee released a report dinging Khan for a supposed lack of independence from the Biden administration."

"Since Trump's election, however, Republicans have shown newfound enthusiasm for the idea of bringing independent agencies under executive control," he added. "That vision was laid out in Project 2025."

Since he's already a commissioner at the agency, Ferguson will not require Senate confirmation to become FTC chair once Trump takes office next month.

In his job pitch to Trump's team, Ferguson pledged to use his tenure as FTC chair to "reverse Lina Khan's anti-business agenda" and halt her "war on mergers."

'Slap in the Face to Working-Class Families': Senate Sends Biden $895 Billion Military Bill

"We do not need to spend almost a trillion dollars on the military, while half a million Americans are homeless and children go hungry," said Sen. Bernie Sanders.



Brett Wilkins
Dec 18, 2024
COMMON DREAMS


The United States Senate overwhelmingly passed an $895 billion military funding bill on Wednesday as critics blasted what many called misplaced spending priorities and highly controversial provisions that ban gender-affirming health coverage for children of active-duty service members and prohibit the Pentagon from citing casualty figures issued by the Gaza Ministry of Health.

Senators voted 85-14 for the National Defense Authorization Act (NDAA) for fiscal year 2025. The following senators voted against the legislation: Tammy Baldwin (D-Wis.), Cory Booker (D-N.J.), Mike Braun (R-Ind.), Andy Kim (D-N.J.), Mike Lee (R-Utah), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Rand Paul (R-Ky.), Bernie Sanders (I-Vt.), Adam Schiff (D-Calif.), Debbie Stabenow (D-Mich.), Elizabeth Warren (D-Mass.), Peter Welch (D-Vt.), and Ron Wyden (D-Ore.). Sen. JD Vance (R-Ohio), the vice president-elect, did not vote on the bill.

"We do not need to spend almost a trillion dollars on the military, while half a million Americans are homeless and children go hungry," Sanders explained earlier this month.

The peace group CodePink said it was "disappointed" by the Senate's passage of the NDAA, "which allocates nearly $1 trillion in taxpayer dollars to weapons and warfare while essential services like healthcare, education, food, and housing remain underfunded."

"Half of the budget will go directly to the pockets of private military companies in the form of contracts and weapons deals," the group continued. "On top of the massive topline and the large allocation to private companies, the Pentagon has never been able to pass an audit. Much like every Pentagon budget before, this money will be largely unaccounted for, with very little transparency."

"This budget is a huge slap in the face to working-class families who are struggling to make ends meet," CodePink added

An amendment introduced on Monday by Baldwin and co-sponsored by two dozen of her Democratic colleagues "to remove language that would strip away service members' parental rights to access medically necessary healthcare for their transgender children" failed to pass.

Speaking on the Senate floor on Tuesday, Baldwin said that Congress has "broken" its commitment to the troops "because some Republicans decided that gutting the rights of our service members to score cheap political points was more worthy."

"We're talking about parents who are serving our country in uniform, having the right to consult their family's doctor and get the healthcare they want and need for their transgender children," she added. "Some folks poisoned this bill and turned their backs on those in service and the people that we represent."

Olivia Hunt, director of federal policy at Advocates for Trans Equality, said in a statement Wednesday that "every military family deserves respect and access to essential healthcare—free from the interference of political agendas."

Hunt continued:
Denying lifesaving, medically necessary care to trans members of military families creates profound hardships, forcing service members to make impossible choices between their duty and the health and well-being of their loved ones. Politicizing access to evidence-based healthcare undermines the principles of fairness, dignity, and respect that our nation aspires to. No one should have to choose between their duty and protecting their family.

By passing this harmful legislation, the Senate has failed our service members and their families. This decision prioritizes political gamesmanship over the dignity, rights, and well-being of those who serve our nation and sets a dangerous precedent of governmental overreach into decisions that should remain between doctors and families.

Some advocates including Hunt want President Joe Biden to veto the bill.

"If signed by the president, the passage of the NDAA will mark the first piece of federal legislation to restrict access to medically necessary healthcare for transgender adolescents," Hunt added. "It would be heartbreaking for an administration that has sought to advance the rights of LGBTQI+ Americans more than any other to date, to enact a law that would endanger countless trans youth. We urge President Biden to take a strong stance for trans youth and their families and veto this bill."

Human Rights Campaign president Kelley Robinson said that "President Biden has the power to put a stop to this cruelty."

"He should make good on his promises to protect LGBTQ+ Americans, defend military service members and their families, and ensure this country's politics reflect the best of who we are," Robinson added. "President Biden must veto this bill."

The NDAA also contains a provision prohibiting the Department of Defense from officially citing "fatality figures that are derived by United States-designated terrorist organizations" or governmental entities or organizations that rely upon such data. Critics say the measure is meant to censor the truth about Israel's 14-month assault on Gaza, which has left more than 162,000 Palestinians dead, maimed, or missing. Various United Nations agencies, international charities and rights groups, and even the Israeli military and U.S. State Department have cited Gaza Health Ministry casualty figures, which have been deemed accurate—and likely an undercount—by experts around the world, including Israeli military intelligence and U.S. officials.

"In other words," Security Policy Reform Institute co-founder Stephen Semler said of the provision, "it's effectively a ban on talking about deaths in Gaza."

Sanders Rips Lawmakers Saying 'We Don't Have the Money' While Backing $900 Billion for Military

'They Are Done With the Disrespect': Atlanta Amazon Drivers Join Strike Threat

"If Amazon Teamsters are forced onto the picket line, it's because the company has failed its workforce," said Teamsters general president Sean O'Brien.


An attendee holds a Support Amazon Teamsters sign during a rally with workers and union members as part of an "Amazon Teamsters Day of Solidarity" in support of the unionization and collective bargaining of Amazon delivery drivers at the Teamsters Local 848 on August 29, 2024 in Long Beach, California.
(Photo: Patrick T. Fallon / AFP)

Eloise Goldsmith
Dec 18, 2024

COMMON DREAMS

The International Brotherhood of Teamsters announced Wednesday that workers at an eighth Amazon facility—DGT8 outside of Atlanta, Georgia—unanimously voted to authorize a strike in response to the global retailer's refusal "to recognize their union and begin negotiations for a first contract."

"If Amazon Teamsters are forced onto the picket line, it's because the company has failed its workforce," said Teamsters general president Sean O'Brien in a Wednesday statement. "Amazon workers want to earn a good living, have decent healthcare, and be safe on the job. They are done with the disrespect, and if Amazon keeps pushing them, they will push them to strike."

Workers in three other states had already joined the strike threat. On Tuesday, the Teamsters announced that workers at four California facilities—DFX4, DAX5, KSBD, and DAX8—had voted to authorize a strike, and a day before that workers at the Amazon delivery station DIL7 in Skokie, Illinois authorized a strike. On Friday, December 13, workers at Staten Island warehouse JFK8 and the DBK4 delivery station in Queens announced approval of strike authorizations.

In June, workers at JFK8—who first voted in favor of creating a union two years ago—joined the Teamsters and chartered the Amazon Labor Union (ALU)-IBT Local 1.

The Teamsters have also been organizing drivers drivers who work for Amazon Delivery Service Partners (DSP), such as those at the DGT8 facility. The union argues that "Amazon wields absolute control over the terms and conditions of employment for its delivery drivers" through its DSP program, and therefore the company has an obligation to bargain with the Teamsters. Amazon argues these workers are the employees of its contractors, not employees of Amazon, according to CNN.

Over the summer, the National Labor Relations Board ruled that Amazon is a joint employer for some subcontracted drivers who deliver Amazon packages in California—a win for the Teamsters and those workers.

In response to the potential labor action, an Amazon spokesperson toldABC News last week that the Teamsters "have continued to intentionally mislead the public—claiming that they represent 'thousands of Amazon employees and drivers.' They don't."

Following the NYC votes, the Teamsters gave Amazon until this past Sunday to start talks. The union said Wednesday that "by ignoring the December 15 deadline set by the Teamsters to come to the table and negotiate a contract, Amazon has set itself up to face large-scale labor actions during the busy holiday season."

The strike threat also comes on the heels of a report from the U.S. Senate Committee on Health, Education, Labor, and Pensions, published on Monday, which alleges that Amazon repeatedly ignored or rejected worker safety measures that were recommended internally—and even misleadingly presents worker injury data so that its warehouses seem safer than they actually are.

Amazon has released a statement decrying the report.

'Tired of Amazon's Lies,' California Teamsters Join Strike Threat

Amazon Teamsters in NYC have voted to authorize a strike

Holiday Season Ultimatum From Amazon Workers: Bargain or We Strike!

Don’t Let Saudi Arabia Hide Its Human Rights Abuses Behind the 2034 World Cup


The host of the 2034 international football competition has a gruesome record of violence against migrant workers.

By Yasin Kakande , 

Truthout

December 18, 2024

Migrant workers are seen at a construction site near Riyadh, Saudi Arabia, on March 2, 2024.Jaap Arriens / NurPhoto via Getty Images


Independent journalism like Truthout has been struggling to survive for years – and it’s only going to get harder under Trump’s presidency. If you value progressive media, please make a year-end donation today.

FIFA has officially announced Saudi Arabia as the host of the 2034 World Cup, marking the second time the prestigious tournament will be held in a Gulf Arab nation and following Qatar in 2022. Saudi Arabia’s ambitious plans include building or renovating 15 stadiums, constructing over 185,000 hotel rooms, and executing massive infrastructure projects to welcome the mass influx of spectators.

However, this announcement has sparked widespread criticism, with Human Rights Watch (HRW) labeling the bid as a blatant example of “sportswashing.” By leveraging high-profile events like the World Cup, critics argue that the Saudi regime seeks to divert attention from its troubling human rights record, using sports to launder its international reputation while repression and authoritarian rule persist.

As someone who documented the abuses against migrant workers during Qatar’s 2022 preparations, this new plan for Saudi Arabia presents me with another reason to expose these persistent injustices. My work as a journalist and activist involved visiting construction sites where laborers toiled under scorching heat, denied basic rights like adequate breaks and humane living conditions. Those efforts not only led to articles and the publication of my books, Slave States and The Ambitious Struggle, but also resulted in my eventual expulsion from the region.

My ordeal began when my editor called me into his office, his face heavy with the burden of what he was about to say. “You’ve committed a grave sin” in the eyes of the UAE government, he said, referring to the book I had published without the government’s approval. The authorities were outraged, and they demanded that the newspaper terminate my employment and send me back to Uganda. Although the situation was dire, I felt a sense of gratitude when my editor managed to secure a one-month grace period for me — time to withdraw my children from school, surrender my apartment, and sell my car before I was forced to leave the UAE.

My book The Ambitious Struggle was primarily an autobiographical novel — though it did not solely recount my own story. It wove together the tales of countless migrants who, like myself, had ventured to the affluent Gulf states in search of opportunity. Across the world, migrant workers faced immense challenges, whether in Europe or America, but these struggles were particularly harrowing in the Gulf. The kafala system is a longstanding legal framework in Arab Gulf countries that gives employers near-total control over migrant workers’ employment and immigration status. This system often subjects workers — primarily from poor Asian and African countries — to exploitation and conditions resembling bonded labor, trapping them in cycles of servitude. This system, unchecked, stripped countless individuals of their dignity, forcing them into lives of hardship and submission.

Related Story

Saudi Arabia Is Using Biden’s Visit and Sports-Based PR to Hide Its Crimes
Biden has decided to forego Saudi-related campaign in order to try to reduce gas prices before the midterms. By William Rivers Pitt , Truthout July 12, 2022

International tournaments like the World Cup draw the world’s gaze to host nations, creating a rare opportunity for advocates to shed light on systemic abuses that might otherwise remain hidden.

During my time as a reporter for The National, I reported on the harrowing case of an Emirati sponsor who admitted to police that she had beaten her Sri Lankan maid to death with a wooden cane for being “lazy.” The woman’s lifeless body was found discarded in a bathtub, her skull fractured, her teeth broken, and her arms and legs marred with bruises — a brutal testament to the inhuman treatment that ended her life. In another heart-wrenching case, I uncovered the murder of an Ethiopian maid at the hands of an Arab family, who callously burned her body before abandoning it in Abu Dhabi’s Ajban desert. In another instance of abuse, a 23-year-old Ethiopian maid in Dubai was burned with cooking oil by her Arab employer, an act of cruelty that still haunts me to this day.

These stories, unfortunately, were not isolated incidents. The catalogue of abuse seemed unending, not just in the UAE, but across the Gulf region, making these countries some of the most perilous places to be a domestic worker. In Saudi Arabia, a 23-year-old Indonesian maid, Sumiati Binti Salan Mustapa, was taken to hospital with broken bones and severe burns, after her employer pressed a hot iron to her head and stabbed her with scissors. The employer was initially sentenced to three years, but she was swiftly acquitted in appeal, her crime overshadowed by claims of self-defense and the impenetrable protection granted by the kafala system.

In another horrific case, a Sri Lankan maid was found with 24 nails and a needle embedded in her body, the result of unimaginable torture. Some maids, like Ruyati binti Sapubi from Indonesia and Rizana Nafeek from Sri Lanka, were executed (beheaded) after rushed and unjust trials for alleged crimes, such as murder. The legal process was often swift and biased, allowing employers to exploit the kafala system to shield themselves while denying the accused a fair defense.

These stories resonated deeply with me, as I was a migrant myself. While my position as a journalist afforded me a certain level of status and privilege — allowing me to retain control of my own passport and those of my family, and enabling me to change jobs — I was still a member of the migrant community. All my friends, and many of my sources for stories, were also migrants. It was because of this shared experience that I dedicated my profession to exposing the atrocities suffered by migrant workers and bringing these injustices into the public eye for scrutiny.

However, it wasn’t long before the UAE government clamped down on my efforts to report and document these abuses, all in the name of protecting the country’s image and safeguarding the political economy. The subtle censorship filtered down through my editors, who began to reject my daily pitches exposing the violence and exploitation that plagued the migrant workforce — from unsafe, unregulated working conditions and squalid housing to unpaid wages, rape, torture and murder. It became increasingly clear that the powers that be would not tolerate anything that risked casting a shadow over the country’s reputation.

One particular story that I pitched, which was ultimately rejected, deeply affected me. It was the case of Khurshid, an Indian worker who perished in a petrochemical fire at the National Paints factory in Sharjah.

Migrant laborers who have been silenced and kept out of media stories are now standing up for their rights, often at immense personal risk.

Khurshid lived in Sharjah with his brother, Tabreer Ahmed. On that tragic day, he had gone to work as usual, but disaster struck when the factory caught fire. He had been assisting in extinguishing the blaze when he lost his life. When Khurshid didn’t return home that evening, his brother went to the charred remains of the factory in search of answers. Speaking to Khurshid’s colleagues, he learned that his brother had died in the fire, but when he approached the factory owners, they flatly denied that any of their workers had been killed. In fact, they claimed they had never employed Khurshid at all. Desperate, Tabreer reached out to me for help, and I joined him in the search for his brother and the truth. We visited the Sharjah Civil Defence, the police — but each denied there had been any fatalities. It wasn’t just Khurshid. There were two other families who had also lost sons in the blaze, and I met with them as well.

I presented all these details to my editors, only to be told that there was no story to publish if officials were denying the deaths. Two months later, the bodies of three workers were discovered on site by other laborers clearing the premises. I was among the first reporters called to the scene, and I attempted to take photographs. But when the police arrived, they deleted my images and confiscated my camera. My editor was furious that I had insisted on pursuing the story, yet when he learned that rival publications were now chasing it as well, he begrudgingly agreed to publish a small piece that downplayed the three men’s deaths.

That incident was the turning point for me. It spurred me to write my first book, an attempt to chronicle every untold story I was unable to publish in the newspaper I worked for. These stories deserved to be written, even if no one was willing to print them.

International tournaments like the World Cup draw the world’s gaze to host nations, creating a rare opportunity for advocates to shed light on systemic abuses that might otherwise remain hidden. Even after my expulsion from the Gulf silenced my voice in the region, the flame of activism has only grown stronger. Migrant laborers who have been silenced and kept out of media stories are now standing up for their rights, often at immense personal risk. Through protests, social media and acts of defiance, they are making their voices heard, challenging a system that once thrived on their silence.

As a journalist and activist, I view Saudi Arabia’s successful bid to host the 2034 World Cup as more than a sporting achievement; it is another opportunity to expose human rights abuses on a global stage.

This article is licensed under Creative Commons (CC BY-NC-ND 4.0), and you are free to share and republish under the terms of the license.


Yasin Kakande, is an international journalist, a TED Global Fellow, and the author of a number of critically acclaimed nonfiction books offering a fresh perspective on immigration and geopolitics, including Why We Are Coming and Slave States. As a migrant from Uganda now based in the US. following asylum, his journalism career spans international outlets including The New York Times, Thomson Reuters, Al Jazeera, The National, and The Boston Globe. His latest book, A Murder of Hate, is out now.

NJ Activists Brace to Fight Trump Immigration Agenda After Setbacks Under Biden


Activists who fought ICE detention under Trump and Biden are bringing their experience into Trump’s second presidency.

By Sam Carliner ,

Truthout

December 18, 2024

Immigrants take the oath of allegiance to the United States during a naturalization ceremony on February 1, 2023, in Newark, New Jersey.John Moore / Getty Images

One month after Donald Trump was reelected president following a campaign where he promised mass deportations, The Guardian published an investigation revealing how outgoing President Joe Biden is laying the groundwork for potential expansion of Immigration and Customs Enforcement (ICE) activity. The report shows that during Biden’s final year in office, ICE has been working to extend contracts with private prison companies to expand detention in 14 locations across the United States.

Immigrant rights organizers in New Jersey were already anticipating such an expansion. New Jersey serves as a unique gauge of the immigrant rights movement more broadly due to its large immigrant population and its advances and reversals of legislation against ICE detention in recent years. Additionally, the state is being viewed by the federal government as a potential hub for ICE expansion. In June 2024, news began circulating that ICE was eyeing Newark as the site of a new jail to hold immigrants. In November, following the election, the ACLU revealed that through the Freedom of Information Act they had found that ICE’s capacity for detention in New Jersey could expand by 600 beds spanning two facilities in the cities of Elizabeth and Trenton. (Beds are the unit most facilities use to measure their capacity for detention.)

This is a setback for the state where years earlier, a diverse mix of activists from socially progressive suburbs and cities with large immigrant communities united around the demand to “Abolish ICE” during the first Trump administration. The organizing carried over into Biden’s term and in 2021 the activists won a state law which “[p]rohibits State and local entities and private detention facilities from entering into agreement to detain noncitizens.” The passage of the law led to the closure of three county-run ICE detention facilities throughout New Jersey.

The recent prospects for ICE expansion in New Jersey are the result of a federal judge’s ruling in 2023, which partially reversed the hard-won ban on private ICE detention contracts. At the time, the judge behind the ruling described the state law as “a dagger aimed at the heart of the federal government’s immigration enforcement mission and operations,” a testament to the national significance of the activity in New Jersey. The Biden administration publicly backed efforts by private prison company CoreCivic to reverse the ban. As a result of the ruling, the Elizabeth Detention Center (EDC), the state’s last standing ICE jail, which is run by CoreCivic, remains open.

Like immigrant rights activists throughout the country, New Jersey organizers are concerned about the Trump administration’s upcoming attacks, but having seen gains advance and then reverse under the Biden administration, many feel their fight remains consistent regardless of who holds the presidency.



One of the groups at the forefront of fighting for immigrant rights in the state is the New Jersey Alliance for Immigrant Justice (NJAIJ), a coalition of more than 50 organizations. The coalition’s executive director, Amy Torres, told Truthout that Trump’s election has not changed the fundamental nature of their work.

“The truth is we’ve been doing the same work we’ve done all along, fighting for state and local policies that affirm immigrants belong in New Jersey, that they have a right to be here, and that they have their fair share of resources as a result,” Torres said.
Immigrant Rights Organizing Surged Under Trump

Many of New Jersey’s most dedicated immigrant rights activists were organizing long before Trump’s 2016 campaign brought the issue to national attention with extreme xenophobic rhetoric and policies. Kathy O’Leary, a member of the progressive Catholic organization Pax Christi, began organizing in solidarity with immigrants under the George W. Bush administration. She explained that much of the local organizing activity is shaped by which party holds the presidency.


“Those who oppose immigration have been very successful at changing the narrative even despite the facts on the ground.”

“Organizing in a blue state under various administrations, it’s easier to get traction when there’s a Republican administration in D.C.,” O’Leary said. According to her, much of New Jersey’s wealthier, suburban population pays less attention to attacks on oppressed communities when Democratic presidents are behind them.

Capitalizing on that surge in activity under the first Trump administration, immigrant rights organizers in New Jersey and New York formed the coalition Abolish ICE NY-NJ with a goal of ending immigrant detention in both states. Tania Mattos, a member of the coalition from Queens, spoke about the success of the campaign.

“We were able to make a lot of gains in closing county contracts with ICE and also making it something believable … that immigration detention should not exist,” Mattos told Truthout. The Abolish ICE NY-NJ coalition was at the forefront of getting New Jersey to ban private ICE contracts.

Shortly after the coalition formed in 2019, the brutal police killing of George Floyd in 2020 reignited a mass movement against racist policing. This created more space for many immigrant rights activists to rally opposition to the carceral system. Brett Robertson, a member of the North Jersey chapter of the Democratic Socialists of America (DSA) as well as the DSA’s Abolition Working Group, believes the 2020 uprising played a consequential role in advancing the fight against ICE detention.

“There is on some level an understanding that we live in a very oppressive carceral state,” Robertson said.

Fighting in the Face of Setbacks

By the time New Jersey activists won the state law, the surge in opposition to immigrant detention under Trump had begun to die down. Even after the ban was passed, EDC stayed open because CoreCivic had renewed a contract with the facility before the passage of the ban. Despite this, some organizers who had stayed active through Biden’s first year in office began to focus on issues other than immigrant detention. Robertson believes this was a mistake and played a role in how easily the federal government was able to challenge the state law against ICE contracts.

“Largely I attribute it to a victim of [the movement’s] successes,” Robertson said. “I was never of the mind that like the job was done. I feel like a lot of people thought that.”

As Todd Miller reported in The Nation, border security contracts issued to private companies reached record levels under Biden. Additionally, ICE and Customs and Border Protection contracts with the private industry reached a value of $23.5 billion under Biden’s first three years in office, surpassing that spent on similar contracts during Trump’s entire first term. According to the ACLU, the average amount of people in ICE detention increased while Biden was president from an average of 15,444 people in detention each day in January 2021, to an average of 30,003 people in detention each day by July 2023.

O’Leary believes that the Democratic Party has played a role in the loss of momentum by promising to fight for immigrant rights so activists will vote for them, but doing little to deliver on those promises once they’re elected.

“The Democrats have been using immigration, and the potential of immigration reform as this carrot. They are the party of the carrot and the Republicans are the party of the stick,” O’Leary said. “The Democrats don’t want to solve this issue either. They want to keep talking about it.”

New Jersey is not the only “blue state” to see its advances erode during the Biden administration. A California ban on private prison detention was stopped by a federal appeals court in 2022, and Washington state legislation to guarantee more “state oversight” of a private detention center was also blocked by a federal judge earlier this year.

Public anti-immigrant sentiment also appears to be rising across the country, driven in part by political fearmongering. According to a Rutgers-Eagleton poll of New Jersey voters, 9 in 10 of voters polled said they support greater border security measures, and a plurality of 49 percent of those polled expressed support for mass deportations. In New York, Democrats including Gov. Kathy Hochul and New York City Mayor Eric Adams are already promising to aid Trump in his attacks on immigrants.

Mattos said these setbacks show the importance of building support for immigrants at the grassroots. “It strengthens our belief that true change comes from communities and people, neighborhoods and people on the ground, and really we’re gonna have to push again and really organize together to show the real consequences,” Mattos said.

Torres of the NJAIJ expressed similar sentiments. “Those who oppose immigration have been very successful at changing the narrative even despite the facts on the ground,” Torres said. “I think once they see some of these policies play out under the Trump administration, hopefully people realize and understand what that policy is actually going to look like in practice.”

Currently, NJAIJ is lobbying the state government to codify the Immigrant Trust Act, which would protect individuals from unnecessary collection or disclosure of their immigration status. In New York, organizers like Mattos are pushing for their state to pass the Dignity Not Detention Act, which they hope can put an end to state-run immigrant detention.

O’Leary hopes that with Trump returning to office some of the people who tuned out for the past four years will once again become active.

“However, many days we have before the inauguration will give us an idea of where this is heading and whether or not the grassroots wake up,” O’Leary said. “[The grassroots] were told to not organize, to not criticize Biden, and anytime you criticized Biden you were told ‘Well if you criticize Biden you’re gonna get Trump.’ Well now we’ve got Trump.”

AMERIKA

How billionaires have sidestepped a tax aimed at the rich

Photo by Daniel Lloyd Blunk-Fernández on Unsplas

Paul Kieland
Pro Publica

December 18, 2024

Fourteen years ago, Congress set out to remedy a basic unfairness in the tax code. The tax that funds Medicare, because it’s aimed mainly at wages, hits even the poorest American workers. But the wealthy could easily avoid paying their share. So lawmakers created a new type of Medicare tax to capture the kinds of income the rich often enjoy: interest, dividends and capital gains from investments.


A host of billionaires — sports team owners, oil barons, Wall Street traders and others — have managed to avoid paying it, ProPublica found.

To study who was actually paying the new tax, ProPublica analyzed its trove of IRS data containing information on thousands of the wealthiest Americans. We identified 17 people who, in the first six years of the law, 2013 through 2018, each shielded at least $1 billion in capital gains from the tax. Together, this small group, by collectively exempting more than $35 billion, saved about $1.3 billion in taxes.

Most members of the group were able to sidestep the tax because of a huge gap written into the law, which allows owners to exempt gains from the sale of their businesses. They include Donald Sterling, the disgraced former NBA team owner who avoided the tax when he sold the Los Angeles Clippers to Steve Ballmer for $2 billion in 2014.

But others eluded the tax in ways that raise questions about how the law is being enforced.

One clear target of the new tax was investment professionals who rack up capital gains. Yet ProPublica found examples in the IRS data of financiers who claimed outsize profits but did not pay the tax. Tax experts contacted by ProPublica said they couldn’t think of a legitimate reason why those individuals were exempt.

Lynn Tilton, a hard-charging private equity manager, who has been dubbed the “diva” of distressed asset investing, is one example. The biggest avoider of the new tax in the data was Jeff Yass, the Republican megadonor who sits atop one of the most profitable trading firms in the world.

Both Medicare tax and its twin, the Net Investment Income Tax, as the new levy was called, are easily avoided by business owners. Last week, ProPublica revealed how some of Wall Street’s most powerful people use a loophole to avoid paying Medicare tax on their share of their firms’ profits. Eliminating these ways around the taxes, as House Democrats proposed to do in a 2021 bill, would raise an estimated $250 billion over 10 years. Medicare, the federal program that provides health care for some 68 million seniors, is projected to run short of money in 2036.

“It becomes a pretty glaring problem when you have ultra-rich individuals layering loopholes on top of loopholes to dodge both the NIIT and Medicare taxes,” said Sen. Ron Wyden, chair of the Senate Finance Committee, in a statement. “To the nurse or the janitor whose taxes come straight out of their paychecks, it’s ridiculous to see these examples of fabulously wealthy individuals enjoying huge windfalls and continuing to avoid paying a fair share.”

The NIIT, together with its holes, entered the tax code as part of the Obama administration’s push to pass the Affordable Care Act. In need of ways to help pay for a major expansion of government health care subsidies, Democratic lawmakers embraced the idea of this new tax on investments.

The aim was to level the playing field. All workers pay at least 2.9% in Medicare taxes on their wages, an amount usually deducted automatically from their paychecks. The NIIT, for high-income taxpayers (defined as $250,000 and up for a married couple), subjected investment income to a 3.8% rate. That mirrored the Medicare tax rate that workers earning over the same threshold paid under the new law.

But while the tax was a bold step, the ACA’s lead negotiators had navigated various interest groups to piece the bill together and were afraid of whom their new tax might provoke. Behind closed doors, Democratic leaders hashed out a compromise that carved active business owners out of the tax.

The small-business owner is a hallowed figure on Capitol Hill, and an army of lobbyists and trade groups stand ready to mobilize against any bill that arguably disadvantages small businesses. The Democrats crafting the NIIT were wary of such a campaign.

Democrats wanted to avoid “a swing state Dem being attacked for punishing an entrepreneurial hard-working person” with the tax, said Robert Andrews, a former Democratic U.S. representative from New Jersey who was among the negotiators.

The phrase “small business” conjures images of Main Street grocers, plumbers or garage-based startups, but the types of business that benefit from the carve-out range from small to enormous. There are millions of passthrough businesses, so called because the income earned and taxes owed pass through to the owner. Only a small number of such businesses are worth $100 million or more, yet the owners of the largest businesses are likely the prime beneficiaries of the exemption.

Owners of passthrough businesses with significant revenue already enjoy plenty of tax perks, as ProPublica showed in previous stories. The NIIT carve-out added to that list. The carve-out meant that when they sold their businesses, or portions of them, they’d be spared any extra charge beyond income tax on their capital gains. They’d pay a lower tax rate on those gains than on virtually any other form of investment.

“What we’re left with in terms of these gaps are nonsensical results,” said Steve Rosenthal of the left-leaning Tax Policy Center.

When Sterling sold the LA Clippers, virtually the entire $2 billion sale price was taxable capital gain, because he’d bought the team for $12.5 million in 1981. Sterling, who made his money in LA real estate, did not give the impression of someone who enjoyed owning an NBA franchise. He was notorious for deriding his own players and underinvesting in the team. But it was only a scandal, a leaked private recording in 2014 of him urging his girlfriend not to be seen “associating with Black people,” that forced him to sell after the NBA banned him.

It was the biggest payday of Sterling’s life by far. He paid substantial income tax on the capital gain from the sale, but the exemption from the NIIT saved him around $70 million. Neither Sterling, who is 90, nor his tax preparer responded to requests for comment.

In ProPublica’s database, most of the biggest winners from the NIIT carve-out were owners, like Sterling, selling their privately held businesses. Among those exempting gains of $1 billion or more were four moguls from the fossil fuel industry spared the extra tax when they sold off portions of their oil, natural gas or coal empires. The carve-out saved each of the four between $45 million and $87 million in taxes.

The NIIT carve-out was huge and costly, but it didn’t apply to all business owners. Owners who are merely passive investors in a business, for instance, must pay the NIIT on that income. And Congress singled out securities traders as clearly subject to the tax.

The NIIT was targeted at “high-income people who lived off investments,” remembered Andrews. It was designed to hit “someone who is day-trading, someone who is arbitraging the market,” he said, referring to the practice of exploiting mismatched prices of securities, like stocks or bonds.

That could serve as a loose description of what Yass’ firm, Susquehanna International Group, is renowned for. Yass, a former professional poker player who thrives on taking well-calculated risks, amassed an army of traders at Susquehanna to outwit the market. They are hired to execute computer-driven strategies that seize on advantages at the microsecond level and search for situations that, through a cleverly executed arbitrage, they can exploit. The firm deals extensively in options as well as other securities. Susquehanna has been immensely profitable; Forbes estimates Yass’ fortune at $50 billion.

From 2013 through 2018, Yass reported a total of $9 billion in capital gains on his taxes, according to ProPublica’s IRS trove, but excluded $8.5 billion of those gains from the NIIT. That saved him more than $300 million in taxes during those years. Two of Yass’ Susquehanna partners, Arthur Dantchik and Joel Greenberg, also excluded billions in gains from the NIIT during that time: $2.1 billion and $1.2 billion, respectively. Together, they saved about $120 million.

In 2013 and 2014, Yass managed to wipe out not only his gains for the purpose of the NIIT but also hundreds of millions in interest and dividend income. In each of those years, his tab for a tax crafted to target traders like him amounted to $0.

Tax experts contacted by ProPublica struggled to explain how Yass and his Susquehanna partners could justify excluding their firm’s gains from the NIIT.

“Although the principal here is active in the business, the business is trading in financial instruments,” said Andrew Needham, a former attorney with Cravath, Swaine & Moore who has written extensively on how tax laws apply to hedge funds and other financial firms and now teaches at New York University School of Law. That means Yass’ gains should be subject to the NIIT, he said. “I don’t know what his theory is.”

A Susquehanna spokesperson, speaking on behalf of Yass and his partners, declined to respond to a list of questions.

Yass, a longtime libertarian, gave $95 million last election cycle to conservative groups, especially the antitax Club for Growth, putting him among the largest political donors in the country.

Yass has a history of taking bold positions on his tax returns. The IRS recovered more than $75 million from Yass after one protracted audit fight that spilled into court, and Susquehanna is currently in court fighting another audit. In an earlier story, ProPublica detailed how Yass and Susquehanna engineered the firm’s investments to transform income normally taxed at the high, ordinary rate into income taxed at the 20% long-term capital gains rate. Those maneuvers saved Yass over $1 billion in taxes.

ProPublica analyzed the tax data of hundreds of the wealthiest hedge fund and private equity managers to understand how they were complying with the NIIT. Huge, blanket exemptions among finance moguls like Yass were rare, we found, but when they did occur, the cost to the Treasury was considerable.

Tilton won fame on Wall Street as the brash, stiletto-wearing head of her own investment firm. She specialized in distressed investing: Her funds purchased both the debt and equity of over 40 struggling companies, then blended those investments together and sold them to investors. Tilton sought out publicity — with mixed success. The Sundance Channel developed a reality show starring Tilton titled “Diva of Distressed,” but it never made it past the pilot. In 2011, she tried to convince Forbes that she was a billionaire, but the magazine disagreed, estimating her wealth at around $830 million.

Tilton has left a trail of unhappy investors. She’s been sued for fraud and racketeering, for misleading investors and pillaging the portfolio companies for her own profit. Tilton, for her part, maintained that she’d fully briefed investors and denied taking any improper compensation. She successfully fought off three major lawsuits, including one from the Securities and Exchange Commission.

Tilton’s investment funds were passthrough businesses set up so that she, not her investors, would bear the tax burden. In most years, there wasn’t much of a burden to bear. But in 2016, the funds posted a $1.4 billion capital gain. While a huge gain sounds like a good thing, for Tilton it meant a big tax bill.

The income tax hit was significant for her, about $162 million after deductions. She complained about having to pay the bill in one of the lawsuits against her firm, calling it a tax on “phantom income.” As she put it later at the trial, “But let’s be clear, I was paying taxes for money received by the noteholders.”

While Tilton did pay income tax on that big gain, she claimed that the entirety of the $1.4 billion was exempt from the NIIT. That saved her about $50 million in tax.

An attorney for Tilton declined to comment for the record but said that Tilton had correctly exempted her gains because she had actively managed the funds’ investments in the portfolio companies.

Tax experts contacted by ProPublica disagreed. Brian Galle, a professor at Georgetown Law and former federal prosecutor of tax crimes, said Tilton appeared to have invented a category of financier who is not subject to the tax. The tax clearly applies to passive investors and traders, he said. Tilton appeared to be claiming to be somewhere in between, an “active” investor but not a trader. While there is some ambiguity in the regulations surrounding the law, he said, it was a “ridiculous argument.”

Tilton, like Yass, has had her battles with the IRS. From 1996 through 2013, all but two of her tax returns drew audits, the largest change leading to $1.5 million in additional tax on one year’s return. But ProPublica’s IRS data shows no active audits of Tilton’s later returns as of mid-2020.

One reason might be the devastating budget cuts to the IRS that started in 2011 and reduced enforcement staff by a third. The agency did glance at Tilton’s 2016 return, according to the data, but concluded that, although the return had “audit potential,” no agents were available to examine the return.

Similarly, there’s no indication the agency has scrutinized Yass’ NIIT obligations. As of mid-2020, the agency did not have an open audit of his tax returns for 2013 through 2017. An audit of his 2018 return was in the early stages. The IRS declined to comment.

In just the last year, the IRS began to regain some of its lost enforcement muscle, hiring thousands of new revenue agents with funds from the 2022 Inflation Reduction Act. However, it’s unclear how long that resurgence will last. Congressional Republicans have continually vowed to clawback the extra enforcement money. The incoming Trump administration has supported that goal while touting a new round of tax cuts, in particular for business owners.

'Tremendous uncertainty': Economists say new tariffs could lead to double-digit unemployment

Image via Walmart/Flickr.

Carl Gibson

December 17, 2024

ALTERNET

The U.S. economy is currently healthy by all measurable metrics including unemployment rate, inflation rate, consumer confidence and GDP growth. But some economists fear that may change if President-elect Donald Trump follows through on one of his core campaign promises.

CNN reported Tuesday that conversations about "stagflation" (the official economic term for a combination of stagnant economic growth paired with high inflation seen in the U.S. between 1974 and 1981) are circulating among leading economists. JPMorgan CEO Jamie Dimon warned in May that the U.S. economy could be headed for a period of stagflation in the coming years based on President Joe Biden's economic response to the Covid-19 pandemic

"I look at the amount of fiscal and monetary stimulus that has taken place over the last five years — it has been so extraordinary; how can you tell me it won’t lead to stagflation?" Dimon said.

But now, as Trump prepares to take office next month while promising to impose 25% tariffs on goods imported from Canada and Mexico and another 10% on Chinese goods, fears of stagflation are once again flaring up. Federal Reserve Chairman Jerome Powell said earlier this year that the period of stagflation that followed the Saudi Arabian oil embargo in the 1970s was marked by "10% unemployment" along with "high single-digits inflation and very slow growth."

As CBS News reported last month, Trump's tariff would cause a significant spike in the prices of many popular consumer goods imported from overseas, like laptop computers, video game consoles and smartphones. iPhones, which are made in China, could see a price increase of more than $200 per device if Trump's proposed tariff is imposed. But business leaders are hopeful that Trump will put a timeline on his tariffs going into effect that will allow companies to reorient their supply chains in order to avoid large price hikes.

“These tariff increases, if implemented shortly after Inauguration Day, would impart a modest stagflationary shock to the U.S. economy, boosting our inflation forecasts in the near term, but also dampening our economic growth outlook,” Wells Fargo economists stated after the 2024 election. “Should this occur, the probability of a stagflation scenario in our growth model would likely increase.”

“That said, there is tremendous uncertainty about future potential policies,” the bank added.

Click here to read CNN's report in its entirety.

'Prone to crises': Trump’s 'sweeping policy changes' could make economy dangerously unstable

New York City's financial district in 2012 (Wikimedia Commons)

Alex Henderson

December 18, 2024

During his 2024 presidential campaign, Donald Trump repeatedly blamed President Joe Biden and Vice President Kamala Harris for inflation in the United States. His messaging worked: Trump pulled off a narrow victory, defeating Harris in both the electoral and popular votes.

Trump didn't win by a "landslide," as "War Room" host Steve Bannon, Rep. Rick Scott (R-Florida) and other far-right Trump supporters have been claiming. The president-elect, according to the Cook Political Report, won the popular vote by roughly 1.5 percent. But he successfully used voters' anxiety over inflation to his advantage.

Nonetheless, the U.S. has had low unemployment rates under Biden's presidency. According to the U.S. Bureau of Labor Statistics (BLS), unemployment was only 4.2 percent in November.

In an article published on December 18, the New York Times' Ben Casselman emphasizes that Trump is inheriting a "stable" economy from Biden/Harris — and addresses fears that the stability coud disappear.

"After five years of uncertainty and turmoil," Casselman explains, "the U.S. economy is ending 2024 in arguably its most stable condition since the start of the coronavirus pandemic. Inflation has cooled. Unemployment is low. The Federal Reserve is cutting interest rates. The recession that many forecasters once warned was inevitable hasn’t materialized."

The Times reporter continues, "Yet the economic outlook for 2025 is as murky as ever, for one major reason: President-elect Donald J. Trump. On the campaign trail and in the weeks since his election, Mr. Trump has proposed sweeping policy changes that could have profound — and complicated — implications for the economy."

Possible Causes for concern, according to Casselman, include new tariffs, mass deportations, and regulation changes that could "make the financial system more prone to crises over the long run."

Michael Gapen, chief U.S. economist for Morgan Stanley, told the Times, "It is a very uncertain outlook, and most of that uncertainty comes from potential changes in policy…. There's a wide range of potential outcomes, and a base-line outlook isn't quite as useful as it is in normal times."

Economist Michael Strain of the American Enterprise Institute warns that changes in "trade and immigration policy could be extremely disruptive to the economy" and lead to slow growth combined with high inflation.

Strain told the Times, "In this scenario, the price of imported goods, the price of groceries, the price of restaurant meals, the price of homes all shoot up dramatically."

Read Ben Casselman's full New York Times article at this link (subscription required).