BIG BUSINESS, NO TAX. WHERE’S THE SENSE IN THAT?

Amazon, Delta Air Lines, Chevron, IBM, General Motors, Molson Coors, Eli Lilly. What do these companies have in common? They paid no US federal taxes last year.

Thanks to President Trump’s 2017 tax law, the number of Fortune 500 companies that pay no federal taxes roughly doubled to 60, according to an analysis by the Institute on Taxation and Economic Policy, a research group. Some of those companies effectively paid negative taxes, because they received a refund.

The number of companies paying no taxes has risen for two main reasons. First, the revised tax law expanded some corporate tax breaks, such as the one for the purchase of machinery and vehicles. Second, the law reduced the top-line corporate tax rate, which means that some companies now have a small enough tax bill that they can wipe it out entirely with tax breaks.

Altogether, the law led to a 31 percent decline in corporate-tax revenue last year. That decline has helped cause an increase in the deficit passing the cost to future generations.

Even before the law change, American companies weren’t paying very much in taxes.

At a time when the public’s confidence in elected officials and institutions is especially low, the specter of big corporations avoiding all taxes on billions in profits sends a strong and corrosive signal that the tax system is stacked against them, in favor of corporations and the wealthiest Americans,” writes Matthew Gardner, the lead author of the Institute on Taxation report.

Where’s the sense in that?

Source: New York Times, Institute on Taxation and Economic Policy

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WHY SOCIAL MEDIA IS A DANGER TO DEMOCRACY

Social media, once seen as profoundly democratic, is increasingly serving the needs of authoritarians. Entrenched authoritarian states, like Russia and China, have become very skilled at manipulating these platforms to marginalize domestic dissidents and destabilize democracies abroad.

Receiving less attention is how authoritarian factions inside democratic states — far-right politicians and parties that are at best indifferent to democratic norms — benefit from the nature of modern social media platforms.

During the Brazilian presidential campaign, a conservative pro-business interest group funded a massive disinformation campaign on WhatsApp (the popular messaging app owned by Facebook). False and damaging information about Bolsonaro’s left-wing opponent, including fake news mocked up to look like neutral fact-checks, spread like wildfire in the run-up to the vote. This deluge, according to one Brazilian expert, played a role in Bolsonaro’s victory.

It is easier to spread misinformation on social media than to correct it, and easier to inflame social divisions than to mend them. In an essay by Ronald Deibert, the director of the University of Toronto’s tech-focused Citizen wrote: “It seems undeniable that social media must bear some of the blame for the descent into neo-fascism.”

Examples include the 2009 Iranian rising to protest against a rigged election. The so-called “Green Movement” used Facebook and YouTube clips of protests to spread their message. In 2011 the Arab Spring protest movements made skilful use of social media to topple regimes in Tunisia and Egypt. By 2013 an excited Bono was declaring that new technologies would be “deadly to dictators.”

This is partly true: It’s difficult to repress the spread of information on social media. But it’s equally difficult to repress the spread of disinformation. Citizens grow tired of trying to sort fact from fiction. Questioning the integrity of all media — one aim of authoritarianism — can in turn lead to a kind of fatalism and policy paralysis.

Donald Trump and his allies employ a similar strategy. The president lies, a lot; while the mainstream press debunks him, right-wing outlets spread those falsehoods or manufacture supporting evidence on social media, where they cement as fact in the eyes of the president’s hardcore supporters.

A recent study found that conservatives were more than four times as likely to share fake news on Facebook as liberals. Another study, from researchers at the University of Oxford, found that conservative users were overwhelmingly more likely to spread ‘junk news’ (defined as outlets that “deliberately publish misleading, deceptive or incorrect information”).

The Philippines’ Rodrigo Duterte has cultivated an online fan base that is known for “patriotic trolling: i.e sending hate messages to his critics and spreading smears about them.

Social media outlets not only are compatible with authoritarianism; they may be one of the main reasons why authoritarian practices are now spreading worldwide,” as Deibert puts it.

Normal use of social media can be equally helpful to all politicians, far-right or otherwise. But the negative use of social media, as in the Trump and Bolsonaro campaigns, intrinsically advantages anti-democratic political factions over their opponents.

The abuse of social media can have a more subtly corrosive effect on a democracy. Authoritarians don’t win solely by spreading their own message; they win by exploiting conditions under which citizens become either indifferent to democratic institutions or actively hostile to them. By working to increase political apathy and undermining trust in established institutions, far-right parties strengthen themselves at the expense of mainstream parties.

The University of Oxford’s Samantha Bradshaw and Philip Howard put out a report last year on the political abuse of social media platforms in 48 countries. They argued that in each of these cases, the use of tools like fake news and trolling undermined the health of democratic regimes and benefited authoritarians.

“There is mounting evidence that social media are being used to manipulate and deceive the voting public — and to undermine democracies and degrade public life,” they write. “Social media have gone from being the natural infrastructure for sharing collective grievances and coordinating civic engagement, to being a computational tool for social control, manipulated by canny political consultants, and available to politicians in democracies and dictatorships alike.”

Source: Vox, University of Toronto, University of Oxford

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OH NO! NOT SUSHI AS WELL!

Sushi has a great reputation for being a healthy, low fat, natural food, usually filled with some type of fish, vegetables, and rice, wrapped in a healthy seaweed wrap. That’s got to be good, right? Well, it all depends on what—and where–you are ordering.

For example, most of the fish served in many sushi restaurants is mislabelled. Oceana, a seafood watchdog company, did DNA tests on over 1,200 fish samples across the US. What they found was that 87% of red snapper and 60% of tuna was mislabelled.

It has nothing to do with posh or plebeian. In big cities at some of the most popular and expensive sushi restaurants, that figure averaged 74%. Most of the mislabelling concerned expensive fish being substituted with a cheaper, more common type of fish. When over 90% of seafood is imported but only 1% is inspected, it’s easy to see why this happens.

Let’s say you do manage to get the type of fish featured on the menu, there are still issues of toxins to be aware of. Tuna is one of the worst, with often high levels of mercury, dioxins, PCB’s, heavy metals and agricultural chemicals that wind up in the water supply. In fact, another study showed that the tuna sold in restaurants usually contained even higher levels of mercury, because the types of tuna used in sushi—bluefin akami and bigeye tuna have a higher fat content, meaning that the toxins build up in the fat. Better choices (if the menu has them) are Bluefin toro, and yellowfin.

OK. Let’s go for shrimp instead. Probably not, because 94% of the shrimp consumed is farmed in man-made ponds along the coasts of Thailand, China, Indonesia, Vietnam, Mexico, and Ecuador. Farmed shrimp is considered to be even more toxic than imported farmed tilapia and catfish, which are among the most toxic and polluted fish in the world. And on top of that, less than 2% of imported shrimp is inspected by the FDA. Choosing wild shrimp is imperative if you can find it.

Crab is another ‘iffy’ option for sushi. Often crab is substituted with imitation crab, and many times is not labelled as such in a restaurant. Imitation crab is made from a variety of fish, including a fish called the Golden Threadfin Bream, which is facing extinction. Even if it is made from Pollack, there is generally a lot of additives such as: Water, Egg Whites, Wheat Starch, Sugar, Corn Starch, Sorbitol, Refined Fish Oil, Rice Wine, Sea Salt, Modified Tapioca Starch, Carrageen, Yam Flour, Hydrolysed Soy, Corn, and Wheat Proteins, Potassium Chloride, Disodium Inosinate and Guanylate, Sodium Pyrophosphate, Carmine, Paprika, Monosodium glutamate.

That’s a lot additives and chemicals in a ‘healthy’ California roll. If you have any food allergies or gluten issues, you could be in trouble. Never mind, there’s still the Wasabi. Well actually even in Japan, only 5% or less sushi restaurants serve real wasabi. In the rest of the world it’s a powdered mix of horseradish, Chinese mustard, fillers such as corn starch, artificial flavouring and green food colouring. I think I’ll stay at home!

Source: Nutrition Watchdog, Oceana

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AT LAST A GLIMMER OF HOPE ON WEALTH TAX

The average wealth of the poorer half of American households has dropped below zero in the years since the financial crisis, according to the World Inequality Database. What does that mean? It means that fully half of Americans hold more combined debt than assets. The average wealth of the richest 1 percent of households, meanwhile, has more than recovered its losses from the crisis. They’re now richer than ever.

This situation isn’t healthy. And the most obvious solution is to change the tax code — specifically, to increase taxes on wealth to undo some of the radical increases in inequality over the last few decades.

Under current law, investors pay taxes on the increased value of the stocks and bonds they own — i.e capital gains — only when they sell them. They also pay a lower tax rate than that on most forms of income. Reform under what is known as the Wyden plan would remove both of those advantages.

Investors would have to pay the ordinary income-tax rate on their capital gains. And they would have to do so each year, based on the assets’ value at the time. In accounting terms, this practice of updating the value of an asset is known as “mark to market.”

The “mark-to-market” idea is similar in principle to the reassessment of home values for property-tax calculations. The property tax is an annual tax on the largest asset for most middle-class families. But the very rich don’t face an annual tax on their largest holdings which often include stocks.

This means that the lower tax rate on capital gains, combined with the deferral of taxing them, has enormous financial consequences. According to the Institute on Taxation and Economic Policy “Wealthy households, who already own the most in assets, can defer paying tax and grow their wealth much more rapidly, while income most of us earn from work is taxed annually. This is a massive tax break for the wealthy, and mark-to-market taxation would bring it to an end.”

The Wyden plan would also raise significant amounts of revenue for the federal government. That money could be used to reduce the deficit or pay for programs such as preschool or middle-class tax cuts. Critics of the Wyden plan claim that revaluing assets each year is too complicated to be feasible and that the plan will harm economic growth. That doesn’t appear to be the case in Europe where both property and fiscal assets are revalued annually without the economy crashing.

Source: New York Times, Wall St Jnl, Institute on Taxation and Economic Policy

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ALARMING BABY DECLINE IN HALF THE WORLD’S COUNTRIES

There has been a remarkable global decline in the number of children women are having, say researchers. Nearly half of the world’s countries are now facing a “baby bust” – meaning there are insufficient children to maintain their population size.

The study, published in The Lancet, followed fertility trends from 1950 to 2017. In 1950, women were having an average of 4.7 children in their lifetime. The fertility rate all but halved to 2.4 children per woman by last year.

But that masks huge variation between nations. The fertility rate in Niger, west Africa, is 7.1, but in the Mediterranean island of Cyprus women are having one child, on average. In most Western European countries the rate is 1.7.

Whenever a country’s rate drops below 2.1 then populations will eventually start to shrink (this “baby bust” figure is significantly higher in countries which have high rates of death in childhood).

At the start of the study, in 1950, there were zero nations in this position. Today half of all countries have fertility rates below the replacement level. Although the other half is still producing enough children to grow, as they advance economically, more will have lower fertility rates.

Most of the economically developed countries of Europe, plus the US, South Korea and Australia have lower fertility rates. But it can take a generation for changes in fertility rate to take hold and effect policies.

The fall in fertility rate is being put down to three key factors:

  • Fewer deaths in childhood meaning women have fewer babies
  • Greater access to contraception
  • More women in education and work

Source: Institute for Health Metrics and Evaluation at the University of Washington, BBC, The Lancet.

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HOW BOEING GOT TO BE GROUNDED

Boeing introduced the 737 in 1967. A perennial favorite of airlines around the world, the 737 has had twelve major updates. In 2017 Boeing launched the new 737 Max 8.

The Max 8 has capacity for 210 travelers compared to its nearest competitor the Airbus A320 which has a 194-passenger capacity. The extra seating makes a difference, especially to discount airlines. Boeing says the Max 8 is the most fuel efficient, most capable airplane with the lowest operating costs in the single-aisle market.

What makes the Max 8 less thirsty is being outfitted with bigger, more fuel-efficient engines than earlier 737s.

However, the weight and positioning of those engines, higher up on its wings, shifted the plane’s center of gravity forward, increasing the potential for the nose of the plane to “pitch up” after takeoff.

If the nose of a plane pitches up too quickly or too steeply, it can cause the plane to stall. To counteract that new risk, Boeing developed software known as the Maneuvering Characteristics Augmentation System, or MCAS and it’s MCAS that appears to be the plane’s problem.

Flight recorders recovered from the crashed Lion Air jet that went down in the Java Sea off Indonesia last October killing everyone on board, revealed the pilots were fighting MCAS that apparently had been fed incorrect data and kept forcing the plane’s nose down – until it crashed.

Investigators now believe the Ethiopian Airlines crash, which killed 157 people, resulted from the same MCAS fault.

What’s shocking is MCAS faults may have been well known, and Boeing may not have alerted airlines early enough – or properly, or with critical enough warnings, or even any at all.

The crew that flew the plane to Jakarta the day before the plane crashed reported faults with MCAS “automatically trimming,” meaning adjusting the plane’s controls to pitch its nose down, multiple times in succession. The pilot ended up turning off the system and trimmed the plane manually.

Once there, the crew filed what aviation experts called a “comprehensive” report of the incident. Why that report or the incidences weren’t immediately circulated to all Lion Air’s pilots and crew is unknown.

Also incomprehensible is why Boeing didn’t require pilots who were certified on 737s to get certified on the new Max 8 aircraft. There was no updated training simulation sessions. In fact Boeing marketed the cost savings of the lack of these certifications as a positive.

Thus having altered the center of gravity of the plane through new wing design, and having installed a software system to compensate for that without training pilots how to properly use it, Boeing then decided that a warning light system that shows any malfunctions in the software system sensors should be an optional extra that must be paid for.

After the two crashes, the equipment that alerts pilots of faulty information from key sensors will now be included on every 737 Max as part of changes that Boeing is rushing to complete. Boeing says it is a common practice in the industry to allow airlines to decide whether to pay for upgrades to a standard plane, which enables manufacturers to charge extra. Try explaining that to the relatives of the 346 people who have died because of this practice.

Meanwhile, investigators are also looking into the US Department of Transportation’s oversight of the Federal Aviation Administration (FAA), which may have had a too cozy relationship with Boeing officials. In particular investigators are probing details of the process behind some of the commercial aircraft design features FAA officials approved on the 737 Max 8. Investigators aren’t going to rush to conclusions when the stakes are so high.

That means 737 Max 8s could be grounded for a long time. Airlines have already told Boeing they are going to seek compensation for lost revenue as a result of the groundings. On top of that, buyers like Garuda have already cancelled orders, and two airlines with planes on Boeing’s tarmac have refused to take delivery. Boeing may find that its cost-cutting antics may cause it to bleed to death.

Source: Wall Street Indictments, The Guardian, Agence France Presse

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WHY THE ARCTIC IS DOOMED ALREADY

Regardless of how successful or not the Paris Climate Agreement is, the Arctic will be totally changed by 2050. The new UN environment report out last week anticipates Arctic winter temperatures increasing by three to five degrees by 2050 compared to 1986-2005 levels, and by five to nine degrees by 2080. And that is if we stop all emissions right now.

The temperature rise, says the report, is “locked in” because of greenhouse gases already emitted and heat already stored in the ocean. “Carbon emissions and the greenhouse gas emissions have a delayed effect and the emissions which we are producing today and which we will keep producing … will have effects for decades,” said Jan Dusik, principal adviser on strategic engagement for the Arctic and Antarctic with the UN environment program.

Expectations include a massive melting of ice and thawing of permafrost that will threaten biodiversity and change the living conditions for the Arctic communities.

According to the report, the world’s frozen soils hold approximately 1,672 billion metric tonnes of carbon. Permafrost will not be the only geographic casualty in the North. Under current rates of carbon dioxide emissions, the report anticipates Arctic summer sea ice could largely disappear within two decades.

Thawing permafrost and melt water from sea ice and glaciers will have impacts worldwide. The melting of Arctic glaciers and the Greenland ice cap will increase sea levels and affect global ocean currents and weather patterns, while thawing permafrost is expected to contribute to increased carbon dioxide and methane emissions.

So goodbye Inuit Villages, Polar Bears, and Arctic Foxes and hello flooded cities and a big increase of violent weather.

Source: CBC News, UN environment report on the Arctic

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