November 5, 2023 • 36 mins
Ever wondered how those with over $30 million maintain and grow their wealth while paying bare minimum taxes? Join us as we unveil the dark underbelly of wealth accumulation and preservation with Chuck Collins, acclaimed author of 'Wealth Hoarders'. In a candid conversation, Collins unravels the complex web of the wealth defense industry, detailing how the wealthy maneuver their fortunes off the balance sheets, and shockingly, position the US as their preferred tax haven. How has the U.S. become the favored country for Russian oligarchs, criminals and drug lords to hide their ill gotten gains?
The revelations don't stop there. We delve deeper into the grim consequences of hidden wealth on our local communities. Examining the Getty family's tax evasion strategies that ran California a loss of $300 million, the manipulation of South Dakota's trust industry to allow wealth to accumulate forever beyond taxation, and the rising ghost neighborhoods as a result of hidden wealth driving up housing prices - it's all here.
And for those seeking solutions, Collins doesn't disappoint. We discuss how the US and UK can spearhead a global transparency system, and highlight revealing films like 'The Laundromat' and 'We're Not Broke'. Get ready for a compelling dialogue that starkly exposes vast wealth disparities and the urgent need for reform.
https://inequality.org
https://www.icij.org
https://www.chuckcollinswrites.com
Watch the trailer for The Laundromat here: https://www.youtube.com/watch?v=wuBRcfe4bSo
Watch We're Not Broke here - free: https://www.youtube.com/watch?v=TPHlhzRSEnw
If you enjoyed this show, please leave a positive review and share with your friends. Thank you! Osha
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
Today's story features the heir to a family
fortune who had an insider seatat the table of wealth
management.
What he learned was alarming.
So Chuck Collins bucked thetrend, choosing to donate his
inheritance and dedicate himselfto exposing the corrupting
(00:31):
influence of dynastic wealth.
On today's show, chuck Collinswill reveal what he learned
about how the wealth defenseindustry uses a complex shell
game to hide trillions ofdollars of inherited wealth so
that it is never taxed, and howthat changes the game for the
(00:54):
rest of us.
He will guide you through somesolutions to changing the system
to promote transparency andempower democracy.
This is Aspire with OSHA Art,nature, humanity and I'm your
host, osha Hayden.
My guest today is Chuck Collins.
(01:16):
He is the author of the WealthHoarders how Billionaires Pay
Millions to Hide Trillions.
He is the director of theprogram on inequality and the
common good at the Institute forPolicy Studies, where he
co-edits inequalityorg.
He is the co-founder ofdivestinvestorg, a global
(01:39):
movement to divest from fossilfuels and invest in climate
solutions, and he's a trustee ofthe Post-Carbon Institute and
resilienceorg.
He's the author of severalbooks on wealth inequality the
one I just mentioned, and also anovel, alter to an Errupting
(01:59):
Sun, which has won high praise.
That interview is alsoavailable on my podcast.
Welcome to the show, chuckCollins.
Speaker 2 (02:07):
Thanks, Thanks for having me OSHA.
Speaker 1 (02:10):
It's a pleasure to have you here today.
So, as the heir to a familyfortune, you had an inside seat
at the table of generationalwealth and the wealth defense
industry.
So can you just tell us thestory of what you learned and
how that influenced your work onincome inequality and the
growing wealth divide in ourcountry?
Speaker 2 (02:32):
Yeah, I mean growing up in a wealthy family, I kind
of learned early on that there'sa whole circle of advisors that
work with families with thegoal of helping them, I guess,
accumulate and maintain as muchwealth as possible and pass it
down the generational line,paying as little taxes as
possible, and that is kind oftheir institutional bias, that's
(02:56):
their North Star.
If you have to pay a lot oftaxes and less money goes to the
next generation, they haven'tsucceeded in their job.
So there is this whole.
Now I describe it as anindustry really the wealth
defense industry.
Tax attorneys, wealth managers,accountants all who serve the
(03:17):
ultra wealthy, and I'm reallytalking about families with $30
million or more.
That's when you start to seepeople hiring these professional
wealth defense industry folks.
So, yeah, I was sort ofprivileged in the sense of
getting a window into that worldand how it's grown in 30, 40
(03:39):
years, because inequality hasgrown and wealth is concentrated
in fewer hands.
So has this industry ofenablers and helpers to help the
ultra rich.
Speaker 1 (03:50):
So you also wrote the wealth hoarders during the
pandemic shutdown.
How did what you witnessed theninfluence the writing of this
book?
Speaker 2 (04:01):
Well, one of the things that happened not long
right around the time that thisbook came out was there was a
huge leak, called the Pandorapapers Trillions of dollars of
wealth.
They discovered, throughseveral wealth management firms,
that they were moving all thismoney to the shadows, and that
was part of.
One of the trends during thepandemic was that the United
(04:22):
States more and more became adestination for hiding wealth.
Prior to that, you know, Ithink people thought oh, there's
this offshore tax system andthere are these Caribbean
islands like the Cayman Islandsor Bermuda or the British Virgin
Islands.
That's where people go.
They move their money offshoreto hide it.
And I think what we learned inthe pandemic was actually,
(04:46):
people don't need to move itoffshore and that the United
States has become a tax havenand a destination for wealthy
people from around the world whowant to hide their money.
Speaker 1 (04:57):
So that really brings up the point of.
I know there are a lot ofpoliticians who are very focused
on immigration making sure wedon't have illegal immigration
but when you have all thishidden money and hidden wealth
coming into the country behindthe scenes without being tracked
, how do those things relate interms of the importance of one
(05:20):
thing over the other?
Speaker 2 (05:21):
Well, it's just sort of a I guess it's a
juxtaposition really the peoplewho you know the United States
has not a very good set of lawsoverseeing these issues of
wealth and hidden wealth.
We don't have very goodtransparency laws.
We have states like Delawarewhere you can incorporate a
(05:42):
limited liability company andnever have to disclose who the
real beneficiaries are.
You have states like SouthDakota that have morphed their
laws, rewritten their laws toallow trusts to live forever and
never pay taxes and beanonymous.
So part of what's happened ispolicymakers have turned the US
(06:02):
into kind of a weak link in thesystem of global transparency.
That's why the money is movinghere.
It's attracted to where there'sthe minimal oversight and
regulation, and the UnitedStates has become that place.
Speaker 1 (06:16):
It used to be Switzerland.
Speaker 2 (06:18):
Right.
I think we all have images ofSwiss banks from our movies and
from 20 years ago and it's truethat after World War II the
numbered Swiss bank account wassort of an ironclad way that
wealthy people could park moneyoff outside the US and never
have to report it, never have topay taxes on it.
Speaker 1 (06:37):
So that's one thing that really surprised me when I
read the book.
Speaker 2 (06:41):
Just to kind of give us a sense of scale, I think
we're talking north of 20trillion dollars.
I mean, we're talking aboutamounts of money that are hard
to even imagine, that have movedoff the balance sheet.
So even when you and I talkabout inequality, we're not even
factoring in so much of thishidden wealth, which is mostly
owned and controlled by therichest people in the world.
(07:03):
So the bad news is we're muchmore unequal than we think we
are, which is already kind ofshocking levels of inequality.
Speaker 1 (07:13):
Seems to me that the less money that the ultra
wealthy pay in their taxes, themore all the rest of us have to
pay.
So I mean, how did really theinfrastructure get so incredibly
broken down to the point whereit was dangerous?
How did the health systembecome so disastrous compared to
(07:34):
every other developed economyin the world?
Those things sort of all leadto the same money river, don't
they?
Yeah?
Speaker 2 (07:41):
I mean, you're pointing to the important point,
which is why does this matterreally, or who is harmed by it?
And the answer is we're kind ofall harmed by it.
You know, I tell the storyearly in the book about Angola
and the wealthiest family inAngola taking money from the
people of Angola that could havebeen invested in building
(08:02):
health clinics or infrastructurein that country and siphoning
it out of the country toPortugal and to European banks
and into this global offshoresystem.
This is the mechanism.
This hidden wealth system isthe mechanism by which the
wealth of the commons is sort oflooted or siphoned away and
(08:23):
where tax dollars that should bespent to make a good society
vanish.
So simple equation if thewealthy aren't paying their fair
share and are hiding theirmoney and avoiding tax, either
the rest of us are paying moreor there's just a gap and we're
not making the kind of publicinvestments that we need to have
(08:45):
healthy and good societies.
It really matters and it reallyharms the lives of everybody
who's not wealthy in the world.
Speaker 1 (08:52):
And you talked also about on this same subject.
Can you talk more about that?
I mean, how much of the worldimagines a problem for
developing countries to bepoverty?
We think of it as, oh, thosecountries are very poor, but
it's actually plundering that iscausing that poverty.
Speaker 2 (09:12):
Yeah, and I mean, let's just take the continent of
Africa.
For every dollar of global aidthat goes to Africa, several
dollars of wealth kind of leavethrough this system, siphoned
away, plundered.
This is the tool for theplundering of the wealth of the
commons for most of the worldand people think, oh yeah, you
(09:32):
know we need to send aid tothese countries, but if, in fact
, if we allowed them to Taxtheir own wealthy and invest in
their own societies, they wouldbe so much better off.
But we're kind of like thegetaway car driver when I say we
meaning the United States,because we're enabling global
oligarchs, not just Russianoligarchs, but African oligarchs
(09:55):
and Asian oligarchs.
They love the United States.
They're bringing money here,parking it in trusts and in our
shell companies and andsometimes in our real estate,
and that's where the hiddenwealth is hidden.
It's hidden here in some cases.
Speaker 1 (10:11):
We talked a little bit about Delaware.
It's mind-boggling really whenyou think about it that we have
a state and isn't that like kindof their primary industry is
the LLCs and wealth defense.
Speaker 2 (10:24):
It's a huge industry in the state of Delaware and
they've had this kind ofcorporate friendly culture for
decades.
They have very low standardsand they have a very corporate
friendly judiciary and so a lotof you know a lot of the Fortune
500 companies are Incorporatedin Delaware for good reason on
(10:45):
their end that there's lessaccountability.
And then the limited liabilitycompany is the premier sort of
anonymous ownership model andeven when law enforcement is
trying to figure out who stolethe money and they track it and
they hit a limited liabilitycompany, it's almost like they
hit the wall.
The search is over, they can'tgo past it because they'll never
(11:07):
be able to find the real ownerand Occasionally there's some
cracks and the light shines in.
We've learned that, forinstance, back pages one of the
premier Child trafficking, sextrafficking websites is
incorporated, formed in thestate of Delaware.
When Donald Trump wanted tolaunder funds to stormy Daniels,
(11:29):
he got his attorney, michaelCohen, to run it through
Delaware limited liabilitycompanies.
So sometimes we learn about therole of Delaware LLCs and it's
really even frustrating for lawenforcement who are just trying
to obey the rules.
We actually are doing a reportright now about private jets and
private jet ownership and theowners of private jets can mask
(11:52):
the ownership of their jetsthrough Delaware limited
liability companies, so we don'teven know who's flying that jet
over our house Thanks to thisopaque ownership system, and
what you see is thewealth-hiding industry will kind
of layer.
They'll have a Delaware LLCthat owns property in a city or
(12:16):
owns a bank account in inBermuda, and what the wealth
defense industry does well ismake things complicated and
layer upon layer of anonymousownership, and that's how they
hide.
The treasure of the worldreally is using these tools in
their toolbox.
Speaker 1 (12:34):
So it's a complicated shell game.
I know that here in NorthernCalifornia there's an Air Force
base and they began startedhearing stories about Alarm as
all of this thousands of acresof land was being bought up by
an anonymous buyer and no onecould figure out who it was.
(12:54):
No one knew and finally it justcame to light it's a group of
investors from Silicon Valleytrying to create a whole new
city.
Speaker 2 (13:05):
Yeah, I'm sure they use Delaware corporations etc to
mask that.
That's a great example like whois buying up our neighborhood,
who owns our community, who ownsour city.
You would think that we wouldhave laws that would say that
has to be transparent, you haveto say who the beneficial owner
is.
We should know that and we'vecreated the system of secrecy.
(13:27):
I have another interestingstory from a California
perspective that came out sinceI wrote the wealth hoarders,
which is the Getty family, whichis the heirs to J Paul Getty,
the oil baron, the Getty Museumin Los Angeles, etc.
Well, turns out many of themlive in California but they
Fictionally pretend to live inNevada for tax purposes so they
(13:48):
avoid taxes.
And a whistleblower came forward.
A wealth manager who sort ofworked with several heirs of the
Getty family Came forward andsaid she recommended that these
family members, look, declareyour California citizenship.
They would literally fly in aprivate jet from their homes in
California to the airport inNevada and Transact business for
(14:14):
their trusts, kind ofmaintaining this fiction.
She said you know, why don'tyou pay your California taxes?
It's not that much moneycompared to what you have.
And they fired her.
So she sued them for a wrongfultermination, but she also blew
the cover on them and there's agreat New Yorker piece About her
.
She's named Marlena son.
Turns out they're stiffeningCalifornia 300 million dollars
(14:38):
of taxes.
So California is being harmedby the system and that means the
other California taxpayers haveto pick up the slack when the
Getty family is avoiding theirtaxes.
And here's this whole industrythat's helping them do that and
it should be simply outlawed.
Speaker 1 (14:57):
It wouldn't be hard to just make it so that these
things are transparent.
And if you buy property, it'stransparent because we could
talk about what's happened tothe property prices.
And I could just say from here,locally in Sonoma County, the
city of Sonoma has been Undersiege, being one thing after
(15:18):
another bought out by this ultrarich guy, matt's, and who
Nobody really knows what all isbehind him, and he's trying to
buy the whole town and own it,basically, and put people on the
board of the school boards andthen change the curriculum.
Wow, it's pretty intense stuffand the people have been trying
(15:40):
to fight it.
But you know, somebody wants tobuy property and someone wants
to sell it and they offer morethan it's worth.
They can pretty much have freereign to do what they want to do
.
Speaker 2 (15:53):
I think this is a really important harm of this
hidden wealth system is you haveultra-wealthy people, not just
from our community but comingfrom all over the world, who are
bidding up the cost of land andhousing, pushing it out of the
reach of local people, andthey're able to do it
anonymously.
So it's almost like ourcommunities are battling these
almost invisible forces of harmand we don't know who's behind
(16:18):
it.
As you said, osha, you can havelaws that say look, you want to
own property in Sonoma County.
You need to record who the realbeneficial owner is.
You can't have a shell companybe the owner and you're giving
political donations to influencelocal policymaker or your
backing local candidates.
We should know who you are andthat's just a simple
(16:41):
transparency provision, but itwould make a difference.
Speaker 1 (16:44):
Because all that hidden wealth also translates
into political power.
Right.
Speaker 2 (16:49):
That's the problem.
It's wealth and power together.
If we're going to have any kindof functioning, healthy
democratic society, we need toknow who holds the power and how
they're wielding it.
Speaker 1 (16:59):
And isn't that what happened in South Dakota, that
they changed the laws in orderto benefit themselves?
They just went to the mayor.
You want to say a little bitabout that.
Speaker 2 (17:08):
Yeah, south Dakota is an interesting example where
the state basically the trustindustry representing the most
dynastically wealthy families inthe country went to South
Dakota.
There was a sympatheticgovernor.
They said listen, if you changeyour state laws, we'll bring
all this business to SouthDakota.
And it's true.
South Dakota has a substantialtrust industry.
(17:29):
They're managing somewherebetween $600 billion and a
trillion dollars of trust wealth.
It's probably much more, wedon't know and they even have a
commission at the state level tojust update the laws every year
based on what the trustindustry needs.
It's an unfortunate example ofhow states have a lot of
(17:49):
independence.
In this country we havefederalism and states have a lot
of autonomy, so you have thesesmall states where a powerful
industry can make, can kind ofhave their way with their state
legislature.
They basically write the lawsthat they want.
In this case of South Dakota,in the 1980s they abolished
(18:10):
something called the ruleagainst perpetuities, which is
basically a limit on thelifespan of a trust.
Trusts used to only be able toexist for a hundred years.
Now they can exist forever.
So people are creating what theycall dynasty trusts.
Wealth will be deposited inthese trusts and will just grow
and grow and grow and the greatgreat grandchildren of these
(18:33):
folks will have these hugefortunes outside the reach of
accountability, oversight,transparency and taxes.
So South Dakota is kind of likeleading the race to the bottom
in terms of setting standardsand that's their competitive
position.
And I was just on a radiointerview in South Dakota
(18:53):
talking about their oversight ofthese trusts and a really good
reporter basically found outthat there's Russian oligarchs
are hiding money in South Dakotaand these trusts are engaged in
illegal activities.
And so they went to the stateand said well, how often are you
overseeing this?
When did it was the last timeyou oversaw this?
(19:14):
And they said sorry, we don'thave to answer that question.
We have a law that says wedon't have to answer that
question.
Speaker 1 (19:20):
So they just keep writing the laws to defend this
industry.
Well, let's talk a little moreabout the housing market I think
that's really important andabout how these ghost
neighborhoods get formed withall of this money coming in,
just how people park their moneyand then price the rest of us
out of housing.
Speaker 2 (19:41):
Yeah, one of the things we've seen in the last 10
years, and particularly on thecoasts.
So the West Coast, theCalifornia, oregon and
Washington state and the EastCoast cities are very attractive
for this hidden, oligarchicwealth and you kind of have to
get into your inner billionairemindset.
Here You've got all this wealth.
(20:02):
You don't really want it all.
In the financial markets that'svolatile.
You want to spread the wealtharound and diversify it and have
it in many, many places, and sowhat better way to do that than
own real estate in multiplejurisdictions and countries?
And what we found was likecities like Vancouver and
(20:24):
British Columbia were justoverrun with global wealth
coming in and buying up andbidding up the cost of real
estate and hollowing outcommunities.
You know they're literallybuying up whole neighborhoods in
Vancouver, mostly money comingfrom Asia, to the point where
the local neighborhood storeswere like there's no one
actually really living here.
(20:44):
This is a wealth parking lot.
It's a safe deposit where yousee.
If you go to New York, you seethese skinny little residential
towers rising all over the cityaround Central Park.
They are housing owned by theultra wealthy, often anonymously
, and in many cases no one isliving there.
The whole purpose of this islike a safe deposit box in the
(21:08):
sky.
So, yeah, it's kind ofdisrupting all this hidden
wealth flowing into ourcommunities is disrupting our
housing markets, bidding up thecost of land and housing,
hollowing out communities andkind of making our communities
less livable for the people wholive there, as opposed to want
to just park their money there.
Speaker 1 (21:29):
Right.
Well, if you own a store, theshops that serve those places,
and then suddenly there's no onethere to buy anything, then
you're out of business, right?
How do you survive?
Speaker 2 (21:39):
Yeah, and even in Boston, where I live, for many
they built this huge residentialtower one Dalton Place.
They advertised it as ainternal vertical neighborhood.
Like you don't really need toeven leave your building here,
we have everything you need, andincluding huge security systems
.
So the surrounding neighborhoodis like a ghost town.
(22:00):
There's no one there, there'sno street life, there's no
people in the parks, the parksare all privatized, so it
creates this sort of privatizedneighborhood, which is really
not healthy for any community.
Speaker 1 (22:12):
We haven't even really talked about the global
corporations and how they hidetheir wealth, but that's another
huge loss of tax revenue wherethey have their own shell
schemes to yes, there's a wholesort of parallel global
corporation part of the story.
Speaker 2 (22:30):
So we're mostly talking about individuals and
individual wealth.
You have big companies likeApple and Google who have
subsidiaries in other countriesand they play a little global
shell game with their taxes.
They'll go to places Google andApple or take Nike and the
Swoosh logo they willincorporate the logo in a low
(22:54):
tax or no tax haven where theydon't pay taxes on royalties
Within their company.
They'll pay their subsidiary inIreland all these royalties as
a way to reduce their taxes inthe US.
So, yes, sort of the samesystem.
Some of the same lawyers andsort of experts that help the
(23:15):
ultra wealthy hide their moneyalso help corporations minimize
their tax and move it around andplay these shell games.
Speaker 1 (23:24):
So I'd like to take a short break and we'll be right
back with more and we'll talkabout some of the measures that
can be put in place to actuallyfix the system and make a
difference.
So we'll be right back.
Stay tuned.
In case you're just joining us,this is Aspire, with OSHA Art,
(23:52):
Nature, Humanity, and I'm yourhost, OSHA Hayden, and I am here
with Chuck Collins.
We are talking about the wealthhoarders.
We've been laying out basicallythe problem and what is
happening and how that isharming us, and now we're going
to talk a little bit about someof the solutions that are
available to us.
Some of the steps forward yousay have already been taken,
(24:17):
such as the passage late lastyear of the Corporate
Transparency Act.
What changes will that make?
Speaker 2 (24:24):
One of the things that the Corporate Transparency
Act does is it gives the federalgovernment the ability to know
who the real owners are ofcompanies, at least law
enforcement.
You and I won't be able to lookup and find out who lives, but
at least the people trying toenforce global and national laws
.
But it's a good example of and,by the way, the wealth defense
(24:47):
industry has fought theimplementation of that law,
whereas we've been pushing it tonot just cover corporations but
also cover trusts, which isanother ownership system
different than a company orcorporation that people use to
hide money.
And one of the challenges inthis is the wealth defense
(25:08):
industry is always two stepsahead when it comes to creating
new ownership entities andmorphing existing laws.
So you really need to have anenforcement and oversight
capacity at the national leveland at the global level.
But partly the interest inRussian oligarchs.
So around the invasion ofUkraine, there were a lot of
(25:31):
sanctions being put on Russianoligarchs.
They realized how much Russianoligarch wealth was here in the
United States, maybe in the landup the road from you.
So there was more desire tokind of expose and pass
transparency reforms.
Speaker 1 (25:47):
It seems really important, not just for the
oligarchs, but also for criminalactivity.
If we don't know where thatmoney is and who's the owner,
there's no way that we canreally deal with that in any
effective fashion.
Tell me about the patrioticmillionaires.
Speaker 2 (26:06):
There's a network of wealthy, high net worth
individuals who are prettyoutspoken on issues around tax
fairness and the need to raisethe floor in terms of wages and
reduce the influence of money inpolitics.
So it's 300 individuals and many, many more who are sympathetic,
and so, yeah, they're anexample of wealthy people
(26:27):
organizing for good, fair publicpolicies, and some of them have
been very outspoken on what youand I are talking about here,
and including going to wealthadvisors and saying things like
hey, I don't want you to useevery loophole, I don't want you
to aggressively hide money onmy account.
The wealth defense industrytheir sort of default position
(26:49):
is tax avoidance, but there area lot of people going to their
wealth advisor saying I shouldpay my fair share of taxes.
This is what good societies do,so they're an important voice
in this conversation, and you'restarting to see wealth advisor
firms that advertise that we'repro-social.
(27:10):
We support our responsibilityto pay taxes.
Maybe it isn't the best thingto pass on unlimited
inheritances to the nextgeneration.
That's not necessarily a goodthing for people's development.
They're starting to sort ofchange and shake up the norms
around wealth management, whichis a good thing.
Speaker 1 (27:29):
So one of the things you talk about, too, is the
common good and how in ademocracy, if there's no
investment in the common good,then how does that democracy
survive?
Do you want to talk a littlebit about the effect on
democracy of all this hiddenwealth?
Speaker 2 (27:44):
Yeah, again, I think this is kind of an interesting
trend is that the levels ofinequality have become so
enormous in the last couple ofdecades that even the
beneficiaries of that system,meaning the people in the top 1%
or the top 1 tenth of 1%, areseeing how distorted and harmful
it is to have so much wealthand power in so few hands and
(28:08):
they're starting to speak out inthat way.
And some of that's pushing backagainst this wealth defense
industry and their norms andcreating a sort of different
demand, if you will, forservices.
And part of it's saying yeah,we can't have a healthy
democracy if the billionairesand the oligarchs have so much
power and say and sway in ourdemocratic system.
(28:31):
It's one of the reasons wecan't get anything meaningful to
happen, particularly at thefederal level where the big
wealth seems to dominate.
So I think from a democracy,from a healthy economy
perspective, you're starting tosee more wealthy people saying
well, not in my name, I don'treally want you to rewrite the
tax code just to benefit me.
(28:52):
We need to have a system thatworks for everybody.
20 years ago I was part of aneffort to keep the inheritance
tax what we call the estate taxin the US from being abolished.
We organized to get wealthypeople to step forward.
Bill Gates's dad and WarrenBuffett and hundreds of
multimillionaires andbillionaires said don't abolish
(29:13):
the estate tax, it's a good tax.
So the people who wanted to getrid of it essentially just
weakened it and created workarounds to the point where it's
a joke.
The ultra-wealthy don't pay aninheritance tax.
In this country, let's say,estimated trillion dollars of
wealth passed from onegeneration to the next.
(29:35):
Last year, in the upper canopyof the wealth forest, the estate
tax only captured about 18billion.
I mean, it's a joke.
And it's because the wealthindustry, wealth defense
industry, has created these workarounds where rich people can
bypass laws and accountability.
Speaker 1 (29:55):
So some of the things that you're proposing and that
are kind of in the works to tryto get past, do you want to talk
about those a little bit?
Speaker 2 (30:04):
The first thing to say is those of us who are in
the United States should take alook at our own house.
I mean, we can talk about theglobal systems and offshore, but
we really need to A get our ownhouse in order and then be part
of a global effort to create asystem of transparency.
Europe is a little fartherahead of us.
(30:25):
England, the United Kingdom, isprobably the other most
important part of the wealthhiding system, not so much both
in terms of London as a sort ofdestination for money, but
within the Commonwealth nationsunder the sort of oversight of
British law.
Those are some of the biggesttax havens in wealth-hiding
(30:47):
jurisdictions.
So if the United States and theUnited Kingdom cleaned up our
own act and then used our globalposition to kind of leverage,
we could close down this hiddenwealth system.
But it starts here in the US, Ithink, federal laws overruling
states that have morphed theirlaws to help wealth-hiding.
(31:08):
So the Delaware LimitedLiability Company just require
federalized corporations above acertain size and require them
to have a federal charter thatrequires disclosure.
You're a Fortune 500 company.
You shouldn't just get toincorporate in a little fiefdom
of Delaware with its own littlelaws.
You should be subject tofederal laws.
(31:30):
That would make a bigdifference.
What you and I talked aboutwith real estate why shouldn't
real estate be transparent?
Why shouldn't everyjurisdiction require the
disclosure of who the realowners are of real property?
And that could be implemented.
We don't have to wait for thefederal government to do that.
Local jurisdictions could dothat.
New York State and New YorkCity have begun to move in that
(31:52):
direction.
So those are some real pressurepoints that would make a
difference.
Speaker 1 (31:57):
So I think that really I just want to recommend
that people read your book theWealth Hoarders, because there's
so much information in thereand it's very compelling, so
it's really an important I thinkI open it for people to
understand.
And one of the things youmentioned in there is the movie
(32:19):
that was filled Meryl Streep andAntonio Banderas, the
Laundromat, which really talksabout the Panama Papers and the
real people that were harmed bythat, and there's another movie,
we're Not Broke.
Speaker 2 (32:36):
Which is free on YouTube, which is a great
introduction to the offshore taxsystem and really showing
people trying to organize aroundthat.
And yeah, there's a greatglobal network called the
International Consortium ofInvestigative Journalists.
You can go to their website,ICIJorg.
They are the ones that arereceiving all this leaked data
(33:01):
and sort of helping make senseof it.
And the Panama Papers youmentioned, the Pandora Papers.
What we've learned about thissystem has largely come about
because of whistleblowers anddefectors within the system
helping tell the story of thiskind of mostly secretive system,
and that's really reallyhelpful to getting the picture
(33:21):
that we're starting to get here.
Speaker 1 (33:23):
So if we really want to make changes in the world and
in this country, we kind ofhave to start with figuring out
what's happening to all thosetax dollars that are being
withheld from the common good,from building the roads, from
the infrastructure, from everysingle system that would help to
elevate life for everyone.
Speaker 2 (33:46):
Yeah, we're really not going to be able to solve
some of our big societalproblems, whether it's climate
disruption or inequality, if therichest people on the planet
are hiding huge amounts oftreasure away from the rest of
us.
It's like we're creating aparallel universe of the
ultra-wealthy who can stashtheir cash and never have to pay
(34:08):
taxes, or can engage incriminal activity and never be
held to account.
So, yeah, we're not going to beable to solve a lot of our
problems unless we fix thisglobal trans system, and the
reality is we in the UnitedStates have more leverage to fix
it than probably anyone else inthe world right now.
To the extent we still have aremaining democracy, to the
(34:29):
extent some of us live in stateslike California or New York,
where we're harmed by thissystem, where other states can
rewrite the rules and undermineour own states.
So that should be organizingthe states that are harmed by
the system as a good startingpoint and fixing it at the
federal level, because SouthDakota and Delaware are not
(34:51):
going to take the lead in fixingthis.
They benefit from the system,so those of us who are harmed by
the system need to push back.
Speaker 1 (34:59):
So people can look up more information at
inequalityorg.
They can look you up atChuckCollinsRightscom, so those
are some places where you can goto get more information.
You can look at the films.
We talked about the laundromator we're Not Broke.
(35:19):
I'm sure there are others outthere, but there are a lot of
resources to really learn abouthow this hidden scheme to kind
of rip us all off is happeningand what we can do about it.
So thank you so much for beingon the show today, Chuck.
As always, you're an amazingencyclopedia of information and
(35:42):
activism and kind of proponentfor the common good.
Speaker 2 (35:47):
Well, thanks for having me back, and it wouldn't
mean anything if there weren'tpeople like you just having
these conversations.
That's so much of what's neededright now.
Speaker 1 (35:55):
Well, thank you so much and, to my listeners, I
hope this has inspired you tolearn more and to perhaps make
some changes or get in touchwith your senators or your
government officials.
And until next time, have aninspired week and live your joy.
Speaker 2 (36:19):
See you next time.
Today's story features the heir to a family
fortune who had an insider seatat the table of wealth
management.
What he learned was alarming.
So Chuck Collins bucked thetrend, choosing to donate his
inheritance and dedicate himselfto exposing the corrupting
(00:31):
influence of dynastic wealth.
On today's show, chuck Collinswill reveal what he learned
about how the wealth defenseindustry uses a complex shell
game to hide trillions ofdollars of inherited wealth so
that it is never taxed, and howthat changes the game for the
(00:54):
rest of us.
He will guide you through somesolutions to changing the system
to promote transparency andempower democracy.
This is Aspire with OSHA Art,nature, humanity and I'm your
host, osha Hayden.
My guest today is Chuck Collins.
(01:16):
He is the author of the WealthHoarders how Billionaires Pay
Millions to Hide Trillions.
He is the director of theprogram on inequality and the
common good at the Institute forPolicy Studies, where he
co-edits inequalityorg.
He is the co-founder ofdivestinvestorg, a global
(01:39):
movement to divest from fossilfuels and invest in climate
solutions, and he's a trustee ofthe Post-Carbon Institute and
resilienceorg.
He's the author of severalbooks on wealth inequality the
one I just mentioned, and also anovel, alter to an Errupting
(01:59):
Sun, which has won high praise.
That interview is alsoavailable on my podcast.
Welcome to the show, chuckCollins.
Speaker 2 (02:07):
Thanks, Thanks for having me OSHA.
Speaker 1 (02:10):
It's a pleasure to have you here today.
So, as the heir to a familyfortune, you had an inside seat
at the table of generationalwealth and the wealth defense
industry.
So can you just tell us thestory of what you learned and
how that influenced your work onincome inequality and the
growing wealth divide in ourcountry?
Speaker 2 (02:32):
Yeah, I mean growing up in a wealthy family, I kind
of learned early on that there'sa whole circle of advisors that
work with families with thegoal of helping them, I guess,
accumulate and maintain as muchwealth as possible and pass it
down the generational line,paying as little taxes as
possible, and that is kind oftheir institutional bias, that's
(02:56):
their North Star.
If you have to pay a lot oftaxes and less money goes to the
next generation, they haven'tsucceeded in their job.
So there is this whole.
Now I describe it as anindustry really the wealth
defense industry.
Tax attorneys, wealth managers,accountants all who serve the
(03:17):
ultra wealthy, and I'm reallytalking about families with $30
million or more.
That's when you start to seepeople hiring these professional
wealth defense industry folks.
So, yeah, I was sort ofprivileged in the sense of
getting a window into that worldand how it's grown in 30, 40
(03:39):
years, because inequality hasgrown and wealth is concentrated
in fewer hands.
So has this industry ofenablers and helpers to help the
ultra rich.
Speaker 1 (03:50):
So you also wrote the wealth hoarders during the
pandemic shutdown.
How did what you witnessed theninfluence the writing of this
book?
Speaker 2 (04:01):
Well, one of the things that happened not long
right around the time that thisbook came out was there was a
huge leak, called the Pandorapapers Trillions of dollars of
wealth.
They discovered, throughseveral wealth management firms,
that they were moving all thismoney to the shadows, and that
was part of.
One of the trends during thepandemic was that the United
(04:22):
States more and more became adestination for hiding wealth.
Prior to that, you know, Ithink people thought oh, there's
this offshore tax system andthere are these Caribbean
islands like the Cayman Islandsor Bermuda or the British Virgin
Islands.
That's where people go.
They move their money offshoreto hide it.
And I think what we learned inthe pandemic was actually,
(04:46):
people don't need to move itoffshore and that the United
States has become a tax havenand a destination for wealthy
people from around the world whowant to hide their money.
Speaker 1 (04:57):
So that really brings up the point of.
I know there are a lot ofpoliticians who are very focused
on immigration making sure wedon't have illegal immigration
but when you have all thishidden money and hidden wealth
coming into the country behindthe scenes without being tracked
, how do those things relate interms of the importance of one
(05:20):
thing over the other?
Speaker 2 (05:21):
Well, it's just sort of a I guess it's a
juxtaposition really the peoplewho you know the United States
has not a very good set of lawsoverseeing these issues of
wealth and hidden wealth.
We don't have very goodtransparency laws.
We have states like Delawarewhere you can incorporate a
(05:42):
limited liability company andnever have to disclose who the
real beneficiaries are.
You have states like SouthDakota that have morphed their
laws, rewritten their laws toallow trusts to live forever and
never pay taxes and beanonymous.
So part of what's happened ispolicymakers have turned the US
(06:02):
into kind of a weak link in thesystem of global transparency.
That's why the money is movinghere.
It's attracted to where there'sthe minimal oversight and
regulation, and the UnitedStates has become that place.
Speaker 1 (06:16):
It used to be Switzerland.
Speaker 2 (06:18):
Right.
I think we all have images ofSwiss banks from our movies and
from 20 years ago and it's truethat after World War II the
numbered Swiss bank account wassort of an ironclad way that
wealthy people could park moneyoff outside the US and never
have to report it, never have topay taxes on it.
Speaker 1 (06:37):
So that's one thing that really surprised me when I
read the book.
Speaker 2 (06:41):
Just to kind of give us a sense of scale, I think
we're talking north of 20trillion dollars.
I mean, we're talking aboutamounts of money that are hard
to even imagine, that have movedoff the balance sheet.
So even when you and I talkabout inequality, we're not even
factoring in so much of thishidden wealth, which is mostly
owned and controlled by therichest people in the world.
(07:03):
So the bad news is we're muchmore unequal than we think we
are, which is already kind ofshocking levels of inequality.
Speaker 1 (07:13):
Seems to me that the less money that the ultra
wealthy pay in their taxes, themore all the rest of us have to
pay.
So I mean, how did really theinfrastructure get so incredibly
broken down to the point whereit was dangerous?
How did the health systembecome so disastrous compared to
(07:34):
every other developed economyin the world?
Those things sort of all leadto the same money river, don't
they?
Yeah?
Speaker 2 (07:41):
I mean, you're pointing to the important point,
which is why does this matterreally, or who is harmed by it?
And the answer is we're kind ofall harmed by it.
You know, I tell the storyearly in the book about Angola
and the wealthiest family inAngola taking money from the
people of Angola that could havebeen invested in building
(08:02):
health clinics or infrastructurein that country and siphoning
it out of the country toPortugal and to European banks
and into this global offshoresystem.
This is the mechanism.
This hidden wealth system isthe mechanism by which the
wealth of the commons is sort oflooted or siphoned away and
(08:23):
where tax dollars that should bespent to make a good society
vanish.
So simple equation if thewealthy aren't paying their fair
share and are hiding theirmoney and avoiding tax, either
the rest of us are paying moreor there's just a gap and we're
not making the kind of publicinvestments that we need to have
(08:45):
healthy and good societies.
It really matters and it reallyharms the lives of everybody
who's not wealthy in the world.
Speaker 1 (08:52):
And you talked also about on this same subject.
Can you talk more about that?
I mean, how much of the worldimagines a problem for
developing countries to bepoverty?
We think of it as, oh, thosecountries are very poor, but
it's actually plundering that iscausing that poverty.
Speaker 2 (09:12):
Yeah, and I mean, let's just take the continent of
Africa.
For every dollar of global aidthat goes to Africa, several
dollars of wealth kind of leavethrough this system, siphoned
away, plundered.
This is the tool for theplundering of the wealth of the
commons for most of the worldand people think, oh yeah, you
(09:32):
know we need to send aid tothese countries, but if, in fact
, if we allowed them to Taxtheir own wealthy and invest in
their own societies, they wouldbe so much better off.
But we're kind of like thegetaway car driver when I say we
meaning the United States,because we're enabling global
oligarchs, not just Russianoligarchs, but African oligarchs
(09:55):
and Asian oligarchs.
They love the United States.
They're bringing money here,parking it in trusts and in our
shell companies and andsometimes in our real estate,
and that's where the hiddenwealth is hidden.
It's hidden here in some cases.
Speaker 1 (10:11):
We talked a little bit about Delaware.
It's mind-boggling really whenyou think about it that we have
a state and isn't that like kindof their primary industry is
the LLCs and wealth defense.
Speaker 2 (10:24):
It's a huge industry in the state of Delaware and
they've had this kind ofcorporate friendly culture for
decades.
They have very low standardsand they have a very corporate
friendly judiciary and so a lotof you know a lot of the Fortune
500 companies are Incorporatedin Delaware for good reason on
(10:45):
their end that there's lessaccountability.
And then the limited liabilitycompany is the premier sort of
anonymous ownership model andeven when law enforcement is
trying to figure out who stolethe money and they track it and
they hit a limited liabilitycompany, it's almost like they
hit the wall.
The search is over, they can'tgo past it because they'll never
(11:07):
be able to find the real ownerand Occasionally there's some
cracks and the light shines in.
We've learned that, forinstance, back pages one of the
premier Child trafficking, sextrafficking websites is
incorporated, formed in thestate of Delaware.
When Donald Trump wanted tolaunder funds to stormy Daniels,
(11:29):
he got his attorney, michaelCohen, to run it through
Delaware limited liabilitycompanies.
So sometimes we learn about therole of Delaware LLCs and it's
really even frustrating for lawenforcement who are just trying
to obey the rules.
We actually are doing a reportright now about private jets and
private jet ownership and theowners of private jets can mask
(11:52):
the ownership of their jetsthrough Delaware limited
liability companies, so we don'teven know who's flying that jet
over our house Thanks to thisopaque ownership system, and
what you see is thewealth-hiding industry will kind
of layer.
They'll have a Delaware LLCthat owns property in a city or
(12:16):
owns a bank account in inBermuda, and what the wealth
defense industry does well ismake things complicated and
layer upon layer of anonymousownership, and that's how they
hide.
The treasure of the worldreally is using these tools in
their toolbox.
Speaker 1 (12:34):
So it's a complicated shell game.
I know that here in NorthernCalifornia there's an Air Force
base and they began startedhearing stories about Alarm as
all of this thousands of acresof land was being bought up by
an anonymous buyer and no onecould figure out who it was.
(12:54):
No one knew and finally it justcame to light it's a group of
investors from Silicon Valleytrying to create a whole new
city.
Speaker 2 (13:05):
Yeah, I'm sure they use Delaware corporations etc to
mask that.
That's a great example like whois buying up our neighborhood,
who owns our community, who ownsour city.
You would think that we wouldhave laws that would say that
has to be transparent, you haveto say who the beneficial owner
is.
We should know that and we'vecreated the system of secrecy.
(13:27):
I have another interestingstory from a California
perspective that came out sinceI wrote the wealth hoarders,
which is the Getty family, whichis the heirs to J Paul Getty,
the oil baron, the Getty Museumin Los Angeles, etc.
Well, turns out many of themlive in California but they
Fictionally pretend to live inNevada for tax purposes so they
(13:48):
avoid taxes.
And a whistleblower came forward.
A wealth manager who sort ofworked with several heirs of the
Getty family Came forward andsaid she recommended that these
family members, look, declareyour California citizenship.
They would literally fly in aprivate jet from their homes in
California to the airport inNevada and Transact business for
(14:14):
their trusts, kind ofmaintaining this fiction.
She said you know, why don'tyou pay your California taxes?
It's not that much moneycompared to what you have.
And they fired her.
So she sued them for a wrongfultermination, but she also blew
the cover on them and there's agreat New Yorker piece About her
.
She's named Marlena son.
Turns out they're stiffeningCalifornia 300 million dollars
(14:38):
of taxes.
So California is being harmedby the system and that means the
other California taxpayers haveto pick up the slack when the
Getty family is avoiding theirtaxes.
And here's this whole industrythat's helping them do that and
it should be simply outlawed.
Speaker 1 (14:57):
It wouldn't be hard to just make it so that these
things are transparent.
And if you buy property, it'stransparent because we could
talk about what's happened tothe property prices.
And I could just say from here,locally in Sonoma County, the
city of Sonoma has been Undersiege, being one thing after
(15:18):
another bought out by this ultrarich guy, matt's, and who
Nobody really knows what all isbehind him, and he's trying to
buy the whole town and own it,basically, and put people on the
board of the school boards andthen change the curriculum.
Wow, it's pretty intense stuffand the people have been trying
(15:40):
to fight it.
But you know, somebody wants tobuy property and someone wants
to sell it and they offer morethan it's worth.
They can pretty much have freereign to do what they want to do
.
Speaker 2 (15:53):
I think this is a really important harm of this
hidden wealth system is you haveultra-wealthy people, not just
from our community but comingfrom all over the world, who are
bidding up the cost of land andhousing, pushing it out of the
reach of local people, andthey're able to do it
anonymously.
So it's almost like ourcommunities are battling these
almost invisible forces of harmand we don't know who's behind
(16:18):
it.
As you said, osha, you can havelaws that say look, you want to
own property in Sonoma County.
You need to record who the realbeneficial owner is.
You can't have a shell companybe the owner and you're giving
political donations to influencelocal policymaker or your
backing local candidates.
We should know who you are andthat's just a simple
(16:41):
transparency provision, but itwould make a difference.
Speaker 1 (16:44):
Because all that hidden wealth also translates
into political power.
Right.
Speaker 2 (16:49):
That's the problem.
It's wealth and power together.
If we're going to have any kindof functioning, healthy
democratic society, we need toknow who holds the power and how
they're wielding it.
Speaker 1 (16:59):
And isn't that what happened in South Dakota, that
they changed the laws in orderto benefit themselves?
They just went to the mayor.
You want to say a little bitabout that.
Speaker 2 (17:08):
Yeah, south Dakota is an interesting example where
the state basically the trustindustry representing the most
dynastically wealthy families inthe country went to South
Dakota.
There was a sympatheticgovernor.
They said listen, if you changeyour state laws, we'll bring
all this business to SouthDakota.
And it's true.
South Dakota has a substantialtrust industry.
(17:29):
They're managing somewherebetween $600 billion and a
trillion dollars of trust wealth.
It's probably much more, wedon't know and they even have a
commission at the state level tojust update the laws every year
based on what the trustindustry needs.
It's an unfortunate example ofhow states have a lot of
(17:49):
independence.
In this country we havefederalism and states have a lot
of autonomy, so you have thesesmall states where a powerful
industry can make, can kind ofhave their way with their state
legislature.
They basically write the lawsthat they want.
In this case of South Dakota,in the 1980s they abolished
(18:10):
something called the ruleagainst perpetuities, which is
basically a limit on thelifespan of a trust.
Trusts used to only be able toexist for a hundred years.
Now they can exist forever.
So people are creating what theycall dynasty trusts.
Wealth will be deposited inthese trusts and will just grow
and grow and grow and the greatgreat grandchildren of these
(18:33):
folks will have these hugefortunes outside the reach of
accountability, oversight,transparency and taxes.
So South Dakota is kind of likeleading the race to the bottom
in terms of setting standardsand that's their competitive
position.
And I was just on a radiointerview in South Dakota
(18:53):
talking about their oversight ofthese trusts and a really good
reporter basically found outthat there's Russian oligarchs
are hiding money in South Dakotaand these trusts are engaged in
illegal activities.
And so they went to the stateand said well, how often are you
overseeing this?
When did it was the last timeyou oversaw this?
(19:14):
And they said sorry, we don'thave to answer that question.
We have a law that says wedon't have to answer that
question.
Speaker 1 (19:20):
So they just keep writing the laws to defend this
industry.
Well, let's talk a little moreabout the housing market I think
that's really important andabout how these ghost
neighborhoods get formed withall of this money coming in,
just how people park their moneyand then price the rest of us
out of housing.
Speaker 2 (19:41):
Yeah, one of the things we've seen in the last 10
years, and particularly on thecoasts.
So the West Coast, theCalifornia, oregon and
Washington state and the EastCoast cities are very attractive
for this hidden, oligarchicwealth and you kind of have to
get into your inner billionairemindset.
Here You've got all this wealth.
(20:02):
You don't really want it all.
In the financial markets that'svolatile.
You want to spread the wealtharound and diversify it and have
it in many, many places, and sowhat better way to do that than
own real estate in multiplejurisdictions and countries?
And what we found was likecities like Vancouver and
(20:24):
British Columbia were justoverrun with global wealth
coming in and buying up andbidding up the cost of real
estate and hollowing outcommunities.
You know they're literallybuying up whole neighborhoods in
Vancouver, mostly money comingfrom Asia, to the point where
the local neighborhood storeswere like there's no one
actually really living here.
(20:44):
This is a wealth parking lot.
It's a safe deposit where yousee.
If you go to New York, you seethese skinny little residential
towers rising all over the cityaround Central Park.
They are housing owned by theultra wealthy, often anonymously
, and in many cases no one isliving there.
The whole purpose of this islike a safe deposit box in the
(21:08):
sky.
So, yeah, it's kind ofdisrupting all this hidden
wealth flowing into ourcommunities is disrupting our
housing markets, bidding up thecost of land and housing,
hollowing out communities andkind of making our communities
less livable for the people wholive there, as opposed to want
to just park their money there.
Speaker 1 (21:29):
Right.
Well, if you own a store, theshops that serve those places,
and then suddenly there's no onethere to buy anything, then
you're out of business, right?
How do you survive?
Speaker 2 (21:39):
Yeah, and even in Boston, where I live, for many
they built this huge residentialtower one Dalton Place.
They advertised it as ainternal vertical neighborhood.
Like you don't really need toeven leave your building here,
we have everything you need, andincluding huge security systems
.
So the surrounding neighborhoodis like a ghost town.
(22:00):
There's no one there, there'sno street life, there's no
people in the parks, the parksare all privatized, so it
creates this sort of privatizedneighborhood, which is really
not healthy for any community.
Speaker 1 (22:12):
We haven't even really talked about the global
corporations and how they hidetheir wealth, but that's another
huge loss of tax revenue wherethey have their own shell
schemes to yes, there's a wholesort of parallel global
corporation part of the story.
Speaker 2 (22:30):
So we're mostly talking about individuals and
individual wealth.
You have big companies likeApple and Google who have
subsidiaries in other countriesand they play a little global
shell game with their taxes.
They'll go to places Google andApple or take Nike and the
Swoosh logo they willincorporate the logo in a low
(22:54):
tax or no tax haven where theydon't pay taxes on royalties
Within their company.
They'll pay their subsidiary inIreland all these royalties as
a way to reduce their taxes inthe US.
So, yes, sort of the samesystem.
Some of the same lawyers andsort of experts that help the
(23:15):
ultra wealthy hide their moneyalso help corporations minimize
their tax and move it around andplay these shell games.
Speaker 1 (23:24):
So I'd like to take a short break and we'll be right
back with more and we'll talkabout some of the measures that
can be put in place to actuallyfix the system and make a
difference.
So we'll be right back.
Stay tuned.
In case you're just joining us,this is Aspire, with OSHA Art,
(23:52):
Nature, Humanity, and I'm yourhost, OSHA Hayden, and I am here
with Chuck Collins.
We are talking about the wealthhoarders.
We've been laying out basicallythe problem and what is
happening and how that isharming us, and now we're going
to talk a little bit about someof the solutions that are
available to us.
Some of the steps forward yousay have already been taken,
(24:17):
such as the passage late lastyear of the Corporate
Transparency Act.
What changes will that make?
Speaker 2 (24:24):
One of the things that the Corporate Transparency
Act does is it gives the federalgovernment the ability to know
who the real owners are ofcompanies, at least law
enforcement.
You and I won't be able to lookup and find out who lives, but
at least the people trying toenforce global and national laws
.
But it's a good example of and,by the way, the wealth defense
(24:47):
industry has fought theimplementation of that law,
whereas we've been pushing it tonot just cover corporations but
also cover trusts, which isanother ownership system
different than a company orcorporation that people use to
hide money.
And one of the challenges inthis is the wealth defense
(25:08):
industry is always two stepsahead when it comes to creating
new ownership entities andmorphing existing laws.
So you really need to have anenforcement and oversight
capacity at the national leveland at the global level.
But partly the interest inRussian oligarchs.
So around the invasion ofUkraine, there were a lot of
(25:31):
sanctions being put on Russianoligarchs.
They realized how much Russianoligarch wealth was here in the
United States, maybe in the landup the road from you.
So there was more desire tokind of expose and pass
transparency reforms.
Speaker 1 (25:47):
It seems really important, not just for the
oligarchs, but also for criminalactivity.
If we don't know where thatmoney is and who's the owner,
there's no way that we canreally deal with that in any
effective fashion.
Tell me about the patrioticmillionaires.
Speaker 2 (26:06):
There's a network of wealthy, high net worth
individuals who are prettyoutspoken on issues around tax
fairness and the need to raisethe floor in terms of wages and
reduce the influence of money inpolitics.
So it's 300 individuals and many, many more who are sympathetic,
and so, yeah, they're anexample of wealthy people
(26:27):
organizing for good, fair publicpolicies, and some of them have
been very outspoken on what youand I are talking about here,
and including going to wealthadvisors and saying things like
hey, I don't want you to useevery loophole, I don't want you
to aggressively hide money onmy account.
The wealth defense industrytheir sort of default position
(26:49):
is tax avoidance, but there area lot of people going to their
wealth advisor saying I shouldpay my fair share of taxes.
This is what good societies do,so they're an important voice
in this conversation, and you'restarting to see wealth advisor
firms that advertise that we'repro-social.
(27:10):
We support our responsibilityto pay taxes.
Maybe it isn't the best thingto pass on unlimited
inheritances to the nextgeneration.
That's not necessarily a goodthing for people's development.
They're starting to sort ofchange and shake up the norms
around wealth management, whichis a good thing.
Speaker 1 (27:29):
So one of the things you talk about, too, is the
common good and how in ademocracy, if there's no
investment in the common good,then how does that democracy
survive?
Do you want to talk a littlebit about the effect on
democracy of all this hiddenwealth?
Speaker 2 (27:44):
Yeah, again, I think this is kind of an interesting
trend is that the levels ofinequality have become so
enormous in the last couple ofdecades that even the
beneficiaries of that system,meaning the people in the top 1%
or the top 1 tenth of 1%, areseeing how distorted and harmful
it is to have so much wealthand power in so few hands and
(28:08):
they're starting to speak out inthat way.
And some of that's pushing backagainst this wealth defense
industry and their norms andcreating a sort of different
demand, if you will, forservices.
And part of it's saying yeah,we can't have a healthy
democracy if the billionairesand the oligarchs have so much
power and say and sway in ourdemocratic system.
(28:31):
It's one of the reasons wecan't get anything meaningful to
happen, particularly at thefederal level where the big
wealth seems to dominate.
So I think from a democracy,from a healthy economy
perspective, you're starting tosee more wealthy people saying
well, not in my name, I don'treally want you to rewrite the
tax code just to benefit me.
(28:52):
We need to have a system thatworks for everybody.
20 years ago I was part of aneffort to keep the inheritance
tax what we call the estate taxin the US from being abolished.
We organized to get wealthypeople to step forward.
Bill Gates's dad and WarrenBuffett and hundreds of
multimillionaires andbillionaires said don't abolish
(29:13):
the estate tax, it's a good tax.
So the people who wanted to getrid of it essentially just
weakened it and created workarounds to the point where it's
a joke.
The ultra-wealthy don't pay aninheritance tax.
In this country, let's say,estimated trillion dollars of
wealth passed from onegeneration to the next.
(29:35):
Last year, in the upper canopyof the wealth forest, the estate
tax only captured about 18billion.
I mean, it's a joke.
And it's because the wealthindustry, wealth defense
industry, has created these workarounds where rich people can
bypass laws and accountability.
Speaker 1 (29:55):
So some of the things that you're proposing and that
are kind of in the works to tryto get past, do you want to talk
about those a little bit?
Speaker 2 (30:04):
The first thing to say is those of us who are in
the United States should take alook at our own house.
I mean, we can talk about theglobal systems and offshore, but
we really need to A get our ownhouse in order and then be part
of a global effort to create asystem of transparency.
Europe is a little fartherahead of us.
(30:25):
England, the United Kingdom, isprobably the other most
important part of the wealthhiding system, not so much both
in terms of London as a sort ofdestination for money, but
within the Commonwealth nationsunder the sort of oversight of
British law.
Those are some of the biggesttax havens in wealth-hiding
(30:47):
jurisdictions.
So if the United States and theUnited Kingdom cleaned up our
own act and then used our globalposition to kind of leverage,
we could close down this hiddenwealth system.
But it starts here in the US, Ithink, federal laws overruling
states that have morphed theirlaws to help wealth-hiding.
(31:08):
So the Delaware LimitedLiability Company just require
federalized corporations above acertain size and require them
to have a federal charter thatrequires disclosure.
You're a Fortune 500 company.
You shouldn't just get toincorporate in a little fiefdom
of Delaware with its own littlelaws.
You should be subject tofederal laws.
(31:30):
That would make a bigdifference.
What you and I talked aboutwith real estate why shouldn't
real estate be transparent?
Why shouldn't everyjurisdiction require the
disclosure of who the realowners are of real property?
And that could be implemented.
We don't have to wait for thefederal government to do that.
Local jurisdictions could dothat.
New York State and New YorkCity have begun to move in that
(31:52):
direction.
So those are some real pressurepoints that would make a
difference.
Speaker 1 (31:57):
So I think that really I just want to recommend
that people read your book theWealth Hoarders, because there's
so much information in thereand it's very compelling, so
it's really an important I thinkI open it for people to
understand.
And one of the things youmentioned in there is the movie
(32:19):
that was filled Meryl Streep andAntonio Banderas, the
Laundromat, which really talksabout the Panama Papers and the
real people that were harmed bythat, and there's another movie,
we're Not Broke.
Speaker 2 (32:36):
Which is free on YouTube, which is a great
introduction to the offshore taxsystem and really showing
people trying to organize aroundthat.
And yeah, there's a greatglobal network called the
International Consortium ofInvestigative Journalists.
You can go to their website,ICIJorg.
They are the ones that arereceiving all this leaked data
(33:01):
and sort of helping make senseof it.
And the Panama Papers youmentioned, the Pandora Papers.
What we've learned about thissystem has largely come about
because of whistleblowers anddefectors within the system
helping tell the story of thiskind of mostly secretive system,
and that's really reallyhelpful to getting the picture
(33:21):
that we're starting to get here.
Speaker 1 (33:23):
So if we really want to make changes in the world and
in this country, we kind ofhave to start with figuring out
what's happening to all thosetax dollars that are being
withheld from the common good,from building the roads, from
the infrastructure, from everysingle system that would help to
elevate life for everyone.
Speaker 2 (33:46):
Yeah, we're really not going to be able to solve
some of our big societalproblems, whether it's climate
disruption or inequality, if therichest people on the planet
are hiding huge amounts oftreasure away from the rest of
us.
It's like we're creating aparallel universe of the
ultra-wealthy who can stashtheir cash and never have to pay
(34:08):
taxes, or can engage incriminal activity and never be
held to account.
So, yeah, we're not going to beable to solve a lot of our
problems unless we fix thisglobal trans system, and the
reality is we in the UnitedStates have more leverage to fix
it than probably anyone else inthe world right now.
To the extent we still have aremaining democracy, to the
(34:29):
extent some of us live in stateslike California or New York,
where we're harmed by thissystem, where other states can
rewrite the rules and undermineour own states.
So that should be organizingthe states that are harmed by
the system as a good startingpoint and fixing it at the
federal level, because SouthDakota and Delaware are not
(34:51):
going to take the lead in fixingthis.
They benefit from the system,so those of us who are harmed by
the system need to push back.
Speaker 1 (34:59):
So people can look up more information at
inequalityorg.
They can look you up atChuckCollinsRightscom, so those
are some places where you can goto get more information.
You can look at the films.
We talked about the laundromator we're Not Broke.
(35:19):
I'm sure there are others outthere, but there are a lot of
resources to really learn abouthow this hidden scheme to kind
of rip us all off is happeningand what we can do about it.
So thank you so much for beingon the show today, Chuck.
As always, you're an amazingencyclopedia of information and
(35:42):
activism and kind of proponentfor the common good.
Speaker 2 (35:47):
Well, thanks for having me back, and it wouldn't
mean anything if there weren'tpeople like you just having
these conversations.
That's so much of what's neededright now.
Speaker 1 (35:55):
Well, thank you so much and, to my listeners, I
hope this has inspired you tolearn more and to perhaps make
some changes or get in touchwith your senators or your
government officials.
And until next time, have aninspired week and live your joy.
Speaker 2 (36:19):
See you next time.
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