Educators are flipping out over Donald Trump’s choice of pro wrestling exec and longtime donor Linda McMahon for secretary of education. Predictably so, since experts in just about every field are flipping out when Trump chooses some poorly qualified (yet very loyal) hack to oversee their specialty—or selects another fox to guard the henhouse.

America’s biggest union, the National Education Association, for instance, slammed McMahon as unqualified and bent on a privatization agenda:

Her chief goal for education is to promote vouchers, which drain resources from public schools and send taxpayer money to unaccountable private schools that are permitted to discriminate against students and educators. The policies she promotes are aligned with Trump’s Project 2025 plan. 

McMahon, who served as head of the Small Business Administration during Trump’s initial term, has scant education experience. She earned a teaching certificate in college and was a student teacher for a semester, but resigned from the Connecticut Board of Education in 2010, according to the Washington Post, after the Hartford Courant found that she’d claimed an education degree she never obtained. More recently, a lawsuit accused McMahon and her estranged husband, Vince, of tolerating the sexual abuse of children by an employee of their company, World Wrestling Entertainment. (A lawyer for McMahon told CNN the allegations are “baseless.”)

But hey, she likes vouchers.

Voucher-esque programs, speaking of discrimination, were first deployed across the South during desegregation so authorities could shutter public schools—the white parents didn’t want their kids mixing with Black kids—and instead provide grants to fund the private education of exclusively white children at hundreds of new private schools that popped up to serve them. This was a sordid and horribly racist enterprise, as you will glean from this history compiled by the Center for American Progress.

When states expand voucher programs, shoddy and established school operators both cash in, and public schools and their students are the losers.

And it’s still happening, de facto. ProPublica reported the other day that tens of millions of dollars in public funds are still flowing to these “segregation academies”—of the 39 schools the reporters found in North Carolina alone, more than half had reported to the federal government that their student bodies were at least 85 percent white.

Republicans have been drooling over vouchers for as long as I can remember. They were talking about them when I was in grade school, and I’m a geezer. But now the messaging revolves around school “choice,” with proponents claiming that vouchers, which a number of states have revived in the form of education savings accounts (ESAs), allow low-income parents to escape failing public schools. And this is certainly true to some extent.

But the voucher/ESA cheerleaders neglect to mention that those public schools are failing in significant part because affluent families have fled en masse, and that their budgets have been gutted by, well, the same voucher-loving politicians and/or charter school systems championed by billionaire philanthropists like Bill Gates and the Waltons, and affluent members of both parties. All this drainage leaves many public schools underfunded to the point that teachers literally have to beg for basic classroom supplies—as some did during parents’ night at the public high school my kids attended in Oakland, California.

McMahon or no McMahon, vouchers have come back into vogue recently, likely in reaction to the educational upheaval of the Covid pandemic. “In 2023 alone, seven states passed new school voucher programs and nine expanded existing plans—highlighting a push that is largely coming from red states,” notes a Brookings Institution report published last year.

And sure, some low-income families will benefit from the programs, which channel money that would have gone to the local public school into private accounts (the ESAs) that can be used for private K–12 tuition and related expenses. But there can be a lot of collateral damage, notes the Brookings report.

First, whenever you expand government payouts—and this is something the Republicans complain about in other contexts—fraudsters and opportunists will come out of the woodwork. The report cites research showing that when traditional voucher programs were enacted, a host of “pop-up” private schools would follow, of which many fail quickly. “That’s exactly what is happening with the ESA-style expansions in Arizona now,” the report notes. (Arizona, which in 2011 became the first state to offer ESAs for selected students, expanded its program in 2022 to all students—including those already enrolled in private schools—according to a subsequent Brookings paper that deems the program “a handout to the wealthy.”)

Voucher programs also lead to tuition hikes by existing private schools, according to the Brookings report, “and that is exactly what recent reports are showing with ESA passage.” So, basically, shoddy and established operators alike cash in, and public schools and their students are the big losers.

There are other consequences, too. From the report:

The last decade of research on traditional vouchers strongly suggests they actually lower academic achievement. In Louisiana, for example, two separate research teams found negative academic impacts as high as -0.4 standard deviations—extremely large by education policy standards—with declines that persisted for years. Those results were published across top journals for empirical public and education policy. Similar results in Indiana found impacts closer to -0.15 standard deviations. To put these negative impacts in perspective: Current estimates of COVID-19’s impact on academic trajectories hover around -0.25 standard deviations.

Vouchers, more broadly, are of a piece with what I’ve been calling the Plunder—the steady rigging of our economic system over the past four and a half decades to benefit people who need no government support at the expense of those who really do. This, as I argued in a recent piece, was a primary reason why Trump won a second term, as ironic as that may sound.

I wrote about the rigging of our educational system in my 2021 book about excessive wealth in America. (Chapter title: “Getting In.”) Take the tax-advantaged 529 college savings plans our government offers. Like private retirement plans—401(k)s, IRAs, etc.—these plans provide far more help to rich families than to poor ones. The example I used in my book involved two (fictitious) students living in Ohio, one rich, the other middle-class.

The middle-class family could only afford to put $6,000 a year into their daughter’s 529—an investment fund that grows tax-free over the years and can be used to pay college tuition and qualified expenses when the child comes of age.

And that’s good. They needed that assistance. But for some reason the rules also allow the rich couple in my example to frontload their son’s 529 with up to five years’ worth of the maximum contribution all at once. So, they put $150,000 into a 529 that they set up for him as a newborn, do this again during his fifth year, and then, when he’s 10, bring the balance up to maximum the state allows, beyond which they can contribute no more. With so much cash in their fund from the start, you can imagine how quickly the interest accumulates.

Rich families gained yet another lucrative perk in late 2017, when Donald Trump signed his most notable first-term achievement, the Tax Cuts and Jobs Act. Beyond cutting taxes for wealthy folks and corporations, the TCJA stipulated that parents could now take up to $10,000 a year from their child’s 529 fund for private K–12 tuition. It’s worth noting that elite private high schools—where tuition typically runs between $40,000 to $60,000 a year—offer extensive college admissions mentoring, whereas a middle-class kid at an underfunded public school cannot use their 529 fund to cover expenses like SAT prep, college advising, or essay coaching that their school doesn’t offer in any meaningful way.

When I crunched the numbers, here’s what I found: Even assuming a conservative annual investment return of 5 percent for the students’ 529 funds, the rich family got some $117,000 in tax breaks, nearly seven times what the middle-class family received, not to mention that young Nigel (XTC fans will get the reference) had two and a half years of his private high school tuition covered by the taxpayers. He also ended up with a staggering $688,660 in his fund—likely enough to also cover the cost of law school or med school or business school should he choose any of those paths.

Small wonder that, at the time I reported these numbers, the “Ivy Plus” colleges were enrolling more students from the top-earning 1 percent families than from the bottom 50 percent. And that, compared with kids with families in the bottom 20 percent of the wealth spectrum, the children of 1 percenters were 77 times more likely to attend an Ivy Plus college. 

Vouchers only add insult to this injury. They can be marketed to sound like a good and equitable thing—a perk for all Americans—when in reality, without serious means-testing, they end up delivering the most benefit to families who need it the least. They are but one of the levers (here’s another) the Project 2025 people and Trump’s new administration may use to accelerate a plunder that has been in progress for decades, under the watch of both major parties.

One can almost hear it now: the “giant sucking sound” that the late Ross Perot used to talk about, except in this case it won’t be the sounds of US jobs going to Mexico. It will be the sound of the remaining wealth of the middle class getting sucked ever upward and into the coffers of our most privileged.

Americans of a certain age tend to throw around the term “Orwellian” willy-nilly. But the expression really suits in describing the behavior of our felonious, twice-impeached president-elect.

In George Orwell’s classic novel 1984, a dictatorship represented by the all-powerful “Big Brother” dictates the reality its citizens must adhere to, however topsy-turvy. Official slogans include “ignorance is strength,” “freedom is slavery,” and “war is peace.”

In this context, another slogan comes to mind: “Drain the swamp.”

Trump didn’t invent this populist expression, but he made it a centerpiece of his first campaign—a vow to rid DC of the toxic influence of special interest money, lobbyists, etc. Of course, politicians of both parties have long railed, often without much credibility, against special interests in Washington, and the US Supreme Court’s trashing of campaign finance safeguards has indeed created a cesspool of oligarchic influence in DC that crosses party lines.

It’s not the slogan itself that’s Orwellian. The Orwellian part is Trump’s evocation of the Swamp as he appoints foxes to guard the federal henhouse yet again. It’s a trolling of the libs, but a trolling with potentially dire consequences—and a signal that our government is for sale, more openly now than ever.

Exhibit A: Trump’s selection of Chris Wright, the CEO of a Denver fracking services company called Liberty Energy, for the position of energy secretary. Wright has no government experience and certainly no experience related to the nuclear weapons whose oversight is a critical part of DOE’s role.

Meanwhile, as typical of Trump’s cabinet picks to date, Wright’s other qualifications for the job are—to use Orwellian “Newspeak”—doubleplusungood.

It has escaped nobody’s notice that Trump’s top consideration in doling out key positions is loyalty to the boss. For attorney general, he chose Matt Gaetz, an inexperienced lawyer (but fierce loyalist) who has been accused of sexual impropriety—no charges were ever filed—and is notorious for allegedly foisting upon House colleagues videos of women he’s bedded. For his director of national intelligence, Trump picked Tulsi Gabbard, a former congresswoman my colleague Dan Friedman describes as a “uniquely bad choice.” Namely, she lacks intelligence experience and is so in sync with Vladimir Putin’s propaganda machine that her nomination was even celebrated on Russian television. To oversee White House communications, he picked a bomb-thrower who cut his teeth at UFC. For Health, he chose Robert Kennedy Jr., a man with no academic expertise in the areas he would oversee, and whose views and priorities are far from the mainstream, as my colleague David Corn has reported. (In this administration, apparently, ignorance is indeed strength.)

Wright, too, is a loyalist, but this pick feels distinctly transactional—Swamplike. Trump, after all, met multiple times during his campaign with top fossil-fuel CEOs, promising that, if they gave him money and helped him get elected, they would be richly rewarded. Wright, who denies the climate crisis and completely dismisses the US clean energy transition—which is weird, because it is well under way, despite the fossil fuel industry’s attempts to thwart it—is the industry’s reward. As was Trump’s choice for Interior, North Dakota Gov. Doug Burgham, who is apparently champing at the bit to expand drilling on federal land.

The New York Times reports that Wright’s wife, Liz, co-hosted a Trump fund-raiser in Montana, and that the couple donated a total of $350,000 to a Trump campaign committee. Most notably, Wright was the preferred choice of oil billionaire Harold Hamm, a major Trump donor and co-host of gatherings where candidate Trump wooed oil executives with what sounded suspiciously like a pay-to-play pitch.

Hamm has been playing the political money game for ages. As former Mother Jones reporter Josh Harkinson wrote in an early profile of the oilman, Hamm began supporting political causes in earnest starting in 2007, founding a group called the Domestic Energy Producers Alliance (slogan: “Good things flow from American oil”) and giving millions of dollars to candidates and right-wing causes supported by the billionaire industrialists Charles and David Koch—including nearly $1 million to support Mitt Romney’s unsuccessful 2012 bid for the White House.

In his rush to exploit North Dakota’s Bakken Shale, Harkinson wrote in 2012, Hamm’s company, Continental Resources, “has ridden roughshod over environmental laws….

Documents acquired by ProPublica show that it has spilled at least 200,000 gallons of oil in North Dakota since 2009, far more than any other company. That year, in one of its few formal citations against oil companies, the state’s health department fined Continental $428,500 for poisoning two creeks with thousands of gallons of brine and crude, but later reduced the amount to $35,000. Around the same time, during a thaw, four Continental waste pits overflowed, spilling a toxic soup onto the surrounding land. The Industrial Commission said it would fine the company $125,000, but it ultimately reduced the sum to less than $14,000, since “the wet conditions created circumstances that were unforeseen by Continental.”

Hamm stepped up for Trump in 2016, securing a VIP seat at the 2017 inauguration and exerting his influence during Trump’s first term. From the Washington Post:

In early 2020, he lobbied Trump to help persuade Saudi Arabia and Russia to end a price war that had driven down the price of oil below $0 a barrel, causing Hamm to lose $3 billion in just a few days.

The effort appeared to pay off. In April 2020, under pressure from Trump, members of OPEC, Russia and other oil-producing nations agreed to the largest production cuts ever negotiated—nearly 10 million barrels a day—as oil demand collapsed during the pandemic. 

This time around, Hamm, now Continental’s executive chairman, and his fellow oil and gas executives, would love to see some of those pesky environmental regulations go bye-bye, including the fines imposed under President Joe Biden’s Inflation Reduction Act on drillers who spew waste methane—a particularly potent greenhouse gas and primary component of so-called natural gas—into the atmosphere.

The purpose of regulating the fossil fuel industry is to ensure Americans clean air and water and at least some hope of escaping the worst ravages of a warming planet. Killing such regulations, and preventing new ones that cost his donors money, is a big part of what this second Trump administration—not to mention the US Supreme Court, with its decisions crippling the automony of federal agencies—is poised to deliver.

Call it Swamp 2.0.

Americans of a certain age tend to throw around the term “Orwellian” willy-nilly. But the expression really suits in describing the behavior of our felonious, twice-impeached president-elect.

In George Orwell’s classic novel 1984, a dictatorship represented by the all-powerful “Big Brother” dictates the reality its citizens must adhere to, however topsy-turvy. Official slogans include “ignorance is strength,” “freedom is slavery,” and “war is peace.”

In this context, another slogan comes to mind: “Drain the swamp.”

Trump didn’t invent this populist expression, but he made it a centerpiece of his first campaign—a vow to rid DC of the toxic influence of special interest money, lobbyists, etc. Of course, politicians of both parties have long railed, often without much credibility, against special interests in Washington, and the US Supreme Court’s trashing of campaign finance safeguards has indeed created a cesspool of oligarchic influence in DC that crosses party lines.

It’s not the slogan itself that’s Orwellian. The Orwellian part is Trump’s evocation of the Swamp as he appoints foxes to guard the federal henhouse yet again. It’s a trolling of the libs, but a trolling with potentially dire consequences—and a signal that our government is for sale, more openly now than ever.

Exhibit A: Trump’s selection of Chris Wright, the CEO of a Denver fracking services company called Liberty Energy, for the position of energy secretary. Wright has no government experience and certainly no experience related to the nuclear weapons whose oversight is a critical part of DOE’s role.

Meanwhile, as typical of Trump’s cabinet picks to date, Wright’s other qualifications for the job are—to use Orwellian “Newspeak”—doubleplusungood.

It has escaped nobody’s notice that Trump’s top consideration in doling out key positions is loyalty to the boss. For attorney general, he chose Matt Gaetz, an inexperienced lawyer (but fierce loyalist) who has been accused of sexual impropriety—no charges were ever filed—and is notorious for allegedly foisting upon House colleagues videos of women he’s bedded. For his director of national intelligence, Trump picked Tulsi Gabbard, a former congresswoman my colleague Dan Friedman describes as a “uniquely bad choice.” Namely, she lacks intelligence experience and is so in sync with Vladimir Putin’s propaganda machine that her nomination was even celebrated on Russian television. To oversee White House communications, he picked a bomb-thrower who cut his teeth at UFC. For Health, he chose Robert Kennedy Jr., a man with no academic expertise in the areas he would oversee, and whose views and priorities are far from the mainstream, as my colleague David Corn has reported. (In this administration, apparently, ignorance is indeed strength.)

Wright, too, is a loyalist, but this pick feels distinctly transactional—Swamplike. Trump, after all, met multiple times during his campaign with top fossil-fuel CEOs, promising that, if they gave him money and helped him get elected, they would be richly rewarded. Wright, who denies the climate crisis and completely dismisses the US clean energy transition—which is weird, because it is well under way, despite the fossil fuel industry’s attempts to thwart it—is the industry’s reward. As was Trump’s choice for Interior, North Dakota Gov. Doug Burgham, who is apparently champing at the bit to expand drilling on federal land.

The New York Times reports that Wright’s wife, Liz, co-hosted a Trump fund-raiser in Montana, and that the couple donated a total of $350,000 to a Trump campaign committee. Most notably, Wright was the preferred choice of oil billionaire Harold Hamm, a major Trump donor and co-host of gatherings where candidate Trump wooed oil executives with what sounded suspiciously like a pay-to-play pitch.

Hamm has been playing the political money game for ages. As former Mother Jones reporter Josh Harkinson wrote in an early profile of the oilman, Hamm began supporting political causes in earnest starting in 2007, founding a group called the Domestic Energy Producers Alliance (slogan: “Good things flow from American oil”) and giving millions of dollars to candidates and right-wing causes supported by the billionaire industrialists Charles and David Koch—including nearly $1 million to support Mitt Romney’s unsuccessful 2012 bid for the White House.

In his rush to exploit North Dakota’s Bakken Shale, Harkinson wrote in 2012, Hamm’s company, Continental Resources, “has ridden roughshod over environmental laws….

Documents acquired by ProPublica show that it has spilled at least 200,000 gallons of oil in North Dakota since 2009, far more than any other company. That year, in one of its few formal citations against oil companies, the state’s health department fined Continental $428,500 for poisoning two creeks with thousands of gallons of brine and crude, but later reduced the amount to $35,000. Around the same time, during a thaw, four Continental waste pits overflowed, spilling a toxic soup onto the surrounding land. The Industrial Commission said it would fine the company $125,000, but it ultimately reduced the sum to less than $14,000, since “the wet conditions created circumstances that were unforeseen by Continental.”

Hamm stepped up for Trump in 2016, securing a VIP seat at the 2017 inauguration and exerting his influence during Trump’s first term. From the Washington Post:

In early 2020, he lobbied Trump to help persuade Saudi Arabia and Russia to end a price war that had driven down the price of oil below $0 a barrel, causing Hamm to lose $3 billion in just a few days.

The effort appeared to pay off. In April 2020, under pressure from Trump, members of OPEC, Russia and other oil-producing nations agreed to the largest production cuts ever negotiated—nearly 10 million barrels a day—as oil demand collapsed during the pandemic. 

This time around, Hamm, now Continental’s executive chairman, and his fellow oil and gas executives, would love to see some of those pesky environmental regulations go bye-bye, including the fines imposed under President Joe Biden’s Inflation Reduction Act on drillers who spew waste methane—a particularly potent greenhouse gas and primary component of so-called natural gas—into the atmosphere.

The purpose of regulating the fossil fuel industry is to ensure Americans clean air and water and at least some hope of escaping the worst ravages of a warming planet. Killing such regulations, and preventing new ones that cost his donors money, is a big part of what this second Trump administration—not to mention the US Supreme Court, with its decisions crippling the automony of federal agencies—is poised to deliver.

Call it Swamp 2.0.

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.

Nevada’s secretary of state, the New York Times’ Danny Hakim reports, is concerned about the large numbers of absentee ballots getting rejected in the state’s most populous counties because of signature mismatches—potentially enough ballots to change election results. From the Times:

More than 11,300 ballots were reported by the state Monday night as still needing signature curing in Clark County, home of Las Vegas, and more than 1,800 in Washoe County. In particularly close elections, a large number of ballots that need curing could determine the outcome.

States that make such comparisons typically match the voter’s signature on the absentee ballot envelope against signatures in the registrar’s voter database and DMV records. If a mismatch is declared, voters are given the opportunity to “cure” a rejected ballot—in Nevada this year, they have through November 12.

The numbers above were much higher than the ones reported in 2020 and 2022, and they are expected to grow as more ballots arrive and are processed, Hakim wrote. “It’s mostly the fact that young people don’t have signatures these days,” Secretary of State Francisco Aguilar told the Times. “And when they did register to vote through the automatic voter registration process, they signed a digital pad at DMV, and that became their license signature.”

This is a problem his office might have seen coming, and it’s just one reason that having minimally trained people matching ballot signatures is not a great practice. Or so people who do it for a living told me when I was reporting on the subject during a past election.

There’s a lot of natural variation in people’s script related to health issues, aging, injuries, changes in mental state, and the circumstances in which a signature is created—that DMV touch pad yields a very different signature than a ballpoint pen at a desk will, for example.

“A person could write their signature 100 different times and none of those will be exactly alike.” 

Sample size is also an issue. “You have to have a series of signatures,” Patricia Fisher, a professional documents examiner from Northern California, told me. “They need to be closer in time, and on similar types of documents, because one signature is not going to represent the full range of variations in someone’s handwriting.”

Fisher, who at the time had spent more than four decades verifying disputed signatures, said her No. 1 rule was as follows: You never compare just two signatures to determine a mismatch. And you certainly don’t call a mismatch by comparing a recent signature with one collected years earlier—as might be the case with older voters who originally registered to vote—or drive—some time ago. 

Six signatures is about the minimum for a solid comparison, Fisher told me. A trained examiner looks for “the commonalities, the permanent characteristics, the fleeting characteristics, the other characteristics like the fluency, the speed, the rhythm. There are dozens of variables,” she said.

I spoke, too, with Mark Songer, a former forensic documents examiner for the FBI. “To do any kind of meaningful examination, I like to get anywhere from 6 to 10 representative samples that are pretty contemporaneous with the signature itself,” he told me. “A person could write their signature 100 different times and none of those will be exactly alike, because we all have a range—the only way to establish that range is to have a sufficient number of samples.”

Signature disputes are becoming increasingly common as more people, starting during the pandemic, began voting absentee. And thanks to the ubiquity of touch-pad signatures and the fact that cursive is no longer taught in many schools, signatures have become ever less reliable as a quick verification of a person’s identity.

“If they use a driver’s license signature and you’re signing an electronic pad, that changes many of the characteristics, because it’s not natural,” Fisher told me. “So you’re comparing apples and oranges for such an important thing—to say, ‘No, your vote doesn’t count because your signature doesn’t look right.’”

For a lot of those Nevada voters, that may be the only thing on file: “We’re seeing high engagement and turnout amongst our youth,” Aguilar told CNN.

I reached out to Nevada officials to ask whether it was true, per a rumor on X, that elections workers were attempting to call those voters, as opposed to, say, texting them. Because, I have a couple of first-time voters in my own household, and those people do not pick up the phone—unless it’s dad, and sometimes not even then.

A Clark County elections spokesperson assured me that elections staffers do, in fact, text voters—and call and email and even send them notices in the mail, and then continue to do so right up to the deadline. Yet despite these efforts, she said, only about half of the rejected ballots got cured in previous elections. That could yet be significant, since Clark County still had 9,600 uncured ballots as of 4 p.m. PT. And Washoe County’s website listed 1,375 still in need of curing.

In any case, “the whole signature thing needs to be totally reevaluated,” Fisher told me. “There should not be all these untrained people—and you probably won’t get trained people there, because trained persons know you don’t compare one signature to another signature.”

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.

Jimmy Carter turned 100 on October 1, making him the oldest former president. According to his family, Carter, also a former Georgia governor who has been in hospice care since February 2023, wanted to live long enough to cast his ballot for Kamala Harris. He passed that milestone on Tuesday, as early voting commenced in Georgia.

But with three weeks to go before Election Day, this raises a question? If Carter casts an absentee ballot and doesn’t make it until November 5, will the state count his vote?

Georgia law doesn’t address this question.

According to the National Conference of State Legislatures, most states haven’t stipulated what to do in such cases. Ten specifically mandate the counting of absentee ballots regardless of the voter’s corporeal status. (Connecticut allows it only when the deceased voter had been an active military member.) Another 10 states specifically forbid the counting of such ballots. Two—Kentucky and Mississippi—don’t have a statute addressing the issue, but reject the ballots based on legal opinions by their attorneys general. Three others allow residents to challenge such ballots. Here’s a map based on the NCSL tally:

Were I your king, or an authoritarian leader—something we may have soon enough—I would allow such votes because they reflect the hopes and fears of then-living Americans for their own near futures and for the futures of their families.

The reason we don't let people cast votes after death is obvious: They're dead, which means those votes would be fraudulent. (Besides, how far back would you go? Would you let the late Shirley Chisholm vote? How about Barry Goldwater?)

My preference on the absentee ballot question suggests I would be a benevolent authoritarian. But the one we might end up with would, I fear, only allow the votes of newly deceased Republicans to be counted.

Heck, he might even Make Goldwater Eligible Again. (MGEA?)

Godspeed, Mr. Carter.

Jimmy Carter turned 100 on October 1, making him the oldest former president. According to his family, Carter, also a former Georgia governor, who has been in hospice care since February 2023, wanted to live long enough to cast his ballot for Kamala Harris. He passed that milestone on Tuesday, as early voting commenced in Georgia.

But with three weeks to go before Election Day, this raises a question? If Carter casts an absentee ballot and doesn’t make it until November 5, will the state count his vote?

Georgia law doesn’t address this question.

According to the National Conference of State Legislatures, most states haven’t stipulated what to do in such cases, which are not likely numerous enough to sway even a local election—unless, perhaps, it’s for a seat on a local nursing home’s resident advisory committee.

Ten states specifically mandate the counting of absentee ballots regardless of the voter’s corporeal status. (Connecticut allows it only when the deceased voter had been an active military member.) Another 10 states specifically forbid the counting of such ballots. Two—Kentucky and Mississippi—don’t have a statute addressing the issue, but reject the ballots based on legal opinions by their attorneys general. Three other states allows residents to challenge such ballots. Here’s a map:

Were I your king, or an authoritarian leader—something we may have soon enough—I would allow such votes because they reflect the hopes and fears of then-living Americans for their own near futures and for the futures of their families.

The reason we don't let people cast votes after death is obvious: They're dead, which means those votes would be fraudulent. (Besides, how far back would you go? Would you let the late Shirley Chisholm vote? How about Barry Goldwater?)

My preference on the absentee ballot question suggests I would be a benevolent authoritarian. But the one we might end up with would, I fear, only allow the votes of newly deceased Republicans to be counted.

Heck, he might even Make Goldwater Eligible Again. (MGEA?)

Godspeed, Mr. Carter.

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.

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.”

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.

Mormons would probably be psyched. The Republican Party less so.

I’m talking about what would happen if we embraced the idea, proposed by Donald Trump’s running mate, Ohio Sen. JD Vance—isn’t he funny?—of empowering families by giving parents of young children an extra vote for each child.

Besides being likely unconstitutional (see the unanimous 2016 Supreme Court ruling in Evenwel v. Abbott, which upheld the 14th Amendment principle of “one person, one vote”) such a policy would be difficult to implement. Who gets the extra votes if there’s an odd number of kids and/or the parents are estranged or have opposing views? Who votes on behalf of stepkids—do they count? Adoptees? How about kids living with their grandparents? Noncitizen parents? Parents with Green Cards? Could undocumented parents vote on behalf of US-born offspring? And how would you verify all of it?

To be fair, in an interview over the weekend, Vance clarified that his proposal was simply a “thought experiment.” Okay then! Let’s think it through.

Assuming this proposal were legal and workable, whom would it benefit? Certainly the Mormons, who are known for prolific procreation (in 2014, according to a Pew Research report, Mormon couples ages 40-59 had an average of 3.4 children vs. 2.2 for all Christians and 2.1 nationally—they also famously have a history of having too many spouses.) Mormons tend to be conservative and vote Republican. But only about 1.2 percent of Americans identifed as Mormons in 2022, per the Washington Post. So who else might benefit?

Predicting voter preference and its impact on a given race is complicated and involves various interrelated factors: One must consider a given group’s cohesiveness, political tendencies, and likelihood of turnout, in addition to age, education, income, and geographical concentration—for example, Michigan’s Somali diaspora, Hawaii’s large Pacific Islander population, and Mexican Americans in the Southwest.

America’s young parents are more ethnically diverse than the broader population, and most minority groups lean Democratic—but turnout wold be key.

To these factors we can now add fecundity.

To make sense of all this stuff, you’d need a pro, so I called up William H. Frey, a senior fellow at the Brookings Institution and US Census expert who has researched urban populations, migration, immigration, race, aging, and political demographics. He’s also the author of the 2018 book, Diversity Explosion: How New Racial Demographics are Remaking America.

I also poked around for useful data. The Census Bureau’s 2023 Current Population Survey breaks down, by race and income, households with children under 18. That’s useful, because income is a rough proxy for education, and families with less education tend to have more children, Frey told me.

Non-Hispanic whites are significantly under-represented among parent households with incomes of less than $75,000—which account for 38 percent of all families with young children—while Latinos are substantially over-represented. In the slightly larger and more educated middle tier, households with $75,000-$199,999 in income, Asians and non-Hispanic whites are slightly over-represented while Black and Hispanic households are slightly under-represented. In the high-income tier ($200,000-plus), non-Hispanic whites and Asians are strongly over-represented while Black and Hispanic households are strongly under-represented—but only 17 percent of all families with young kids fall into this high-income, high-education, and likely high-turnout group.

The US has 3.5 million non-Hispanic, mixed-race kids, whom Trump managed to insult by asking, of Kamala Harris, “Is she Indian or is she Black?”

Slice and dice as you will, the upshot is that America’s youth, and their parents, are more ethnically diverse than the broader population. Non-Hispanic whites are 58 percent of the population, but less than half of kids under 18 are white only. Fourteen percent of kids are Black only, echoing the Black share of the US population. Ditto Asian kids (6 percent vs. 6.5 percent). But Latinos, representing 19.5 percent of the overall population, account for more than a quarter of minor children.

As of last year, non-Hispanic white families had 35.2 million minor children, whereas Asian, Black, and Latino families—all groups that tend to vote Democratic, Frey says—had 33.4 million children combined. (There were also 3.5 million non-Hispanic mixed-race kids—whom Trump may have managed to insult by asking, of Kamala Harris, “Is she Indian or is she Black?” Because one can’t be both!)

Trump’s supporters tend to be older and whiter, whereas most voting-eligible parents of young children would fall into the 25-44 age categories, which are more ethnically diverse, as this chart Frey put together demonstrates. (Scroll over the bars for exact percentages.)

Given our Electoral College rules, geographical clustering matters for the presidential race. Ethnically diverse states such as Texas and California, as Frey points out, "are going to have a bigger share of their voting age population with children and minority children. So that can help bolster the minority vote." Also, a sizeable share of America's Black population resides in red and purple states. And again, minority voters tend to favor Democrats.

"The key issue is turnout," Frey says. "High turnout is largely old people, college educated whites. Not so much for young people. And not so much for most minorities, except in some elections, like when Obama was running." (Note: This could be one such election.)

There's also an X-factor to consider: Might the promise of extra votes serve as an incentive for parents who might not otherwise do so to get out and exercise their patriotic duty, potentially narrowing ethnic and educational turnout disparities?

Frey was too busy to help me conduct an official analysis, but his overall impression is that Vance's idea would likely benefit Democratic candidates and priorities. "The whole thing is a bit hard to execute anyway," he says with a laugh. "Who’s gonna check? They accuse everybody of voter fraud if they just do normal voting. What happens if they do this kind of thing?"