This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration.

Private jet flights have soared in recent years, with the resulting climate-heating emissions rising by 50 percent, the most comprehensive global analysis to date has revealed.

The assessment tracked more than 25,000 private jets and almost 19 million flights between 2019 and 2023. It found almost half the jets traveled less than 500 kilometers (about 310 miles) and 900,000 were used “like taxis” for trips of less than 31 miles. Many flights were for holidays, arriving in sunny locations in the summertime. The FIFA World Cup in Qatar in 2022 attracted more than 1,800 private flights.

Private flights, used by just 0.003 percent of the world’s population, are the most polluting form of transport. The researchers found that passengers in larger private jets caused more CO₂ emissions in an hour than the average person did in a year.

The US dominated private jet travel, representing 69 percent of flights, and Canada, the UK, and Australia were all in the top 10. A private jet takes off every six minutes in the UK. The total emissions from private jet flights in 2023 were more than 15 million metric tons, more than the 60 million people of Tanzania emitted.

The jets “are an utterly unjustifiable and gratuitous waste of our scarce remaining emissions budget…and their emissions are soaring.”

Industry expectations are that another 8,500 business jets will enter service by 2033, far outstripping efficiency gains and indicating that private flight emissions will rise even further. The researchers said their work highlighted the vast global inequality in emissions between wealthier and poorer people, and tackling the emissions of the wealthy minority was critical to ending global heating.

Stefan Gössling, the professor at Linnaeus University in Sweden who led the research, said: “The wealthy are a very small share of the population but are increasing their emissions very quickly and by very large levels of magnitude.” He added: “The growth in global emissions that we are experiencing at this point in time is coming from the top.”

The research, published in the journal Communications Earth & Environment, took data from the ADS-B Exchange platform, which records the signals sent once a minute by transponders on every plane, recording its position and altitude. This huge dataset—1.8 terabytes—was then filtered for the 72 plane models marketed by their manufacturers as “business jets.” The emissions figures are most likely an underestimate, as smaller planes and emissions from taxiing on the ground were not included.

The analysis found the number of private jets increased by 28 percent and the distance flown jumped by 53 percent between 2019 and 2023. Fewer than a third of the flights were longer than 620 miles and almost 900,000 flights were less than 31 miles.

“We know some people use them as taxis, really,” Gössling said. “If it’s just [31 miles], you could definitely do that by car.” Outside the US and Europe, Brazil, the Middle East, and the Caribbean are private jet hotspots.

Much of the use is for leisure, the researchers found. For example, private jet use to Ibiza in Spain and Nice in France peaked in the summer and was concentrated around weekends. In the US, Taylor Swift, Drake, Floyd Mayweather Jr., Steven Spielberg, and Oprah Winfrey are among those who have been criticized for heavy private jet use.

The researchers also looked at some business events in 2023, with the World Economic Forum in Davos, Switzerland, resulting in 660 private jet flights and the COP28 climate summit in Dubai having 291 flights.

Gössling said the driving factors behind the large recent increase in private jet use have not been analyzed but might include an increasing reluctance to share cabins on commercial flights that began during the Covid pandemic. Industry documents describe private jet users as “ultra-high net worth,” comprising about 250,000 individuals with an average wealth of $123 million. US private jet users are increasingly using “privacy ICAO addresses,” which mask the identity of the plane and could make tracking them much harder in the future.

According to Gössling, passengers should pay for the climate damage resulting from each ton of CO₂ emitted, estimated at about $216: “Very basically, it would seem fair that people paid for the damage they are causing by their behavior.”

A second step would be to increase the landing fees for private aircraft, which are currently very low, he added. A landing fee of $5,400 could be an effective deterrent, roughly doubling the cost of common private flights.

Alethea Warrington, head of aviation at the climate charity Possible, said: “Private jets, used by a tiny group of ultra-wealthy people, are an utterly unjustifiable and gratuitous waste of our scarce remaining emissions budget to avoid climate breakdown, and their emissions are soaring, even as the impacts of the climate crisis escalate.”

“It’s time for governments to act,” she said. “We need…a supertax, rapidly arriving at an outright ban on private jets.”

The US Private Aviation Association did not respond to a request for comment.

This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration.

Private jet flights have soared in recent years, with the resulting climate-heating emissions rising by 50 percent, the most comprehensive global analysis to date has revealed.

The assessment tracked more than 25,000 private jets and almost 19 million flights between 2019 and 2023. It found almost half the jets traveled less than 500 kilometers (about 310 miles) and 900,000 were used “like taxis” for trips of less than 31 miles. Many flights were for holidays, arriving in sunny locations in the summertime. The FIFA World Cup in Qatar in 2022 attracted more than 1,800 private flights.

Private flights, used by just 0.003 percent of the world’s population, are the most polluting form of transport. The researchers found that passengers in larger private jets caused more CO₂ emissions in an hour than the average person did in a year.

The US dominated private jet travel, representing 69 percent of flights, and Canada, the UK, and Australia were all in the top 10. A private jet takes off every six minutes in the UK. The total emissions from private jet flights in 2023 were more than 15 million metric tons, more than the 60 million people of Tanzania emitted.

The jets “are an utterly unjustifiable and gratuitous waste of our scarce remaining emissions budget…and their emissions are soaring.”

Industry expectations are that another 8,500 business jets will enter service by 2033, far outstripping efficiency gains and indicating that private flight emissions will rise even further. The researchers said their work highlighted the vast global inequality in emissions between wealthier and poorer people, and tackling the emissions of the wealthy minority was critical to ending global heating.

Stefan Gössling, the professor at Linnaeus University in Sweden who led the research, said: “The wealthy are a very small share of the population but are increasing their emissions very quickly and by very large levels of magnitude.” He added: “The growth in global emissions that we are experiencing at this point in time is coming from the top.”

The research, published in the journal Communications Earth & Environment, took data from the ADS-B Exchange platform, which records the signals sent once a minute by transponders on every plane, recording its position and altitude. This huge dataset—1.8 terabytes—was then filtered for the 72 plane models marketed by their manufacturers as “business jets.” The emissions figures are most likely an underestimate, as smaller planes and emissions from taxiing on the ground were not included.

The analysis found the number of private jets increased by 28 percent and the distance flown jumped by 53 percent between 2019 and 2023. Fewer than a third of the flights were longer than 620 miles and almost 900,000 flights were less than 31 miles.

“We know some people use them as taxis, really,” Gössling said. “If it’s just [31 miles], you could definitely do that by car.” Outside the US and Europe, Brazil, the Middle East, and the Caribbean are private jet hotspots.

Much of the use is for leisure, the researchers found. For example, private jet use to Ibiza in Spain and Nice in France peaked in the summer and was concentrated around weekends. In the US, Taylor Swift, Drake, Floyd Mayweather Jr., Steven Spielberg, and Oprah Winfrey are among those who have been criticized for heavy private jet use.

The researchers also looked at some business events in 2023, with the World Economic Forum in Davos, Switzerland, resulting in 660 private jet flights and the COP28 climate summit in Dubai having 291 flights.

Gössling said the driving factors behind the large recent increase in private jet use have not been analyzed but might include an increasing reluctance to share cabins on commercial flights that began during the Covid pandemic. Industry documents describe private jet users as “ultra-high net worth,” comprising about 250,000 individuals with an average wealth of $123 million. US private jet users are increasingly using “privacy ICAO addresses,” which mask the identity of the plane and could make tracking them much harder in the future.

According to Gössling, passengers should pay for the climate damage resulting from each ton of CO₂ emitted, estimated at about $216: “Very basically, it would seem fair that people paid for the damage they are causing by their behavior.”

A second step would be to increase the landing fees for private aircraft, which are currently very low, he added. A landing fee of $5,400 could be an effective deterrent, roughly doubling the cost of common private flights.

Alethea Warrington, head of aviation at the climate charity Possible, said: “Private jets, used by a tiny group of ultra-wealthy people, are an utterly unjustifiable and gratuitous waste of our scarce remaining emissions budget to avoid climate breakdown, and their emissions are soaring, even as the impacts of the climate crisis escalate.”

“It’s time for governments to act,” she said. “We need…a supertax, rapidly arriving at an outright ban on private jets.”

The US Private Aviation Association did not respond to a request for comment.

In the coming days, you will hear every imaginable take on why Americans voted to put Donald Trump back in office.

Pundits will say toxic masculinity was to blame—and men feeling usurped by women. They’ll say it was the Christian nationalism movement. A surprising shift in Latino voting patterns. Sexism. Racism. Transphobia. Elon Musk. Crypto bros. “Theo bros.” Housing prices. Gaza! Propaganda from Fox News and Newsmax. Misinformation on X.

Perhaps it was the cowardice of powerful men like Jeff Bezos and Jamie Dimon. The anti-immigrant frenzy—Trump’s incessant false claims about vicious murderers and rapists and mental patients swarming across the border like locusts. Property crime. Inflation. Interest rates. Lingering malaise from the pandemic. The Democrats’ failure to sell their economic wins. Kamala Harris’ inability to distance herself from an unpopular president.

Or maybe a combination of all these things. Gender and Gaza clearly made a difference. Inflation is a notorious regime killer—it was high inflation that underpinned the rise of fascism in Europe in the last century—and rising wages haven’t kept pace. When the Dems say, “Look, inflation is back to normal,” well, the price of groceries sure ain’t.

But I’m talking here about something even more basic, something that undergirds so much of America’s discontent. The best explanation, after all, is often the simplest:

Wealth inequality.

There is little that leaves people as pissed off and frustrated as the feeling that no matter how hard they work, they can’t ever seem to get ahead. And this feeling has been slowly festering since the 1980s, when Ronald Reagan and his cadre of supply-side economists launched the first salvos in what would become the great fucking-over of the American middle and working classes.

Half of the families in the richest nation on the planet have no wealth at all. Is it any wonder some of them are willing to see the system burn?

The frustration was evident in something two very different women in two very different states told me on the very same day in 2022 for a story on how America spends hundreds of billions of dollars a year subsidizing retirement plans mostly for rich people: “I’m going to have to work until I die.”

The great fucking-over commenced with President Reagan’s gutting of unions and the wealth-friendly tax cuts he signed into law in 1981 and 1986. The trend continued with George W. Bush’s tax cuts in 2001 and 2003, and culminated with the Trump tax cuts of 2017—which, like all of those other Republican initiatives, failed to generate the degreee of growth and prosperity the supply-siders promised. They did, however, make the rich richer as wages stagnated and the middle class shriveled.

We talk a lot about income inequality, but wealth and income are different beasts. Income is what pays your bills. Wealth is your security—and in that regard, most American families are just not feeling sufficiently secure.

In January 1981, when Reagan took office, the households of the Middle 40—that’s the 50th to 90th wealth percentiles—held a collective 31.5 percent of the nation’s wealth. Fast-forward to January 2022: Their share of the pie had dwindled to 25.7 percent, even as the combined wealth of the richest 0.01 percent of households soared from less than 3 percent of the total to 11 percent.

Put another way, 18,300 US households—a tiny fraction—now control more than a tenth of the nation’s wealth.

And what of the bottom 50 percent? How have they fared over the past four decades or so? When Reagan came in, their average household wealth was a paltry $944. (All figures are in 2023 dollars.) Today they have even less—just $659 on average, according to projections from Real Time Inequality, a site based on data from the Berkeley economists Emmanuel Saez and Gabriel Zucman. All told, those 92.2 million households now hold less than 0.05 percent of the nation’s wealth—which rounds down to zero. In short, half of the people living in the richest nation on the planet have no wealth at all.

They’re not doing so hot income-wise, either. In September, the Congressional Budget Office reported that average income of the highest-earning 1 percent of taxpayers in 2021 was more than $3.1 million, or 42 times the average income of households in the bottom 90 percent, according to the nonprofit Americans for Tax Fairness. That’s the most skewed income distribution since CBO began reporting this data in 1979, the group noted. Back then, the disparity was only 12 to 1.

And the billionaires? I’m glad you asked. Based on Forbes data, from January 1, 2018, when the Trump cuts took effect, to April 1 of this year, the nation’s 806 billionaires saw a 57 percent gain in their collective wealth—after adjusting for the inflation that has plagued working families.

Team Biden has actually done a good bit for the middle class, and tried to do more, but nuance is a hard sell when you’re pitching to families worried about whether they can make it to the end of the month.

“It’s a class and inequality story for sure,” Richard Reeves, the author of 2017’s Dream Hoarders, concurred when I ran my premise by him. “But it’s also a gendered class story.” (His latest book, Of Boys and Men, examines how “the social and economic world of men has been turned upside down.”) And he’s right.

But are you starting to see why the broader electorate, race and gender notwithstanding, might be just a little fed up?

I suppose, having also written a book about wealth in America, that I know enough to assert that wealth insecurity is fundamental.

But why, you might ask, would someone living on the edge vote for Republicans, whose wage-suppressing, union-busting, benefit-denying policies have only tended to make the poor and the middle class more miserable?

And why in the name of Heaven would they vote for Trump, a billionaire born with a silver spoon in his mouth who has lied and cheated his way through life? A man whose latest tax-cut plans—though some, like eliminating taxes on tips and Social Security income, can sound progressive—will be deeply regressive, giving ever more to the rich and rationalizing cuts that will hurt the poor and middle class and accelerate global climate chaos.

The reason, my friends, may well be that those on the losing end of our thriving economy don’t see it as thriving. Historically, every election cycle, when reporters fan out to ask low-income voters in swing states what they are thinking, the message has been roughly the same: Presidential candidates, Democrats and Republicans, come around here every four years and talk their talk, and then they leave and forget about us when it comes to policy.

Now that’s not entirely fair, because the Biden administration actually has done a good bit for working people and families of color, and has proposed all sorts of measures to make the tax code fairer and reduce the wealth gap (both the racial one and the general one)—including increasing taxes and IRS enforcement for the super-rich. But one can only get so far with a split Senate, Joe Manchin and Kyrsten Sinema on your team, and a rival party that would just as soon throw you into a lake of fire as support your initiatives.

And nuance is a hard sell when you’re pitching yourself to families worried about whether they can make it to the end of the month. Roughly half of the population barely gets by, has no stocks, no wealth, no retirement savings, and can’t imagine how they’ll ever afford a house—certainly not at current interest rates. Meanwhile, the billionaire techno-dicks are strutting around, publicly flexing their wealth and power with Democrats and Republicans alike.

In courting Americans who, fairly or not, feel like the system has never done them a bit of good, Team Trump has the rhetorical advantage, because he says he’ll destroy that system—even if that really just means he’ll subvert it to further enrich his buddies. “Populist Revolt Against Elite’s Vision of the U.S.” was one of the New York Times’ headlines after the race was called on Wednesday morning. And that’s absolutely right.

Because when the Republicans say, “The economy is a nightmare under Biden and Harris, and illegal immigrants are committing heinous crimes and taking your jobs and we’re gonna cut your taxes,” and the Dems counter, “Hey, none of that is really true and we actually did a lot and we feel your pain and the economy is going gangbusters and Trump’s tariffs will destroy it,” well, whom do you think a person struggling from paycheck to paycheck might be more inclined to believe?

Sure, the economy is doing great—if you own stock. If you have a well-paying job and a retirement plan. If you are in the top fifth of the wealth and income spectrums.

If not, even if you rightly suspect that the Republicans won’t do a damn thing to improve your lot, you might just be tempted to say, “Fuck it.”

And watch the system burn.

Elon Musk, far and away the richest man on the planet, is pouring tens of millions of dollars into efforts to get Donald Trump elected. In addition to his massively valuable promotion of Trump’s messaging on X—an in-kind donation if ever there was one—he reportedly gave $50 million to a group linked to immigrant-hater Stephen Miller, the architect of Trump’s morally abominable family separation policy. And then there’s the legally problematic $100 payments and $1 million lottery-style giveaways he’s been offering registered swing-state voters who sign a petition stating the following:

The First and Second Amendments guarantee freedom of speech and the right to bear arms. By signing below, I am pledging my support for the First and Second Amendments.

Weird, right? But Musk’s return on investment could be huge if Trump prevails and gives him even more power over the very government at whose teat Musk’s companies were nurtured to profitability—and on which they continue to depend. Also, let’s remember, tens of millions for this dude is the equivalent of pocket change for the rest of us. Here’s how much of Musk’s net worth $50 million represents:

0.000183486238532

But what of his philanthropy, you ask? Didn’t Musk sign Bill Gates’ “Giving Pledge,” vowing to give at least half of his wealth to charity?

Yes, he signed up in 2012, for what it’s worth. But he’s running way behind on his giving. Consider that, in all of 2022, according to his foundation’s latest tax filing, he gave $160.5 million to charitable causes. Musk made more than that just yesterday—a great deal more.

That’s right, Musk’s net worth increased by $2.7 billion on Friday, according to Forbes’ Real-Time Billionaires, a database that serves as a reminder of just how far our supposedly egalitarian American experiment has devolved into plutocracy—or oligarchy, if you prefer—a situation that founder John Adams had hoped we would avoid (though he wasn’t terribly confident that we would).

Put another way, the amount Musk gave to charity in one year is this much of what he gained in a day:

0.05962962962963

Six percent! Musk, by the way, is now roughly 100 times as rich as he was when he signed the pledge—a scenario Andrew Carnegie would consider grotesque. He’d best start acting more like MacKenzie Scott. Because, as a trusted advisor to industrialist John D. Rockefeller once warned his boss:

You must distribute it faster than it grows! If you do not, it will crush you, and your children, and your children’s children!

Now, Musk did contribute almost $2.3 billion in Tesla stock to his foundation in 2022, earning a fat tax break and locking in a huge, tax-free capital gain at the expense of America’s taxpayers. But our rules governing philanthropy are so toothless that he need only disburse a small fraction of these “charitable” assets. His foundation’s nest egg—roughly $7.2 billion at the end of 2022—generated $309 million in investment income that year, and the value of its unsold assets gained at least $373 million. Yet the amount it gave to charity was about the same as the previous year.

Federal law requires private foundations to spend down 5 percent of their assets annually (which includes overhead). Musk’s 2022 obligation was about $358 million—he didn’t give even half that. The government lets foundations average their disbursements over five years, but he’ll have to pick up his pace considerably.

Lest you were hoping the Musk Foundation’s tax documents would reveal sinister causes to which he may have donated, sorry to disappoint. His public giving is unobjectionable. What you have to watch out for, though, is the transfers to donor-advised funds. His foundation has, since 2018, moved more than $75 million over to a fund at Fidelity Charitable. For some unfathomable reason, the government lets such transfers count toward a foundation’s mandatory charitable payout.

Donor-advised funds are even more problematic than private foundations—although both cost taxpayers a fortune and are, as I explained in our must-read American Oligarchy issue, profoundly undemocratic. Not only are the creators not obligated to dole out a minimum of their assets each year, they are not obliged to reveal whom they are giving to. It’s dark money, in other words— convenient for anyone who wants to give secretly to odious nonprofits, including groups willing to subvert the democratic process if it will help put a certain candidate back in the White House.

As Donald Trump campaigns to be a dictator for one day, he’s asking: “Are you better off now than you were when I was president?” Great question! To help answer it, our Trump Files series is delving into consequential events from the 45th president’s time in office that Americans might have forgotten—or wish they had.

President Donald Trump was lying profusely about his administration’s most notable achievement, the Tax Cuts and Jobs Act (TCJA), even as he sat down to sign the bill into law in 2017, a few days before Christmas.

“As you know, we had the largest tax cuts in our history just approved,” he remarked at the “rush-job” Oval Office signing ceremony, from which the usual gaggle of fawning Republican legislators was excluded—the souvenir pens were instead offered to the lucky few reporters on hand. “This is bigger than, actually, President Reagan’s.”

Uh, not even close—though it was the biggest corporate cut. Thanks to his tax bill, Trump went on, corporate America was already “making tremendous investments. That means jobs; it means a lot of things. And we’re very happy. So that’s AT&T, Boeing, Sinclair, Wells Fargo, Comcast, and now many other companies.”

The rich are feasting on America’s economic pie. Republican tax cuts have set them on a steep upward wealth trajectory, far and away from the “little people.”

The executives sure were happy. The legislation slashed corporate income taxes dramatically, from 35 percent to 21 percent. Not surprising, given that, according to the nonprofit Public Citizen, more than 7,000 lobbyists—on behalf of a who’s who of Corporate America—helped hammer out the bill’s details. That’s 13 lobbyists per lawmaker.

And what did these joyful companies do with their windfall? Build new factories? Hire more workers? Raise wages? Stimulate economic growth? There was some of that, sure. But the cuts came “nowhere close to paying for themselves,” the New York Times later reported, and have added more than $100 billion a year to the deficit.

Just about every Republican president since Reagan has relied on the same debunked theory to advance tax cuts for corporations and wealthy Americans. It’s called supply-side (or “trickle-down”) economics. The idea is that if we give rich folks more money, they’ll invest, build companies, and create good jobs. The economic benefits will then trickle down to what the late New York heiress Leona Helmsley—whom the press nicknamed “Queen of Mean”—allegedly called the “little people.” (That fun fact emerged during testimony at her 1989 trial for tax evasion—where she was found guilty. Helmsley died in 2007, famously leaving $12 million to Trouble, her pampered little dog, but nothing to two of her four grandchildren.)

Trump’s corporate cuts, predictably, trickled not down but up. As I wrote in my 2021 book, Jackpot, the first instinct of executives and board members after Congress passed the TCJA was to enrich themselves:

S&P 500 firms spent a record $806 billion in 2018 buying back their own shares on the public markets. The Harvard Business Review notes that senior executives, paid largely in stock and stock options, use buybacks to manipulate share prices “to their own ben­efit” and the benefit of “investment bankers and hedge-fund manag­ers” who are further enriched “at the expense of employees, as well as continuing shareholders.”

Buybacks are indeed marvelous for executives and Wall Street bankers. By reducing the number of outstanding shares on the market, they drive up the stock price to the benefit of major shareholders. But they’re bad news for workers, who have traditionally benefitted from excess corporate profits and their reinvestment in operations and equipment, which tends to strengthen the business and bring new jobs. Buybacks also can be bad for long-term investors, because they encourage a short-term mindset in the C-suite and can be used to mask a firm’s underperformance.

Notably, every one of the firms Trump praised by name during the signing ceremony notched major buybacks soon afterward: Sinclair’s board greenlit $1 billion in the months to follow. Boeing’s board approved $19 billion, and numerous reports have blamed the company’s aircraft safety fiascos in part on its lust for buybacks. (Late last week, the company announced it would lay off roughly 17,000 people, or 10 percent of its workforce.)

On Trump’s watch, Congress doubled the gift and estate tax exemption. A rich couple can now leave their kids $27.2 million without paying one dime in tax.

AT&T repurchased $692 million worth of its stock in 2018 amid reports that it had been laying off workers and closing call centers—and completed nearly $2.5 billion in buybacks the following year. Wells Fargo was in for almost $41 billion, and Comcast shelled out $8.4 billion for buybacks and dividends (which it juiced by 10 percent).

“We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve,” Robert Jackson Jr., who then served on the Securities and Exchange Commission, declared in a June 2018 speech. “Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense.”

Even when wealthy businesspeople are incentivized to “create value,” results may vary. “A friend of mine, Bob Kraft, called me last night, and he said this tax bill is incredible,” Trump remarked at the signing.

“He owns the New England Patriots,” Trump said, “but he’s in the paper business too. And he said, based on this tax bill, he just wanted to let me know that he’s going to buy a big plant in the great state of North Carolina, and he’s going to build a tremendous paper mill there.”

I looked up that “tremendous” paper mill. Trump, as usual, botched the details. The plant is in Catawba, South Carolina. Kraft’s company, New-Indy, took it over in September 2018, after which it became a total nightmare for the community—generating more than 47,000 complaints of noxious odors “similar to rotten eggs, dirty diapers or other foul smells,” including from people in North Carolina.

The Institute for Taxation and Economic Policy released an analysis of whom Trump’s new tax proposals would benefit. Guess what: It probably isn’t you!

Another big deal, Trump said, were the estate tax changes in the tax bill: “Something very important to me,” he said (if you can imagine anyone not named Trump being important to Trump), were “the family farmers and small-business owners who lost their business because of the estate tax. Most of them won’t have any estate tax to pay. It will be a great thing for their families. You can leave your farm to your family. You could leave your business, your small business to your family—not even so small, because the numbers are pretty big here.”

They are big! The TCJA doubled the gift and estate tax exemption and pegged it to inflation, which means, as of 2024, a well-heeled couple can leave $27.2 million to their heirs without paying one dime in tax.

But that won’t save any “family farms.” That’s a well-worn Republican talking point that amounts, fittingly enough, to a heap of cow manure. Back in 2017, a researcher with the nonpartisan Center on Budget and Policy Priorities (CBPP) pointed out that only 50 small farms or businesses would be on the hook for federal estate tax that year (a “small” business can have up to $40 million in annual revenues and 1,500 employees), and most would likely have other assets, such as stock, that could be liquidated if need be to cover the tax. Existing law, she also pointed out, allows estates “to spread their payments over a 15-year period at low interest rates.” America’s farmers were never in danger.

The Reagan tax cuts enacted in 1981 and 1986 added up to biggest break for wealthy Americans since 1920. The top marginal rate owed in 1981 on the uppermost income tier of the nation’s highest earners—anything exceeding $215,400 for a couple (about $760,000 in today’s dollars)—was slashed dramatically, from 70 percent when Reagan took office to 28 percent the year he left. Congress also reduced the gift/estate tax, more than tripled the lifetime exemption—the amount parents can leave their offspring tax-free—and trimmed taxes on capital gains and corporate profits.

And what was the outcome of all this largesse? Another snippet from Jackpot:

In 2012, a researcher at the nonpartisan Congres­sional Research Service sought to determine whether the Reagan cuts and other reductions in marginal income tax rates over the prior sixty-five years had benefited the overall economy. He came up short. The tax cuts did not appear to be correlated with more robust saving, investment, or productivity growth. They did, however, appear to be associated with rich people making a lot more money than before. There was no evidence that the cuts expanded America’s economic pie, the report noted, “but there may be a relationship to how the eco­nomic pie is sliced.”

You might even say the very rich pigged out on the pie. The Reagan cuts set America’s most affluent citizens on a steep upward wealth trajectory, soaring them far and away from the “little people.”

Supply-side economic arguments would later enable George W. Bush to slash taxes further. Among other provisions, the 2001 and 2003 bills he signed reduced the top income tax rate, then 39.7 percent, to 35 percent—lower even than today—and began phasing out the estate tax, which Congress briefly repealed in 2010, only to reinstate it the following year.

“High-income taxpayers benefitted most from these tax cuts, with the top 1 percent of households receiving an average tax cut of over $570,000 between 2004-2012,” explains a CBPP analysis. By 2010, the report notes, the Bush cuts resulted in a 1 percent bump in annual after-tax income for the poorest fifth of US families, whereas the top-earning 1 percent enjoyed a 6.7 percent increase.

Unfair? Sure. But did the Bush cuts ever deliver the economic results supply-siders promised? Nope. “Evidence suggests that they did not improve economic growth or pay for themselves, but instead ballooned deficits and debt and contributed to a rise in income inequality,” notes the CBPP.

Fast forward to 2024, when Trump told a crowd of “rich as hell” donors he’ll give them more tax cuts if elected to a second term. They cheered! Joe Biden and Bernie Sanders made a Facebook video.

Trump has said he wants to cut the corporate income tax further, too—to 15 percent. (Kamala Harris proposes raising it to 28 percent, still well below the pre-Trump rate of 35 percent.) And he keeps introducing new, ill-conceived, tax proposals on the campaign trail—mostly regressive—adding to a haphazard plan that the nonpartisan Committee for a Responsible Federal Budget projects will cost the federal government, depending on economic conditions, anywhere from $1.5 trillion to $15.2 trillion over a decade. (The Harris plan, the group projects, would cost between zero and $8.1 trillion.)

On October 7, the nonpartisan Institute for Taxation and Economic Policy released an analysis of whom Trump’s tax proposals would benefit.

It’s probably not you.

Love it or hate it, at least now you better understand the Republicans’ dirty little secret: Supply side economics, cutting taxes on the wealthy, doesn’t work. It has never worked. It’s complete bullshit. But alas, it’s the sort of bullshit that refuses to be composted.

Kamala Harris is starting to respond to calls by media outlets and voters to share a detailed economic policy plan ahead of November, including making billionaires “pay their fair share.”

Harris delivered a speech to the Economic Club of Pittsburgh on Wednesday, along with the release of a policy book that lays out her strategy to lower costs and “create an opportunity economy” for the middle class. 

In Pittsburgh, Harris attempted the delicate balance of reaching out to undecided voters while also appealing to those already excited by her campaign as she replaced President Joe Biden as the Democratic nominee. 

“I believe we shouldn’t be constrained by ideology, and instead should seek practical solutions to problems,” Harris said. “Part of being pragmatic means taking good ideas from wherever they come.”

The result was a speech that didn’t do much to elaborate on policy, instead seeking to avoid language or commitments that could reinforce Republicans’ description of Harris as a “Marxist.”

But the 82-page document, “A New Way Forward for the Middle Class,” gets into some of those details, including “making the wealthiest Americans play by the same rules as the middle class.” 

To do this, Harris proposes a minimum income tax for billionaires—at an amount yet to be disclosed—and “commonsense tax reforms for corporations.” 

The policy guide cites the federal budget for fiscal year 2025—according to which Donald Trump’s 2017 tax breaks brought effective corporate tax rates to less than 10 percent—and a study by the Center on Budget and Policy Priorities, a nongovernmental think tank, that found that large companies didn’t pass the profits from those cuts to workers or into other investments. 

Harris states that she will raise the corporate tax rate to 28 percent—notably still less than the 35 percent rate for the richest companies that was in place from 1993 until Trump’s 2017 cuts. In the document, the vice president emphasized the difference with Trump’s tax policy, which by 2020 allowed at least 55 of the largest American corporations to pay no federal income tax and to make $3.5 billion in rebates. 

Voters remain concerned about economic policy. According to a September poll conducted by the New York Times and Siena College among undecided voters in Arizona, Georgia, and North Carolina, about one in eight said Harris’ handling of the economy was their most pressing concern. What her latest economic strategy means for such voters remains to be seen. 

Kamala Harris is starting to respond to calls by media outlets and voters to share a detailed economic policy plan ahead of November, including making billionaires “pay their fair share.”

Harris delivered a speech to the Economic Club of Pittsburgh on Wednesday, along with the release of a policy book that lays out her strategy to lower costs and “create an opportunity economy” for the middle class. 

In Pittsburgh, Harris attempted the delicate balance of reaching out to undecided voters while also appealing to those already excited by her campaign as she replaced President Joe Biden as the Democratic nominee. 

“I believe we shouldn’t be constrained by ideology, and instead should seek practical solutions to problems,” Harris said. “Part of being pragmatic means taking good ideas from wherever they come.”

The result was a speech that didn’t do much to elaborate on policy, instead seeking to avoid language or commitments that could reinforce Republicans’ description of Harris as a “Marxist.”

But the 82-page document, “A New Way Forward for the Middle Class,” gets into some of those details, including “making the wealthiest Americans play by the same rules as the middle class.” 

To do this, Harris proposes a minimum income tax for billionaires—at an amount yet to be disclosed—and “commonsense tax reforms for corporations.” 

The policy guide cites the federal budget for fiscal year 2025—according to which Donald Trump’s 2017 tax breaks brought effective corporate tax rates to less than 10 percent—and a study by the Center on Budget and Policy Priorities, a nongovernmental think tank, that found that large companies didn’t pass the profits from those cuts to workers or into other investments. 

Harris states that she will raise the corporate tax rate to 28 percent—notably still less than the 35 percent rate for the richest companies that was in place from 1993 until Trump’s 2017 cuts. In the document, the vice president emphasized the difference with Trump’s tax policy, which by 2020 allowed at least 55 of the largest American corporations to pay no federal income tax and to make $3.5 billion in rebates. 

Voters remain concerned about economic policy. According to a September poll conducted by the New York Times and Siena College among undecided voters in Arizona, Georgia, and North Carolina, about one in eight said Harris’ handling of the economy was their most pressing concern. What her latest economic strategy means for such voters remains to be seen. 

Project 2025, the Heritage Foundation’s blueprint for a second Donald Trump presidency—you know, that document he knows nothing about even though 140 people from his first administration, including six former Cabinet members, helped create it—is full of delightful little Easter eggs. One provision that has attracted almost no public notice, perhaps because it seems so reasonable, is the authors’ call for the government to create “universal savings accounts” (USAs).

Heck, it even has a patriotic name!

All taxpayers should be allowed to contribute up to $15,000 (adjusted for inflation) of post-tax earnings into Universal Savings Accounts (USAs). The tax treatment of these accounts would be comparable to Roth IRAs. USAs should be highly flexible to allow Americans to save and invest as they see fit, including, for example, investments in a closely held business. Gains from investments in USAs would be non-taxable and could be withdrawn at any
time for any purpose. This would allow the vast majority of American families to save and invest without facing a punitive double layer of taxation.

But let’s think about this. Over the past few decades, Congress passed a series of bills to help Americans save for old age privately via government-subsidized pensions, 401(k)-type plans, and individual retirement accounts—of which Roth IRAs are one type. These tax breaks and program expansions have all been bipartisan, and all have passed with flying colors, because they sound pretty good—much like these universal savings accounts—until you examine them more closely.

And then you have to ask: Good for whom?

Taken collectively, the various retirement subsidies are mind-bogglingly expensive. They are, in fact, the federal government’s single largest tax expenditure, projected to deprive the Treasury of almost $2.5 trillion over five years (2023–2027), according to the bipartisan Joint Committee on Taxation (JCT)—mostly, as I’ve written, to the wildly disproportionate benefit of our most affluent.

In the most extreme case reported thus far (by ProPublica), the Silicon Valley entrepreneur and political puppet-master Peter Thiel used a $1,700 contribution to his Roth IRA—Roths are intended for middle-class savers—decades ago to purchase 1.7 million “founder’s shares” of PayPal at one-tenth of a cent each. Because of that, by 2002, the year eBay purchased PayPal, ProPublica reported, the balance in Thiel’s Roth was up to $28.5 million, with all of those gains nontaxable. He then repeated this cycle with other fledgling companies, culminating in a Roth IRA containing north of $5 billion in assets.

Thiel was an outlier, but ProPublica identified others with IRAs worth tens or hundreds of millions of dollars. Indeed, in 2021, at the request of Senate Finance Committee chair Ron Wyden (D-Ore.), the JCT counted more than 28,000 taxpayers with traditional or Roth IRAs with balances exceeding $5 million—497 of the accounts contained $25 million or more.

What does this have to do with Project 2025? Well, USAs would be Roths on steroids. The $15,000 annual contribution limit is more than twice what people under 50 are allowed to contribute to a Roth. And even the highest earners could contribute to a USA—with Roths, you can only make the full contribution if your income is $146,000 or less. The fact that one needn’t wait until retirement to withdraw funds make USAs all the more compelling.

Heck, if you can afford to put $15,000 a year into an investment fund and let it take a tax-free ride—which the majority of Americans cannot—there would be no reason not to. “High bracket taxpayers would get the biggest tax benefits and could find the disposable savings to participate most easily,” says Steven Rosenthal, a senior fellow at the Tax Policy Center who has written about the retirement system’s income and race disparities.

Roth IRAs cost taxpayers relatively little, mainly because most people play by the rules. USAs would obliterate the rules, and cost the government a pretty penny.

But the real poison pill is this line: USAs should be highly flexible to allow Americans to save and invest as they see fit, including, for example, investments in a closely held business.

That sounds an awful lot like what Thiel did. Or, for example, a private equity fund manager could put his “carried interest” in a USA at the outset of a project. A CEO could contribute tens of thousands of shares of cheaply acquired stock options before the company goes public. A garage inventor—like Bill Gates once was—could value his company initially at $15,000 and put all of the stock into his USA. It’s not worth much now, but wait 10 years—Jackpot!

“Their tax avoidance potential would be infinitely greater. They would have the potential to exempt multibillion-dollar gains, even trillion-dollar gains, from taxation,” tax attorney Bob Lord and Morris Pearl, chair of Patriotic Millionaires, wrote in a Fortune commentary.

“Allowing taxpayers to invest ‘as they see fit,’ could fuel stuffing…when an individual uses a tax-free account to acquire non-publicly traded assets at prices below fair market value,” Rosenthal told me in an email. (He and New York University law professor Daniel Hemel have written to the Senate Finance Committee, urging lawmakers to crack down on the practice.)

Whether Thiel’s Roth magic trick violates current IRS rules on “prohibited transactions” is a private matter for him and agency lawyers to hash out—but legal minds who have thought it through see some potential red flags. What’s more, the IRS has issued guidance that deems similar-sounding strategies “abusive” and says it views them as “tax avoidance transactions.”

Democratic presidential nominee Kamala Harris regularly asks Americans to imagine Donald Trump without guardrails. Well, imagine Roths without guardrails—larger contributions, no income cap, and no rules about how the funds can be invested. Roth IRAs in particular cost US taxpayers relatively little—about $14 billion a year—mainly because most people play by the rules. USAs would obliterate the rules, and in doing so, cost the government a pretty penny.

But this isn’t just about tax revenues. The bigger problem is how wildly inequitable America’s wealth and income distributions have become over the past four decades, a shift that started with the wealth-friendly tax cuts of the Reagan era. Just this week, the Congressional Budget Office reported that the average 2021 household income for the top-earning 1 percent of taxpayers was more than $3.1 million—42 times the average for the bottom 90 percent, according to an analysis of the data by Americans for Tax Fairness. That’s the most skewed income distribution since CBO began reporting on the data in 1979. Back then, the income disparity was 12 to 1.

America has ceased to be recognizable as a land of opportunity—or rather, one must now ask, a land of opportunity for whom?

USAs would be worth considering if Congress limited them to people with few assets who earn less than $100,000, for example, and imposed strict rules to prevent wealthy investors from gaming them for tax avoidance. As proposed by that nonprofit Trump knows nothing about, they would make our class divisions even worse. And that would truly be unaffordable.

Do you have $100 million? I don’t. Heck, I don’t even have $50 million! Which is why I’m not worried about the likes of President Joe Biden and maybe-president Kamala Harris and Rep. Barbara Lee and Sens. Elizabeth Warren, Ron Wyden, and Bernie Sanders—all of whom have proposed various levies on excessive wealth over the past five years—taxing my unrealized capital gains.

I do have unrealized capital gains. Maybe you do, too. My wife and I bought our house in Oakland, California, almost 20 years ago, and it’s worth more now than when we bought it. We also own shares of some stock funds that have appreciated over the years. Those paper gains are “unrealized” because we haven’t sold the assets. Unless they are sold, and the profits “realized,” they won’t be taxed under current law.

This gives America’s richest families a convenient way to avoid income tax. If you, like our thousand-ish billionaires, have vast stock holdings, you can have your tax lawyers and accountants arrange your affairs so as to minimize your realized income. Then, instead of selling long-held assets to fund your lavish lifestyle—and paying a capital gains tax of 20 percent plus a 3.8 percent surcharge known as the Net Investment Income Tax (NIIT)—you simply borrow against your holdings at a few percent interest, tops.

Guys like Bezos and Bloomberg and Buffett (who needs first names?) take advantage of this tactic, which is why ol’ Warren can accurately say he pays a lower overall tax rate than his secretary does. Per ProPublica‘s analysis, the wealth of the 25 richest Americans totaled $1.1 trillion at the end of 2018, but their combined 2018 tax bill? A scant $1.9 billion.

Several of the aforementioned wealth tax proposals, including Biden’s (which Harris generally supports), aim to shrink our obscene wealth gap by taxing the unrealized gains of the super-rich. But the $100 million Biden-Harris cutoff means that fewer than 10,000 people would be affected.

TikTokkers are having fun with this...

@mayagouliard

They arent talking about us. The capital gains tax has nothing to do with us. Aside from trying to reign in the uber greed of the already mega wealthy in our country. Trickle down economics failed. #harriswalz #capitalgainstax #taxtherich #99percent

♬ original sound – theshamingofjay

The TikTok dad below, Dean, sums up the situation nicely: Taxing unrealized gains “sounds really ridiculous, and it’s very, very complicated,” he says. “But the key thing everyone needs to know, which is why I don’t care about it,” he says, is the cutoff: “I’d love to have this problem. It means I’m freakin’ worth $100 million!”

@alexisanddean

Should we be worried about the proposed capital gains tax by Kamala Harris? #capitalgains #capitalgainstax #kamalaharris #harris2024 #tax #taxes #capitalgains #uspolitics #politics #trump #trump2024 #taxcuts #taxpolicy #economics #useconomy #ustaxes #taxation #econ101 #fintok #finance #finance101 #financialfreedom #financialliteracy #financialeducation #financetiktok #invest #investing #investor

♬ original sound – Alexis and Dean

The people who are freakin’ worth $100 million oppose such a tax, of course. The New York Times reports that a group of venture capitalists calling themselves VCs for Kamala has been whispering in her ear to dissuade her from trying to tax unrealized gains. In a survey, 75 percent of the group’s members reportedly agreed that doing so would “stifle innovation.”

Bob Lord, a tax attorney who advises Patriotic Millionaires, a group of affluent people seeking fairer tax policies, isn’t buying it. Wouldn’t that innovation-stifling argument “apply equally to their realized gains? And to their tax rates?” he asks in an email. “The logic would justify them having a negative tax rate, so we could spur innovation.”

“As I see it,” adds Lord (who helped write Rep. Barbara Lee’s Oligarch Act of 2023, and who has contributed to this publication) “any tax on the ultra-rich is significant to them only for how it impacts their wealth. Taxes don’t impact their spending decisions, their career decisions, college affordability, retirement decisions, or whether a spouse needs to work full time.” 

Those taxes also won’t affect you if you have the following issue:

@dadified

Just a quick PSA #capitalgains #taxes #kamalaharris #repairs

♬ original sound – Freddie

VCs for Kamala did not respond to questions I sent via their media contact, but those rich kids may not have to worry either. Congress has thus far been unwilling to touch unrealized gains, in part because, as Dean noted, it sounds ridiculous—even un-American—when applied to ordinary people.

I know. These aren’t ordinary people. But remember how, when Congress passed $80 billion in funding so the IRS would finally have sufficient resources to go after wealthy, sophisticated tax cheats? And remember how Republican lawmakers, including Donald Trump, widely (and falsely) shrieked that the Biden administration was hiring 87,000 new IRS agents to fan out and harass regular people just like you? Yeah, that was hogwash. But it was politically effective hogwash that helped set the stage for the GOP to claw back tens of billions of that funding as part of a subsequent debt ceiling deal.

Something similar would almost certainly happen if Congress got close to imposing a tax on unrealized gains. It’s simple politics: “We don’t feel in general that it’s fair to tax people when they don’t have the ability to pay,” explains Harvey Dale, an attorney who advises ultra-wealthy clients on tax matters. “Suppose I am a farmer. My family has owned this 1,000-acre spread for four generations, and in a good year I make $30,000 farming. But the land, wow, that could be worth $10 million now.”

(Note: That farmer, lacking $100 million in assets, would be unaffected by the Harris plan.)

The Supreme Court “is all but certain to strike down a tax on wealth, and the wealth transfer tax system we have has effectively been neutered through avoidance strategies.”

One could, of course, write exceptions into the law, “as long as you could figure out what all of those kinds of issues are,” Dale says. Or you could take a different approach: “Why don’t you say, in general, we won’t tax unrealized gains, but we’ll make exceptions and tax them—for example, if the asset in question is freely marketable, like securities, and we won’t do that for people below a certain level of wealth or income.”

As things stand, investors already get a sweetheart deal. When you profit from the sale of an asset today, you pay a far lower tax rate than you would if you made the money by working. Sometimes you pay no tax at all: Uncle Sam, for instance, lets a married couple pocket the first $500,000 in gains from the sale of their primary residence. (Sorry, renters.)

Stock is different. If you sell shares you’ve held at least a year, any profits are taxed at a rate based on your overall income. For 2024, a couple making up to about $94,000 pays no capital gains tax. From there up to $583,750, the rate is 15 percent plus that 3.8 percent NIIT on incomes north of $250,000. Families raking in even more pay 20 percent—23.8 percent with the NIIT.

That’s a great deal for people whose incomes derive largely from investments. It means that a couple with wage income of $1 million in 2024 owes the IRS about $321,000, whereas a couple with $1 million in investment income owes only $181,000. (These simple figures ignore tax credits, deductions, etc.)

Why structure our tax code this way? Some people say it’s to incentivize investment, but I’m skeptical. As long as the government isn’t taking 90 percent of your profits, people will keep investing. What else are you gonna do—shove your excess cash under the mattress? Bury it in the yard?

Another rationale, says Dale, who has taught tax at New York University’s law school for decades, involves “bunching.” If my job pays $100,000 a year and I work for five years, I pay 22 percent annually to the federal government. But suppose capital gains were taxed the same as wages. If an investor who’s held a bunch of stock for four years then sells that stock the fifth year for a $500,000 profit, their income is the same as mine, but because it came all at once, their tax rate would be closer to 28 or 29 percent. “So if you want the theoretical justification, it is to average out the bunching,” Dale told me.

For people who make more than $1 million a year, Biden has proposed taxing capital gains at the same top rate as ordinary income—currently 37 percent. Last week, Harris softened that proposal, saying she’d only raise the rate to 28 percent. She and Biden also both seem to support raising the NIIT to 5 percent on incomes north of $400,000. Which means wealthy investors would pay a total of 33 percent on realized gains.

But you don’t make $1 million a year, so never mind.

Trump hasn’t specified his plan for capital gains—maybe, as with health care, he only has a “concept of a plan.” But Project 2025, the Heritage Foundation blueprint created by conservatives from Trump’s first administration, proposes cutting the top rate to 15 percent and eliminating the NIIT. If that happens, America’s one-percenters will pay a tax rate on investment profits that’s less than half the rate they pay on their salaries. And it means wealthy families whose income comes largely from investments will pay a lower tax rate than workers who bring home the nation’s median pay: roughly $60,000 a year.

For hectomillionaires, people with $100 million or more, the Biden-Harris plan would impose a minimum tax of 25 percent on all income, realized and unrealized. But that faces long odds, because even if Congress passes it, the Supreme Court might slap it down.

As the Tax Policy Center’s Steven Rosenthal has written, in the case of Moore v. United States, four of the justices “expressly declared that realization is a constitutional requirement” for taxation. If either Chief Justice John Roberts or Justice Brett Kavanaugh joins with their fellow conservatives, most of those wealth tax proposals would be in trouble.

Lawyers specializing in trusts and estates have long been engaged in “an ongoing, very complicated game to reduce the taxes paid by the wealthy.”

Tax attorney Lord sees a window: “The court is all but certain to strike down a tax on wealth, and the wealth transfer tax system we have has effectively been neutered through avoidance strategies,” he says, “so that leaves a tax on true economic income [including unrealized gains] as the only plausible option.” 

Dale says he likes the Harris plan, and “it’s not clear that SCOTUS would declare unconstitutional a 25 percent tax on unrealized gains of people whose net worth is over $100 million, but it’s also not clear that SCOTUS would approve or sustain such a tax.”

That uncertainty, he adds, will affect how Congress views the proposal: “At least some senators and representatives would decide to vote against it because of its possible unconstitutionality. Others in Congress will vote against it because they will dislike such a tax.”

Dale’s NYU colleague, former Biden Treasury official and tax expert Lily Batchelder, is more optimistic about the Supreme Court sustaining a minimum income tax for extremely high-wealth individuals: “The majority in Moore expressed concern about how the petitioners’ arguments would deprive the government and the American people of trillions of dollars in tax revenue by eliminating a vast array of existing provisions, including multiple provisions that already tax unrealized income,” she notes in an email. “I think the case educated the justices about the ‘blast radius’ that would result if they read some sort of realization requirement into the Constitution.”

It’s always been somewhat of a challenge to effectively tax the superwealthy, who wield political power and guard their hoards as jealously as Smaug, the Tolkien dragon. But Congress isn’t without options. It could, as Sens. Wyden and Angus King have proposed, restrict abusive trusts that allow billionaires to transfer massive sums to their heirs without paying a dime in tax. And lawmakers could cap federally subsidized retirement accounts to prevent wealthy retirees from taking excessive government handouts.

They also could do away with carried interest once and for all and strengthen the rules for Roth IRAs—retirement accounts meant for the middle class—that have famously allowed Silicon Valley’s Peter Thiel to parlay a $1,700 retirement fund contribution into billions of tax-free dollars.

And they could, as Biden has proposed, eliminate the socially corrosive “step-up in basis” rule: Suppose your father bought $5,000 worth of stock in 1960 and now it’s worth $5 million. If he dies and leaves it to you, under today’s rules, the “cost basis” of the stock—what it cost him originally—resets to the current market value. Boom! Your family just sidestepped taxes on almost $5 million in investment profits.

His estate wouldn’t have to pay any tax on that transfer, either: As of 2024, the IRS lets a couple give their kids up to $27.2 million, free of any gift or estate tax. This generous exemption is yet another rule that Congress could target. In fact, it’s set to revert to half that amount at the end of 2025, so I guess we’ll see whether our lawmakers will stand up to the oligarchs.

“There are $5 trillion of offsets in the president’s budget that raise revenue exclusively from large corporations and individuals earning more than $400,000 in income,” Batchelder points out. “Every member of Congress has different views about which of these options are most appealing, so the most doable reforms will depend on who are the marginal votes in Congress after the election, but there are many, many options.”

Dale figures the best way to shrink the wealth gap is to target inheritances—closing loopholes, restricting trusts, and generally strengthening the rules on intergenerational wealth transfers, which are taxed at only about 2 percent overall, per Batchelder’s 2020 analysis. The wealth industry will find workarounds, and you’ll never get a perfect system, he says, but you could make inheritance taxes harder to circumvent.

“A nontrivial portion of my practice was estate planning,” a field that has long engaged in “an ongoing, very complicated game to reduce the taxes paid by the wealthy,” Dale says. “It would be sweet, I suppose, to say, here is one simple thing that could be done that your readers can understand. But the loopholes are very, very sophisticated. If I tell you that the right thing to do is to repeal 664(c)(1), your eyes would glaze over. But there are trillions of dollars in that simple thought.”

This story was originally published by Grist and is reproduced here as part of the Climate Desk collaboration.

Following the release of a major climate report last year, UN Secretary-General António Guterres warned that the “climate time bomb” was ticking. Standing behind a podium emblazoned with the United Nations symbol of a globe encircled by olive branches, Guterres declared, “Our world needs climate action on all fronts—everything, everywhere, all at once.”

That call to action (possibly inspired by the movie of the same name) turns out to be a decent summary of what it takes to tackle rising carbon emissions. According to a new study out Thursday in the journal Science, countries have managed to slash emissions by putting a price on carbon, but the biggest cuts came from adopting a combination of policies. Seventy percent of the instances where countries saw big results were tied to multiple actions that generated “synergy.”

“There really isn’t a silver bullet,” said Felix Pretis, a co-author of the study and an economics professor at the University of Victoria in British Columbia, Canada. “That goes a bit against the conventional wisdom that economists have been saying that carbon pricing is the one thing we should push for.”

“I feel like there’s so much gloom and doom around climate policies, that nothing really happens, but actually, we’ve made a fair amount of progress.”

Pretis and researchers in Germany, France, and the UK looked for big drops in countries’ emissions and compared those results against the policies that had been adopted. Using machine learning, they analyzed 1,500 policies across 41 countries between 1998 and 2022, and found just 63 instances in which countries substantially slashed emissions. In total, these cuts added up to between 600 million and 1.8 billion metric tons of carbon dioxide. 

“I feel like there’s so much gloom and doom around climate policies, that nothing really happens, but actually, we’ve made a fair amount of progress,” Pretis said.

Part of the reason that the study only found 63 success stories is because it set a high bar in terms of emissions reductions, Pretis said. “But at the same time, we also see lots of policies having been implemented that don’t really bite.”

Governments are falling short of their climate targets set in the 2015 Paris Agreement by about 23 billion metric tons of CO2. The problem isn’t just caused by a lack of ambition, the study says, but a lack of knowledge in terms of what policies work in practice.

Carbon pricing, whether through a carbon tax or a cap-and-trade program, was “a notable exception” in that it sometimes led to large emissions cuts on its own, the study says, and worked particularly well for emissions from industry and electricity. However, “it works even better if you complement and package it up as a policy mix,” Pretis said.

The study doesn’t capture policies “that would have been wildly successful but didn’t pass precisely because they would have been so effective.” 

For example, the United Kingdom saw a 19 percent drop in emissions from the electricity sector between 2012 and 2018 after the European Union introduced a carbon price for power producers. Around the same time, the UK had implemented a host of other steps, including stricter air pollution standards, incentives for building solar and wind farms, and a plan to phase out coal plants. Similarly, China cut its industrial emissions by 20 percent from 2013 to 2019 through a pilot emissions-trading program, but also by reducing fossil fuel subsidies and strengthening financing for energy-efficiency investments.

To cut emissions from transportation and buildings, the study shows that it’s an even better idea to pair together multiple tools. Regulation is the most powerful policy for reducing emissions from transportation, and it can work well alongside carbon pricing or subsidies. The study also stresses that different policies might be effective in different contexts. The researchers found that carbon pricing was less effective in developing economies, places where regulations to limit pollution and investments in green technologies might be a better fit.

Gernot Wagner, a climate economist at Columbia Business School, said the study shows what measures to curb carbon emissions have been politically possible, but it shouldn’t necessarily serve as a guide for future policymaking. “It doesn’t capture policies that never passed—including those that would have been wildly successful but didn’t pass precisely because they would have been so effective.” 

Because of the bounds of the study, it also missed some of the most significant climate policies, Wagner said, pointing to the carbon taxes Sweden’s government passed in the early 1990s and the Inflation Reduction Act, signed by President Joe Biden in 2022. The United States’ landmark climate law invests hundreds of billions of dollars in clean energy and tax credits toward low-carbon technologies like heat pumps. The law is estimated to cut emissions by 40 percent by 2030, compared to 2005 levels.

“I wouldn’t be surprised if this exercise gets repeated five, 10 years from now, the Inflation Reduction Act would show up” as causing a big drop in emissions, Wagner said.

It’s fair to say that Michelle Obama stole the show at the Democratic Convention on Tuesday. (Husband Barack was on point in noting how hard an act she was to follow.) And to a journalist like me who covers wealth and inequality, one line in particular stood out. Listen:

Michelle Obama: She understands that most of us will never be afforded the grace of failing forward. We will never benefit from the affirmative action of generational wealth. pic.twitter.com/ywBjdwZl3E

— Acyn (@Acyn) August 21, 2024

The affirmative action of generational wealth. That’s a smart reframing of a longtime conservative hobby horse.

Republican politicians and right-wing media have regularly attacked programs designed to counter the generational impacts of government-sanctioned discrimination in housing, education, and veterans benefits. Now they’re targeting diversity, equity, and inclusion programs—see JD Vance’s recently introduced “Dismantle DEI Act“—and trying to brand Kamala Harris a “DEI hire.” That’s a laughable assertion. (New York Times columnist Lydia Polgreen argues that the moniker applies more aptly to Vance.)

But the critics of DEI and affirmative action want to have their cake and eat it too. For example, if you, like our Supreme Court, think the use of race as a factor in college admissions should be illegal, that’s your prerogative. But I hope you are similarly inclined to outlaw the practice of elite colleges giving an admissions boost to children of alumni and to students (like Jared Kushner) whose parents are major donors. Because isn’t that, too, a kind of affirmative action?

In just a handful of words, Michelle Obama managed to convey a simple truth, says Dedrick Asante-Muhammad, president of the Joint Center for Political and Economic Studies, a Washington think tank that focuses on the racial wealth-and-opportunity gap: “It is not those asking to break up concentrated wealth and opportunity that are asking for an unfair advantage, but rather those who are hoarding concentrated wealth.”

“Most of us,” as Obama noted, “will never benefit” from generational wealth. And that’s true of everyone, but even truer when you are Black or Hispanic. In the Federal Reserve Board’s 2019 Survey of Consumer Finances (SCF)*, about 47 percent of white respondents said they’d either received an inheritance or expected to receive one. Their median inheritance expected was $195,500 (in 2019 dollars).

Only 16 percent of Black respondents had received or expected an inheritance—and their median expectation was about half the white figure. Less than 12 percent of Hispanic respondents had received or expected an inheritance.

The disparities are similar when you look at federally subsidized retirement savings, which, according to the congressional Joint Committee on Taxation (JCT), will cost US taxpayers a whopping $1.9 trillion from 2020-2024. Most of that cash goes to the wealthiest 10 percent of Americans, who tend to be, yep, pretty white.

In 2021, the JCT identified 8,000 Americans with Individual Retirement Account (IRA) balances in excess of $5 million who were still getting tax breaks for their annual contributions—which is “shocking but not surprising,” noted Senate Finance Committee chair Ron Wyden. Peter Thiel, ProPublica reported, even managed, using questionable tactics, to amass a Roth IRA worth $5 billion.

Affirmative action for the rich.

According to the latest (2022) SCF, only 35 percent of Black families and less than 28 percent of Hispanic households even had a retirement account, compared with 62 percent of white families. The accounts of those white families were worth over $380,000 on average, more than triple the Black and Hispanic savings—and again, these numbers don’t account for the fact that a large majority of Black and Hispanic households have no private retirement accounts at all.

Then there’s land ownership—see “40 Acres and a Lie,” our acclaimed multimedia package exploring how the few Black families who received land reparations after the Civil War then had their acres cruelly rescinded a year and a half later. And consider these passages on the Homestead Acts, from a chapter of my 2021 book, Jackpot, titled “Thriving While Black.”

The two acts, passed during and after the Civil War, granted 160-acre parcels of public land—a foundation for generational wealth—to families willing to stake out the plots and make improvements. But the timing and circumstances made it extraordinarily difficult for Black Americans to participate:

It was a once-in-a-lifetime bonanza for white fortune-seekers. “The acquisition of property was the key to moving upward from a low to a higher stratum,” wrote author Everett Dick. “The property holder could vote and hold office, but the man with no property was practically on the same political level as the indentured servant or slave.” […]

Between the two acts, about 270 million acres of farmland—14 percent of the total landmass of the continental United States—was granted to 1.6 million white families, but only 4,000 to 5,000 Black families. [University of Michigan professor Trina] Shanks calculates that more than 48 million living Americans are direct descendants of those Homestead Act beneficiaries. Which means there’s a greater than one-in-four chance your forebears benefited directly from the biggest public-to-private wealth transfer in American history—if you’re white, that is. 

Affirmative action for the rich.

Obama hit the nail on the head. Asante-Muhammad says he was struck by her simple acknowledgement “that affirmative action for the privileged happens,” though “I wish there could have been a follow up to re-emphasize why programmatic affirmative action to advance more equal opportunity is necessary.”

But “it felt good,” he adds, “to hear a political speech that connects so personally with my political ideals, and to the challenges of the racial wealth divide and the action and ideals needed to bridge it.” 

*I used 2019 numbers here because the 2022 inheritance data was only available in raw form.

This story was originally published by the Guardian and is reproduced here as part of the Climate Desk collaboration.

The Inflation Reduction Act (IRA), passed exactly two years ago, was pitched as a policy that puts the “middle class first.” But the spending bill’s residential tax credits have so far disproportionately benefited wealthy families, new data indicates.

That’s a major challenge for the efforts to decarbonize the US economy in time to avert the worst consequences of the climate crisis. “If going green is just a niche lifestyle choice for the upper middle class, it won’t move the needle on emissions at a societal level,” said Matt Huber, a geography and environment professor at Syracuse University and the author of the 2022 book Climate Change is Class War.

A Treasury Department report published this month shines a light on the use of two IRA renewable energy tax credits: one that helped Americans boost the energy efficiency of their homes by installing heat pumps, electric water heaters, efficient windows and doors, or other upgrades; and another that helped households install small-scale renewable energy production—most commonly rooftop solar panels.

Households living paycheck to paycheck “do not have the savings or credit to buy a new heating/cooling system…even with a complicated incentive to do so.”

In 2023, about 3.4 million households, representing 2.5 percent of all tax filers, took advantage of at least one of these two subsidies, both of which were expansions of pre-existing incentive programs. That represents a 30 percent rise in the use of efficiency and clean energy tax credits over 2021 levels.

Nearly half of those who claimed at least one of these credits last year had incomes lower than $100,000. Yet roughly 75 percent of tax filers had incomes lower than $100,000 in 2023, and a closer look at the use of the credits by households within that bracket shows that wealthier Americans more frequently adopted both tax credits.

Of all filers making less than $100,000, just 0.7 percent claimed the clean energy tax credit, and just 0.9 percent claimed the efficiency incentive. In the over-$100,000 bracket, those percentages rose to 1.6 percent and a stunningly high 4.0 percent.

This dynamic, said Huber, was predictable. Tax credit programs can be difficult to navigate, especially for families who can’t afford to hire tax accountants, he said.

Further, though tax credits can make upgrades more affordable, they may not bring them into reach for Americans with lower incomes, especially because the programs come with spending caps for each household. “Most working-class Americans, living paycheck to paycheck, do not have the savings or credit to buy a new heating/cooling system…even with a complicated incentive to do so,” he said.

The tax incentives also favor those with higher tax burdens. If an upgrade is eligible for up to $2,000 in credits, for instance, filers must owe that amount or more in taxes to receive the full incentive amount.

This marked a substantial change from earlier proposals, which would have made the incentives available even for those with no tax burden. Lew Daly, a senior fellow with the climate justice group Just Solutions, said this was “a tragic political error” that should be changed by Congress.

“Without refundability, most of our country’s millions of moderate- and low-income homeowners are intentionally being excluded from the clean energy transition and its benefits in their everyday life, even as we are giving a massive fortune of tax dollars to big corporations and affluent households through the energy credits program as codified,” he said.

Instead of creating individual incentives, “why not work with utilities on a program that would aim to install heat pumps in every household for free.”

The two credits also require Americans to pay the up-front cost of home upgrades and wait until tax season to recoup costs—an option some households cannot afford.

It’s a major problem for lower-income Americans who are grappling with rising utility bills and a “threadbare social safety net,” said Daly. “The exclusionary design of the energy credits program is just piling on to create a future of worsening inequity.”

Despite these issues, when compared with similar tax incentives that pre-dated the IRA, the distribution of these credits has been more even, said James Sallee, energy economist at the University of California, Berkeley. One study showed 60 percent of benefits went to the top 20 percent of households from 2006 to 2020.

“But, the benefits are still regressive,” Sallee said. “In every income category, the more money you make, the more money on average people are claiming per tax return.”

The IRA does include provisions aimed at promoting equal distribution. The renewable energy tax credit, for instance, can be used to enroll in community solar—a helpful arrangement for renters and apartment dwellers who tend to have lower incomes than house-owners.

The bill also includes point-of-sale rebates for efficient appliances and upgrades, though their rollout has been slow because they are being distributed locally. Only two states have yet to offer rebates, though others could launch their programs within months.

Other changes could help change the distribution of tax credits, said Sallee. One of them: placing income caps on eligibility.

But ultimately, said Huber, to create green benefits that are easier for all Americans to access, they should be universal rather than means-tested.

“Instead of putting out incentives for individual households, why not work with utilities on a program that would aim to install heat pumps in every household for free,” he asked. “That might sound outlandish, but if we see solving climate change [as] critical to the public good, there’s no reason why decarbonization shouldn’t be seen as a core public service like healthcare or education.”