Protests were a preview of planned marches in the city ahead of United Nations’ climate ambition summit on 20 September
Progressive lawmakers and climate activists rallied at the Capitol on Thursday to demand an end to fossil fuel usage, previewing a planned march in New York on Sunday ahead of the United Nations’ climate ambition summit on 20 September.
“Clearly, saving the planet is the most important issue facing humanity,” the Democratic senator Jeff Merkley of Oregon, said. “But here’s the ugly and brutal truth: right now, humanity is failing. The planet is crying out for help.”
In New York, dozens of activists protested outside of the headquarters for asset manager BlackRock and Citibank on Wednesday and Thursday respectively, to call attention to both firms’ investments in fossil fuels.
The mobilizations are set to culminate with the March to End Fossil Fuels in New York City on Sunday, 17 September, which has been endorsed by 400 scientists and 500 organizations, including the NAACP, the Sierra Club and the Sunrise Movement. Organizers have predicted the event, which aims to convene tens of thousands of activists from across the country and around the world, will be the largest climate march in the US in five years.
“Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure,” said Sen. Elizabeth Warren.
The United States’ astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Timesdescribed Sunday as “the greatest wealth transfer in history” gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.
“Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets,” the Times reported. “Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade.”
The newspaper added that thanks to the loophole-ridden U.S. tax system, “heirs increasingly don’t need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of ‘giving while living‘—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start.”
“The trillions of dollars going to heirs will largely reinforce inequality,” the Times observed. “The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers.”
Don Moynihan, a professor at Georgetown University’s McCourt School of Public Policy, argued that the Times analysis further demonstrates that “we are not taxing the very wealthy enough.”
The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.
“As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion,” the Times observed.
The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.
Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation’s wealthiest households another $2 trillion in tax breaks.
In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.
“At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes,” Sanders said last month. “We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks.”
Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders’ legislation, tweeted Monday that “Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure.”
“Congressional Republicans need to get on board,” the senator added.
Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.
“People are following the law just fine. I generally don’t pay much taxes,” said Pearl, whose group has warned that democracy “will not survive” unless the rich are taxed much more aggressively.
Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife’s father, “who died a long time ago, bought in the 1970s,” an investment that “has gone from a few thousand dollars to many hundreds of thousands of dollars”—unrealized capital gains that are not subject to taxation.
University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.
“I’ve never paid a penny of taxes on all that,” Pearl said of his inherited equities, “and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that’s never taxed in any way, shape, or form.”
Fresh analysis of asset managers’ 2022 proxy voting patterns reveals the world’s largest investors are backsliding on climate-related votes, mainly in the energy sector.
While 2022 was the hottest year on record for a number of countries globally, the world’s largest asset managers’ progress on climate action has cooled.
Investors filed a record number of shareholder resolutions relating to environmental and social issues during 2022’s proxy season. However, new analysis by non-profit ShareAction of how US, UK and European asset managers voted on these resolutions reveals that those with the biggest influence worked to block a number of key climate votes last year.
The overall share of support across surveyed investors for environmental or social resolutions (filed mainly in the US, with a handful from other countries) increased from 60% in 2021 to 66% last year, but this was mainly down to a surge of supportive votes from asset managers in Europe, where sustainability disclosures are tightening.
Overall, the total number of supportive votes from US and UK investors barely changed between 2021 and 2022. Worryingly, the data reveals how the world’s four largest asset managers – BlackRock, State Street Global Advisors, Vanguard Group and Fidelity Investments – have worked to block key climate votes going through.
This is particularly notable within the energy sector, where the world’s largest asset manager, BlackRock, went from supporting 72% of such votes in 2021 to just 16% in 2022.