News
We need to look into EpiPen
The makers of EpiPen testified in front of Congress -- and it was an epic fail.
They failed to justify their 500% price increase, their 600% increase in executive pay, or their tax-dodging move of corporate offices to the Netherlands.1
Join our campaign to tell the FTC to investigate Mylan for price-gouging and anti-competitive behavior.
Since acquiring the product in 2007, Mylan has raised the price of an EpiPen two-pack from a little over $90 to more than $600.2
Imagine you’re the parent of a child who suffers severe allergic reactions. You depend on the EpiPen to keep your child safe. But now you face a $600 bill for the same product that costs you $90 a few years ago -- for no good reason.
Meanwhile, Mylan’s CEOs are cashing in: their combined pay of $292.1 million “outpaced” larger rival companies like Johnson & Johnson and Pfizer.3
What did they and Mylan do to deserve such a generous raise?
In terms of medical research? Nothing -- the firm didn’t create the EpiPen. They just bought the patent a decade ago.4
In terms of increasing market share? Plenty -- including state and federal laws requiring or incentivizing schools to stock their product.5 And the firm has done plenty more to dodge taxes -- Mylan recently reincorporated in the Netherlands.6
Meet the new poster child for anti-competitive, anti-consumer corporate behavior.
We’re calling on the FTC to investigate Mylan.
1. Letter from the Office of Governor Jerry Brown, September 16, 2016.
2. “An EpiPen is 500% more expensive than it was in 2007—here’s how that happened,” Business Insider, August 24, 2016.
3. “EpiPen Maker Dispenses Outsize Pay,” The Wall Street Journal, September 13, 2016.
4. “EpiPens cost just several dollars to make. Customers pay more than $600 for them,” CNBC.com, August 25, 2016.
5. “How Mylan, the maker of the EpiPen, became a virtual monopoly,” The Washington Post, August 25, 2016.
6. “Another reason to hate Mylan, which jacked up the price of the life-saving EpiPens: It’s a tax dodger,” The Los Angeles Times, August 23, 2016.
The “Child Care Dance” and why we need reform
Post by Chloe Sasson
“We thought we were doing everything right,” said Jenny, a young mom and Fair Share supporter. “We thought we were so ahead of things, we had even started a college fund, but … no one told us what we needed was a child care savings fund!”
Few things compare to the joy of seeing your kid learn, grow and succeed. And few things compare to the amount of work and sacrifice of parenting young children.
And while young parents like Jenny try to prepare for parenthood, the challenges of arranging and paying for trustworthy child care (which averages nearly a fifth of household income) poses an extra challenge.
According to the last U.S. census, Massachusetts has roughly 225,000 preschool-aged children, only 59% of which are enrolled in an early education program. And it isn’t as though the other 41% of families want to keep their children from getting this critical early learning. For many, it’s just too expensive.
For the 69% of families with two working parents and children under 6, child care is a must. However, as Eric Morath of the Wall Street Journal notes, “as jobs have become more plentiful, demand for child care has increased—pushing up its cost and partially offsetting income gains.” 19 out of 25 parent participants in a Massachusetts Fair Share survey name affordability as the one thing they would change within the child care system.
For parents weighing their main options – staying home, trying to line up informal care, or finding professional care – here are some of the factors that go into those decisions.
Parental Care
Many parents face the tricky decision whether to stay at home or return to work after having a baby. In Massachusetts, every parent is entitled to at least eight weeks per child in family leave. Additional eligibility can earn parents a minimum of 12 work weeks off under the Family and Medical Leave Act. Whether or not a one is paid during this period varies based on employer.
Once this leave is over, transitioning from providing direct care for your infant to finding outside coverage when returning to work can be hard. With infant care expenses eating up nearly 20% of the median family’s income, staying home and avoiding those costs is tempting.
However, getting by on one income can pose a significant challenge. One parent reports that even scaling back to part-time employment is “unfeasible,” stating, “We have to be a two income household, and suspect many are in the same boat.”
What stay-at-home parents save in child care and other work-related expenses in the short-term, may lead to difficulty down the line in relation to retirement and insurance. Plus, reentering the workforce after a being at home for several years is not easy. Gaps on résumés may be red flags for employers and hurt chances of being hired.
Research has shown that, “leaving the workforce, even for less than a year, can have long-term negative consequences [on] careers and lifetime earnings.” Given that women are 4.5 times more likely than men to take prolonged time off to care for children, parent care contributes to the wage gap.
A myriad of online “stay at home” calculators can help provide financial guidance to parents given their current income and expenses. Those that cannot afford to stop working, or choose not to for other reasons, must then consider informal and professional child care options.
Informal Care
Many families opt for care offered by grandparents, relatives, neighbors, and/or friends. However, it’s often difficult to find capable care-givers who are available enough to actually cover needs. Au pairs and full-time nannies, although potentially pricey, are another informal alternative to parent and professional care.
Given that close to 70% of children under six have two working parents yet only 59% are enrolled in a child care program, we see a 10% gap that must be accounted for through full-time informal care. However, the numbers of parents taking advantage of part-time informal aid is of course much higher. Informal care is often used to supplement other child care methods to provide affordability and flexibility in a family’s child care situation.
Professional Care
Professional child care centers definitely have their advantages. They are consistent, credentialed, and, because they must be licensed by the state, abide by thorough safety regulations. Parents looking to socialize their children at a young age prefer these types of care centers. One father notes that, “Many parents, myself included, want our children to have rich peer relationships—we want our children to interact with other kids, learn how to socialize, and make friends.” These settings expose children to the diversity in background and values that facilitate their transition into kindergarten.
Child care centers. Traditional center-based child care and preschools are the most popular choice for parents. 68% of survey participants report enrolling their child in a child care center. But all the advantages of center-based care come at a steep price. With infant care costing a whopping $17,062 per year on average and preschool-aged care costing about $12,781 per year, Massachusetts has the second most expensive child care system in the United States, exceeded only by Washington DC.
Parents face the challenge of “finding a place that is of good quality and also affordable,” claiming such centers are “extremely hard to come by”. Survey respondents expressed their frustration at the high cost of preschool and daycare, arguing that “It costs as much as our mortgage” and “Most of the places I would want to send my children I cannot afford”.
Family child care. Finding licensed professionals who provide care directly out of their homes is typically a more affordable alternative to care centers. However, these in-home programs, costing a little over $10,000 per year on average, are often capped at just six children and thus fill up very quickly. Finding a family child care provider with available openings and a location that works can be challenging. Because these homes tend not to be centrally located, transportation can be an issue, especially for parents without a car. We’re looking into programs to help with transportation needs to ensure that family care can be a viable option for parents.
Head Start programs. Families living below the poverty line or relying on public assistance have the option of pursuing Head Start. Started as part of the War on Poverty in the 1965, this national program is mostly known for its free, holistic preschool programs for children ages 3-5. Early Head Start is a support program for pregnant women and children ages 0-3.
Despite being a great resource for many young parents, Head Start cannot possibly serve all eligible children due to limited space. Head Start also fails to benefit those who make too much to qualify for public assistance, yet still cannot afford child care.
Vouchers. Another option for low-income families is the “voucher”—a private preschool or daycare subsidy provided by The U.S. Department of Health and Human Services, and administered by the state. This subsidy can be used for any licensed child care provider, either center or family child care.
The voucher is distributed through a lottery system. Because of the voucher’s long waitlists and low reimbursement rates, child care remains inaccessible for many families. Unfortunately for the 32% of Massachusetts children under six years who qualify as low-income, the “current funding level for the Child Care and Development Block Grant provides assistance to only one out of 10 eligible children”. Like Head Start, parents frequently find themselves earning “too much for vouchers, but not enough to afford [preschool] all the time”.
It’s time for a system that works for parents and teachers
Navigating the tricky waters of child care, especially for new parents, can be quite challenging. In order make child care attainable, we need to ensure that quality early education is both affordable and accessible for every family. Because low wages for educators endanger learning quality by creating a 30% industry turnover rate, funding a teacher rate reserve is a key place to begin. Early education cannot expand if the workforce is in crisis.
Another solution would be to issue a cap on child care expenses. One report states that “meaningful child care reform that capped families’ child care expenses at 10% of their income would expand Massachusetts’s economy by 1.6%. That’s $7.07 billion of new economic activity.” Massachusetts congresswoman Clark recently proposed the 21st Century Child Care Investment Act, which would provide tax credits keeping expenses at 10%, improve quality, and increase educator salary. With this plan, the median Massachusetts family with an infant would save roughly $8,300 annually.
Parents need to speak up about the growing child care problem in order to achieve real progress. Until Massachusetts makes necessary changes to its child care system, parents are left to haphazardly piece together parental, informal, and professional care plans just to get by.
ACTION: Anonymous and deadly
There are many reasons why we should ban the practice of anonymous shell companies -- companies formed with no way of knowing who is in charge.
But here's one of the most compelling: They're being used to shield illegal opioid dealers. Most businesses have nothing to hide, but if you do have something to hide, it's easy: You just set up an anonymous shell company -- which in America, requires less personal information than it takes to get a library card.
Since they're anonymous, shell companies are a favorite tool to hide all sorts of unsavory behaviors, from terrorism and drug cartels to tax dodging.
And our latest report "Anonymity Overdose," connects opioid trafficking with the activities of anonymous shell companies.
According to the CDC, opioid deaths in 2014 exceeded those from motor vehicle accidents in the U.S. They even refer to the opioid crisis as an epidemic.
It's clear we need to do more to solve this problem.
You can help to show our elected officials overwhelming support of this bipartisan bill, the Transparency and Law Enforcement Assistance Act. If passed, law enforcement would have access to clear information about who owns the company and be able to hold them to the same rules as the rest of us.
The opioid crisis is taking an increasing toll on the nation, and this is one more reason we need to take action and end the use of anonymous shell companies.
Send a message to your represenatives: Anonymous shell companies help drug cartels and opioid trafficking. Help put a stop to this dangerous practice.
World’s Largest Banks Support Reforms to End Anonymous Companies
The Clearing House Association—representing the world’s largest commercial banks—sent a letter to Congressional lawmakers supporting strong measures to crack down on the abuse of anonymous companies. The group, which counts among its owners Bank of America, Citibank, JPMorgan Chase, and Wells Fargo, explicitly endorses the bipartisan Incorporation Transparency and Law Enforcement Assistance Act (H.R.4450, S.2489). (Via the FACT Coalition)
Fair Share has been working to close loopholes that allow anonymous companies. Anonymous shell companies have been used to finance human trafficking rings, defraud local government, launder bribes, skirt international sanctions and fund Super PACs. Even if we know there are crimes being committed, law enforcement has trouble figuring out who to arrest, as the identities of the criminals are shielded by layer after layer of anonymous companies.
Earlier this month, Fair Share Education Fund released a report detailing how these companies are used in opioid trafficking.
Banks, who see a lot of transactions involving shell companies, offered this in their letter: "We can see no justification for allowing corporations to shield their ownership."
Anonymity Overdose - How our opioid crisis and shell companies are linked
Aug. 1, 2016 -- Opioid deaths now exceed those from motor vehicle accidents. It's clear we need to do more. Fair Share Education Fund's latest report, “Anonymity Overdose,” connects opioid trafficking and the subsequent crisis with the activities of anonymous shell companies – companies formed with no way of knowing who is actually in charge. Because they shield the owners from accountability, anonymous shell companies are a common tool for disguising criminal activity and laundering money, and are also at heart of the Panama Papers.
“Anonymity Overdose” found 10 case studies that show the connection between the use of anonymous shell companies and opioid trafficking and related money laundering. In one such example, Kingsley Iyare Osemwengie and his associates were found to use call girls and couriers to transport oxycodone, and then move profits through an anonymous shell company aptly named High Profit Investments LLC.
Meanwhile, the crisis is taking an increasing toll on the nation. According to the Centers for Disease Control (CDC) , in 2014 there were approximately one and a half times more drug overdose deaths in the United States than deaths from motor vehicle crashes. Since 2000, the rate of deaths from opioid related overdoses has increased 200%. The CDC refers to the opioid crisis as an epidemic.
“The opioid problem has been profoundly felt by our communities, health care workers and law enforcement officials,” said Nathan Proctor, co-author of the report and national campaign director with Fair Share Education Fund. “We should be doing everything in our power to address this crisis. We can add to those efforts by ending the use of anonymous shell companies.”
“Shell companies that can be formed in the shadows with little transparency have been used to promote drug trafficking, money laundering, and fraud against the United States government. This makes it difficult for law enforcement to determine the real person behind a company and its illegal activity. The Incorporation Transparency and Law Enforcement Act would require companies to provide information on their beneficial owners, for use by law enforcement as they build a case against these bad actors. The bill would help ensure that criminals cannot hide behind shell companies to conduct illegal activities. So, this is yet another way to attack crises like the opioid epidemic that is taking root in communities across our country,” said Senator Chuck Grassley, a cosponsor of the bill and Chairman of the Senate Judiciary Committee and Co-Chairman of the Senate Drug Caucus.
The report uses perspectives provided by law enforcement officials as well as federal court cases to highlight the role that ending anonymous shell companies could play in addressing the crisis.
“We know the drug cartels are in it for the money – and to stop them we need to go after their profits,” said John Cassara, former special agent in the U.S. Treasury with the Office of Terrorism Finance and Financial Intelligence, whose work helped inform the report. “Anonymous shell companies make that work much more difficult for law enforcement. We need to do more than just bust the street level distributors, we need to go after the real kingpins, and to do that we need better tools to follow the money.”
The report shows how ending the use of anonymous shell companies could make it significantly harder to keep drug profits safe from law enforcement. There is currently bipartisan legislation, the Incorporation Transparency and Law Enforcement Assistance Act, in both the House and Senate which would require the collection of information about the true owner of a company, and make sure law enforcement has access to that information.
“Drug traffickers regularly set up anonymous shell companies. In fact, the U.S. is one of the easiest places in the world to do so,” said Gary Kalman, executive director of the FACT Coalition, a non-partisan alliance of more than 100 state, national, and international organizations in support of shell company reform. “Congress should immediately pass bipartisan legislation to end the secrecy and give cops and prosecutors the tools they need to go after drug cartels and others who threaten the safety and security of our communities.”
“Anonymous shell companies are bad for America and the whole world for a number of reasons,” added Proctor. “They are used to defraud Medicare, conduct predatory scams on working class people and avoid taxes. But their role in drug trafficking is just another reason we need our lawmakers to take action and end anonymous shell companies.”
Cases in the report also include that of Owen Hanson, a former USC athlete who ran a complex drug trafficking, money laundering and illegal gambling ring. The Los Zetas cartel, who invested their drug profits in racehorses in Oklahoma, giving them names such as ‘Morning Cartel’. Fernando Zevallos, founder of an airline in his native Peru, and who is behind bars, yet his drug trafficking operation continues through his family ties.
To download the report, click here.
In Mass., 1,100 and counting call for reversal of early education cuts
Community members have expressed frustration in response to Governor Charlie Baker vetoing $17.5 million in funding to early education, including a much needed $7.5 million to the struggling workforce. A petition that has garnered over 1100 supporters in just the last 2 days from across the state will be delivered to The Massachusetts State House and State Senate in an effort to push legislators to override Gov. Baker’s targeted line item cuts to early education funding.
Since 2001, early education and out-of-school-time programs have lost more than $148 million in state funding (adjusting for inflation). There were modest gains in the budget around early education funding, but those gains are in jeopardy.
We know that early education helps more children start kindergarten ready, and that residents from across the state strongly support investing in early education and preschool. We should be expanding these programs, not cutting them. Massachusetts Fair Share is especially troubled by the $7.5 million cut targeted at addressing early educator pay, as that investment is critical in stabilizing the field, which is in crisis.
Among the comments on the petition:
“Cuts in this service are short sighted. Research has documented that early education and care is a vital investment in our children and the benefits outweigh costs.” – Susan from Belmont
“Early ed. is one of the most important funding areas for government. You will save money fighting crime and housing prisoners in the long term. Please override Baker’s line-item veto of this educational item.” – Alice from Arlington
“An educator from the Middle East I met once told me that we Americans have it all wrong. We value Ph.D’s and spend as little as possible on early childhood education. Yet it’s the age before 5 that is so critical to the development of a person. And children are the future of the country. Massachusetts needs to give the best foundation possible to its children and that means spending on early childhood education in ways that can make a real difference.” – Dee from Lowell
Current and former teachers have also spoken out regarding the multi-million-dollar cuts to funding:
“As an Early Childhood Educator who has worked in the State for over 16 years, I have seen less and less funding. I work in Lowell, where many of our children/families struggle financially and the teachers absorb many of the costs that our schools and families cannot fund. By taking more money away from ECE, you are depriving the children of assistance from a paraprofessional who is essential in our Kindergarten classrooms. We are not only educators, but parents, caregivers, and confidants.” – Tara from Lowell
“More money should be allowed for Early Childhood education. This is where we need to close the gap in education. As a kindergarten teacher I see more and more students coming into kindergarten with no prior early childhood experience. When they start kindergarten they are already behind many of their classmates. We need to offer more full day preschool and programs to those in early childhood!” – Heather from Worcester
We can do better. Every child deserves the same strong start.
Obama administration takes step to curb offshore tax dodging
On Wednesday June 29, the Obama administration's Department of Treasury issued new rules which require large U.S. multinational companies to report profits and taxes on a country-by-country basis.
This is meaningful progress in Fair Share's ongoing work to end offshore tax dodging.
These new rules mean that the IRS will collect and exchange tax information on a country-by-country basis, and will show them tax multinationals paid overseas (for companies making more than $850 million per yer). The more interesting aspect of course, are the taxes they didn't pay. We know that some large multinationals cook the books, making it appear to each country in which they do business that their taxes belong elsewhere. Now we can begin to untangle these webs and hold bad actors accountable.
In a global world when everyone is interconnected, the only way to ensure everyone plays by the same rules is to open doors of communication and work together keep the large companies honest. It evens the playing field for companies that don't hide their profits in elaborate multinational schemes, but have compete against other companies that do.
There are further steps we can take to strengthen this ruling -- for example, making this tax information available to the public. We must continue our efforts, but these new rules bring us one step closer to ensuring that everyone gets and pays their fair share and plays by the same rules.
Our statement on Supreme Court blocking progress on immigration reform
WASHINGTON, DC -- Fair Share is deeply disappointed that the Supreme Court's decision today to block progress on immigration reform. This news further clarifies the need for Congress to act.
Our immigration system is broken, and that’s bad for our country and our economy. It’s long past time to bring undocumented workers out of the shadows and allow them to join the legal, regulated workforce, with a fair shot and fair wages and the same rules as everyone else. We can fix our immigration system with a common sense, comprehensive set of reforms that ensures everyone plays by the same rules. Not only will it be more fair, it will increase investment in our economy.
When the playing field is level, both American and immigrant workers can expect their wages to rise. Higher wages will mean more revenue for government, additional consumer spending, and more jobs -- to the tune, economists estimate, of an additional $1.5 trillion for our economy over 10 years.
Panama Papers and the Need for Tax Haven Reform
In the Panama Papers, the unprecedented release of 11 million documents from a law firm in Panama, we see in great detail how the secret accounts of the global elite launder money and hide corruption.
After initial coverage focused on international figures like Vladimir Putin and Lionel Messi and their connections to secretive accounts, a June 5 New York Times article shed yet more light on how individual U.S. citizens are among those hiding their millions abroad.
The Times showed that over the past decade, the now famous Mossack Fonseca had at least 2,400 U.S. based clients, some with criminal records, for whom they set up over 2,800 (shell) companies.
Among their findings:
- Mossack Fonseca helped the manager of one of the biggest hedge funds in the world hide $134 million in six countries, through seven banks. If one bank asked too many questions, they used another.
- The firm set up an offshore account called April Fool for the then chief of Citigroup. It was for his yacht.
- The firm helped the founder of Boston Capital Ventures falsely retain Guatemalan residency to evade U.S. taxes. The beneficial owners of all his accounts and trusts was his 100 year old mother.
There are many more examples.
As you look through the files, it is striking the plain language by which company executives discussed tax avoidance and evasion. In an email to clients, Ramsés Owens, a partner in Mossack Fonseca, laid out the process of evading U.S. taxes, step by step.
First, set up a private offshore company using nominee directors. Then open a bank account using the new company. Finally, deposit money in these bank accounts, which are now private and act as a ‘black hole’. Easy.
“You can take the money in cash, you can do a bad investment; you can purchase something and not receive anything (an expensive piano, an expensive software),” Mr. Owens wrote. “You can receive an invoice from Panama or any other location and that would justify some of the outgoing moneys. You can also declare everything to the tax administration.”
Despite all this, it seems unclear what laws, if any, Mossack Fonseca has broken.
The elaborate shell games which both individuals and large multinational companies use to avoid taxes and accountability are not limited to Panama.
In fact, it’s just as easy to set up an anonymous shell company in America as it is in Panama.
That anonymous company could win a state contract, buy a farm or rent a store without anyone knowing who is behind it.
Anonymous shell companies have been used to finance human trafficking rings, defraud local government, launder bribes, skirt international sanctions and fund Super PACs. Even if we know there are crimes being committed, law enforcement has trouble figuring out who to arrest, as the identities of the criminals are shielded by layer after layer of anonymous companies.
Earlier this year, Congress introduced bipartisan legislation to end anonymous shell companies, requiring that the actual owner of a company be listed somewhere available to law enforcement. Fair Share is working to support this reform, and you can join us here.
We’re also getting behind legislation to end the loopholes which allow companies to hide their profits in offshore tax havens like Panama and the Cayman Islands to avoid paying U.S. taxes. You can take action to support our campaign, here.
Hunger advocates oppose attempt to gut school lunch program
The House Child Nutrition Reauthorization (CNR) bill, H.R. 5003, was voted out of the House Education and the Workforce Committee on May 18. Among the provisions opposed by Fair Share (read our statement here), is a new plan to create a three-state block grant proposal for the school meal programs.
Fair Share has joined our national allies, including FRAC, to repsond to these attacks on school meals, and any effort that would lead students to be more likely to sitting in classes hungry. Block grants are especially problematic, because they cap spending, so in the case that the number of students who need to access free and reduced school lunch increases, there will not be additional resources to assist them.
House Speaker Paul Ryan pushed for more block granting of hunger programs in his policy agenda released on June 7, which lays out his plans to reform the safety net.
Fair Share will continue to push for real solutions to child hunger and show support for the things that are working, like an effective school lunch program. You can take action here.