Millennial Luck, FOIA Surprise, Gender in the Valley

By Peter Ward     March 11, 2016

Generational Incomes Interactive

Warren Buffett wrote in his annual letter to Berkshire Hathaway shareholders this month that American babies born today are “the luckiest crop in history.” Buffett argues that the American GDP per capita is around $56,000, six times the number recorded in 1930 in real terms.

But how much better off are ‘millennials’ than ‘baby boomers’ and other generations in America and around the world? The Guardian aimed to find out in an interactive feature published on Monday.

Readers are invited to see where they fit on this scale: they can enter age and country of residence into a calculator at the top of the page, though the countries represented are limited to the U.S., Canada, the U.K., Italy, Spain, Germany, France and Australia. They can then see how their average income compares to average income in 1979.

For millennials between the ages of 20-24 living in the U.S., for example, disposable income in real terms is on average at least $3,300 lower per year today than it was in 1979. But for those aged 30-34 and living in the U.S., disposable income is over $3,000 higher than the average disposable income for their age range in 1979.

Readers can then compare disposable income for their age group in one country versus another and relative to other age groups. For example, 30-34 year olds have the highest disposable incomes in Spain, whereas 20-24 year-olds have the highest disposable incomes in Australia.

FOIA Reform Block Uncovered by FOIA Request

Documents obtained through Freedom of Information Act (FOIA) requests often serve as the backbone for investigative news reporting. But the process of requesting FOIAs is notoriously difficult and can take years to yield results, in some cases. Lately lawmakers and open government advocates have been pushing legislative reforms that seek to simplify the process, making it easier for journalists and the public to access government information through FOIA requests.

But the government has been pushing back, according to documents obtained by the Freedom of the Press Foundation, a non-profit organization supporting public interest journalism. Those documents show the Obama administration has been attempting to derail legislative reforms to the FOIA process, by allegedly using its influence to halt a reform bill that has bipartisan support.

Ironically, the documents were requested through FOIA, but the group had to take legal action to get them: Last December the group sued the Department of Justice after its FOIA requests were ignored for over a year.

The Freedom of the Press Foundation shared the documents exclusively with Vice, which published them on Wednesday. The documents show that the government opposed the FOIA reform bills, which received bipartisan support and were unanimously passed through the House and Senate in 2014, but were never put up for a final vote. In the released six-page set of talking points outlined by the Department of Justice, the Obama administration strongly opposed the House bill, claiming it would increase the backlog of FOIA requests and result in astronomical costs.

The FOIA Oversight and Implementation Act of 2014 was co-sponsored by then–House Oversight and Government Reform Committee Chairman Darrell Issa and ranking member Elijah Cummings to make it easier for journalists and the public to gain information from the government. It called for the introduction of a centralized online portal to deal with all FOIA requests and was introduced in March 2014.

Charity or Taxes?

Can charitable contributions excuse the wealthy from paying their fair share of taxes? That question is the primary theme of a piece penned by Alec MacGillis for ProPublica, published on Monday. MacGillis profiles renowned philanthropist David Rubenstein, and his role in preserving a tax loophole exploited by some of the wealthiest people in America.

Rubenstein, the co-founder of private equity firm the Carlyle Group, has given millions to the city of Washington DC, including half of the $15 million required to fix the Washington Monument, $21.3 million on a copy of the magna carta and $13.5 million to build a gallery to house it. But he has also played a major role in safeguarding the carried-interest tax loophole, which has helped private equity become one of the most profitable industries in the U.S. That loophole has been vocally opposed by legislators such as Senator Elizabeth Warren and others on the left, as well as some on the right, including Presidential candidate Donald Trump.

The loophole means that those managing private equity funds are taxed at a lower rate than regular income tax. Cue Warren Buffett famously complaining that he gets taxed less than his secretary.

In June 2007, a bill was introduced that attempted to reform tax laws and close the loophole for all private equity partnerships. The private equity industry immediately mobilized millions of dollars in lobbying power, and in the summer of 2007 Rubenstein went to Capitol Hill to appeal to Democrats. The bill failed in the Senate. In 2010 attempts to close the loophole were made again, and once more failed on the Senate floor, in part due to the influence and lobbying of Rubenstein, according to the article.

At the same time, Rubenstein was giving generously to several causes, and was honored with an award for his philanthropy. MacGillis draws a parallel between Rubenstein’s attempts to pay less tax and instructions in Andrew Carnegie’s ‘The Gospel of Wealth’ which tells the wealthy to give generously to charity in place of raising wages. In Rubenstein’s and other billionaires’ case, they see more value in giving to charity than paying equal amounts of taxes, the article argues.This allows them to essentially act as standins for the government, managing spending on social causes as they see fit rather than leaving that job to elected officials.

Victor Fleischer, a tax-law professor at the University of San Diego School of Law, described by MacGillis as the person most responsible for inspiring the movement to close the tax loophole, said, “I don’t want to bash the philanthropy, because it does good…But we’re creating what’s essentially a parallel system, where a small number of individuals control quasi-public spending, and that will reflect their values and not democratic values.”

Silicon Valley Gender Bias Examined

Silicon Valley has a gender inequality issue. Over the past two years or so, the surveys, data, research and court cases alleging gender bias have built up against technology companies operating in the American home of technology – but how is the problem being addressed?

According to a report by Joint Venture Silicon Valley last year, men in Silicon Valley reported earning up to 61% more than their female colleagues. Another survey published last year called The Elephant in the Valley showed that 48% of respondents believed they’d been passed over for promotion based on gender.

In March 2015, Ellen Pao sued her former employer, the Silicon Valley venture capital firm Kleiner Perkins Caufiled & Byers for gender bias. The case brought up many accusations of gender discrimination within the firm and the wider industry, but Pao lost the case.

And in September last year, computer security researcher Kate Moussouris filed a suit against her former employer Microsoft, alleging her and her female counterparts were discriminated against based on their gender.

There is hope within the industry though. Arjuna Capital, the activist arm of investment advisory firm Baldwin Brothers, is attempting to put a resolution in front of the shareholders of some of technology’s biggest companies, asking them to create detailed reports about the extent to which female and male employees are paid differently. So far, shareholders at Expedia, Facebook, Google and eBay have all agreed to vote on the proposal.

The draft resolution has also been presented to Microsoft and Adobe, and has been met with opposition from Amazon.

One company that doesn’t need the resolution is Intel. The chipmaker claims to have achieved 100% equity on pay and set up a $300 million fund at the beginning of last year to improve the diversity of the company’s workforce. Apple also boasts 99.6% equal pay. “The excellent moves by Intel and now Apple on gender pay equity means that the clock is ticking for the rest of America’s major technology companies, said Natasha Lamb, director of equity research and shareholder engagement, at Arjuna Capital.

The Week’s Top Headlines

Rubio’s Partial 2012 Tax Return Left Question: When Did He Pay? – Lynnley Browning, Bloomberg News

Snowden: FBI’s claim it can’t unlock the San Bernardino iPhone is ‘bullshit’ – Samuel Gibbs, The Guardian

Nasdaq to acquire options exchange operator ISE for $1.1B – Kevin McCoy, USA Today

Alibaba’s Ant Financial could be valued at nearly $60 billion: source – Paul Carsten, Reuters

Nasdaq to Buy Options Exchange Operator ISE for $1.1 Billion –  Josh Beckerman and Saumya Vaishampayan, The Wall Street Journal

ECB reveals surprise stimulus moves – BBC News

Yahoo Adds Two Directors to Fill Out Board Amid Turbulence – Austen Hufford, The Wall Street Journal

US and Canada promise to lead world to low-carbon economy – Suzanne Goldenberg, The Guardian

E.U. Approves Teva-Allergan Deal With Conditions – Chad Bray, The New York Times

Volkswagen’s US chief leaves troubled German carmaker – BBC News

This entry was posted on Friday, March 11th, 2016 at 5:24 pm. It is filed under Week in Review. You can follow any responses to this entry through the RSS 2.0 feed.