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Friday, December 05, 2025



America Needs To Tax Its Own ‘Second Estate’: Billionaires

The United States has no nobility, according to our Constitution. But our tax code does protect the very rich.


Google CEO Sundar Pichai and Elon Musk attend the inauguration of Donald Trump at the US Capitol Rotunda on January 20, 2025 in Washington, DC.
(Photo by Julia Demaree Nikhinson - Pool/Getty Images)
Common Dreams

Pre-revolutionary French aristocrats—the “Second Estate”—didn’t pay taxes. Amazingly, America too has a second estate, billionaires who pay virtually no taxes. In her very outstanding recent book, law professor Ray D. Madoff shows how they get away with this.

The United States has no nobility, according to our Constitution. But our tax code does protect the very rich.

Federal taxes on income and estates—intended to fund government and prevent development of a hereditary financial aristocracy—were enacted early in the 20th century and originally worked well.

But since about 1980, the estate tax—infested with loopholes—has been nearly abolished for practical purposes and now produces trivial income.

Madoff wants to get rid of the ability of ultra-rich people—billionaires—to avoid having any taxable income in the first place.

Madoff suggests that the estate tax should be completely eliminated because its existence deceives the public about what is really going on. People falsely think that billionaires who pay no federal income tax will at least pay the estate tax when they die. In fact, they are paying neither kind of tax.

Billionaires avoid the income tax by arranging to have no taxable income.

Before 1982 ultra-rich people could not avoid paying income tax. Their income consisted of dividends and capital gains harvested by selling shares of stock, the price of which had increased. Dividends and capital gains are taxable income.

But in 1982 federal regulators weakened a rule prohibiting corporations from buying back their own stock. Since then, many corporations have used profits to buy back stock shares instead of issuing dividends. With fewer shares of stock outstanding and the value of the corporation increasing, the value of each share of stock began increasing dramatically.

What used to be taxable dividends turned into large capital gains benefiting the stock owners, including very rich ones. If shareholders need cash and sell appreciated stock, of course they would owe income taxes on the capital gains (selling price of the stock minus how much the shares cost them). But capital gains are taxed at a much lower rate than normal income like salaries, bank interest, and returns on bonds.

As Madoff points out, however, billionaires need not sell any stock to get cash to live on. Instead, they can borrow the money, using their stock as collateral. Borrowed money is not taxable income, so they owe no tax while living extravagantly.

And when they die, the stock they bequest to their heirs gets a stepped up “basis,” so if their heirs sell the stock they will owe no taxes because the stepped up basis leaves no taxable capital gains.

And inherited money is not considered taxable income. Someone who earns $50,000 pays significant income (and payroll) taxes on it, while someone who inherits $1 billion pays no income or payroll tax on it.

Madoff rightly objects to this situation, but she is not arguing that we should “soak the rich” with higher income tax rates at the top. She points out that there are two kinds of “rich” people. One is the working rich, skilled professionals earning high salaries and, usually, already paying very high taxes. A high percentage of all income tax receipts come from these people.

Increasing the high tax rates these “rich” people are already paying would produce insignificant extra revenue for the government.

Instead, Madoff wants to get rid of the ability of ultra-rich people—billionaires—to avoid having any taxable income in the first place. She wouldn’t tax them while they are alive, but would tax whoever inherits from them.

Rather than trying to fix the estate tax, Madoff would abolish it, eliminate the stepped up basis for inherited stock, and make inherited money and other gifts received taxable income for the recipients.

Assuming an exemption for small gifts (to allow birthday presents and the like), this could be a reasonable reform. It would bring in very large amounts of taxes while reducing today’s extreme economic inequality.

For further details, see Ray D. Madoff, The Second Estate: How The Tax Code Made An American Aristocracy. This is one of the two best books I have read since retiring in 2000.



 

Wind Farm to Power Amazon and Google Sends First Power to German Grid

German offshore wind farm
Germany's Borkum Riffgrund 3 started feeding power and when completed it will send power to major corporations including Amazon and Google (Orsted)

Published Dec 4, 2025 9:47 PM by The Maritime Executive

 

The Borkum Riffgrund 3 offshore wind farm started feeding its first power to the German grid on December 3. The wind farm marks another milestone both for Germany and the EU, becoming the largest offshore wind farm in Ørsted’s German portfolio and one that has contracted more than four-fifths of its power with long-term corporate power purchase agreements.

Located about 45 miles off the German coast in the North Sea, the project is being developed in a partnership between Ørsted and Nuveen Infrastructure.  When it is fully commissioned in the first quarter of 2026, it will have a total capacity of 913 MW, making it just slightly smaller than EnBW’s He Dreith (currently Germany’s largest) and among a crop of new large offshore wind farms that are planned to reinvigorate the EU’s drive to renewable energy.

“The generation of the first power at Borkum Riffgrund 3 is both a significant landmark for German offshore wind and our commitment to accelerating the EU energy transition,” said Jordi Francesch, Managing Director, Renewable Energy Investments at Nuveen Infrastructure.

The companies note that the project illustrates the depth of the EU supply chain for renewable energy. The wind turbines and foundations came from Germany and Denmark, cables from Germany and France, and installation vessels from the Netherlands and Belgium. Operation and maintenance for all Ørsted’s German offshore wind farms is carried out from Norden-Norddeich and Emden in East Frisia.

The project will consist of a total of 83 wind turbines, each with a rated capacity of 11 MW. The companies note that when it is fully operational, it will produce the same amount of electricity that a large city uses every year.

Borkum Riffgrund 3 is supported by several long-term corporate power purchase agreements (CPPA), which they highlight create long-term price security for the project developer and for the customers. Offtake agreements ranging between 10 to 25 years and totalling 786 MW have been entered into with Amazon (350 MW), BASF (186 MW), Covestro (100 MW), Energie-Handels-Gesellschaft/REWE Group (100 MW), and Google (50 MW). 

The project is also the first offshore wind farm to be built by Ørsted in Germany without an offshore substation (OSS). The new connection concept provides a direct connection between the wind turbines via a 66 kV connection to the DolWin epsilon offshore converter platform, installed and operated by the German transmission system operator, TenneT.

As it completes commissioning, Borkum Riffgrund 3 joins a growing portfolio of German offshore projects. Earlier this year, Ørsted and Nuveen Infrastructure’s other jointly owned offshore wind farm, Gode Wind 3, was fully commissioned. The project is located close to Ørsted’s existing wind farms: Borkum Riffgrund 1 and 2 and Gode Wind 1 and 2. With these recent additions, Ørsted's installed offshore wind power capacity in Germany increases to around 2.5 GW in early 2026, making the company the market leader in Germany, operating over 20 percent of the country’s total offshore wind capacity.

Germany’s largest offshore wind farm to date, EnBW’s He Dreith, generated and delivered its first kilowatt-hour of electricity on November 25 as it started the commissioning process for its turbines. It is expected to be completed during the summer of 2026, making another major addition to Germany’s renewable energy supply.

Germany's current offshore wind power capacity is just over nine gigawatts. The country has set ambitious targets to reach 30 GW by 2030, 40 GW by 2035, and 70 GW by 2045. It has not been immune to the pressures on the industry, and in August, for the first time, reported it had received no bids in its latest leasing round. The commissioning of the two large wind farms in 2026 will be a boost as the government explores future policies to encourage the next phase of development.




From Soaring Energy Prices to Climate Threat to AI Bubble, Experts Warn Against Data Center Buildout

“Tech giants are cutting backroom deals with utilities and government officials to build massive data centers at breakneck speed, while passing the costs onto working families,” said the author of a new Public Citizen report.



Attendees await the arrival of Texas Gov. Greg Abbott and Alphabet and Google CEO Sundar Pichai at the Google Midlothian Data Center on November 14, 2025, in Midlothian, Texas.
(Photo by Ron Jenkins/Getty Images)


Stephen Prager
Dec 04, 2025
COMMON DREAMS

As the construction of artificial intelligence data centers expands across the nation largely unregulated, experts warn that the unrestrained buildup of these facilities is causing electricity costs to skyrocket, accelerating the climate crisis, and putting the economy at risk.

A new report out Thursday from the consumer advocacy group Public Citizen highlights the “unchecked expansion” of these data centers, often with little oversight, input from communities, or even financial responsibility on the part of the Big Tech firms profiting.
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“We’re watching Big Tech overlords write their own rules in real time,” said Deanna Noël, Public Citizen’s climate campaigns director and one of the report’s authors. “Tech giants are cutting backroom deals with utilities and government officials to build massive data centers at breakneck speed, while passing the costs onto working families through higher electricity bills, polluted air and water, and false claims about job creation.”

A forecast published earlier this week by Bloomberg New Energy Finance projected that the power demand for AI facilities will hit 106 gigawatts by 2035—a 36% jump from what it predicted back in April.

That dramatic increase, it said, can be attributed not just to the more rapid buildup of AI facilities, but also to the size of the ones being constructed: “Of the nearly 150 new data center projects BNEF added to its tracker in the last year, nearly a quarter exceed 500 megawatts,” it found.


This faster-than-expected expansion has come with massive consequences for the people living near the power-sucking behemoths. Public Citizen’s report found:
Residents’ electricity costs in some data center-dense areas have surged over 250% in just five years. At PJM—the world’s largest power market—capacity auction prices spiked 800% in 2024, in part due to data center growth. That same year, consumers across seven PJM states paid $4.3 billion more in electricity costs to cover data centers’ new transmission infrastructure.

On Wednesday, CNBC reported on findings from a watchdog report that PJM’s 65 million consumers will pay a total of $16.6 billion to secure future power supplies needed to meet demand from AI data centers from now until 2027, approximately $255 per person on average.

In some of the states with the most data centers, residential electricity prices have spiked considerably over the past year. In September, they were up 20% in Illinois, 12% in Ohio, and 9% in Virginia, according to data from the federal Energy Information Administration.

The massive surge in electricity usage is also fueling the climate crisis. As of March 2025, 56% of the electricity used to power data centers came from fossil fuels, a share that is likely to increase now that the Trump administration has pushed to expand the extraction of coal and other planet-heating energy sources in order to power them.

“At the very moment we must rapidly phase out fossil fuels,” Noël said, “the Trump administration is doing the opposite—fast-tracking data center development powered by coal, oil, and gas.”

Tech companies like Amazon, Meta, and Google that benefit from these projects rarely have to bear the full economic cost, instead passing some of it onto taxpayers, often without public debate due to nondisclosure agreements that keep the details of proposals under wraps until deals are finalized.

“In the race to attract large data centers, states are forfeiting hundreds of millions of dollars in tax revenue,” a June CNBC investigation found. The report determined that 42 states provide full or partial sales tax exemptions to data centers or have no sales tax at all. Thirty-seven of those states have legislation specifically granting sales tax exemptions for data centers.

While these exemptions are often granted following promises of economic growth and job creation, as the Public Citizen report argues: “They rarely deliver on these promises. Data centers create few permanent, high-paying jobs, and generous tax breaks deprive communities of critical revenue needed to fund schools, infrastructure, and other public services.”

Data centers have increasingly faced pushback from local communities. On Wednesday night in Howell, Michigan, over 150 people assembled at a town hall in opposition to a proposed $1 billion “hyperscale” data center project backed by Meta, following days of protest.




“Already we have started to see many regions (across the country) realizing that the huge spike in electricity demand from data centers is straining the grid, and this is only going to get worse as the growth of data centers increases based on the projected and planned investments,” said one of the panelists, Ben Green, an assistant professor of information and public policy at the University of Michigan.

Economic analysts, meanwhile, remain skeptical about whether the rapid buildup of AI infrastructure will be sustainable in the long term, given the extraordinary energy demand.

In November, Morgan Stanley projected AI-related data center spending will total $2.9 trillion cumulatively from 2025 to 2028, with roughly half requiring external financing.

Abe Silverman, general counsel for the public utility board in New Jersey, pointed out to CNBC the unease communities are feeling about “paying money today for a data center tomorrow.”

“We’re in a bit of a bubble,” he warned. “There is no question that data center developers are coming out of the woodwork, putting in massive numbers of new requests. It’s impossible to say exactly how many of them are speculative versus real.”

Cathy Kunkel, a consultant at the Institute for Energy Economics and Financial Analysis, said, “It does tend to be consumers—residential, commercial, and other industrial ratepayers—that end up paying for overbuilt electrical infrastructure.”

The health of the entire US economy, it turns out, may be hitched to this “bubble.” As the Wall Street Journal reported in late November, “business investment in AI might have accounted for as much as half of the growth in gross domestic product, adjusted for inflation, in the first six months of the year.”

OpenAI founder Sam Altman raised eyebrows last month when he suggested that if the bubble bursts, his company is too big to fail, and would likely receive a large taxpayer-funded federal bailout: “When something gets sufficiently huge... the federal government is kind of the insurer of last resort as we’ve seen in various financial crises,” Altman said. “So I guess given the magnitude of what I expect AI economic impact to look like, sort of I do think the government ends up as like the insurer of last resort.”

A looming financial bubble related to AI’s rapid growth, alongside the various other concerns related to the data center buildout, is why Public Citizen says policymakers must understand the gravity the situation and be willing to push back against an industry that has built an army of lobbyists to press its interests on Capitol Hill.

“Policymakers at all levels of government must act with urgency to rein in Big Tech’s unchecked expansion,” Noël said. “By demanding transparency and accountability, enforcing strong community protections, and requiring clean and cheap renewable energy, policymakers can shield consumers from soaring electricity costs, reduce emissions to protect public health, and align this buildout with the clean energy transition.

“Without urgent intervention,” she said, “Big Tech will continue getting a free ride while more neighborhoods are turned into sacrifice zones for Silicon Valley’s tech tycoons—fueled by the fossil fuel industry.”

Thursday, December 04, 2025

 

Source: Project Syndicate

When, in a few years’ time, almost everyone is claiming that they opposed Israel’s war crimes in Gaza, the world will remember Judge Nicolas Guillou of the International Criminal Court fondly. But the world will also remember how Europe’s leaders collaborated with Donald Trump by enforcing baseless US sanctions against Guillou.

ATHENS – Let us, for a moment, entertain the fanciful hypothesis that Europe cares about its values. Imagine a Europe where the principles so lavishly inscribed upon the banners of the European project – the rule of law, the dignity of the individual, a commitment to strategic autonomy – are more than just rhetorical filigree for grand speeches in Brussels.

In this parallel Europe, the story emerging from the pages of Le Monde concerning Judge Nicolas Guillou, the French magistrate at the International Criminal Court (ICC) in The Hague, would be the political scandal of the century. It would be the kind of affair that topples governments and reignites a proud European mindfulness.

But we do not inhabit that Europe. In this really-existing Europe, Guillou’s ordeal has been shrugged off, a symptom of our continent’s descent into a state of uncontested vassalage.

Stripped bare, the facts of the case are disconcerting beyond measure.

Before us we have a French citizen. A magistrate of some note sitting on the bench of the ICC which European diplomacy went to great lengths to establish so as to turn the page from a past in which war criminals could hide behind their governments’ shielding. Meticulously following the procedures of his institution in the execution of his sworn duties, this judge authorized arrest warrants for Israel’s prime minister and former defense minister for alleged war crimes in Gaza. In response, US President Donald Trump’s administration sanctioned Guillou.

The imposed sanctions are a masterclass in the evisceration of European sovereignty. They render Guillou a non-person, not only in the United States, but also in his own country – the beating heart of Europe. He has been locked out of the global digital realm (WhatsApp, all Google apps, and social media like Facebook and Instagram). Even his French bank account is virtually useless, given the ban on all payments that require the cooperation of Visa, Mastercard, American Express, and the supposedly European SWIFT interbank messaging system. As if that were not enough, when he recently tried to book a hotel room in France, Expedia canceled his reservation a few hours later.

Trump’s success at “flooding the zone” with outrageous behavior must not cause us to miss the significance of these developments. The US government has decided to sanction – or, essentially, de-person – a European judge for carrying out his official duties in Europe while working in an institution established by Europe’s elected representatives at great cost and effort.

The real tragedy is not that Trump is throwing his weight around. It is in the nature of hegemons to bully those who inconvenience them. The real tragedy, or perhaps farce, lies in Europe’s reaction. Did our governments respond with a unified, thunderous condemnation? Did they trigger retaliatory measures and immediately create European financial and digital channels to protect their own judiciary and citizens from extraterritorial bullying? Alas, the response was a tragicomic spectacle of utter and complete acquiescence.

European banks, cowed by a stern look from a US Treasury official in Washington, rushed to close Guillou’s accounts. European companies, whose compliance departments act as extensions of the US authorities, refuse to provide him services. Meanwhile, European institutions – the Commission and the Council – look the other way, wringing their hands and muttering platitudes about the “complexities” of transatlantic relations. They are not merely failing to protect Guillou; they are actively enforcing US sanctions against their own citizen.

During a week when European leaders loudly protested how the US had sidelined them in drawing up a peace deal for Ukraine, their silence over Guillou’s treatment completely normalized the erosion of their authority. From Trump’s perspective, they swapped the challenging, messy project of sovereignty for the comfortable decline of a US protectorate. How else could French President Emmanuel Macron have expected Trump to interpret his decision to treat the economic assassination of a French judge on French soil as nothing more than an unfortunate technical glitch or a minor bureaucratic snafu? Did he and Germany’s Chancellor Friedrich Merz really believe that sacrificing their citizens to Trump would gain them a seat at the negotiating table on issues such as Ukraine and Palestine, which are of existential importance to Europe?

No, Guillou’s Kafkaesque nightmare should not surprise us. What should be shocking is the silence surrounding it. We should be outraged not only by US actions, but also by Europe’s inaction. Guillou’s case is a stark metaphor for Europe itself: a union of nation-states that helped build an international court to uphold its values, allowing a foreign power to punish its own judge for doing so, and then helped to enforce the punishment. This is a union that has lost its way, its soul, and its spine, turning Europeans into willing extras in the theater of our own diminution.

When, in a few years’ time, almost everyone is claiming that they opposed Israel’s war crimes in Gaza, the world will remember Judge Guillou fondly. But the world will also remember Europe’s leading politicians not just for their cowardice but for their inattention to the simple fact that those who fail to uphold their own values become irrelevant.Email

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Yanis Varoufakis born 24 March 1961 is a Greek economist, politician, and co-founder of DiEM25. A former academic, he served as the Greek Minister of Finance from January to July 2015. Since 2019, he is again a Member of Greek Parliament and MeRA25 leader. He is the author of several books including, Another Now (2020). Varoufakis is also a professor of Economics – University of Athens, Honorary Professor of Political Economy – University of Sydney, Honoris Causa Professor of Law, Economics and Finance – University of Torino, and Distinguished Visiting Professor of Political Economy, Kings College, University of London.

In this livestream, Yanis Varoufakis and Ukrainian sociologist Volodymyr Ishchenko explore how EU leaders are undermining Ukraine to justify their plans to re-arm Europe. If EU leaders won’t send troops and won’t negotiate, whom does their “solidarity” really serve? And why are some in Brussels worried that peace itself would threaten their new militarisation agenda?

Cocks Coming Back Home to, well, not Roost, but to Gouge, Scratch, Cut, Swipe, Kill


“Even an empire cannot control the long-term effects of its policies. That is the essence of blowback.”


Paul Haeder has been a teacher, social worker, newspaperman, environmental activist, and marginalized muckraker, union organizer. Paul's book, Reimagining Sanity: Voices Beyond the Echo Chamber (2016), looks at 10 years (now going on 17 years) of his writing at Dissident Voice. Read his musings at LA Progressive. Read (purchase) his short story collection, Wide Open Eyes: Surfacing from Vietnam now out, published by Cirque Journal. Here's his Amazon page with more published work AmazonRead other articles by Paul, or visit Paul's website.