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U.S. presidential hopeful Warren wants breakup of Google, Facebook and Amazon

U.S. presidential hopeful Warren wants breakup of Google, Facebook and Amazon

Postby smix » Fri Mar 08, 2019 4:31 pm

U.S. presidential hopeful Warren wants breakup of Google, Facebook and Amazon
Reuters

URL: https://www.reuters.com/article/us-eliz ... SKCN1QP1M0
Category: Politics
Published: March 8, 2019

Description: (Reuters) - Senator Elizabeth Warren said on Friday that if elected U.S. president she would seek to break up tech companies Amazon.com Inc, Alphabet Inc’s Google and Facebook Inc as part of a structural change to the sector aimed at promoting competition.

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Warren, who is seeking to stand out in a Democratic field crowded with progressives, said in a blog post that the companies have been allowed to purchase potential competitors, like Facebook’s acquisition of Instagram. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation,” Warren wrote. Amazon shares fell 1.5 percent and Facebook and Alphabet shares were down 0.6 percent in morning trade on Friday. Warren said that she would nominate regulators who would unwind mergers such as Facebook’s deals for WhatsApp and Instagram, Amazon’s deals for Whole Foods and Zappos, and Google’s purchase of Waze, Nest and DoubleClick. Amazon, Google and Facebook did not immediately respond to requests for comment.



Wall Street critic Warren vows to break up Amazon, Facebook, Google
Reuters

URL: https://www.reuters.com/article/us-eliz ... SKCN1QP1M0
Category: Politics
Published: March 8, 2019

Description: NEW YORK (Reuters) - Senator Elizabeth Warren vowed on Friday to break up Amazon, Google and Facebook if elected U.S. president to promote competition in the technology sector. Seeking to stand out in a crowded field vying to be the Democratic candidate for president in 2020, Warren said at a campaign event in Queens that it was time to challenge the increasing dominance of America’s biggest technology companies. “We have these giant tech companies that think they rule the earth,” she told a crowd of about 300 people in Long Island City. “I don’t want a government that’s here to work for the giant tech companies. I want a government that’s here to work for the people.” Amazon abruptly scrapped plans in February to build a major outpost in the neighborhood that could have created 25,000 jobs, blaming opposition from local leaders. In an event held not far from the proposed Amazon site, Warren said that big tech companies come into towns, cities and states and “bully everyone into doing what they want” and “roll right over” small businesses and startups that are a threat.

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“Giants are not allowed to buy out the competition. The competition needs the opportunity to thrive and grow,” she said. Some of those in attendance said they didn’t know enough about Warren’s proposal to back it fully but they trusted her policy expertise. “What I like is that she’s proposing big ideas. I think that’s important,” said lawyer Kate Aufses, 32, who said she was undecided about which Democratic candidate she would support. Earlier in the day, Warren said in a post on Medium that she would nominate regulators to unwind acquisitions such as Facebook's deals for WhatsApp and Instagram, Amazon's deals for Whole Foods and Zappos, and Google's purchases of Waze, Nest and DoubleClick. Shares of Facebook Inc closed up 0.3 percent on Friday, while Alphabet Inc’s Google fell 0.08 percent and Amazon.com Inc lost 0.3 percent. Warren also proposed legislation that would require tech companies like Google and Amazon that offer an online marketplace or exchange to refrain from competing on their own platform. This would, for example, forbid Amazon from selling on its Amazon Marketplace platform. Amazon and Google did not immediately respond to requests for comment. Facebook declined comment. It is rare for the government to seek to undo a consummated deal. The most famous case in recent memory is the government’s effort to break up Microsoft. The Justice Department won a preliminary victory in 2000 but was reversed on appeal. The case settled with Microsoft intact.
“AN ARCHAIC IDEA”
U.S. Congress held a series of hearings last year looking at the dominance of major tech companies and their role in displacing or swallowing up existing businesses, among other things. Amazon’s business model has displaced brick-and-mortar stores and the company has been criticized for poorly paying its warehouse workers. Facebook has angered lawmakers for losing track of users’ data and for not doing more to stop foreign meddling in the 2016 U.S. presidential election. Google has clashed with smaller companies, like Yelp, over search placements and has raised concerns it would comply with China’s internet censorship and surveillance policies if it re-enters the Asian nation’s search engine market. NetChoice, an e-commerce trade group whose members include Facebook and Google, said Warren’s plan would lead to higher prices. “Senator Warren is wrong in her assertion that tech markets lack competition. Never before have consumers and workers had more access to goods, services and opportunities online,” said Carl Szabo, vice president and general counsel for NetChoice. In Washington, the president of the U.S. Chamber of Commerce, Tom Donohue, said breaking up the big tech companies would “take us back to the Stone Age.” “This is not a vision for the future, but an archaic idea that should be dumped in your computer trash can,” he said. Public Knowledge, a tech policy group, called Warren’s plan a step toward protecting the next generation of businesses, but stopped short of full-throated support for breaking up the tech giants. Tim Wu, a professor of law, science and technology at Columbia Law School who coined the term “net neutrality” and has warned against an economy dominated by a few giant firms, said in a tweet that it was “heartening” to see the idea of breaking up the tech giants gaining some traction. Tech companies are some of the biggest political donors. Google spent $21 million to lobby in 2018 while Amazon spent $14.2 million and Facebook spent $12.62 million, according to their filings to U.S. Congress. Angering a deep-pocketed industry could hurt Democrats, but that is not likely to be a big concern for Warren, who made her political mark and plenty of enemies by going after big banks after the 2007-09 financial crisis. In the Senate, Warren continues to be an outspoken critic of Wall Street and is a leader of her party’s progressive wing. Other Democratic candidates have also weighed in on the issue. Senator Amy Klobuchar used her campaign launch speech to vow action on digital issues like privacy, saying “big tech companies” misuse personal data. Senator Bernie Sanders in 2018 even named a bill after Amazon founder Jeff Bezos, the Stop BEZOS Act, which would tax big companies if their employees receive public benefits.



U.S. presidential hopeful Warren proposes new corporate profit tax
Reuters

URL: https://www.reuters.com/article/us-usa- ... SKCN1RN1P8
Category: Politics
Published: April 11, 2019

Description: WASHINGTON (Reuters) - U.S. Senator Elizabeth Warren is proposing a new 7 percent tax on corporate profits that exceed $100 million, her presidential campaign said on Thursday. Warren’s proposal would apply the new tax to the profits reported to shareholders, instead of the amounts companies already report to the Internal Revenue Service. The profits reported to shareholders are frequently much larger, given the loopholes, deductions and other accounting differences allowed by the tax code. Her campaign estimates about 1,200 companies would be subject to the new tax. It would bring the government an additional $1.05 trillion in new tax revenue over 10 years, according to estimates from economists Emmanuel Saez and Gabriel Zucman at the University of California-Berkeley. Under her proposal, companies’ first $100 million in profit would be exempt from the new tax, which would be in addition to existing corporate taxes that companies pay. Warren specifically targeted Amazon.com and Occidental Petroleum as two companies that are not paying enough in corporate taxes and would be forced to pay more under her proposal. Amazon disputed that the company is not paying adequate taxes, and a spokesperson also pointed out that the company creates “tens of thousands of quality jobs.” “Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years,” an Amazon spokesperson said in a statement. For each dollar over that threshold, the companies would be subject to a 7 percent tax, Warren outlined in a post on the website Medium and seen by Reuters. Warren hopes to challenge Republican President Donald Trump, who has focused on tax cuts for corporations, which he says have allowed the economy to flourish and helped lower the unemployment rate. Warren is competing in a crowded field of more than 15 Democrats vying for their party’s nomination and has sought to distinguish herself by offering the most numerous and expansive policy proposals. Warren’s new tax, which she dubs the “Real Corporate Profits Tax,” would account for profits U.S. companies make globally and would also be imposed on foreign companies doing substantial work in the United States. “This new tax applies to the profits very large American companies report to their investors — with no loopholes or exemptions,” Warren wrote in her proposal. Republicans are likely to criticize her plan by arguing it will drive companies currently incorporated in the United States to leave or change domicile to avoid the tax - a practice known as inversion. Warren’s campaign argues that rules on inversions put in place by the Treasury in 2016 have halted the practice and that she would continue strict enforcement if elected.
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Sen. Elizabeth Warren unveils plan to break up Amazon, Facebook and Google in ambitious campaign pledge

Postby smix » Fri Mar 08, 2019 6:50 pm

Sen. Elizabeth Warren unveils plan to break up Amazon, Facebook and Google in ambitious campaign pledge
The Washington Post

URL: https://www.washingtonpost.com/technolo ... gn-pledge/
Category: Politics
Published: March 8, 2019

Description: Sen. Elizabeth Warren (D-Mass.) pledged Friday to take aim at Amazon, Facebook and Google if she is elected president in 2020, breaking apart each of the big tech companies and introducing sweeping new regulation of Silicon Valley. The proposal marks the most ambitious and aggressive effort targeting the tech industry offered by any Democratic contender for the White House, and it could put pressure on other presidential aspirants to offer similar plans for more aggressive tech oversight.

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“To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies,” Warren said. Warren’s proposal has two key elements. First, the Democratic lawmaker said her administration would appoint “regulators committed to reversing illegal and anti-competitive tech mergers,” including Amazon’s purchase of Whole Foods, Facebook’s tie-up with WhatsApp and Instagram, and Google’s ownership of Waze, Nest and DoubleClick. Second, Warren said she would push legislation that would label key services — such as Amazon’s marketplace for goods and Google search — as “platform utilities,” which would have to be spun off from those tech giants’ other businesses. Her plan primarily targets companies with annual revenue over $90 million, and it would embolden federal and state regulators to issue steep fines and other penalties that harm competition or consumers. Even Web users could sue Amazon, Facebook and Google if they violated Warren’s proposed federal rules. Warren’s blueprint — detailed in a Medium post — comes as she prepares to speak to supporters in New York’s Long Island City neighborhood, where Amazon initially sought to construct one of two new headquarters. The company ultimately withdrew from the city amid staunch local opposition and fierce criticism from national figures, like Warren, who felt Amazon had received “taxpayer bribes” from New York. “We must ensure that today’s tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy,” Warren said in the Medium post.

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Amazon, Facebook and Google did not immediately respond to requests for comment. For now, Warren’s plan illustrates the tech industry’s political fall from grace, as policymakers around the world begin to confront the ills posed by Silicon Valley — from the job losses threatened by the rise of automation to the fast spread of falsehoods online. Privacy scandals, fears of election interference and rapid consolidation have soured even the industry’s historically close ties with Democrats in Washington in recent years. Previously, Democratic presidential candidates jockeyed to be seen as digitally savvy in the hopes of courting young voters and raising critical cash from tech moguls’ deep pockets. Then-candidate Barack Obama even appeared at Google headquarters during the early days of his 2008 campaign. More than a decade later, though, the party’s most prominent national figures have become some of Silicon Valley’s fiercest critics, responding to mounting concerns about the effects of major Internet platforms on the economy and even democracy itself. Sen. Amy Klobuchar (D-Minn.), another 2020 presidential hopeful, broadly has decried the “major monopoly problem” in the United States — particularly with big tech. Sen. Bernie Sanders (I-Vt.), meanwhile, has tangled specifically with Amazon over its business practices, particularly its treatment of workers. While neither they nor their peers have issued a plan as aggressive as Warren’s new pledge, tech experts in Washington said the party writ large had set its sights on the tech industry. "I don't believe this will be an out-of-the-mainstream proposal in 2020,” said Rob Atkinson, the president of the Information Technology and Innovation Foundation, a think tank where representatives from Apple, Microsoft, Google and other tech companies sit on the board of directors. Calling Warren’s proposal “appalling,” he said of the tech industry’s ties to Democrats: “Not only is the honeymoon over, but they’re in divorce court.”



Warren makes Democrats antsy. Sanders should petrify them.
The Washington Post

URL: https://www.washingtonpost.com/opinions ... 818a660ff2
Category: Politics
Published: March 5, 2019

Description: Sen. Elizabeth Warren (D-Mass.) is fully in tune with the progressive wing of her party, has a boatload of detailed policy ideas and high name recognition. She seems to be working hard in early primary states, giving voters plenty of access. And yet, it haunts her. The Native American thing, of course. She has slipped dramatically in polls since last year, and hasn’t matched others in small-donor fundraising, one indication of enthusiasm. And the Native American story just won’t go away. During this interview with CNN’s David Axelrod, Warren explains why she listed her ethnicity on her bar application:

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The most telling part of that interview was her response when asked whether it was a mistake to release a video and give new life to President Trump’s nasty “Pocahontas” taunt. “I can’t go back," she says. But did she learn from it? And herein lies the ongoing issue: Warren insists Trump is going to be Trump, and that she’s just got to move forward. On one level, it is true that Democrats cannot react to everything Trump says. But she made Trump the alpha dog in that fight by conducting the DNA test and releasing the video. She put him in control. Moreover, the notion that Warren is just going to let Trump’s barbs slide off of her raises the question: Does she really know how to fight back? Could Trump put her back on her heels from day one of the general election? Sure, Democrats’ sensitivity about racial and ethnic identity may play a part in concern about her candidacy. That doesn’t really get to the nub of the problem, however. Likewise, most Democrats seem to accept her assertion that she never got a job because of her claim to have Native American ancestry. So what’s the problem? The problem for her is the nagging sense among Democrats that Trump has already gotten the better of her — and their conviction that their party’s nominee cannot start out already playing defense. Her problem isn’t that she seems dishonest, it’s that she seems politically feckless. And in an election where winning is everything, that’s worse. Democrats are right to be concerned about their nominee’s political chops, but they should be more concerned with a candidate’s boasting about a socialist pedigree than one claiming to have Native American ancestry. The latter is politically dumb, the former raises questions ranging from electability to capacity for governance to possessing a unifying vision. If Democratic are nervous Trump will skewer Warren over her ancestry, they should be petrified about what Trump is going to do with the socialist affiliation of Sen. Bernie Sanders (I-Vt.). It will frighten voters and transform the election from a referendum on Trump to one on socialism. The future for them, Trump already insists, would be Venezuela. Sure, it’s ridiculous to claim that socialism is best exemplified by Nicolás Maduro’s Venezuela (Why not Norway?), but it sure doesn’t help when Sanders refuses to condemn Maduro outright. Moreover, it’s not as though Sanders has ever gotten consensus for and passed his self-described socialist ideas. Other candidates can claim victories in passage of green-energy legislation and support for state compacts to adhere to the Paris Agreement, both of which address the problem of climate change. The Green New Deal hasn’t been implemented because, in its idealized version, it lacks substantial political support and won’t pass. Likewise, Democratic governors can claim progress in extending Medicaid coverage or reforming fee-for-service payment in their states. Former Colorado governor John Hickenlooper went to bat to fight to save the Affordable Care Act; Sen. Amy Klobuchar (D-Minn.) has been front and center working on reducing the cost of prescription drugs. But Medicare-for-all? It has never come close to passing, partly because voters have no desire to give up employer-provided insurance. Part of vision is the ability to set out an agenda that is attainable and attractive for an electoral majority. A vision so extreme that it loses half the voters coming out the gate isn’t what primary voters should crave. In short, Democratic voters definitely should be concerned about giving Trump the political upper hand. The worst thing they can do, far worse than nominating a political neophyte, is to nominate someone with an agenda easily portrayed as scary. If the candidate has no track record of success for measures precisely because they are far out on the left-wing of an already progressive party, primary voters should run the other way. If Democrats want to win, they better find a candidate who can remind voters Trump is the scary one with policies (e.g., repealing Obamacare, tax cuts for the rich) ordinary voters hate.
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2020 candidate Elizabeth Warren unveils plan to 'break up big tech,' targeting giants like Amazon, Google and Facebook

Postby smix » Fri Mar 08, 2019 7:52 pm

2020 candidate Elizabeth Warren unveils plan to 'break up big tech,' targeting giants like Amazon, Google and Facebook
ABC News

URL: https://abcnews.go.com/Politics/2020-ca ... d=61555895
Category: Politics
Published: March 8, 2019

Description: Democratic candidate Sen. Elizabeth Warren on Friday followed up on her campaign theme that, if she were president, everyone would have to play by the rules, this time targeting giant tech companies like Amazon, Google and Facebook for having “too much power.”

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Through the policy, the Democrat from Massachusetts would "unwind tech mergers that illegally undermine competition " — citing Amazon for its takeover of Whole Foods, Facebook for its takeover of WhatsApp and Instagram, and Google's for its takeover of the mapping app Waze. “Today’s big tech companies have too much power?—?too much power over our economy, our society, and our democracy,” Warren said in a statement. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else.” Warren continues to churn out policy, outpacing fellow 2020 contenders and pushing the field left. In late February, Warren announced a plan to guarantee every American free or affordable childcare. Before that, she announced sweeping taxes on the ultra-rich. In a lengthy description of the tech-busting policy Friday, Warren criticized the system for allowing companies to complete mergers that snap up competitors, and by using their own marketplaces to drown out other companies. The result, Warren highlighted, is stifled competition in the tech industry and increased privacy risks to users. “With fewer competitors entering the market, the big tech companies do not have to compete as aggressively in key areas like protecting our privacy,” she said.
What would breaking up big tech look like?
Warren’s plan would prohibit companies that make more than $25 billion a year through an online marketplace from also owning participants on the platform. It would prohibit, for example, Amazon from selling its own line of “everyday items” called Amazon Basics — things like bath towels and HDMI cables — on Amazon’s own marketplace. Warren would also appoint federal regulators “committed to using existing tools to unwind anti-competitive mergers.” In her statement, Warren promised users would still be able to “go on Google and search like you do today” or “go on Amazon and find 30 different coffee machines.” But, she said, small businesses would have a shot at selling on Amazon, Google Search couldn’t push competitors down in favor of their own companies, and Facebook would be pressured to “improve the user experience and protect our privacy.” Her proposal won’t solve every problem, Warren acknowledged. She mentioned other holes that prevail in tech policy, like helping local newspapers to make money off their work online. “And we must ensure that Russia?—?or any other foreign power?—?can’t use Facebook or any other form of social media to influence our elections,” Warren said. Notably, Warren's plan did not call out Apple, a tech company that has frequently been named the most valuable publicly traded company in the U.S. When asked, a spokesperson for Warren's campaign said Apple was indeed targeted by the policy. The company produces over $25 billion in revenue and would have to choose between, for example, "running the App Store or offering their own apps," said Saloni Sharma, a spokesperson with the campaign. Warren was set to speak about the policy to supporters Friday in Long Island City, which would’ve been home to one of Amazon’s headquarters in New York but the tech-conglomerate pulled out of the deal after critics said the city gave them unfair government incentives.

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One such critic was Rep. Alexandria Ocasio-Cortez, backed by supporters in groups like Democratic Socialists for America. “Amazon is paying $0 in taxes on $11+ billion in profit. $0 for schools. $0 for firefighters. $0 for infrastructure. $0 for research and healthcare,” Ocasio-Cortez tweeted a few days before Amazon pulled out. “Why should corporations that contribute nothing to the pot be in a position to take billions from the public?” 2020 Democratic candidate Sen. Bernie Sanders, who, like Ocasio-Cortez, holds support from Democratic Socialists of America, has also made Amazon a target. Sanders went after Amazon for its wage and benefits, which the company increased in October to $15 an hour.
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3 reasons Elizabeth Warren's tech giant breakup plan is idiotic

Postby smix » Fri Mar 08, 2019 11:02 pm

3 reasons Elizabeth Warren's tech giant breakup plan is idiotic
Washington Examiner

URL: https://www.washingtonexaminer.com/opin ... is-idiotic
Category: Politics
Published: March 8, 2019

Description: Wooing far-left Democrats to her 2020 presidential campaign, Sen. Elizabeth Warren, D-Mass. has a new proposal to destroy the crown jewels of the U.S. economy. She wants to break up Facebook, Google, and Amazon. It's an idiotic idea for three reasons.
It's disingenuous.
Knowing that her millennial base loves Apple, she leaves Apple off her explicit target list. It's so politically calculating it's funny.

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These companies aren't anti-competitive monopolies.
Let's start with the basics: there are a multitude of search websites online varying from Yahoo, to Bing, to Ask, to AOL. But what makes Google successful is the fact that it is seen by consumers as the best service. Consumers use Google even though Google gives preferred status to its own products. But that's not Google's fault, it's a consumer choice. A similar theme is true of Amazon. Warren says that "Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version." Sorry, senator, that's called free trade. Amazon "crushes" the marketplace because it sells more goods, more cheaply, more efficiently than its competitors. It "crushes" because consumers choose it. Warren's plan would have consumers pay more for products they currently buy at lower prices. Count me out. But count me in when it comes to the rising competition from big companies like Walmart. That retail giant's invasion of the online space is already paying dividends for consumers in forcing Amazon to be even more competitive.
These companies are massive innovators, job creators, and wealth creators.
Warren says that Amazon, Facebook, and Google snap up too many smaller companies and thus stifle innovation. Untrue. Why is it that even though their original business models were focused on far more basic consumer services, Amazon now dominates globally in cloud computing, Google now dominates globally in artificial intelligence, and Facebook now dominates globally in social networking and business facilitation? It's because those companies have invested vast sums of money in great talent and high-risk, high-reward research and development. Warren's plan would obstruct that innovation by taking away that which empowers it: capital. What of Warren's claim that the big technology firms prevent innovation from smaller competitors? Again, it's untrue. Job creating high-value companies are forming at increasing rates. Smaller technology companies can refuse to sell to or merge with the tech giants if they choose to do so. Why do smaller companies so often choose to sell or merge? There's a lot of money to be made. But also, more importantly, because these business owners know that they are valued for their innovation as much as their existing product. They know that joining the big giants gives them means to invest more heavily and create new products more actively. Their talents are enabled. Remember, the source of Amazon, Facebook, and Google's success is not creating barriers to market entry or success, but rather in constantly innovating. That's why they buy up smaller companies — to gain their talents and empower their potential. Ultimately, that speaks to the ultimate problem with this plan: It sounds intelligent and pragmatic, but it's actually just delusional. But we shouldn't be surprised. History tells us that when Warren takes a stance on regulation it's going to be bad news. Consider Warren's genius banking regulations. They have gutted small community banks that cannot maintain capital reserve requirements under Dodd-Frank. But at least payday lenders are winning. The best argument against Warren's proposal comes from her very first words in introducing it: "Twenty-five years ago," Warren begins, "Facebook, Google, and Amazon didn’t exist. Now they are among the most valuable and well-known companies in the world. It’s a great story — but also one that highlights why the government must break up monopolies and promote competitive markets." It's a great story, so let's ruin it. How are these ideas feasible in a globalized economy? The moment President Warren started enacting these plans, Amazon, Google, and Facebook would simply relocate their research, jobs, products, and yes, tax revenues, to a foreign shore. Note that there's a reason these giants are American, not European. Europe, not America, has chosen Warren's way of regulation. Still, as a conservative, I hope Warren ends up being the Democratic nominee. In this proposal and her broader agenda to gut the military but boost 10-year domestic entitlement spending by trillions of dollars, she'll make the case against herself. Whatever Americans think about President Trump, and I recognize that many despise him, threats posed by China, Russia, and North Korea, and an existing national debt of $22.1 trillion ( the debt matters), suggest that Warren's presidency would-be America's Titanic.



Elizabeth Warren outlines the next part of her plan to destroy the economy
Washington Examiner

URL: https://www.washingtonexaminer.com/opin ... he-economy
Category: Politics
Published: April 11, 2019

Description: Sen. Elizabeth Warren, D-Mass, has an odd presidential campaign strategy: She wants voters to know that her top priority is to break the U.S. economy. Okay, she doesn't put it exactly like that. But that would be the consequence of Warren's policies toward America's most successful corporations.

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Enter her announcement on Tuesday of a plan to impose a 7% tax surcharge on corporate profits over $100 million. Warren says this will ensure that big companies such as Amazon pay a fair amount of taxes. It might sound good, but Warren's plan would actually make the U.S. corporate tax rate one of the most expensive and thus most unattractive in the world. After all, the former Harvard Law School professor also opposes the 2017 tax reform's corporate rate cut from 35% to 21%. Aside with her surcharge tax, a Warren presidency would mean major companies paying a marginal tax rate of over 40%. Is this a good idea? Well, no, considering nearly every major economy is reducing corporate tax rates to attract foreign investment and facilitate capital formation, I would suggest that Warren's plan is not a very good idea, to put it gently. Moreover, the evidence in favor of lower corporate tax rates is clear. President Trump's corporate tax cut has worked wonders for the economy, especially for minorities and the least skilled of workers. The issue here isn't simply that Warren should have walked across Harvard's campus and sat in on a few business classes. It's that Warren genuinely embraces the economic theory of self-destruction. It's not just that Warren utterly ignores the facts on companies such as Amazon, it's that she actually wants to destroy them. Warren recently outlined a plan to break up big technology companies such as Amazon and Facebook. She claims that this would foster innovation and competition. But it would only weaken the most innovative elements of the economy and drive them overseas. All this leads to one inevitable conclusion: Basically, no major foreign investor would look at Warren and think, "She makes me want to invest in America." Unless, that is, they are insane. Regardless, it is fortunate for America and the world that Warren is unlikely to ever become president. She's not just a poor campaigner, she's an especially bad fit to challenge Trump in 2020. No wonder the president is so eager for her to win the nomination.
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Elizabeth Warren Fires a Warning Shot at Big Tech

Postby smix » Sat Mar 09, 2019 8:52 pm

Elizabeth Warren Fires a Warning Shot at Big Tech
Wired

URL: https://www.wired.com/story/elizabeth-w ... ok-google/
Category: Politics
Published: March 8, 2019

Description: The tech industry is already under siege by the press, the public, and regulators around the world. But on Friday, Democratic presidential candidate Elizabeth Warren lobbed a bomb onto that battlefield, designed to crack the fortresses that have formed around tech monopolies like Google, Facebook, and Amazon. In a Medium post, the senator from Massachusetts laid out her presidential platform for breaking up these big tech companies, unwinding their past mergers, and preventing giant platforms like Amazon from also selling their own products on those platforms, potentially stifling competition. "As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people," Warren wrote in the post. "To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it’s time to break up our biggest tech companies."

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Several of Warren's fellow candidates, including US senators Amy Klobuchar and Bernie Sanders, have recently spoken out about tech monopolies and mergers. But Warren's stance is by far the boldest articulation of how the country might go about dismantling the businesses that have insinuated themselves into every part of our lives. It's also the clearest sign yet that Big Tech is in big trouble going into the 2020 primaries. "This is a pace-setter," says Matt Stoller, a fellow at the anti-monopoly think tank Open Markets Institute, who applauded Warren's proposal. "This is going to be a real party debate. If you don't have a plank on tech platforms, it will be very notable." Warren's plan envisions a new category of company called a "platform utility." This would include companies "that offer to the public an online marketplace, an exchange, or a platform for connecting third parties." That includes, of course, Facebook, Google, and Amazon. Any platform utility that makes at least $25 billion in annual revenue would be prohibited from simultaneously owning and participating on that platform. It would also have to commit to "meet a standard of fair, reasonable, and nondiscriminatory dealing with users," though it's still unclear how that would be defined. This means, for instance, that Amazon's private label product division, called Amazon Basics, would have to be spun off into its own company or be prohibited from selling on Amazon's marketplace. Google's ad exchange and Google Search would also have to be split up under such a policy. Companies that make less than $25 billion a year wouldn't have to split up, but would still be monitored for fairness and nondiscrimination. Warren also wants to unwind what she calls "anti-competitive mergers," specifically naming Facebook's acquisition of Instagram and WhatsApp, Amazon's acquisition of Whole Foods and Zappos, and Google's acquisition of Waze, Nest, and DoubleClick. Though it wasn't mentioned in the post, Warren's campaign also confirmed to WIRED that Google's acquisition of YouTube would be reviewed, and that YouTube could be considered a platform utility in its own right. Finally, Warren seeks to prevent these so-called "platform utilities" from sharing data with third parties. That would simultaneously shift Facebook and Google's position as the center of the data economy and also go a long way toward protecting user privacy. Several tech advocacy groups jumped to condemn Warren's proposal as anti-consumer. "Consumers now benefit greatly from having one Amazon, one Google, and one Facebook," Rob Atkinson, president of the Information Technology and Innovation Foundation, said in a statement. "The goal of competition policy should be to enhance consumer welfare, not penalize companies for earning market share and operating at scale—yet that is exactly what the Warren proposal would do." Ed Black, president and CEO of the Computer and Communications Industry Association, said that while he agrees competition enforcement is important, "this unwarranted and extreme proposal, which focuses on a highly admired and highly performing sector, is misaligned with progressive values, many of which are shared within the tech industry." Still others were more reticent. The Internet Association, which represents Facebook, Google, and Amazon, declined to comment on the plans. According to Frank Pasquale, a law professor at the University of Maryland and co-author of the book The Black Box Society: The Secret Algorithms that Control Money and Information, these reactions from the industry ignore a key principle of market dynamics. "The more competitors that have a chance on proprietary marketplaces, the better off consumers are in terms of quality, variety, and price," he says. "I don't think you can say whatever Big Tech wants is best for consumers." Pasquale says the country's regulators need to reassess the definition of consumer welfare, which guides antitrust decisions in the United States. It's what has traditionally led to the assumption that lower prices are always better for consumers. But, Pasquale argues, there are other aspects of consumer welfare to consider. "The newer forms of antitrust coming out in Europe, particularly with respect to German authorities, say that privacy is a social value," Pasquale says. Across the country, the last few years have seen a growing understanding that the tech industry's interests and the interests of the public aren't always aligned. Warren's declaration of war with tech monopolies says as much about her as it does about the state of Silicon Valley's reputation. Warren has been one of Congress's most vocal tech critics for years, having delivered impassioned speeches on breaking up big tech in 2016 and 2017. Given that context, she can hardly be charged with opportunism. And yet, the timing also seems fortuitous. For all the talk of reining in Wall Street that took place in the 2016 Democratic primaries, the tech industry's unchecked power was scarcely mentioned. Now, just three years later, it's hard to escape. That may make it feel less risky for Democrats to take on an industry that has disproportionately swung left with both its campaign donations and its votes. This week, Sen. Klobuchar told The Washington Post that the United States has "a major monopoly problem," and that the biggest one is in the tech sector. Even Sen. Cory Booker, who as mayor of Newark worked closely with Facebook CEO Mark Zuckerberg and received substantial backing from tech industry employees in 2018, recently spoke at an event about corporate monopolies, saying, "It’s no coincidence that after the most sustained period of merger activity in American corporate history, entrepreneurship has reached a 40-year low." Warren's proposal is undoubtedly the most aggressive, but it's clear she won't be the only candidate in the race pushing for a national discussion on these issues. That includes President Trump, who has accused Facebook and Google of being biased against conservatives and is presently engaged in a mud-slinging battle with Amazon CEO Jeff Bezos (or as the President recently called him, "Jeff Bozo"). If tech giants think the years since the 2016 election have been rough on them, the path to 2020 is about to get a whole lot bumpier.
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Elizabeth Warren rolls out her plan to break up the tech giants in the place where Amazon was supposed to open its New York HQ2

Postby smix » Sat Mar 09, 2019 9:57 pm

Elizabeth Warren rolls out her plan to break up the tech giants in the place where Amazon was supposed to open its New York HQ2
Business Insider

URL; https://www.businessinsider.com/elizabe ... nts-2019-3
Category: Politics
Published: March 9, 2019

Description: Sen. Elizabeth Warren traveled to Long Island City, Queens — the very same neighborhood where Amazon was supposed to open one of its HQ2 centers before it cancelled the deal last month — on Friday night to talk to New Yorkers about her plan to break up America's biggest tech companies. A substantive crowd showed up to hear the Massachusetts Democrat and 2020 presidential candidate argue that massive tech companies like Amazon, Facebook, and Google are undermining democracy with their monopoly power.

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"They want to be the umpire and they want to run a bunch of teams in the game," Warren said of the tech giants. "My view on this is you can be an umpire or you can own a team, but you can't do both at the same time." "We have these giant tech companies that think they rule the earth," Warren added. "They think they can come to towns, cities, states and bully everyone into doing what they want. They think they can scoop up all of our personal data and sell it to whoever they want for whatever purposes. They think they can run their business to just roll right over every small business, every entrepreneur, every start-up that might threaten their position. And what does our government in Washington do? Nothing." "We need big structural change in this country," Warren emphatically stated. Many in the assembled crowd shared Warren's frustration with companies like Amazon. "I didn't have a problem with Amazon coming to Long Island City in general, I just didn't like the way they were coming," William Hampton-Sosa, a professor at Brooklyn College, who lives in Long Island City told INSIDER. "The agreements were done in secret, behind closed doors, they didn't engage the community. If they're going to come to New York City, that's fine. But don't ask for tax breaks, especially when you don't pay taxes." Luke Thomas, 33, a software developer who works in nearby Greenpoint, Brooklyn said he didn't have "strong feelings" about Amazon coming to Queens. However, he thinks breaking up the major tech companies won't hurt them too much saying, "There's a rich tradition of breaking up monopolies." Kim Clay, a 23-year-old law student, who lives two blocks from the Long Island City site that would have housed Amazon's HQ2 said she was worried about "getting priced out" of her apartment. The Friday night event wasn't a formal rally or speech. Instead it featured a number of local politicians, including New York City Council Deputy Leader Jimmy van Bramer and New York state senator Michael Gianaris — both vocal opponents of the deal to bring Amazon to New York. "We were not elected to serve as Amazon drones," van Bramer and Gianaris, both of whom represent Long Island City, said in a statement shortly after Amazon announced it had reached a deal to move into New York last fall. At Friday's event, Gianaris said, "We brought the presidential campaign to our doorstep because we stood up to corporate greed in this neighborhood … All we do is suffer while the rich get the heli-pads."
A progressive backlash to Silicon Valley
On Friday morning, Warren announced her plan to break up some of the largest US tech companies, including Amazon, Google, and Facebook. It was no coincidence that Warren chose to debut the proposal in Long Island City — the same neighborhood that Amazon had plans to build a second headquarters. The tech giant pulled out of the deal last month amid fierce opposition from local activists and lawmakers. The proposal includes a call for "platform neutrality" — barring tech giants from both providing a marketplace and selling their product on the same marketplace. And it would appoint new regulators to undo mergers they believe would smother competition. For example, the senator wants to break Facebook away from Instagram and WhatsApp, Amazon away from Whole Foods, Google away from Nest. Warren's aggressive move — and Amazon's recent cancellation of its Queens HQ2 — illustrates the progressive left's growing disillusion with Silicon Valley. Progressive New York lawmakers, including democratic socialist Rep. Alexandria Ocasio-Cortez, responded to a grassroots backlash against the corporation's deal with the city and state, which included up to $3 billion in tax breaks and incentives in exchange for the creation of 25,000 jobs. This comes after Sen. Bernie Sanders repeatedly criticized Amazon's treatment of its workers, particularly its lowest-wage employees. Reports have emerged in recent years that suggest grueling and even inhumane working conditions in Amazon's warehouses around the world. The company raised its minimum wage to $15 per hour for all of its fulfillment center workers shortly after Sanders introduced a bill, known as the Stop Bezos Act, which would tax large companies whose low-wage employees rely on government assistance.
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Elizabeth Warren proposes breaking up Apple, in addition to Google, Facebook, and Amazon

Postby smix » Sun Mar 10, 2019 7:18 pm

Elizabeth Warren proposes breaking up Apple, in addition to Google, Facebook, and Amazon
Fox News

URL: https://www.foxnews.com/politics/elizab ... and-amazon
Category: Politics
Published: March 10, 2019

Description: Democratic 2020 presidential hopeful Elizabeth Warren announced in an interview on Saturday that she wants to break up not only Amazon, Google, and Facebook, but also Apple -- as the Massachusetts senator pushes further to the left of her numerous Democratic rivals on a host of populist issues. Speaking to The Verge at the South by Southwest (SXSW) technology conference in Austin, Texas, Warren specifically demanded that Apple must be forced to either surrender control over the App Store, or cease selling its own apps within it. "Apple, you’ve got to break it apart from their App Store. It’s got to be one or the other," Warren said. "Either they run the platform or they play in the store. They don’t get to do both at the same time." She elaborated: "If you run a platform where others come to sell, then you don’t get to sell your own items on the platform because you have two comparative advantages. One, you’ve sucked up information about every buyer and every seller before you’ve made a decision about what you’re going to to sell. And second, you have the capacity — because you run the platform — to prefer your product over anyone else’s product. It gives an enormous comparative advantage to the platform." Warren asserted that similar antitrust principles were "applied to railroad companies more than a hundred years ago," and that "we need to now look at those tech platforms the same way." Responding to a federal appeals court's recent rejection of the Trump Justice Department's bid to block the planned AT&T-Time Warner merger, Warren told The Verge: "How well do I think the Justice Department and the FTC are doing? Not well at all, and not well for a long time now." In a lengthy post on the website Medium on Friday, Warren targeted Amazon, Facebook, and Google for breakup, but did not mention Apple. Warren said the large tech giants had used mergers to "limit competition," citing examples such as Facebook's acquisitions of Instagram and WhatsApp; Amazon using its market power to "force" smaller competitors, such as Diapers.com to sell to the company; and Google buying mapping company Waze and advertising company DoubleClick. She also mentioned that their marketplaces were used to limit competition. "Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp," Warren wrote. Warren, who specifically denied being a Socialist as recently as this weekend, proposed two ways of restoring competition to the tech sector, including passing legislation that would designate the large platforms as "platform utilities" and reversing already approved mergers, which she deemed "illegal and anti-competitive." Rob Atkinson, president of the Information Technology and Innovation Foundation (ITIF), a think tank for science and technology policy, sharply disagreed with Warren's proposal. "The Warren campaign’s call to break up big tech companies reflects a 'big is bad, small is beautiful' ideology run amok," Atkinson said in a statement obtained by Fox News. "The proposal ignores the fact that many of the services big tech companies now provide free used to cost consumers money. Breaking up large Internet companies just because they are large won’t help consumers. It will hurt them by reducing convenience, reducing quality of service and innovation, and in some cases leading to the introduction of priced services." Warren herself tempered some of her rhetoric on Saturday, saying simply, "I am not" when asked if she considered herself a democratic Socialist, in the vein of New York Rep. Alexandria Ocasio-Cortez or Vermont Sen. Bernie Sanders. “All I can tell you is what I believe – there’s an enormous amount to be gained from markets. Markets create opportunities. … but markets have to have rules. They have to have a cop on the beat,” Warren told an energetic crowd at the Austin City Limits’ Moody Theater. Warren's calls for major changes in antitrust law follow her other relatively radical proposals, including her idea of taxing idle wealth. Specifically, Warren has proposed an annual 2 percent tax on every dollar of net worth above $50 million and a 3 percent tax on every dollar of net worth above $1 billion. But because Warren would seek to tax wealth itself -- as opposed to income or some other kind of transfer -- without equally apportioning such a tax among the states, legal experts say it is likely unconstitutional.

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Warren has also said that Native Americans should be “part of the conversation” on reparations for African-Americans -- a move that threatens to bring back her own history with Native Americans. Her fellow 2020 hopefuls Sen. Kamala Harris, D-Calif., and former San Antonio Mayor Julian Castro have come out in favor of reparations for African Americans, but have so far not gone as far as Warren in opening the door to reparations for Native Americans.



Elizabeth Warren’s attention-grabbing progressive playbook
Fox News

URL: https://www.foxnews.com/opinion/elizabe ... e-playbook
Category: Politics
Published: March 11, 2019

Description: Elizabeth Warren has gone off the rails. Frantic to stand out in a crowded field of Democrats running for president, the Massachusetts senator has grabbed ahold of one outlandish policy after another, leaving most commonsense Americans far behind. Her most recent idea? Breaking up America’s successful tech companies, which have created untold wealth for the United States and are the envy of the world. Warren looks desperate. She is desperate. And it has nothing to do with her embarrassing (and offensive) claims to Native American heritage.

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Instead, Warren has probably concluded that her moment has passed. The financial crisis put Ms. Warren on center stage as legislators struggled to rein in and punish the nation’s largest banks. Thanks to the recurring financial failures of her father, Warren grew up dreading that the local bank would foreclose on the family’s home. Simply stated, she hates banks and bankers, and jumped at the chance to put them in their place. In the aftermath of the downturn, she became the financial sector’s fiercest critic, ultimately helping to establish the Consumer Financial Protection Bureau as part of the Dodd-Frank legislation. Her advocacy was so strident that President Obama declined to appoint her head of the controversial new agency, but her fingerprints were all over it, earning her substantial visibility. Come 2016, many expected Warren to run, but she demurred to Hillary Clinton. Now, the country has moved on. Dodd-Frank, which raised capital requirements and put in other safeguards, became law in 2010. It has since been softened somewhat, over the objections of Warren, as even Democrats realized the bill was overly restrictive. Last year we noted the 10-year anniversary of the collapse of Lehman Brothers, one of the seminal events that triggered the crisis. Those dark days are not forgotten, certainly, but are not top of mind, either. With her anti-bank crusade no longer resonating as it once did, Warren is flailing, appropriating every far-left program in sight. She adores the Green New Deal, can’t wait to legalize marijuana, enthusiastically backs reparations, and naturally favors Medicare-for-all. She has also proposed a wealth tax, even though it has proved damaging in other countries. But the bedrock of Warren’s platform is that corporate America is the enemy. It’s a strange focus, given that about 40 percent of American workers are employed by big firms. Do those people agree with Warren? Last year, Warren introduced the Accountable Capitalism Act, which would put Uncle Sam in charge of how American businesses are run. Among other things, it demanded that every company with more than one billion in revenues acquire a federal charter and that employees elect 40 percent of corporate board representatives. Jeffrey Miron, Harvard director of undergraduate studies, said in an interview on CNBC that Warren’s bill would “destroy capitalism.” He was not alone in that assessment. Warren’s most recent attack on business is her proposal to break up large tech firms like Amazon and Facebook, an idea the New York Times described as “expansive.” Our tech giants, it’s worth noting, have spawned countless related businesses and inspired an entire generation of innovation. What millennial does not pine to create the next Facebook or Google? In launching this latest fantasy, the New York Times reported, Warren likened Amazon to “the dystopian novel “The Hunger Games,” in which those with power force their wishes on the less fortunate.” Warren summarized: “I’m sick of freeloading billionaires.” Such rhetoric may resonate with progressives, but it sounds phony coming from a supposedly intelligent law professor. Who are those free-loading billionaires? Jeff Bezos, who has built an extraordinary company that most Americans rely on to make life simpler and that employs nearly half a million workers? Amazon’s sin is that it doesn’t pay much in taxes; that’s because the company had many years of losing money. Our tax code allows firms to carry forward past losses to reduce current taxable income. Warren has been in the Senate for over six years; if she doesn’t like our tax code, she should try to change it. Meanwhile, the country does not share her view that the government needs to bring big business to heel. According to Gallup, nearly three-quarters of the country thinks there is “too much” or “about the right amount” of government regulation of Big Business, with only 25 percent thinking there should be more. Warren recently declared that during primary season she will not hold the kind of pricey events that typically attract deep-pocket donors and big contributions. “The wealthy and well-connected have been taught by politicians to expect that more money buys more access,” she said smugly. Some think that Warren’s self-righteous pledge is designed to lower expectations of her fund-raising ability. The day Warren announced the formation of an exploratory committee, she raised $299,000 in online donations. The day Kamala Harris entered the race she took in $1.5 million and Bernie Sanders hauled in $6 million. Elizabeth Warren ranks fourth or fifth in most surveys of likely candidates; Bernie Sanders and Kamala Harris have the pole position, with Joe Biden looming as possible front-runner should he enter the race. Judging from anxious emails the senator is sending out pleading for donations, and despite having $11 million left over from her Senate campaign, she will not likely have the funds to narrow the gap. Meanwhile, she has offended the financial and tech industries – both important constituents in her state – as well as wealthy donors. No wonder Warren is desperate.
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If a Wealth Tax is Such a Good Idea, Why Did Europe Kill Theirs?

Postby smix » Sun Mar 10, 2019 9:07 pm

If a Wealth Tax is Such a Good Idea, Why Did Europe Kill Theirs?
NPR

URL: https://www.npr.org/sections/money/2019 ... ill-theirs
Category: Politics
Published: February 26, 2019

Description: In late January, Senator Elizabeth Warren, who's in the race to become president in 2020, added a new kind of tax to the American conversation, causing anxious pacing on superyachts in every port: a wealth tax. It's a cousin of the property tax, but it encompasses all forms of wealth: cash, stocks, jewelry, thoroughbred horses, jets, everything. Warren calls the policy her "Ultra-Millionaire Tax." It would impose a 2% federal tax on every dollar of a person's net worth over $50 million and an additional 1% tax on every dollar in net worth over $1 billion. Economists estimate it would hit the 75,000 richest households and raise $2.75 trillion over ten years. It's a direct attack on wealth inequality, and it's influenced by the work of French economist Thomas Piketty, whose book Capital in the Twenty-First Century put a spotlight on the increasing disparity of wealth in developed nations. Warren, who informally endorsed a wealth tax while at an event with Piketty in 2015, is the first U.S. presidential candidate to take up the cause. The disparity in what Americans own is much greater than the disparity in what they earn. Jeff Bezos has a net worth of $135 billion, but his formal salary is less than $100,000 per year. Warren's proposal aims to tap the fortunes of the ultra-rich and use the proceeds to fund social programs. But a wealth tax faces serious hurdles, including lessons from a failed experiment in Europe, the need for significant bureaucratic expansion, and serious questions over whether it's even constitutional.
Euro Flop
Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries. France's wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems. Only last year, French president Emmanuel Macron killed it. In 1990, twelve countries in Europe had a wealth tax. Today, there are only three: Norway, Spain, and Switzerland. According to reports by the OECD and others, there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn't raise much revenue. UC Berkeley economist Gabriel Zucman, whose research helped put wealth inequality back on the American policy agenda, played a part in designing Warren's wealth tax. He says it was designed explicitly with European failures in mind. He argues the Warren plan is "very different than any wealth tax that has existed anywhere in the world." Unlike in the European Union, it's impossible to freely move to another country or state to escape national taxes. Existing U.S. law also taxes citizens wherever they are, so even if they do sail to a tax haven in the Caribbean, they're still on the hook. On top of that, Warren's plan includes an "exit tax," which would confiscate 40 percent of all a person's wealth over $50 million if they renounce their citizenship.

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Warren's tax is also only limited to the super rich, whereas in Europe the threshold was low enough to also hit the sort-of rich. This higher threshold helps it avoid problems like someone having a family business that makes them look rich on paper but, in fact, they're short on the cash needed to pay the tax. Also important, Zucman argues, the higher threshold means only a small group will be affected. And smaller groups have a harder time fighting for exemptions, which hurt European efforts. Some countries, for example, exempted artwork and antiques on the grounds they were hard to value. It's true, but it creates a huge loophole: Buy lots of art! Economists hate incentives like these because they distort markets. Warren's proposal calls for no exemptions.
Bureaucracy and the Constitution
But having no exemptions means the U.S. government will have to get very good at valuing art, diamonds, superyachts, and all the other fabulous things the super rich collect. Indeed, Warren's plan includes a call for "a significant increase in the IRS enforcement budget." It was the hefty cost of enforcement that played a big part in Austria killing their wealth tax back in 1993. It turns out it costs a lot to track and value rich people's stuff every year. And a wealth tax may not even be legal. The ability of the federal government to tax is tightly curtailed by the U.S. Constitution. Legally imposing the first income tax in 1913 required a constitutional amendment. Legal scholars are currently debating whether a wealth tax would need another amendment. The debate, Josh Barro writes, centers on whether a wealth tax would be a "direct tax," which the Constitution makes really hard for the federal government to impose. While the legality of a federal wealth tax is in question, the current politics of it are not. A new poll finds that even a majority of Republicans support Warren's wealth tax. It turns out President Trump himself once advocated for one too.
A Local Problem with a Global Solution
It's been roughly five years since Piketty published Capital in the Twenty-First Century. One of the book's central arguments was that the rate of return on capital will be higher than the rate of economic growth ("r>g") and, as a result, the wealthy will continue seeing their fortunes increase faster than everyone else's. His solution was a wealth tax, but he recognized that exemptions and freedom of travel had doomed the European experiments. So he suggested a global wealth tax: The whole world would decide to do one thing at one rate. That such a solution is highly unlikely is a perfect symbol for the difficulty of getting money from people with the best accountants, the best lobbyists, and the best boats.
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The folly of Elizabeth Warren’s wealth tax

Postby smix » Mon Mar 11, 2019 3:42 pm

The folly of Elizabeth Warren’s wealth tax
MarketWatch

URL: https://www.marketwatch.com/story/the-f ... 2019-03-11
Category: Politics
Published: March 11, 2019

Description: Most fortunes are the earned by entrepreneurs cashing in on their great ideas, not the idle rich of Democrats’ fantasies

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Democratic presidential candidates appear driven by tales of the rich exploiting the downtrodden and support higher taxes to redress injustice — Sens. Elizabeth Warren and Bernie Sanders want a federal wealth tax and higher levies on estates. Warren is most intriguing, because she tries to make the case for a wealth tax more in terms of correcting adverse forces within the capitalist system than as a means to finance, for example, Medicare for all or a Green New Deal. She proposes a 2% annual tax on households with assets exceeding $50 million and 3% on those exceeding $1 billion, and cites economists Emanuel Saez and Gabriel Zucman to bolster her case for “capitalism with rules.” Saez is the occasional research partner of Thomas Piketty who created a stir in 2014 with his book “Capital in the Twenty-First Century,” which allegedly documented the trend for wealth and income to become increasingly concentrated in market economies. Chris Giles of the Financial Times and others found numerous errors in the statistics and basic computations. Martin Feldstein effectively argued that death, estate taxes and division of wealth among multiple heirs—not to mention the penchant of scions like Andrew Carnegie to endow charitable foundations—tend to dissipate family wealth. Wealth always begins with savings and better ideas. Entrepreneurs raise capital—that is how we got Sears, Macy’s and Amazon and IBM, Microsoft and Google in the first place. Eventually, though, most businesses fall from the control of founding families and patriarchs become portraits on board-room walls. If wealth did not consistently dissipate, income would be increasingly concentrated, as Saez and Piketty allege, among a coupon clipping, unproductive aristocracy. However, recent efforts to document concentration focus on financial and real property assets and income flows and gloss over the contributions to income of human capital. A Treasury economist and professors at Berkeley, Princeton and Chicago found most of the income accruing to top earners is that of entrepreneurs who are still actively managing their businesses—it’s mostly the return on their ideas and exceptional management skills. Once ownership and control transfer to heirs and professional managers, income and businesses eventually decline. A recent American Institute for Economic Research study found that the share of income going to the 10% of earners has hardly varied from its average over the last century by more than 5 percentage points. Even now Jeff Bezos only owns 16% of Amazon—and his pending divorce could cut that in half. Those who fear Amazon will eventually run everything should consider that Sears once built homes and sold automobiles. All businesses have limited scope—the critical idea, product or management process reaches market saturation as Apple’s iPhone is now demonstrating. The founders, heirs or stewards of their wealth look for other businesses to invest but eventually lose interest or don’t do well. GE veered far from its roots in electrical equipment, and now serious questions are emerging about Alphabet’s new projects beyond Google’s ad and cloud business. Obsolescence kills businesses—soon Sears and likely Macy’s. Contemporary entrepreneurs throw their weight around in politics but that is nothing new. George Washington was among the richest men in the largest colony and got appointed commander-in-chief of the Continental Army after a mediocre record in the French and Indian War. These days most “dark money” goes to liberals and progressives, not Republicans, the alleged party of wealth.

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Do Democrats really want to destroy the billionaires who bankroll their movement? Warren says her wealth tax would yield about $275 billion annually but history teaches wealth has quicker feet than the IRS. A good measure of it will move offshore in the wake of such foolishness. What revenue is actually gained will be squandered. California and New York City have among the highest local taxes and the former abounds with potholed roads and the latter sports a wretched subway system. No doubt, if Warren or another wealth thrasher wins the Democratic nomination, Michael Bloomberg and Bezos will put their media machines and money behind them. And if their candidate proves successful then do as Fred Trump did—find creative trusts and other vehicles to make certain smaller entrepreneurs and not their heirs ultimately pay those taxes.
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Elizabeth Warren Drags Big Tech Into the Populist Crosshairs

Postby smix » Mon Mar 11, 2019 8:55 pm

Elizabeth Warren Drags Big Tech Into the Populist Crosshairs
The Ringer

URL: https://www.theringer.com/tech/2019/3/1 ... e-facebook
Category: Politics
Published: March 11, 2019

Description: Warren’s proposal to break up tech giants like Google, Amazon, and Facebook has not only reset the terms of a nebulous debate about Silicon Valley’s power—it’s also turned the battle against Big Tech into a presidential campaign issue
Last week a tech CEO and a presidential candidate presented two divergent paths for an industry under fire. On Wednesday, Mark Zuckerberg announced plans to refocus Facebook on private messaging rather than public sharing, a sweeping overhaul of the philosophy that propelled the platform to a user base of more than 2 billion. Key to his plan is more closely tying the core Facebook experience to the company’s two highest-profile acquisitions, WhatsApp and Instagram, so that messaging among the three services is effortless. “If we can implement this, we can give people more choice to use their preferred service to securely reach the people they want,” Zuckerberg wrote in a blog post. On Friday, Senator Elizabeth Warren (D-Massachusetts) announced a proposal to force Facebook to spin off WhatsApp and Instagram into independent companies. The plan is only one part of her aggressive gambit to dismantle Facebook, Google, and Amazon if she is elected president in 2020. (She threw Apple into the mix over the weekend.) Warren calls for separating Google Search from the rest of Google, splitting Amazon’s third-party marketplace from its division of in-house retail brands, and rolling back many of the major tech acquisitions this decade. “We need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor,” she wrote in her own post, entitled “Here’s how we can break up Big Tech.” The tech giants want to create a seamlessly integrated world in which they organize every aspect of our digital lives, largely collecting consumer data rather than dollars as payment. Warren and a growing faction of antitrust reformers want to break up these companies in the hope that new competitors can create viable alternatives with different corporate practices and less rapacious business models. Over the next few years, Americans will have to decide which of these two visions they prefer. By turning the battle against Big Tech into a campaign issue, Warren is betting that popular opinion will be on her side. Under the legislation that Warren proposes, any company that generates $25 billion or more in annual revenue would be designated a “platform utility” and forced to spin off any businesses it owns that compete on a marketplace it also owns. Google would have to separate its search engine from its comparison shopping service and its local reviews platform, which vie for space in search results with sites like Yelp. Amazon wouldn’t be able to sell its in-house brands on the same platform where it recruits other businesses to sell similar products. “It’s a little like baseball,” Warren said at a South by Southwest panel Saturday. “You can be an umpire—a platform—or you can own teams. That’s fine. But you can’t be an umpire and own one of the teams that’s in the game.”

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Warren also wants to roll back many of the headline-grabbing acquisitions the tech giants have made in recent years. In addition to breaking off WhatsApp and Instagram from Facebook, she’d like to nix Amazon’s purchase of Whole Foods and Google’s tie-ups with Waze and Nest. Federal law enforces no statute of limitations on mergers, so the Federal Trade Commission could theoretically sue to undo any of these deals at any time. The proposal has been met with silence by the tech giants, but with some level of alarm from antitrust traditionalists, including those who pursued the breakup of Microsoft within the U.S. Department of Justice 20 years ago. According to this contingent, forcing firms that grew into behemoths to break apart could introduce inefficiencies to the economy that could harm both the companies and their customers; Amazon’s low prices and Google’s abundant free services are both benefits of being big. Unwinding mergers—a process lawyers call “unscrambling the eggs”—can be tricky, depending on how deeply an acquired company has been integrated into the corporate mothership. And punishing tech companies for making lots of money without investigating their specific anticompetitive behavior strikes some as a wrongheaded approach that could stifle innovation. “It wouldn’t really make a difference whether they had abused their power or not,” says Stephen Houck, who served as the antitrust bureau chief in the New York Attorney General’s Office during the Microsoft trial. “The fact that they had power—[Warren] would break up the companies. I’m not sure that would really benefit consumers in the end.” (Houck later represented Google during an antitrust investigation by the FTC.) Indeed, Warren’s move is not an attack on only the tech giants, but on the way that antitrust law has been carried out over the last several decades. “This is a populist attack on bigness,” says Doug Melamed, who was the acting assistant attorney general in the Justice Department’s Antitrust Division during the Microsoft trial. “It is lumping together stories that as an economic and factual matter are very different.” Warren would hardly shy away from the populist moniker, which is central to her progressive brand. (Her response to economic handwringing at SXSW: “The monopolists will make fewer monopoly profits. Boo hoo.”) Though in her post she mentions the Microsoft case and how it helped open a competitive lane for Google, her go-to historical reference when laying out her proposal is the railroad monopolies of the late 19th century, which worked out self-serving deals with companies like Standard Oil, though they were supposed to act as neutral carriers. As to the specter of lost innovation, she points to the decline in new businesses in recent years as a counterargument to the idea that a scrappy startup will inevitably topple the incumbents. Despite the flurry of “Uber for X” apps that captured media attention early in the decade, entrepreneurship is in a generational decline. The share of U.S. companies less than a year old fell from 15 percent in 1980 to about 8 percent in 2015. Warren’s proposal is influenced by the work of younger legal scholars like Lina Khan, whose paper decrying Amazon’s platform power as anticompetitive has helped spark a broad pushback against prevailing antitrust theory during the past two years. It’s also easy to see the influence of Europe’s more strident crackdowns on Big Tech. Warren’s provisions to fine companies up to 5 percent of annual revenue for breaking the platform utility law echo the tough regulations across the pond. More than anything else, though, Warren is attempting to leverage the growing dissatisfaction with the U.S.’s most powerful corporations into a political movement. By naming specific companies and framing the issue as one that can be solved by congressional vote, she’s inviting Americans to take part in a debate over bigness that has long been left to D.C. lawyers and economists. While some warn that politicizing antitrust enforcement would undermine its reliability, others find the idea particularly appealing when a handful of corporations are wielding lots of political power themselves. Whether that power is accrued by accident, like Facebook’s role in influencing elections, or on purpose, like Amazon’s HQ2 sweepstakes, it brings to mind the “kingly prerogative” that Congress was trying to eliminate in 1890 when it passed the Sherman Antitrust Act. “If you’re not gonna enforce the [current antitrust law] … we’re not just gonna sit here and take it,” says Gary Reback, a longtime critic of Google who represented Netscape in the runup to the Microsoft antitrust case. “Something has to happen. The kind of thing that might happen is a throwback to the antitrust of the old days.” Warren will face an uphill battle in turning her proposal into reality. Google and Amazon continue to score highly on customer satisfaction surveys; while Facebook is hardly beloved, it remains entrenched in many people’s lives. Some of the companies she wants to split apart, like Amazon and Whole Foods, haven’t achieved monopoly market share in the sectors in which they compete. And unlike in the Microsoft saga of the ’90s, the current crusade against Big Tech lacks a Netscape: a popular underdog startup that’s being demonstrably harmed by a big, bad corporate giant.

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“[Netscape] was in some respects a brand-new technology,” Reback says. “It made it easier to have something specific to rally around as opposed to having to just push back against a big monopolist.” Whatever becomes of Warren’s proposal, it’s valuable for bringing a specific, accountable plan of action into the nebulous debate about how to deal with companies that have unprecedented and ever-growing power. So far none of her Democratic primary competitors have offered comment or rebuttal to her plan, but they’ll likely feel compelled to as the issues of 2020 fully take shape. As Facebook’s latest philosophical pivot makes clear, absent any input from political leaders or regulators, Silicon Valley will continue to govern itself. “These institutions are enormously powerful,” says Matt Stoller, a fellow at the Open Markets Institute think tank. “They’re either going to organize our society, or we’re going to figure out a way to fit them into our democracy.”
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